by Mike Aux-Tinee.
I was out on Amazon today, copying the link for my book for another post, Islands of Happiness and came across this review:
by Mike Aux-Tinee.
I was out on Amazon today, copying the link for my book for another post, Islands of Happiness and came across this review:
by Mike Aux-Tinee.
Don’t look now, but the next time you whip out that credit card for your next must-have splurge purchase, it may cost you an additional 1.5 to 4.0% of the purchase price. There’s nothing like a sucker punch coming right at you when you were least expecting it.
When I was watching the video, the thing that struck me as just odd was that the reporter kept saying ‘what I like about this…’ I got the feeling that she was not a reporter but a paid spokesperson for the credit card companies. I guess her bias is coming out front and center.
I wonder, when will we, the consumer, stand up for ourselves? Of course, why would we want to do that? Because we are being taken to the cleaners and here’s how.
1. Interest rates: Let’s face it, most of us are not paying off our credit card bill(s) every month. When this happens, more of your money is going to the credit card company’s bottom line and not your own bank account (They win and you lose!)
See, once expenses are taken out, what is left is their ‘profits’ and from the amount of money the credit card companies are making, business and profits are good! Since Visa and MasterCard are publicly traded companies, you can check for yourself just how much they are making. But prepare yourself… it’s A-L-O-T!
2. Other fees: This latest fee, the charge by retailers, is another sign of the companies making more money at your expense. In addition to this new fee, there are late fees, over limit fees, fees to avoid going over your limit and so on. I understand, these fees are ‘products’ that the company offers its customers. But it sounds more like taking candy from a baby…
I know. You are going to try to defend these fees because you think you cannot survive without your credit cards. But let me tell you a story.
A very long time ago, back before credit cards were as common as they are now, there were just two ways to pay for things: with cash or by check. Now, you had to keep track of how much money you had in the bank and could not spend any more than that. It was the perfect utopia for us consumers.
When credit cards came out, very few people could even get a credit card, let alone use it without two forms of identification! Again, we customers were in a state of nirvana!
But the problem was, those who wanted to make more money, called up our Federal Government and asked them to change the laws. At first, any loss or fraudulent use would come out of the business profits. The laws were changed and now it’s the customer’s problem. What happened you may wonder?? The number of credit cards in circulation just shot up (and so did the amount of our debt.) Everyone under the sun could and did get a credit card and that propelled us down the path we currently are on now. Where we are the losers and the retailers, credit card companies and banks are the winners. I know, leaves a bad taste in your mouth…
But there is a way out. It’s going to take a little adjustment on your part, but the end result will put more money in your bank account.
1. Once and for all pay off what you owe and never look back.
You may think this is easier said than done. If you are like millions of Americans, you could have several thousand to over ten thousand dollars of combined debt. The thing is, you might not be able to pay it off in the short-term, but you can in the mid to long-term.
I was in your position, being hit with fee after fee and I decided to get off the hamster wheel. I paid off what I owed, transitioned to using cash and changed my life dramatically! If you need help, I wrote a book about what I did titled, Islands of Happiness.
2, With a little planning, use cash or pay by check.
Once all of my debt was paid off, using cash required just a little planning. I created a budget and stuck to it. You may have to ask if you can pay by check and might get some weird looks, but it can be done.
There are going to be those who attempt to label you… Maybe they will say you are overreacting, or are thrifty (which is a compliment to me) or say – how about you move into the 21st century like the rest of us. Whatever is said, ignore them one hundred percent. This is about protecting yourself and your money. Doing these things are just as cool as they were then.
Why do I want you to do this? Well, when you run the numbers the amount of money you are losing to fees and interest is a staggering amount. Don’t believe me, then just add up those numbers and let it sit on the paper and stare back at you. It’s hard to sit there and think what you could be doing with the money (maybe a vacation, take a class or just save the money!)
I want you to take back control of your life and the first step in the process is realizing there is more to life than the story you’ve been given.
If you do pay off your debt and follow my advice, I’d love to hear from you!
by Mike Aux-Tinee.
There you stand, looking over the edge at the abyss. What has brought you here is so much debt – your own personal financial cliff. As you gaze into the bottomless, dark hole, you think to yourself, ‘Could I have avoided this?’, ‘What should I do?’ and ‘Is this the end?’.
You begin to sweat, your heart races and you can feel that sick prickly feeling just race through every nerve of your body. You wish things could have been different and maybe you are quietly praying, a last desperate attempt to prevent the inevitable.
This scenario has been playing on an endless loop lately. Millions of people have taken on too much debt trying to live the ideal of the American Dream. It’s no use trying to point the finger and blame anyone but yourself. That’s not going to make the situation any better or make it go away in the short-term.
The one thing that can change in the short-term is how to cope with the stress over the debt you have. While it may take several years to pay off what you owe, you do not need to allow the stress from it all to negatively affect your life anymore.
I know where you are. See, I was over my head in debt and lost my job. It was (and still is) one of the worst feelings that I have experienced. I expected to wake up from the nightmare to find myself clutching a pillow for security. Well, I did not wake up like that and the nightmare stayed with me for some time.
I had to do something about the stress. I had to take some control back and find a way to cope with it before it started to cause serious damage to my life and erode my health. What I am going to share with you are the ways I dealt with the stress of being in debt.
1. Come up with a debt reduction plan.
The one thing you need to do to bring about the end of this nightmare is to recognize that your life is unsustainable. You can no longer go on recklessly spending money. It’s time to come to grips with the idea that you must learn to live below your means. Otherwise this is going to be how your life will be forever… and I really mean forever!
Coming up with a debt reduction plan allows you to have something positive to look forward to – the day you will be completely debt free. This is creating the notion that there is a way out, albeit some time down the road.
To help you with your debt reduction plan, I wrote a book, Islands of Happiness.
Stress unchecked, puts a lot of pressure on the body. And at some point the pressure will become too much and something will pop. Stress can contribute to some very serious health problems like high blood pressure, heart attacks and ulcers.
By getting out and exercising you are doing two things. One, helping your body burn off the pent-up stress and pressure. And two, building up resistance to stress. When you decide you want to begin exercising, consult your doctor.
3. Eat better food.
I know you already know this, but the body needs fuel and we get that fuel from eating food. What’s important is what kind of fuel you give your body. To give the body the nutrients needed for daily operation, fight off diseases and illnesses, you must give it the good stuff: fruit and vegetables and keep the bad stuff out: fast food, soda, candy…etc.
Another benefit to eating better, your body will not put as much of it into storage (a.k.a fat). If done right, you can improve your health and how you feel.
4. Find a quiet place.
This is pretty important for a number of reasons. You need to have a place where the distractions of life cannot enter in and bombard you all at once. It gives you the space and time you need to sort through any problems, and come up with better solutions.
Having a quiet place also gives you the opportunity to pursue personal interests like reading, painting or just sitting and watching mother nature at work. (no surprise…it should be some place outside and away from your home!).
As you incorporate these activities into your life, you will discover once your debt has been paid off, that you are a much healthier and happier person. Your life, as it is right now, is doing more harm than good. No matter how many things you can point to as signs of success. The price you have to pay to obtain those things is too high…
If you have other ways to cope with stress, please pass them along for the good of everyone else!
By Mike Aux-Tinee.
When I wrote Islands of Happiness, I spoke about cutting expenses, then taking the money and using it to pay off your debt. In a round about way, this was a back door approach to creating a budget.
I am rather shocked that anyone would risk financial ruin by not living within their means and establishing a budget. I wish the President and members of the United States Congress would come to grips with this notion. Oh! Before I forget, I would like to formally offer my services to help create a budget. I am sure, the President of the United States has a way to contact me…(I secretly doubt I will get a call though).
To help this process along, there are a few things that I want to state right from the beginning. There is nothing wrong with creating and living with a budget. It will take some serious strength and a commitment by you to do this. And there is a huge difference between what needs, wants and luxuries are and these differences are creating a debt problem that is spiraling out of control.
In my post, Why Debt is the Perfect Storm I gave some very sobering information about the debt problem in America so I will not get into it here. Before you read any further, head over there and read that post.
About the inner strength and commitment part. You will need to make some difficult decisions and understand that the way you are living right now is unsustainable. I know you can do it, I went through it and I am much better off today than I have ever been. I do not regret changing my life and living within my budget.
The first thing I want to talk about is the differences between what a need, want and a luxury really is. What we need to get by is food, shelter and clothing. Along with those we also need to have utilities, insurance and for some a car.
Now as far as the wants go, we all want to have the ‘better versions’ of those above items. For example, we want to eat steak and potatoes for dinner, when in reality, we can really live with eating something not as expensive.
As for luxuries, these are things that are at the extreme end of the pricing scale. We may need a car, something to get us from point A to point B. A standard four door sedan would work. But, we would love to have a high-end luxury car.
Time for some serious inner strength. Now that you have a better idea of what a need, want and luxury is, it’s time to go through your expenses, classify them into one of these three categories and then cut them out of existence. It is even possible to cut back on some of the needs too!
This is about establishing priorities and looking at the opportunity cost – basically, what else you could be doing with the money!
You may have some questions about what to do with the money that has come up because you created a budget.
One thing I think a lot of people have a hard time with is accepting the idea that living by a budget is only for the short-term. Once the amount needed is accumulated then the old way of living can resume. But the thing is, cutting expenses and living with a budget is a long-term game plan. Of course, there are going to be some very minor deviations, like taking a trip that could bruise the budget. But that’s alright.
Coming up with a budget is about creating balance and protecting yourself from unforeseen economic problems like losing your job. It’s also about becoming more self-reliant and learning to accept that there are financial limitations – the credit card is really not your best friend. You will be very tempted to toss the budget away and resume living your old life. But before you do this, think about the hard work and sacrifices you have made to create your budget. Not only that, but look at what you did with the money: how much debt you have paid off, how much more money you have and the peace of mind of being in a better financial position. Looking at it in those terms, living with the budget is actually a win! And we all want to be ‘winners’ in life!
By Mike Aux-Tinee.
Since 2007, I have been sitting here, watching what is going on with our economy and the terrible things that have happened to people. So many have lost everything: jobs, homes, savings and worst of all their self-esteem and respect. I know some of the problems many of them have been going through. See, I lost my job in August 2007 and it took me until August of 2008 to find full time employment.
At the time, I was in the process of buying a house and going about my business of living my life. I had the idea, that everything would be fine and it’s just a little bump in the road – but keep going forward otherwise I would be viewed as a failure.
That’s a pretty powerful motivator! And I did not want to be viewed as a failure. We have been repeatedly told throughout our life that we are a winner. We are given medals for just showing up and participating, while the winners are given a large trophy. As if the medal is to make up for that empty feeling we are experiencing. It’s supposed to build up our self esteem and we are rewarded for mediocrity. We are given a pat on the back and told things like the score does not matter… in fact we are told a lot of things, by those who really should just sit there and be quiet.
I know… I was told a lot of things about life from people. How to live, what I absolutely just had to have to be happy and what I needed to do to be viewed as successful.
Looking back, there was really only one piece of advice that I wished I would have been given. That being, to be a success requires hard work, thriftiness and to protect yourself from things like losing a job.
It’s one of my beliefs that having debt is not a good thing, no matter what anyone says – no debt is good debt. I know, some people have said that there are two kinds of debt, good debt and bad debt. That you really want to take on good debt, like school loans and avoid the bad debt, such as credit cards. But what happens to you, when you take on all of that good debt, like we have been lead to believe and we lose our job? There is no form to fill out, in some government program that looks at the kind of debt (good or bad) and then if it’s determined that we took on the good kind, that what we owe would be put on hold until we get back on our feet.
In the real world, reality comes along and wipes us out – lock, stock and barrel. I believe having debt is just like the perfect storm.
Alright, what do I mean when I say that debt is the perfect storm? Let me start off by giving a definition of a perfect storm and how it applies to debt. I checked Wikipedia for the definition of perfect storm and here is what it had to say:
A “perfect storm” is an expression that describes an event where a rare combination of circumstances will aggravate a situation drastically.The term is also used to describe an actual phenomenon that happens to occur in such a confluence, resulting in an event of unusual magnitude… The confluence of three different phenomena when combined create the “perfect situation” to generate such a storm.
So what are the three different phenomena when combined create the perfect storm?
It creates a false sense of security and prosperity.
When you use debt, instead of paying cash, you are able to have more things. We associate someone who has more as being prosperous. After all, they must have the money otherwise they would not be able to afford (and possess) all of those things. Having a line of credit (credit card, home equity line of credit etc…), you are in effect borrowing money, someone’s money, to make a purchase and obtain more things. The more you have around you, the more prosperous and the safer you feel. But what you are experiencing is an illusion. It is a trick that is designed to make you feel this way, in actuality, what you really have is less. I know. That did sound like I am trying to trick you. Your eyes can see the things you bought, you can touch them and so on. But, if you don’t make the payments… bye..bye..bye things. You are trading off your financial security for physical security when you used some form of debt – not cash to make a purchase. However, if you save your money and then make the purchase then I concede the point that you are rich and have both security and prosperity. But that does not happen. You will attempt to point and what you have and say… “Look and what I have.” and I will say, “Yes, and look at all of the debt you have too.” If something happens and you lose your job, then all of these things will go away and you will be left with nothing. Still don’t believe me? Then check into the home foreclosure rates around the country.
There is a lower rate of savings.
The Federal Reserve Bank keeps track of a lot of information about the U.S. banking sector (and what we do or don’t do). One tiny and very sad piece of information is the dismal savings rate of Americans. Which at this point is going down not up, meaning we are spending more of our money and saving less of it. I always wonder why this is? What happened between our grandparents generation and ours? Well, they grew up not having access to credit and believed they should save their money and then make a purchase or learn to live without it. Now, there were some forms of credit around but they shunned it. It was seen as a terrible, terrible thing. They were more self-reliant and had a completely different set of values and priorities. Now, it’s more important to have things, it’s alright to be in debt (because some pundit, politician or a commercial said so) and we compare what we have to what others have, if someone has something and we don’t, then we need to head out and get it just to keep up with the Joneses’.
Not saving your money exposes you and your family to unforeseen economic problems. You are putting their welfare at stake just so you or one of them can have the latest and greatest version of whatever fad item comes out. Imagine how you would feel if you were one of those individuals who lost everything during the 2007-2009 economic collapse?
Once you start using debt, it’s impossible to stop.
Using debt to fund your life is a lot like using drugs. Once you start using and become addicted, it’s down right impossible to quit. Here is just a little information that may make you uneasy. This information was obtained from http://www.creditcards.com.
Total cards in circulation in U.S.
(Through year-end 2011, unless otherwise noted)
Credit card debt
Debt as percentage of income
By Mike Aux-Tinee.
As of yesterday, 09-09-12, it’s been six months since my big break up. Up until then, I was involved in a very troubling and emotionally taxing relationship. As in all relationships, both parties need to benefit from it – equally. Of course, that’s in an ideal world, where things are always fair.
The relationship that I ended six months ago, started off like most. There was so much hope and excitement about what could be. I had never experienced anything like this before, so when I say it was different it really was.
Throughout this relationship, I invested a lot of time, resources and most of all, I invested something very precious, I opened my heart and allowed my emotions to be exposed. What I received in return for doing this was a broken heart, many sleepless nights, so much time and resources wasted pursuing (what I thought at the time) was something that was good!
What I discovered, was that this relationship I was involved in was not what it started out to be. And the longer I stayed in it, the more harm it caused.
It took me some time (to come to the conclusion) that it might be better to look at what I was involved in, weigh the pros and cons and let the numbers do the talking. Because if things were going bad now, then (and they very well could) be this way or even worse in the future.
But there is a problem. I hate to give up and throw in the towel. I like to be optimistic and hope things will be better tomorrow. So, I kept investing more of myself with the hope of things turning around. I should have just listened to my heart, relied on the numbers to make my decision and then just taken the shears and let it go…
Which is what I did on March 9th. I had enough of everything that I had experienced. It was better (maybe not in the short-term) for me to finally summon the courage and break it off once and for all.
What I did, was break up with using and being in debt. I worked for four and a half years to rid myself of this very inequitable and toxic relationship.
Being in debt, I constantly lived in fear. Fear of losing my job and not being able to pay my bills – of financial ruin. The job that I had to take was not right for me and I needed it just to pay my bills – instead of pursing something that was a better fit.
I feared, my future would not be as happy nor financially sound because more of my money was going to the bank to pay back what I borrowed (with interest) and not to my savings.
It’ a very sick feeling, to think that something you have done and continue to do is a mistake. After all, we have been told, that we are perfect that we are a winner in everything we do. Some bad advice that is! Because in life, more often than not, there is a winner and a loser.
My plan, to get out of debt, took me over four and a half years. It was a mental and some times a physical challenge to stick with it until the very end. I did stick with it and on March 9th, I wrote out my last check and became 100% debt free!
To get to that point, there were a lot of self-imposed rules. I would use cash not credit. I made significant cuts in spending: I did not eat out as much, I cut out buying things I did not really need (like new clothes) and I gave myself an allowance.
The end of the road is really not the end of the story. Since the date of my big break up with debt, I have stayed debt free the entire time. Spending has been kept down and I save more. I am much happier than I have been in a very long time. My weight has dropped and I sleep so much better!
Now that I am debt free, my life is much different. I am pursing a life that I was meant to live. One that is on my terms and does not involve so much uncertainty and fear. I now spend my time, working to create a life that is about having experiences and not the reckless accumulation of more things – which only brings more debt.
My life, as it is now is about being free to pursue personal interests, to make the most of my life and the time I have left. Now, unlike any other time in my life, I truly have the opportunity to be anything, go anywhere and experience all this world has to offer.
You can be debt free too! It will take some very hard work and a desire to life your life on your terms and not someone elses.
Over the last six months, I have spent my time, writing about what I did. It is my plan to have my book Islands of Happiness, out within the next 2-3 weeks. I will keep you updated on my progress. Because in it, I will show you exactly what I did and what you can do to also become debt free!
By Mike Aux-Tinee.
I caught 60 Minutes this past Sunday and one of the segments was called Jobs program for people trapped in unemployment. I usually do not suggest watching a specific television show, but there are several things about this segment that every one of us needs to see…
I really hope you have hit the link and watched the video. Because I hate to blow the story for you. If you have not done it yet, please do… I will insert some elevator music…
Alright, now that you have watched that video, what did you notice? Here is what I noticed about nearly every person there…
Everyone was in their 40’s and older.
Many were college educated.
There were both men and women.
There were both black and white.
They were all out of work for a very long time.
And drum roll please…
They all are productive, experienced and want to work…
But for some reason, the market place just does not want them. How sad is that? One line in the segment that set me off, was how companies search the internet and if you are not there, you are irrelevant. Irrelevant! Isn’t that just the dumbest thing! But yet, there is it.
One of the men, in the interview talked about how he did everything he was told, from going to college… getting a job… etc… He was following instructions to achieve the American Dream. What it got him and so many others is nothing close to a dream but more of a nightmare.
And that is the problem. We are listening to people tell us how to live our life. From early on we are receiving instructions: from what to eat, how to dress, what college to attend, and when to have kids. As we go through life, following that advice, we take on so much debt that if and when something like a job loss happens, it destroys everything.
Combined with a negative savings rate, our high debt load is tearing up this country and destroying the American Dream. But what many people do not know, the original meaning of the American Dream came from James Trunslow Adams. Please, take a look at the link. He states, the American Dream is about “a set of ideals in which freedom includes the opportunity for prosperity and success, and an upward social mobility achieved through hard work.”
What do you notice about his definition of the American Dream? It is vastly different that the current version in circulation. You know, the one that says, you need to go to college (take on debt), buy a house in the suburbs (take on more debt), that happiness is about having more and more things (and more debt!).
And believing in that American Dream, so many people have become over their heads in debt and their lives have come falling down.They have landed and smacked face first into the earth at terminal velocity. I think that would probably sum up the pain and severity of losing everything you have worked for.
Maybe you do not care because it has not happened to you. It’s better to turn off the television or change the channel so you are not bummed out. I know, let’s play pretend that it will never happen to you so there is no need to change your life and how you spend and save money.
So… what happens when it does happen to you? How do you think you will feel when you, like those people who have been unemployed and cannot find a job, will live? Well, maybe it’s time we do an about-face, and recognize that it could and most likely will happen.
But there are ways to protect yourself. You will not like to hear what I am going to say, but you do know, I am very direct and to the point. So, without further delay here are my ideas.
NUMBER 1: Stop spending!
That is right… I DID just say that. It’s time to come to terms that you do not need the latest and greatest version of whatever toy comes along. Life will go on, you will not die if you do not get it. And oddly, you will have more money. Because you saved it, did not spend it on this thing that will ultimately lose favor in your life and be replaced by something else that you just had to have.
NUMBER 2: Pay off all debt
It’s the overwhelming amount of debt we are carrying that is also making us poorer. We not only lose the money from the initial purchase, but the interest that accrues when we do not pay the bill off next month. Think of it like the school bully who comes around every day to take your lunch money. Every day at the same time, here he comes, and there is nothing you can do about it. Well, that is not true, you can pay off all of your debt and he will stop coming around. Debt is holding you back from being richer. Unless you like losing more, it’s time to pay off what you owe and end the defeating cycle of using debt.
NUMBER 3: Redefine what makes you happy! Things don’t!
The version of the American Dream that is being circulated is about having things, more and more things in our life that are supposed to make us happy. And maybe for a moment, there is a sliver of truth to that. But you wake up the next day and pursue another thing that will make you happy! All the while, you are accumulating so much more debt! Do you have a storage area or basement? What is down there? It’s filled with many of those most have items that you really are not interested in using any more. But, you cannot bring yourself to part with them. Silly isn’t it?
NUMBER 4: Live for tomorrow, not today! Save, save, save!
For some reason, it has become quite in vogue to only live for today, tomorrow is forgotten about. It does you no good to spend more than you make, trying to make your life better today. The ones who benefit from you spending your money are the retailers, banks, advertising companies and anyone else who stands to make a buck when you spend your money. They want you to spend, and continue spending even if it puts you further in debt. Once you are at your limit, they just sit back and continue to make more money or move on to someone else who can pay. It’s time to get out of this cycle and just save your money! That is right, you need to have 5-10 years of living expenses in a savings and rainy day fund. I know, that’s not what other people are telling you to have on hand. But if you remember, those people in the 60 minutes video were out of work for 2 or more years!
NUMBER 5: Your house is on fire… you have 60 seconds, what 3 things will you take out?
These are the only things that truly matter to you. And for most of us, we would include our family members on that list. For me, I would take my family, my wallet and car keys, that’s it! Everything else I own can burn. The only thing that cannot be replaced is my family. This list is what you should focus on every day because is brings more meaning to your life, more happiness and does more for you than any thing you can buy.
Debt and financial ruin does not care… who you are…what race you are… what gender you are… what your educational background is…how much money you have (or don’t have)… or for that matter any other demographic characteristic. It will attack and ruin any and everyone’s life, whenever it can.
As in the 60 Minutes episode, becoming unemployed is very likely going to happen to you and you will struggle finding another job. I know that sounds very alarmist and completely puts a damper on the fun times. But one day, something is going to happen and I think, you will be much better off with money in the bank versus a basement of things you no longer use…