Saving

Financial Experts

Be Wary Of So-Called Financial Experts

Money Maroon

There is a reason why Warren Buffet said to be “fearful when others are greedy, and greedy when others are fearful.” The reason is simple, so-called financial experts do not necessarily know what they are talking about most of the time. In effect, it has been shown that a monkey can pick stocks better than a financial expert. Yes, a monkey is a better stock picker than an institution paid a percentage of your portfolio. If financial experts were foolproof, they would beat the market every year, but this is simply not the case. This is also the reason why index funds are the safest bet to have consistent growth over time. So-called financial experts of the stock market are typically no better than you and I at gaging what will happen next.

Stop & Think

In life, whenever a large group is running to the left, stop and ask why. Do your due diligence and investigate whether or not these individuals are going that way in view of reason or an irrational drive to follow the heard. In most circumstances, the answer is herd mentality. Someone with name recognition will make a statement, others will be too lazy to do their due diligence and instead parrot the earlier person’s statement. This then occurs over and over again and soon you have a group of individuals moving in the same direction without a concrete reason to do so. This is particularly problematic when the individuals that are irrationally moving are also in positions of power. You end up with irrational acts leading to longterm detrimental effects.

Economic Movements

Just think back. How many financial experts called the great recession? How many financial experts predicted the sustained bull market following covid lock downs? The answer is not too many individuals. If you go back and take a look, most so-called experts where shouting from the roof tops about a sustained bull market back in 2007. When covid-19 hit, many financial experts were calling for a massive recession as a result of the lock downs. In both cases, the opposite actually occurred. 

If experts are calling for a specific economic activity to occur, the more fervor they have, the more likely it seems that the event will not occur. When the majority is looking for a recession, there may be a dip, but just wait for the bull market. When the majority is calling for a bull market, it is only a matter of time before the market falls. The point is, it is your money that you are playing with, do your own due diligence. Make informed money decisions by doing your own investigation into the matters at hand. 

Do not be a lemming. Do not turn over your life savings to an expert and sit back in the hopes that they will do what is right for you. It is your money. No matter who you choose to manage your money, you should also play an active roll in the actions taken with your money and how it is allocated. If you do not take an active roll in your financial security, do no be surprise to find that your money is not being managed in the way that you would want or like.

Financial Experts

This is not to say that experts should be ignored. If qualified, they are experts for a reason. They have the requisite knowledge and qualifications. This is to say that while experts may know more than you do about a subject, you should still take an active role in your money management. Trust but verify. In the end, it is your money.

Conclusion

Warren Buffet said to be “fearful when others are greedy, and greedy when others are fearful.” The reason for this statement is simple, do not follow the herd. A blindfolded monkey beats humans with stock picks. As such, keep in mind that some financial experts do not necessarily know what they are talking about most of the time. Be an active participant in the management of your money. Trust but verify. Educate yourself and do your due diligence. Do not be a lemming when it comes to how your money is managed. Actively participate in the management of your money and your journey to financial independence.

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Video Summary

Earning More

Earning More To Financial Independence

Money Maroon

You have no doubt heard about the simplicity of being wealthy or growing wealth. Simple in text by difficult to achieve. Here it is, you have to save. You must also live below your means. You already know this, to gain wealth, you cannot spend all that you earn. With what you save, you can invest consistently and take advantage of opportunities when they arise. But this is only one side of the equation. The other side of the equation is your earnings. The more you earn, the more you can save and invest. So while money is not everything, earning more is an important component of building wealth and achieving financial independence.

The Equation

We know the equation. Becoming wealthy is a matter of money in versus money out. Wealth is a matter of earning versus spending. We typically spend a lot of time on the spending side of the equation. And yes, the spending side of the equation is very valuable. You have heard it before, live below your means and stick to a budget. 

We rarely focus on the other side of the equation. We tend not to focus on the side of the equation relating to bringing money in. There may be a reason for this. While it may be virtuous to save and live below your means, trying to earn more may not be looked at in the same light. Typically, if someone is pushing to earn more they are labeled as a gunner, which has certain bad connotation. Further, many of us do not want to be known as someone that is chasing money. We want to chase our passions and if money comes with it, great. But you now what, there is nothing wrong with chasing money. There is absolutely nothing wrong with getting paid what you are worth. The fact is, you deserve to be paid in line with your skills and ability. If you are not being paid to a level commensurate with your skills, you should consider moving on to another opportunity.

Simple Facts

If you are going from zero to wealthy, you must earn. It is that simple. Now, this does not mean that you need to be making a million dollars each year. As you well know by now, you can become a millionaire on just about any salary if you save and invest smartly. However, if you are able to maintain your living standard and earn more, you will get there faster.

Earning More

We are no longer in a system where you can expect to work for the same company for your entire career. Whether it is a matter of being laid off, conflicts with your manager or simply getting a better opportunity elsewhere, it is likely that you will be switching jobs at least three times in your working life. 

But if you are not ready to leave your company, just know that by staying at your current job you are guarantee to be making less than you would elsewhere. It may be counter intuitive but companies typically pay new hires more than their current employees. In some ways, while they may appreciate you as an employee, they are constantly looking to attract the best talent. This is not to say that you should leave your current position, especially if the benefits and the work load fits your lifestyle. However, if you are not happy where you are, know that leaving could be a financial benefit.

Live Below Your Means

But even if you are earning more, you must not allow lifestyle creep to take over. If it does, then yes you will have a better standard of living but you will be no closer to achieving your financial goals. The point is, while you are focused on saving and living below your means, also work on the other side of the equation. Focus also on trying to earn more. Whether this is by getting a new job or starting a side hustle. Increase your income to achieve your financial goals faster.

Conclusion

Do not only focus on saving and investing. Also focus your attention on increasing the money in. Focus on earning more. The more you earn, the more you can save and invest. While money is not everything, earning more is an important component of building wealth and achieving financial independence.

Video Summary

Crypto Crash

Crypto Crash 2022

Money Maroon

I typically do not talk much about crypto, but you cannot ignore the growth of crypto over the last few years. It is also difficult to ignore the volatility of the crypto market lately.  The volatility is so much so, that the dramatic downturn in crypto valuation are rising concerns of a total crypto crash. 

What Is Crypto

If you do not know what crypto is, here is a simplified definition. Crypto currencies are digital currencies that are not reliant on any central authority. Crypto essentially is a digital currency that is not backed by a government or bank. While crypto is designed to be outside of the traditional financial system, it can be affected by the system.

Crypto Crash

Over the last few months, the crypto crash has wiped out  an estimated $1.6 trillion. Coinbase has tanked in value. Bitcoin and Ether has also lost value. For the most part, much of the value gained over the last two years have disappeared. For example, Bitcoin has dipped below $28,000 after hitting a high of over $68,000. But one of the largest crash is that of TerraUSD.

TerraUSD

2022 has not been a great year for the stock market. The stock market has fallen, with some individual stocks dropping more than 70%. On the crypto side, one of the biggest losers in 2022 has been TerraUSD, one of the largest stablecoins. As a background, TerraUSD was intended to be pegged to the U.S dollar.  TerraUSD was backed by credible venture capital firms, but not backed by cash, treasuries or other traditional assets. The supposed stability of TerraUSD was derived from algorithms that linked its value to the cryptocurrency called Luna. 

The aim was to use algorithms to peg TerraUSD to the U.S dollar. Essentially, minting $1 of TerraUSD requires burning $1 worth of Luna and vice versa. So, as TerraUSD demand increase and its value goes above $1, to bring the value down, Luna would be exchanged for TerraUSD to increase TerraUSD’s supply to bringing the value down. The reverse would be used to increase TerraUSD’s value where low demand lowers its value. However, TerraUSD had a known issue, the possibility of a death spiral.

With large dumping of Luna on the market, Luna began to lose value as supply became inflated. This resulted in more Luna being minted for each TerraUSD burned. This in effect caused a death spiral effect on TerraUSD. As Luna’s value fell, investors panicked and sold off their tokens. This action further fueled the death spiral, until Luna went to $0 from a value of $116. It is estimated that this crash wiped out about $40 billion.

The Real World & Crypto

Just as the stock market is affected by the traditional financial system, so is the crypto market. The current crypto crash is part of a broader pullback from risky assets.  This pullback has been driven by rising interest rates and regulatory policies to tighten the monetary supply, inflation and economic uncertainty caused by Russia’s invasion of Ukraine. With interest rates rising, savings accounts are becoming more attractive to many. Many investors are taking profits and pulling money from the stock market and putting it where they can get predictable returns.

Additionally, as the stock market falls, some investors are liquidating crypto investments to meet other obligations. This all comes together to drive crypto prices lower which causes further panic in the crypto ecosystem. Another factor that is affecting the crypto ecosystem is the increase scrutiny being placed on crypto by governments around the world. There is more and more calls for increase regulation. 

Long Term View

As the crypto crash continues, it is expected that a lot of different crypto currencies will fail, while others will succeed. This is not the first time that crypto has fallen. Do not forget that in May 2021 to July 2021, crypto  also had extreme volatility where Bitcoin fell more than 45%. For those investing in crypto for the long term, massive price swings are expected.

Conclusion

As crypto continues to grow, it cannot be ignored. Whether you make crypto apart of your portfolio is a decision that you should not take lightly. As the crypto crash of 2022 rolls on, no matter the instrument, do not invest in things you do not understand, and invest only what you can afford to lose.

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Video Summary

Financial literacy

Financial Literacy Is Important

Money Maroon

Without a basic understanding of simple financial concepts, good luck. It will be almost impossible to achieve your financial objectives. Everyday we make decisions about banking, budgeting, saving, credit, debt, and investing. Financial literacy enables you to make informed financial decisions that will propel you toward financial stability and achieving your financial goals.

Financial Literacy

There is currently no one definition for financial literacy. However, generally, financial literacy is the ability to understand and use personal financial management, budgeting, and investing to your financial advantage.  Simply put, financial literacy is having the knowledge to know what to do in a financial sense. This does not necessarily mean that every financial decision will result in success. But over time, it is likely that you will improve your financial situation.

Why Is Financial Literacy Important

Financial literacy is important because it results in budgeting, being prepared for emergencies, and limiting debt. These are the financial forces that we deal with on a daily basis. But more importunely, the financial decisions we make today compounds. The decisions we make today are more important than ever because of the limited safety net available for retirement. 

Most pension plans have been replaced by 401Ks. Unlike pension plans, 401K plans leave the bulk of the decision making and planning to the employee. Without proper financial knowledge, many will be saddled with debt and be ill-prepared for retirement. 

Lack Of Financial Literacy Is Expensive

Not being financially literate is expensive. Some consequences of lacking financial literacy appears in everyday life. These consequences show themselves in increase costs that can be locked in for decades. For example, higher transaction fees, banking charges, higher interest rates on debt, and loses in the stock market. Financial ignorance also compounds as you will not understanding the concept of  compounding. Compounding in view of debt and also in view of income/interest. In a recent survey, it is estimated that financial illiteracy costed Americans about $353 Billion in 2021 alone. That is a crazy amount of money. That is a nontrivial amount of funds.

The Solution

The solution to lack of financial literacy is simple, educate yourself. It is to you and your family’s benefit to be financially literate. Financial decisions not only affect you, but also those around you. 

Financial education resources are available. Best of all, a lot of the information is free. You have this blog as an example and hundreds of others that you can subscribe to or follow. If you want to learn the thoughts of the biggest financial titans in the world today, just search for it. Financial literacy comes down to how important it is to you. Believe me, it should be at the top of your to do list.

For the same reasons why a coach is likely not the best player on a team, financial literacy alone will not be enough to win the financial game of life. Knowledge alone is not enough.

Financial Literacy Alone Is Not Enough

While financial literacy is important, it is not enough. To achieve your financial goals, you need a climate that facilitates wealth generation. This means that the country/jurisdiction that you are in has to facilitate wealth generation. You have to have access to tools and resources to build wealth.  For example, in starting a business,  you need to have/have access to capital, general money management, supply chain and transportation infrastructure. Financial literacy alone will not overcome infrastructure deficiencies.

Financial education is important, but you must also tackle your beliefs and attitude toward money. Having the financial knowledge alone will not change your attitude.

Additionally, having knowledge does not mean taking action. You, yes you have to take action. You have to put your plans in motion. Start today. Take action. Use money  as a tool and other resources around you to move toward your financial goals.

Conclusion

Everyday we make decisions about banking, budgeting, saving, credit, debt, and investing. Financial literacy enables you to make informed financial decisions that will propel you toward financial stability and achieving your financial goals.

Below, is the reproduced S&P Global FinLit Survey. Take the test. Answers are given below. Are you financially literate?

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Financial Literacy Test (S&P Global FinLit Survey)

RISK DIVERSIFICATION

  • 1. Suppose you have some money. Is it safer to put your money into one business or investment, or to put your money into multiple businesses or investments? 
    1. one business or investment; 
    2. multiple businesses or investments; 
    3. don’t know

INFLATION

  • 2. Suppose over the next 10 years the prices of the things you buy double. If your income also doubles, will you be able to buy less than you can buy today, the same as you can buy today, or more than you can buy today? 
    1. less; 
    2. the same; 
    3. more; 
    4. don’t know

NUMERACY (INTEREST)

  • 3. Suppose you need to borrow 100 US dollars. Which is the lower amount to pay back: 105 US dollars or 100 US dollars plus three percent? 
    1. 105 US dollars; 
    2. 100 US dollars plus three percent; 
    3. don’t know

COMPOUND INTEREST

  • 4. Suppose you put money in the bank for two years and the bank agrees to add 15 percent per year to your account. Will the bank add more money to your account the second year than it did the first year, or will it add the same amount of money both years? 
    1. more; 
    2. the same; 
    3. don’t know
  • 5. Suppose you had 100 US dollars in a savings account and the bank adds 10 percent per year to the account. How much money would you have in the account after five years if you did not remove any money from the account? 
    1. more than 150 dollars; 
    2. exactly 150 dollars; 
    3. less than 150 dollars; 
    4. don’t know.

A person is typically defined as financially literate when he or she correctly answers at least three out of the four financial concepts described above. What was your result?

Answers: 1(2), 2(2), 3(2), 4(1), 5(1).

Video Summary

Tithe Yourself

Tithe Yourself Now

Money Maroon

Let us start by saying that this posting has nothing to do with religion. This posting focuses on tithing yourself. More specifically, from every paycheck, pay yourself first. Tithe yourself. Ensure that you are taking at least 10% from your paycheck and directing that portion to a personal account. If you do not tithe yourself, someone else will have a claim to your money. You work hard for your paycheck, why have others take a share before you do?

Tithe Yourself

The word tithe in Hebrew literally means tenth. By tithing yourself, we mean automatically taking at least 10% of your paycheck off the top and directing this amount to a personal account. Some folks religiously tithe to a church but often forget about tithing to themselves. It is important for your financial future that you tithe yourself.

When beginning on a journey to save or to establish an emergency fund, you may not be able to tithe 10% to yourself. Start small and build from there. The first step is to start. Once you start and begin to build a habit of tithing yourself, move on from just tithing yourself to tithing as much as you can to yourself. Aim to increase your tithing percentage up to 10% and once you hit the 10% mark, aim for 15% and beyond.

Tithe Yourself – Pay Yourself First

Tithe yourself is to encourage you to pay yourself first. You should pay yourself first because if you do not, you run the risk of not paying yourself at all. For example, after paying your bills and spending discretionarily, how much of your paycheck do you have remaining? If you have money left over, it does not take much for all that money to disappear due to frivolous spending? 

Many times, living above your means and going into debt can result when you do not pay yourself first. If you do not pay yourself first, it is likely that you will not budget and over spend, or you will simply spend what you have because you have not assigned a task to that money.

By paying yourself first, you will force yourself to live below your means and budget accordingly. By paying yourself first, you are assigning a task to every dollar that you make. Imagine upfront knowing that 10% of your paycheck is off limits. By reframing your paycheck this way, you know that you are limited to 90% of your paycheck. This means that all of your bills must be paid by this amount. Can you pay rent/mortgage, phone, cable, internet, subscriptions, power, and whatever other bills you may have from this amount? If the answer is yes, increase the amount of your paycheck that you are paying yourself. If the answer is no, you will be forced to cut back. You will be forced to make hard decisions. But trust me, it is worth it. Saving for your financial future is worth it. Tithing yourself is worth it.

Money in hand. Tithe yourself. Pay yourself first

You Are Not Being Selfish

It may sound selfish when it is said to pay yourself first or to tithe yourself. However, if you do not pay yourself first, you are always putting yourself behind someone else. You are putting your bills ahead of your financial future. You are also putting the temptation of instant gratification ahead of the delay gratification that will benefit your future. Instead of having others having a claim to your money, claim it as your own. You worked hard for it, so keep it and grow it to the betterment of you and your family.

If you still think that tithing yourself is selfish, then sometimes in life, you need to look out for yourself and your financial future. Because the simple fact is, if you fall on hard times, it is unlikely that there will be many people lining up to pay your bills or to house your family.

Conclusion

This posting focuses on tithing yourself. More specifically, from every paycheck, pay yourself first. Tithe yourself. Ensure that you are taking at least 10% from your paycheck and directing that portion to a personal account. For example, a personal investment account or a personal savings account. If you do not tithe yourself, someone else will have a claim to your money. You work hard for your paycheck, why have others take a share before you do? Reward yourself for your hard work by saving for your financial future.

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Why Lottery Winners Go Broke

Why Lottery Winners Go Broke

Money Maroon

Ever since I understood the concept that buying a lottery ticket gives you the chance of winning millions, I wanted to win the lottery. As I got older, I realized that the probability of winning was extremely low, as such, I rarely ever play. When I do play, I see it as a donation to the State’s education system as a percentage of the lottery usually funds education. For the lucky few who plays and wins, congratulations. However, for winners there is happiness, that is typically followed by sorrow and many times tragedy. It makes you wonder, why does such tragedy follow many lottery winners? Looking at the financial side, why do lottery winners go broke?

Lottery Winners Go Broke Because Of Inexperience Money

A lot of lottery winners are not math or financial whiz. The fact is, the more educated you are, the less likely you are to play the lottery. It is simple, you understand that the odds of winning is extremely low and as such you do not play.

Those who win the lottery, tends to be those playing the lottery which is in effect proportionally not the most educated with regard to finances. Most lottery winners have the issue of having a large sum of money and not knowing how to maintain it. 

Many lottery winners fall prey to their wildest financial dreams. The dream of having one or more mac mansions, new expensive cars and other toys that are wanted but not needed. With a scarcity mentality, many lottery winners are frivolous with lottery winnings. Some winners see their winnings as “free money” to be spent. While individual purchases may not put a dent in the overall winnings, they can quickly add up if winners don’t keep a close eye on what they are spending. A bigger home comes with a bigger bill to upkeep. Luxury cars come with larger insurance and repair bills.

lottery check - why lottery winners go broke

The Payout Is Not As Much As You Think

When taking the payout from the lottery, winners usually have a choice. The choice is typically between taking a lump-sum or a fixed payment overtime. If you take the lump-sum, sometimes it is only around 60-75% of the advertised prize. This can leave winners with a lot less money than they expected. Then do not forget about the taxes. In most jurisdictions, lottery winnings are taxed. As such, in the end, while you will have a huge sum of money, the sum may not be as large as others think it is. Therefore, it may be bit more difficult to rebuff family and friends when they falsely believe that you have a lot more than you actually do.

Lottery Winners Go Broke Because Everyone Knows That You Won

In many places, a condition of winning the lottery is that your name is made public. Many lotteries do require that basic information about winners are made public. For example, name, city and the amount won.

When every one knows that you won millions of dollars, you will have long lost friends and family coming out of the woodwork. They will all come calling.  Many new lottery winners will not be well equipped to say no to friends and family. Once family and friends learn of the windfall, they will have expectations of what they should be entitled to.

But also, there are complete strangers who targets lottery winners. Some with sad stories, others with investment ideas and still others who aims to rob, maim or kill lottery winners.

Typically, lottery winners go broke as a result of a million cuts. One bad investment idea or falling for one sad story will likely not completely deplete the millions won. However, not paying attention and learning to manage your money will eventually lead to bankruptcy or worst.

Addiction

There is the saying that money does not buy happiness, it only amplifies who you are. A jerk before having a lot of money, will likely be a jerk with lots of money after winning the lottery. If you were previously prone to addiction prior to winning the lottery, now you are a wealthy individual who is prone to addition with the financial means to support that addiction. If you were an alcoholic before winning the lottery, you are now a very rich alcoholic. For those with addition issues or tendencies, winning the lottery and having the financial resources to support an addition habit is dangerous and can be deadly.

For those who cannot handle stress, winning the lottery will add a lot of stress. There is some stress that comes with having the money. You will like be stressed about how to maintain it, how to manage it, how to handle the constant requests for handouts, and how to face resentment (because it will come from family and friends). For many, alcohol and drugs are the remedies often sought with stress. It is not uncommon for many lottery winners to blow huge sums of their winnings on drugs and alcohol. At times, this is in an attempt to cope with their new lives as lottery winners.

Not Asking For Help

As mentioned above, many lottery winners were not finance majors in college. As such it is probably in their best interest to seek advice from qualified financial professionals. However, despite the fact that sudden wealth can cause lots of financial complications, very few lottery winners seek professional help. Very few lottery winners seek out professional advice on how to grow and or maintain their wealth. Without the requisite knowledge of how to manage such an instant inflow of funds, many lottery winners mismanage their money and go broke.

Conclusion

With winning the lottery or with any other instant financial windfall, be careful what you wish for. Many lottery winners go broke. By not being able to handle the stresses of winning the lottery, you could end up being a lottery winner that goes broke or worst.

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Video Summary

Not getting The promotion

You Did Not Get The Promotion, Now What

Money Maroon

At some point in our lives, if you are an employee, a worker for pay, you will miss out on a promotion in view of someone else. This other person may be a current coworker or someone from outside the company. In either case, it will leave you wondering, why. Especially if you believe that the person receiving the promotion is less experienced and/or less qualified.

Be Graceful

Once a promotion has been given to another, congratulate that person. Rise above your feelings of disappointment and be professional. No matter how you may be feeling, your reputation matters. Do not come off as unprofessional or as someone who do not know how to deal with disappointment. By not being graceful or lashing out because you were passed over for a promotion, you may be confirming that you are not mature enough for the role. Be graceful, even if it is difficult.

Evaluate Why You Did Not Get The Promotion

If you missed out on a promotion, you will be hurt. This feeling is normal. It does not matter whether or not you really wanted the position or not. Just being rejected will have an effect. While you may be hurt, you must try to be objective. Was the chosen person better for the role? Where you misled about what is required for the role? Do you think that you were treated unfairly in any way?

If in the end you were objectively not the best person for the position, if you really want this position, it is time for you to add to your skillset. Work toward a direction that will get you where you need to be.

On the other hand, if you were truly the better person, find out why you did not get the role. Is there a bit of favoritism or some other isms at play? Did you have the credentials, but others did not believe that you were qualified or ready? If this is the situation, it may be time to begin advocating for yourself. Begin to show who you really are and what you know. At times, the most qualified person may not get the position. The role typically goes to those who promote themselves. Lots of idiots have been promoted because they know how to play the game.

Ask For Feedback

Ask for feedback. If you did not get a role that you believe that you are qualified for, ask for feedback. Note that most managers are terrible at giving feedback, so try to read between the lines. At times, when you ask for feedback, your manager may justify the case for the other person being promoted, without actually giving you the feedback you asked for. So read between the lines. 

Some managers will provide adequate feedback and provide a roadmap to being promoted.  This rarely occurs, but it does. When you have such a manager, you are very lucky. You are more so lucky if the roadmap provided actually leads to a promotion.

Some managers will flat out tell you that you did not get the promotion because you are needed in your current role. If this happens to you, it may be time to leave. It essentially means that you are too good at your job. The company is not incline to promote you and train two people to do your work, when they can simply keep you at that position.

Some managers may even say that you will be up next or there was a business need for a specific skillset or there will be more opportunities in the near future. It will really be up to you to believe if this is truly the case or not. Many employees have been strung along in the past with the promise of a position opening up or an opportunity that is just on the horizon. Be careful in how you approach these promises. Many times, these promises are only lip service for you to calm down and to move beyond your disappointment.

Review The Landscape

In your evaluation of why you did not receive the promotion, review the landscape. Were you best placed for the role? For example, were you told not to apply, encourage not to apply or told that there are certain requirements but then the chosen individual did not fit the announced requirements? There could be more at play here.

Take a step back and look at the individuals in the role that you did not receive. The requirements posted about the role may just be a preference but not really a requirement. The most important characteristics may not actually be posted. By looking at who previously occupied the role, or who currently occupies that role, you can gain a lot of information. 

Some corporations have a certain type that is elevated to certain positions. That may be education level, select schooling, sex, race or demeanor. When you look at the role you missed out on, do you fit? This is a real question and you must be honest with yourself? If you do not fit the role, it may be time to leave as it is unlikely that you will ever be elevated to that position.

Improve Yourself

If you received a road map that will lead to a promotion, if you believe that the recommended action would lead to a promotion, follow that path. Also, seek to improve yourself for the job you want with your current company but also for another company. Work to improve yourself not only for a promotion but also to better yourself. Take additional classes in an area. Volunteer for new assignments. Work across departments. Make your resume the best it can be for your future role or new job that you may be interviewing for in the near future.

Didn’t Get The Promotion, Leave!

If you believe that you were wronged, or you see your non promotion as a pattern of activities, begin your task of leaving. Many times when we work for a company, we may hear stories and rumblings of who is being promoted. It may not bother you at first because it was not affecting you, but once it affects you directly, you may see things a bit differently. If you are in this situation, know that this is how your company works, and they will likely not change. As such, it may be time for you to leave.

This does not mean announcing that you will leave or making an ultimatum. Simply prepare your resume and improve yourself. Over the next few months, keep an eye on job openings and apply. When the time is appropriate give your two weeks notice and move on. There is no reason for you to stay in a toxic environment. Especially if your non promotion begins to impact your mental health.

At times, once you give your two weeks notice, you may be offered a higher salary, you may even be offered a new role. Whether or not you stay at your current company or leave is up to you. But note and keep in mind what it took for the company to come up on your salary or offer you the new role. You had to threaten to leave. Will this be required going forward? This also does not bode well for you when times are hard and the company performs a reorganization to cut headcount, it is highly likely that you will be cut.

Conclusion

At some point in our lives, if you are an employee, a worker for pay, you will miss out on a promotion in view of someone else. This other person may be a current coworker or someone from outside the company. In either case, it will leave you wondering, why. Especially if you believe that the person receiving the promotion is less experienced and/or less qualified. In these situations, be graceful, evaluate why you did not receive the promotion, ask for feedback, improve yourself and if necessary, leave.

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Video Summary

Athlete

This Is Why Athletes Go Broke

Money Maroon

Over the years, for professional athletes, we have seen astronomical contracts that have repeatedly broken records. We have also seen the sobering news that many athletes go broke. At times, we may fall into the trap and think, how can you go broke after earning hundreds of millions of dollars? But do not forget, a lot of our sports stars are young and have never had the life experiences that would have taught them how to manage money and plan for the future. 

Athletes Go Broke Due To Short Careers

For most athletes, once they sign the big contact, the financial mistakes are immediate. Some begin spending in anticipation of the contract or is out spending once signed. This happens in some cases because like us, many athletes are aware of the superstars who have decades long careers. Many rookies believe that they will continue to play their respective sports for years to come, earning an ever increasing salary. But this is not the case.

For the National Basketball Association (NBA), the average player lasts around 4.5 years. Like many other sports, making it to the NBA is hard, staying there is even harder. For the National Football League (NFL), the average career length is about 3.3 years. Let’s take a deeper look at the NFL. On average kickers and punters last 4.9 years, quarterbacks last about 4.4 years, cornerbacks last about 2.9 years, wide receivers last about 2.8 years and running backs last a dismal 2.5 years. Those in the National Hockey League (NHL) fare a bit better and last around 5 years. The average career of a Major League Baseball (MLB) player is about 5.6 years, and soccer players have careers of about 8 years.

It is therefore unsurprising that the average retirement age for MLB players is about 29.5, 28.2 for NHL players, 28 for NBA players, and 27.6 for NFL players.

If you have no transferable skills, lack financial discipline and your career lasts only a few years, you will have financial problems. No wonder athletes go broke.

Athletes Go Broke Due To Their Contracts:

Not all sports contracts are created equal. In some leagues, it is normal for the contracts to be guaranteed, but this is not the case for others. So when a player signs a contract for hundreds of millions of dollars, depending on the league, they may never receive the full amount.

Players’ contracts are guaranteed in Major League Soccer (MLS). For the most part, NBA, MLB and NHL contracts are also fully guaranteed. However, this is not the case for the NFL. For many NFL players, only a portion of their contract is guaranteed. This is very troubling as the NFL has one of the shortest career spans of the major sports. NFL players are faced with only a few years on average of playing in the league and also not having guaranteed contracts. Don’t forget, as a contact sport, NFL players also have a very high risk of injury.

Young And Dumb

If you received 100 million dollars upon your 18th birthday, in ten years, would you have more or less. The fact is, for many of us, at the age of 18-25, our sense of money is to get it and spend it. For many, this is the period of time where we spend a lot of time trying to impress the opposite sex. 

With money, comes the expensive cars, clothing and homes. At this age, as hormones rage, it may be a matter of time before kids. For many professional athletes, kids occur outside of wedlock which leads to child support and crazy exes. Think of your twenties but to the extreme. The fact is, not many of us could manage money in our twenties.

For athletes, it is a bit worst. Everyone you know, knows that you have money. Everyone around you potentially will have their hands out or will be reaching into your pockets. For so many athletes, it was family, agents, accountants or friends that stole from them. It is no wonder about 78% of professional athletes go broke after 3 years of retirement. Some professional athletes stand very little chance of building wealth in view of the people that are around them.

Most professional athletes just do not realize until it is too late – your career will be short, and your savings must last for the rest of your life.

What Can We Learn

What we can learn from athletes is that it is not about how much money you have, it is about how much you keep and grow. If you have no financial background or do not know how to mange your money, it is likely that you will lose it. No matter if it is 10 dollars or 10 million dollars.

As you move through your career, or your many careers, learn to manage and grow your money. You should learn who to trust and set boundaries with friends and family to ensure that your financial future is secure. Be the CEO of your life and your financial position. It is your money so take responsibility for what happens to it.

Conclusion

Over the years, for professional athletes, we have seen astronomical contracts that have repeatedly broken records. We have also seen the sobering news that many athletes go broke. At times, we may fall in the trap and think, how can you go broke after earning hundreds of millions of dollars? But do not forget, a lot of our sports stars are young and have never had the life experiences that would have taught them how to manage money and plan for the future. 

Follow me on Twitter @JoToFI_com

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Wedding rings

Your Wedding Cost & Crushing Debt

Money Maroon

It is wedding season again. It is time to overpay to join union with another. Don’t get me wrong. A wedding is a beautiful thing. However, so many overpay to show love. If you are currently planning your wedding or have planned your wedding, focus on your wedding cost and do not go into debt for your wedding. Please do not do it.

The Wedding Cost

It is no doubt an exciting time in life. Your partner asked and you said yes or vice versa. You are about to make it official, you have a wedding in your future. If you are not simply going to a court house to sign the papers, watch your wedding cost closely.

You will need to plan out how you will pay for things like your wedding venue, flowers, chairs, photographer, food, alcohol and anything else that may pop up. I do not know why, but when “wedding” is attached to any of the above, the prices explodes. You will be charged a premium.

Expectations

To ensure that your wedding cost does not explode, do not make wedding decisions or purchases because it is what is expected or traditionally done. If you do what is expected, you may run yourself into financial trouble.

It is important to understand, for a wedding, everything have a cost. Further, as the guest list grows, so does the cost. As such, it is important to do what is important to you and your partner. Do what you want and what you can afford. Because in the end, you may fulfill everyone’s expectations, but you and your partner will be left with the bill. At times, this could be a very big bill.

One Day

Do not fall into the trap of believing  that your wedding day is the most important day of your life. It is a special day, but it is only one day. One day that will cost you thousands or hundreds of thousands of dollars if you do not pay attention. This day may also set you on the trajectory of a divorce as well.

Remember, close to 50% of all marriages end in divorce and the number one cause of divorces tend to grow from financial issues. Starting out your marriage in substantial debt is not a good start. Further, so many couples divorce while haven’t paid off their wedding day debt. This is a cruel situation to be in, divorce and still paying off your wedding.

If your next step after marriage is kids and/or a new home, note that these are also very expensive. The better financial situation you begin your marriage in, the better. Do not ruin your financial life for a wedding.

Control Wedding Cost

To control wedding cost, consider what you could potentially change. Also consider what is right for you and your partner.

  1. Change the venue. The venue comes with a lot of costs. For example, the venue typically sets the price for a number of different aspects of the wedding. By changing your venue, you can significantly impact the cost associated with your wedding. A golf course on the ocean will have a very different cost profile as compared to a church in a small town. 
  2. Communicate. Communicate not only with your partner but also with your friends and family what your financial boundaries are. This may lower expectations and reality check your friends and family. Be upfront about your expectations of them and what it is that you want for your wedding.
  3. DIY. There are some things that you can do yourself or have a friend do. For example, taking your engagement photos. This is one task that anyone with a good camera can do. You may also choose to make your own table numbers, for example. There are a myriad of ways for you to get involve and lower the cost of your wedding.
  4. Change when you will have your wedding. There is a wedding off-season where you may be able to get a discount. Also consider having your wedding on an off-day. You could have your wedding on a Friday or another day during the week because the weekend tends to be significantly more expensive.
Wedding ceremony sign

Conclusion

In the end, whatever you choose to do on your big day is between you and your partner. Make decisions for your longterm future and if possible, do not go into debt for your wedding. Your financially independent future self will thank you.

Follow me on Twitter @JoToFI_com

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