Be Brave Not Safe

Sharks come in all sizes, each with the objective of taking a proportionate bite (out of our cash).

The prior posts in this series covered what I would consider to be great whites. The topic of this post relates to a breed that takes much smaller bites, which, over time, can add up.

Here we go…

How many times have we signed up for a membership, with good intentions, only for the activity to fade away (we stop using the membership)?

First, I’ll say, if there is a membership that is key to our plan to achieve a goal, such as physical fitness, we need to discipline ourselves to use it (i.e., get our butts to the gym). And/or, find other means to achieve our goal (i.e., mine is mountain biking, since I hate being cooped up).

I digress…

The issue is that we sign up for memberships that we continue to pay for even though we aren’t reaping the full benefits. What if we could head this off at the front-end?

Since I can’t mountain bike (as much) in the winter, I’ve played racquetball to fill that void. The closest gym with a racquetball court offers an on-demand court rental fee. After a few visits (a number of years ago) I was visited by a shark who managed to convince me to become a member, doing some clever math suggesting that on a “per visit” basis I’d save tons of money over the course of the year.

The reality: The math worked in “their” favor. Especially, since I was a “seasonal” user at best…

Bottom-line: Unless we are absolutely committed to a long-term, consistent relationship (“at least” weekly visits over the course of a year) we may be better off avoiding these memberships.

Just to make sure we are covering the gamut on this…Other membership (or membership-like) programs that can take a similar bite out of our cash include:

• Massage / spa programs
• Lessons (music, languages, etc.)
• Associations

An option, in many cases, is to pay a per use fee and/or find another means to achieve the same objective.

That said, “if” entering into these long-term memberships is a catalyst to create discipline to get us to the gym (or whatever), then we should “just do it.” That is, get there, and make use of the investment 🙂

While it may not seem like much (let’s use $20 per month, to support our math illustration), the cost adds up over time.

• $20 x 12 (months) is $240
• $240 x 10 (years) is $2,400

This is a fine investment, when we are actually reaping the benefits. If, however, we aren’t making use of the membership there is only one course of action: kill it ASAP!

I know, I know…It is so easy to avoid that confrontational meeting and/or phone call to initiate the cancellation. Just think of our math illustration (above) and it will increase the pain level (create motivation), which will make it a much easier call 🙂

More to come!

Even though we have well-paying jobs we may wish to augment our income to step up the pace to achieve our financial goals more quickly than the daily grind might provide. If you are in that boat, good for you! That is the American Way!

You will soon find (if you haven’t already) that there are many “programs” available offering the promise of financial freedom.

These “programs” can include, but are not limited to, things such as:

• Multi Level Marketing
• Network Marketing
• Referral Marketing (these 3 are ALL the same)
• Real Estate Investment Training and Mentoring (by well known / mega-rich / real estate magnates)

You may proceed, but with extreme caution! These waters are chock full of sharks!

Yep, I’ve gone for a swim here too…All-in-all, I emerged “unscathed” — barely…

Would I do it again? NO! Am I glad that I did? Absolutely, YES, for two reasons:

1. I learned a lot (more like a TON) – Especially from my experience in network marketing
2. So that I can share my experiences to help others avoid the scars that can too easily be acquired

To be clear, I am NOT suggesting that these programs be avoided. In fact, if you read the post on my Boot Camp Experience, I’d consider that my time in network marketing served me quite well – as a solid business / entrepreneurial education! This resulted in dramatically accelerating my career (day job) as well as providing a foundation from which to launch my consulting business. All good!

However, we must be aware. These are NOT part-time endeavors, as much as the “pitch” would suggest. In order to succeed, they will require EVERY hour of EVERY day that you are not working your day job. This can be good, as it puts you through some SERIOUS training (which I happened to need, and am now reaping the rewards from).

And, you must be EXTREMELY careful, because where there is money (blood) flowing there are sharks!!!

For example…Some absolutely shocking advice my wife and I received was that you must give it all (your time, effort and money) to the business (read, your “up-line”) – to the point of personal bankruptcy. The stated reasoning: by doing so, you will be so desperate that you will do whatever it takes to make your (network marketing) business succeed.

If you’ve been reading this blog, you know that I’m all about DOING WHATEVER IT TAKES. But, not when it is STUPID!

Fortunately, when we heard this advice we gracefully left those shark infested waters and went along our way. My 10 +/- years in these marketing “programs” provided a significant education and I was able to exit without any permanent damage 🙂

Sadly, I cannot say the same for others…

There are other programs that will tantalize you with the promise of financial freedom, such as real estate investment training and mentoring offered by well-known / mega-millionaire / real estate magnates.

They draw you in as follows:

1. Get you to place your toe into the water – We will give you a free book authored by (well known / mega-millionaire / real estate magnate) if you simply attend this FREE seminar. Who doesn’t like free?
2. Seek the commitment of a limb – At the seminar they get the crowd all worked up in a frenzy with the potential of financial freedom and then float some bait: If you are TRULY serious about becoming financially independent you need to join our real estate investment program (a series of seminars to attend) — RIGHT NOW. A little blood (money) is drawn.
3. They go for the torso – Now that you’ve attended these 3 seminars (on 3 consecutive weekends) it is time for you to step things up by enrolling in our ongoing mentorship program and the monthly subscription to the necessary support system. At this point they aren’t just seeking a few thousand dollars. But, MUCH more!

It was at this point, when they were going for our torso, we decided to (again) gracefully exit these shark infested waters.

The experience made me think of a quote by Ralph Waldo Emerson, in which he acknowledges that there are those who would seek to inspire us (get us all worked up into a frenzy about some “program”), but cautions that we must be careful…

[Don’t] be warped by its attraction clean out of our own orbit

Ralph Waldo Emerson

That is, you have dreams, goals and plans. When you see something that looks amazingly attractive (maybe even a bit too good to be true) study it, before making a quick decision. Does it fit into or augment your plans? It actually “may” be worthwhile; or, it could turn out to be a shark attack!

In closing, I can honestly say that I am glad to have had these experiences (my wife isn’t so convinced 🙂 ), because I learned a GREAT deal.

Just be aware of the simple, step-by-step tactics that sharks will use to draw you into the water.

And, when (not if) a shark calls upon you, I hope this helps to give you an understanding of what you “may” be getting yourself in to.

If you choose to proceed, do so with caution.

More to come!

In discussing life insurance we must first confirm what it is and what it isn’t!

In summary, the purpose of life insurance is to protect our loved ones from having to fulfill our financial obligations after we pass on. These obligations could include:

• College and/or other loans
• Our family’s living expenses (especially if we are the “primary” bread-winner) so they can maintain the same lifestyle as when we were around
• And, finally (and morbidly) the costs to torch and/or bury our carcass

On the flip side, life insurance is not an investment! This is the first shark attack we’ll cover…

To be clear, I am NOT an expert on life insurance. And, my intention is not to share a detailed description of the various forms. My goal is to merely point out a few kinds, identify the one that makes sense, and put up the flag where there are shark sightings.

At a high-level, there are a few forms of life insurance:

• Term Life Insurance
• Whole Life
• Variable Universal Life

The ONLY kind of life insurance we really need is Term. It is very simple and low cost. And, we can “pay as we go”, based on need.

As our obligations increase (we have kids, acquire a mortgage) we can choose to ratchet up our coverage. As our obligations decrease (the kids move out, debts paid off) we can ratchet down our coverage. All, very simply and cost-effectively.

The other forms of life insurance are pitched as a form of investment. Complicated and costly investments. Do NOT be confused or persuaded otherwise. Life insurance is NOT an investment. Tangling life insurance up into an investment product is a way for sharks to take their bite out of our cash. I hate that!

A great quote to live by, in this regard:

Never invest in any idea you can’t illustrate with a crayon.

Peter Lynch – American businessman and stock investor

Rest assured, there is no insurance agent or financial advisor on the planet who can illustrate with a crayon how whole life and/or variable universal life insurance works. Avoid them both.

Bottom-line: Keep things simple. Acquire the appropriately sized term life insurance policy to ensure our loved ones aren’t burdened with our obligations, upon our leap to the other side. And, separately define and manage our investments.

More to come!