Commentary Archives - KNS Financial

New Year’s Resolutions Don’t Count – Only Follow Through Matters

We’re at that time of the year when people are either making resolutions, or slowly beginning to realize – just a few weeks into the new year – that they probably won’t reach the ones they’ve already made. And that’s the point, New Year’s resolutions don’t count – only follow-through matters.

It doesn’t matter how many resolutions you make, or how noble sounding they are; if you can’t follow through they’re virtually meaningless.

So how do you make your New Year’s resolutions stick? There’s no one answer, but several possibilities that can make this year’s resolutions more lasting and effective than they have been in the past.

[Here is a model for setting goals based on the bible!]

Cold Turkey Won’t Work For All The Same Reasons It Hasn’t In The Past

One of the reasons that New Year’s resolutions fail is because of the “cold turkey factor”. By cold turkey I mean that most resolutions attempt to put you on a course that you’ve never been on before, or in one that’s far more radical than anything you’ve ever tried. That’s the exact reason why they don’t work.

For example, if one of your resolutions is to lose 50 pounds by the end of the year, you’re almost doomed to fail. There are reasons why you’re 50 pounds overweight in the first place, and they won’t go away over night, so setting such an ambitious goal will probably be doomed to failure, and early on at that.

No resolution can succeed if it will require a radical change in direction. That usually comes about only after successive steps, which is our next topic…

Setting Doable Resolutions

There’s no point in setting resolutions if they’re not doable. This gets back to the cold turkey factor – setting a resolution that requires a complete change in behavior is doomed to fail. The better approach is to set low resolution – one that’s completely doable – as part of a series of resolutions throughout the year that are designed to achieve a bigger goal.

Rather than setting a resolution to lose 50 pounds in 2014, it will be better to make a resolution to lose 10 pounds. It’s probably well within the realm of achievement, and once you succeed at that level, you can set a new resolution to lose an additional 10 pounds. You can keep doing that until you reach your ultimate goal of losing 50 pounds.

In point of fact, you won’t be able to lose 50 pounds if you can’t lose the first 10 – that’s why the lower amount needs to be your resolution. Even if you don’t reach your 50 pound goal by the end of this year, you will still be well on your way if you “only” lose 20 or 30 pounds.

The point is, New Year’s resolutions are rarely life-changing. We may have good intentions in setting them, but that’s not the way they usually play out. By making your resolutions doable, you set yourself up for success that you can build upon to reach the bigger goals.

Making Change Automatic

One of the best ways to make your New Year’s resolutions stick is by finding ways to make them automatic. This works particularly well for financial resolutions.

For example, if you have not done terribly well saving in the past, you can set up automatic payroll deductions into your savings account. You’ll be achieving the goal of saving money, except that for the most part you won’t see it happen or have anything to do with it beyond creating the payroll deduction.

[Take the 52-week savings challenge!]

Let’s say that another resolution is to increase your retirement funding this year. You can do this simply by increasing your payroll deduction into your retirement account. What happens from there will be completely automatic so you’ll be able to achieve your resolution without any active effort.

You can do the same thing when it comes to paying bills. If you’ve had problems paying bills on time in the past, setting up automatic debits through your checking account or credit card could automate the bill paying process. You’ll achieve your resolution of paying your bills on time this year, except that the process will move largely out of your hands.

Look to automate your resolutions as much is possible, especially early in the year.

The 21 Day Rule To Creating A Habit

If one or more of your resolutions involves breaking a bad habit, you may be aware that the only way to do this is to replace it with a good habit. I forget the source, but it’s been determined that takes 21 days to create a new habit. If that’s the case, you should plan for the first few weeks of this year to create the good habits that will replace the bad ones you’re trying to get rid of.

Many people fail to break bad habits because they simply try to do it by avoiding it (ie, “not doing it”). But if the best way we can break a bad habit is to replace it with a good one, you might be best to focus on creating the good habit more than anything else. Take whatever bad habits you have, decide which habits you want to replace them with, then use the 21 day rule to cement the good habit in your life.

The point is, bad habits won’t simply stop despite your good intentions or your will to stop doing them. You have to create a diversion – a good habit – that will replace the bad one. That will take a few weeks, but it’s worth the effort.

It’s Not How You Start, But How You Finish That Counts

It’s worth remembering that it’s never the intensity or the desire of a New Year’s resolution that counts, but how you follow through on making it happen.

Keeping that in mind, be careful not to make your resolutions too bold – you may be setting yourself up for failure. Instead, set smaller, more doable resolutions, and be prepared to invest the time and effort necessary to make each happen. It’s far better to have one small resolution achieved, than a half dozen grand ones that you’re never able to bring into reality.

The strength of a New Year’s resolution isn’t in the declaration, but the follow-through that makes it happen.

How are you doing with your New Year’s resolutions so far?

Cash – Your Best Defense Against Identity Theft

By Kevin M

Amid all the internet clamor over the lowest rate credit cards, zero interest transfers, and of course, rewards points, it’s often easy to forget the fact that good, old fashioned cash is your best defense against identity theft. That alone is a compelling reason to use it as much as possible.

Sure credit and debit cards offer various forms of fraud protection, but cash keeps identity theft from happening in the first place.

Theft Of Money Is Nothing Compared To Identity Theft

We can agonize over the potential for the loss of cash in a bank account as a result of a lost or stolen debit card, or of the potential for a thief to tap out the remaining balance on a credit line. But neither of those potential losses comes close to the outright theft of our identity. And each carries a limit of loss anyway.

If all we could lose in an identity theft situation was a limited amount of money, it wouldn’t be nearly so terrifying. But if access to a single account is stolen, a thief could take over and plunder every account we’re connected with, and a whole lot more.

With sufficient information, a thief could become “you“ – for financial purposes – and do some or all of the following:

Empty your bank accounts and investment accounts
Max out your credit cards and credit lines
Get employment in your name
Obtain new credit in your name
Apply for government benefits in your name
File a fraudulent income tax return and obtain a huge refund in your name
Commit other illegal acts in your name
Sell your identity to a third party for immediate cash

Sure, eventually you will remedy that situation, but it may take months or years, and that is disruptive. And if the theft is severe enough, you may even need to get a new Social Security number, and transfer all of your financial information from what ever the source. In a financial sense, that’s like having to create a whole new you!

[Find out how to protect yourself from identity theft while using Facebook & other social media!]

Credit And Debit Card Paper Trails

A generation or so ago, no one worried about identity theft. There are various reasons for this, but one of the most significant is the widespread use of credit and debit cards. Every time you use plastic in a transaction, a paper trail is created! That paper trail is a rich target for identity thieves.

As a result of a single transaction, a thief will know your bank, your account number, your signature and other important information, which may be all that’s needed to gain access to your account, and ultimately to your entire identity.

Back when most transactions were conducted in cash, this threat was non-existent. After all, cash leaves no paper trail. There’s a lesson in there somewhere.

“Inside Jobs”

A large percentage of identity theft is “an inside job” – it isn’t initiated by some shady looking dude with a wide brim hat hanging out in a dark corner of the store, but by an employee of the establishment. In fact, it is estimated that as much as 65 to 75% of identity theft is committed by employees.

And why not – employees are the ones with access to the paper trails! When we do business with any company, we’re supplying them with personal information that could be used to perpetrate identity theft. We’re relying heavily on the integrity of the employees of that company and on the hope that they won’t use that information to steal our identity or commit some other form of fraud.

But not all employees have integrity. Access to personal financial information – in combination with an employee’s need (or greed) for cash or other benefits – could cause them to cross the line to the dark side.

Transactions completed with plastic increase the possibility of this outcome. But if you pay with cash, there is no personal information supplied on your part. Identity theft thwarted!

Using Cash To Minimize Identity Theft

By paying in cash – especially for small purchases – you lower the chance of being a victim of identity theft. The last thing that you want to have happen is to become a victim of identity theft as a result of a purchase of a bottle of soda at a dollar store! Paying cash for small purchases is a way to minimize that outcome.

Plan to carry a certain amount of cash with you at all times, and establish guidelines for payment methods based on the amount and type of the purchase.

For example, you could decide that you will pay cash for any purchases under $50 – that would probably eliminate most credit/debit card transactions. Any transactions of a higher amount could be paid by either credit or debit card.

If that strategy cuts your use of plastic by 75%, it will also lower your chance of being a victim of identity theft by 75%!

Paying cash is a way of disarming would-be identity thieves. Cash is virtually “invisible” – it leaves no record of it’s users. That’s your single best protection against identity theft.

How common is cash as a payment method in your life?

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photo credit: freedigitalphotos.net

Would You Be Willing To Move To Another Country?

By Khaleef Crumbley

So the other day I talked about being reminded about contentment by watching House Hunters. Thinking about the show made me reflect on conversations that my wife and I would have while watching “Househunters International“.

This is where people would either make a permanent move to another country, or just purchase a vacation home. The people who were making a permanent move didn’t seem to have any real connections in the states and seemed at ease with their decision.

My wife and I would watch this show sometimes and think about whether we could really pick up and move to another country. I couldn’t imagine going about my life in the U.S. and then waking up one day and trying to find a home and establish a new life in a new place. I know that something as basic as car insurance laws and other specifics differ from state to state in the U.S., so I can only imagine the headache of trying to get that sorted out in another country.

And if we don’t manage to get on the show (does that even come on anymore?), then we will have to deal with learning all of the real estate laws for ourselves. Even a move to Canada (which is on the same continent) would probably be too much for me.

I couldn’t imagine us being that far away from our family. My wife and I have lived a combined 59 years in the U.S. (all of them in New Jersey), and I think it would be too much of a shock to go and live somewhere else. Also, if we don’t move to another country where English is the official language, we may have a hard time adapting. Also, we would have to worry about finding a strong, biblical church with expository preaching wherever we go…something much more difficult to do in another country.

I don’t even want to think about serious issues such as visas, dual citizenship, wills & estates, and all the other things which may be handled differently in the new country. There are other things that take up a lot of time and/or money right now that people have to contend with when they move to another country – even if the native language is English.

So when I think about it, I don’t think I will ever be in the position of the people on this show – willingly, cheerfully, and voluntarily moving to another country (it will probably be a necessity if it ever happens).

I don’t even feel comfortable with the idea of moving to another state! 😉

So What About You?

Would you ever permanently move to another country?
What would be some of the things that might stop you from making that move?
For those of you who moved to a different country as an adult, why did you move and how difficult was the transition?

You Don’t Have to be Rich to Live the American Dream

By Kevin M

The American Dream has always been a loose concept at best. But a lot of people are taking their cues on it from TV, and I think that may be the reason why a lot of us are just not feeling it any more. Let’s face it, on TV everyone is rich and they live lives that ordinary folks can only dream of. Most of us don’t feel that we can ever be a part of that, so the dream gets old and dies.

We probably need to get away from the visual picture of what the American Dream is supposed to be, or at least what it‘s morphed into. In truth, the American dream is whatever we want to be in our own lives. There are multiple aspects to it, most of which don’t require a lot of money at all, least of which being rich.

Be Free From Debt

Ironically, that may be the single biggest reason why the American Dream has died. Millions and millions people have gone deep into debt trying to pursue that TV image of the dream. TV isn’t real, but the debt accumulated to mimic the lifestyle is. We have to break free of that.

Living a life without debt is a true form of freedom, and freedom is a major component of the American Dream. By eliminating debt from your life, you eliminate stress and open up all kinds of other possibilities. Without debt, no one owns you, and you can do many of the things that you choose to do with your life. The strings that tied you down will have been cut.

Get Liquid

In the chase to have the physical possessions of the American Dream – house in the suburbs, late-model car and all kinds of technological gadgets – people have a lot of stuff, but not much money. An absence of cash is a major reason why people feel trapped, and even poor.

By getting rid of the addiction to shopping, eliminating debt, and becoming a systematic saver, you raise your liquidity. Liquidity means having the money that you need to do what it is you want to do, without having to borrow to get it.

The more cash you have in the bank, and the more you have in your wallet, the closer you will be to living the American Dream.

Have A Dream

Speaking of dreams – do you have one? We should always have a desire to pursue something that is bigger than we have right now. That doesn’t mean a bigger house or a more expensive car, but a bigger vision for ourselves. What do you want to be in your life? What do you want to accomplish?

The possibilities are endless, and by having a dream for ourselves we also have a purpose – a goal that we are striving for. It keeps us moving and hoping. As long as we can keep hope alive, we have a real opportunity to lead fulfilling lives.

Build Your Own Business

In recent years the real estate industry has done an outstanding job of hijacking the concept of the American Dream. They turned it into the pursuit of the better house in the suburbs. Personally, I think that’s nothing more than a marketing job. Owning your own home may be a part of the American Dream, but it’s nothing close to the whole dream.

In my opinion, having your own business is at the center of the American Dream. That’s the opportunity to achieve career and income independence, and also to build your business as big as you are able. You can run your business the way you want, and when you’re ready to pack it in and retire, you can sell it and hopefully live comfortably on the proceeds.

{Find out how to discover the right business for you!}

If that’s not the American Dream, then I don’t know what is!

Live An Interesting Life

Most of us get into routines early in life. It’s probably an unconscious thing – we imitate our parents lives, go to school and learn how to conform, then come out to get a job based primarily on salary and benefit levels. A few years later, we wonder why we aren’t happy.

That whole process, as necessary as it may be, is mostly about going through the motions. We do all of the things that we are “supposed to do”, but in the end it’s really not that interesting. But here’s a revelation: in order for your life to be interesting, you have to make it that way.

I know this sounds simplistic, but you should resolve to live an interesting life. It’s perfectly okay to have routines in your life, such as attending school, working your job and taking care of your family and your home. But what you do beyond that is completely up to you.

Don’t settle for being ordinary; be purposeful about living an interesting life. You will take on new challenges, explore beyond your comfort zone and dare to be as different as you are able. Life is a journey and not an event, so be open to whatever comes your way. Find some avenues that interest you, and follow them as far as you can. Don’t box yourself in because of your personal routine. We all need routines, but we also need challenges. Go for them.

America has historically been a nation of non-conformists; that’s the whole reason so many people came here, and continue to do so today. It’s an underappreciated component of the American Dream, and one that we need to pursue with a passion.

Each of these is a part of the American Dream, and you don’t need to be rich to pursue any of them. Start living your part of the American Dream–and don‘t attach dollar signs to it.

Michigan Residents Still Collecting Food Stamps After Winning Millions In The Lottery

By Khaleef Crumbley

My wife came across this story on Yahoo a while back about a woman who won $1 million in the lottery, yet still collects food stamps!

I’m used to reading about people who win the lottery, and then throw their riches away on useless items or things which don’t hold value. You even hear stories of people giving all of their money away and failing to save any of it, and ending up in the poorhouse.

However, I must say that this is a new one for me! Michigan resident, Amanda Clayton decided to continue collecting food stamps even after she won a $1 million lottery prize (see full video below)!

Many people are outraged because they feel as though Clayton is robbing taxpayers of their hard-earned money! What makes this even worse is the fact that 25% of Michigan residents are currently collecting food stamps.

Here is how she responded when a reporter asked her if she thought it was the right thing to do for her to continue to collect public assistance:

“I thought that they would cut me off, but since they didn’t, I thought maybe it was OK because I’m not working…”

“I feel that it’s OK because I mean, I have no income and I have bills to pay,” she said. “I have two houses.”

According to the reporter in the video, she purchased her new home and car with cash. I assume that she is selling her old home (which can take forever in Michigan), so she will soon be without any debt at all. This means that she will have a new house, a new car, and no debt…she’s probably better off than half of the residents of that state!

Amanda Clayton — She doesn't look like she needs food stamps to me!!!

However, she is not the first million dollar lottery winner to continue to collect food stamps. According to ABC News, Leroy Fick won a $2 million lottery prize about 2 years ago…also from the state of Michigan! The 59-year old took home $850k after taxes, and purchased a new home and an Audi convertible.

Despite his winnings, he still used his Bridge Card for groceries. The difference in this case is that Fick actually called Michigan’s Department of Human Services to tell them that he won the lottery, and they said that he can continue using public assistance. Here is what his attorney, John Wilson had to say…

“He’s not trying to cheat the state,…based on his income, he’s eligible.”

He specifically called the Department of Human Services and said, ‘Can I still use the Bridge Card?’ and they said, ‘Yes,’ because he is eligible,” said attorney Wilson. “He’s done everything right in the eyes of the law.”

“He lives a simple life,” Wilson said. “He doesn’t even have the Internet.”

The eligibility requirements posted on the Michigan Department of Human Services website, lists the following sources of income as examples of what is counted when determining eligibility: Wages, self-employment earnings, rental income, child support, Social Security benefits, and veterans benefits. Lottery benefits, gifts, or other “windfalls” are not listed.

The fact that lottery winnings are not explicitly mentioned in the list of eligibility requirements leads to a huge debate about this subject. Do these people who can obviously afford to buy food on their own now, have an obligation to refuse food stamps?

Arguments For Them Being Justified In Their Actions

If you look at the comments sections in the various articles that covered these stories, you will see a few ideas being repeated constantly, justifying the actions of these lottery-winning, welfare recipients:

They both paid at least 50% of their “winnings” in taxes (a portion of that to the state of Michigan), and so they should be entitled to collect $200/month or less.
The small amounts that they are receiving pale in comparison to what the government wastes each month, so the real outrage should be with our elected officials first.
They exploited a loophole in the system, so this is really the state’s fault. In fact, these 2 should be rewarded for sparking a change in government policy.

Arguments For Them Being Wrong

They are stealing from the system since they do not need public assistance.
There are taxpayers who are struggling to make ends meet, that now have to support a couple of millionaire lottery winners!
Just because there was a loophole and therefore no legal issue, their actions are still immoral and are ultimately hurting Michigan.

What Do You Think?

Were they right for continuing to accept public assistance after winning the lottery?
Should we even care about this? If they turn down the benefits, it won’t reduce the taxes of anyone in Michigan…so who cares, right?
Should they be required to pay back all of the money they used on their Bridge Card after receiving their “winnings”?
What would you do if you were in this position?