Start Over, Finish Rich: 10 Steps by Richard Bach

Richard Bach has been writing the "Finish Rich" series for as long as I can remember. His latest addition to the series is "Start Over, Finish Rich: 10 Steps to Get you Back on Track in 2010."

Compared to his other books, this is a short one and seems to be a quick start to getting back on track. Most of us in the USA have been affected in some way shape or form by the economic downturn over the past couple years. Mr. Bach's followers were no exception as he illustrates in chapter 1, not even his students are immune to our current recession.

Many ideas introduced are steps that you should have implemented in some of the previous "Finish Rich" series. He updates the steps with some online resources and updated forms on his website.

If you have never picked up any of the previous books and want a quick read that gives you the actions steps you need to get started right away pick it up.

If you own any of the previous "Finish Rich" series. Re-read your old book, then visit his website for the updated resource material.

Step 1 attempts to mentally prepare you for the rest of the book and helps you realize that you cannot truly "Finish Rich" unless you make a commitment to take action on these steps.

Step 2 addresses additional preparation in the form of organizing your finances online using web based tools like wasabi.com or mint.com; offline using the Finish Rich Folder System and removing clutter. This chapter also visits the patented Latte Factor philosophy created by David Bach.

Steps 3 and 4 touch on debt. Namely, the evil that is credit cards. David introduces the reader to the DOLP system, credit scores, what to do in certain circumstances and how to fix and protect your credit.

In Step 5 David reminds us of the importance of rebuilding or in my case building an emergency saving account. We all need to have approximately 3 months savings somewhere just in case.

Retirement is the focus of Step 6 and it made me realize that re-balancing your portfolio periodically is just as important as opening the account.

The secret to "Finishing Rich" is Step 7, Automation. Once you create a system, set it and forget it, you will be much less likely to miss bill payments, 529 contributions and retirement contributions.

Step 8 focuses on mortgage and provides options for anyone purchasing a home to someone who is in default.

Step 9 discusses college funds and how to navigate those waters no matter how old your child is. David even provides ways to have other people contribute to your college savings.

Step 10 is the last of this series and gives you 25 ways to save $5k. Some of these will work for you and some won't. I don't think anyone will be able to use all 25 ways.

Step 10 is followed by a chapter on giving. It lists a number of charities and even if you can't give $$ it discusses ways you can give your time.

In the last Chapter Dave tells us what motivated him to write "Start Over, Finish Rich" and his experiences with having to "reboot" his life, his business and his thought processes in order to truly start over and make this book happen.

Overall, this book was very helpful and I like the fact that it was action oriented. It took a little longer than I planned to actually finish the book but I took the time out to actually perform many of the steps recommended by David. Not everything in this book is for everyone but it forced me to take a look at the major areas of my finances and tweak where needed. This was an easy read that actually made taking these steps painless.

Recovering from a Setback.

I started the last post by stating that it feels like I've been experiencing life at a rate of WTFs, which led me to this post.

How do you handle a setback? There are only 2 things you can do when faced with a setback:

1. Back down
2. Rise above

Backing down, giving up, quitting, falling off, etc. No matter how you slice it, when you give in to defeat you are truly defeated. Just because you've lost the battle doesn't mean you're going to lose the war. You'll never know if you just quit and let whatever happened take control.

Rising above, facing defeat, planning your next move and using your setback as a lesson learned will help you recover. There are 5 steps you need to follow to overcome defeat.

1. Decide to do something about your situation. (decide that you will not be defeated)
2. Take action on your decision.
3. Focus on the future. ( focus on the solution not the problem)
4. Close the past and put that defeat behind you.
5. Believe in yourself and learn from the experience. (move in the direction of your dream)

Someone once told me "Winners Have Options"

Gratitude

Lately it feels that I've been experiencing life at a rate of wtf's per minute.  Yet, I am still grateful that I'm here to blog about it.  Which brings us to .....

Gratitude.

Gratitude is the ability to be grateful for everything we have in our lives.

So I've been trying to ignore the WTFs and make gratitude a daily practice.  Someone once told me that an attitude of gratitude protects us from negative emotions. I'm not 100% sure yet but I'm trying to get there.

Seriously, "do you bless everything that comes your way? How deep is your gratitude? Are you thankful for you meal? For the store it came from? For the migrant workers that picked the crops? How about the farmer that planted the seeds?" Heck, I even thank the company that genetically engineered the seeds and sell 'em to the farmers every year. Well maybe not but you get my point.

My Quote for 2010
"You can be grateful because you are happy, but you can also be happy because you are grateful."

Credit Secrets Revealed: Loan Modifications

I've been on a credit kick lately and I think its time I start looking at a loan modification. I've been thinking about it for a while since all of this hoopla about homeowners losing their homes and others saving their homes.

My home is worth less than what I currently owe and the minimum payments on my credit cards are going up due to the CARD ACT, so if the bank is willing to work with me it's worth a shot. I did some research and you don't have to be behind in payments or in financial trouble at the moment.

Let's start with a definition of what a loan mod is then we'll get into the details.

Simply put a Loan Modification or Loan Mod is a change to the mortgage terms which are agreed to by the lender and the homeowner. The lender modifies the existing loans in order to work with the homeowner because of hardship. The changes are usually in the form of a rate reduction, where the interest rate is fixed for a certain duration of time or a term extension, where the length of the loan is increased by several years.

When the bank makes these changes it makes the loan more affordable for the homeowner, it keeps a foreclosure off of the banks books, it allows the homeowner to keep the house and it keeps the property values from plummeting.

Credit, credit, credit: Get it together!

OK since we've been visiting and focusing on credit lately, I decided to get my affairs in order.

Credit Report
First of all I need to get my credit reports.
According to the Federal Trade Commission there is only 1 place to go to to get your free annual credit report.

http://www.annualcreditreport.com/

It takes a few minutes but when you are done you will have all the information that 3 of the major credit bureaus have about you. Once you get it, review it and make corrections by writing the bureaus or following the instructions on their websites.

If you need more information about credit reports, the credit bureaus and pricing:
http://www.credit.com/credit_information/credit_report/How-to-order-your-free-annual-credit-reports.jsp

Credit Score
You also want to get your credit score. My favorite site is www.myfico.com
They charge money for the information but they deliver it to you in an easy to read format and also provide all sorts of calculators and other information.

If you want to wait until you clean up your credit to start paying for those types of services there are free alternatives.

One is Credit Karma. They provide you a credit score from TransUnion and they also provide a credit "report card".

Credit Report Cards
Another free tool is Credit.com's Credit Report Card. A nifty tool that also attempts to rate your credit based on the information pulled from the credit bureaus. It also provides you with an "estimated" credit score.

Which One?
At first glance, there isn't a huge difference besides CreditKarma.com offering a free score from transunion. According to this article Credit Report Cards: Credit.com vs Credit Karma, Credit.com tends to be more accurate in terms of pure data. Check out both websites and see which ones appeal to you. I've been using Credit Karma for about a year and don't have any issues. I don't see a need to switch, but that's just me.

Mint.com
Since we are getting our affairs in order, you might as well sign up for Mint.com. A real easy way to track your finances, it includes some calculators and budget tools to help you see where you need improvement. Mint.com needs its own article and I will provide one in the future.

Investigating the massive consumer loan industry and what's ahead for customers and banks -- a FRONTLINE-New York Times co-production.

Since I've been posting so much about credit lately. I came across this Frontline investigation also available on DVD.

As credit card companies face rising public anger, new regulation from Washington and staggering new rates of default and bankruptcy, FRONTLINE correspondent Lowell Bergman investigates the future of the massive consumer loan industry and its impact on a fragile national economy.

Source: http://www.pbs.org/wgbh/pages/frontline/creditcards/etc/synopsis.html

Watch the whole program on PBS Frontline.

Crunch or Be Credit Crunched Pt 2: An actual letter from "CityBanc"

In Part 1 of "Crunch or be Crunched" we discussed the CARD ACT, what it is and some of the changes we have to look forward to. If you missed it go here.

I wanted to address the letters that the card companies have been sending out. I got this one from "City" and it basically states:

Dear Quest,

We are making changes to your account terms.
To continue to provide our customers with access to credit, we had to adjust our pricing. The terms of your account will be changing.

Changes include:
- increase in the variable APR to 19.99% (currently at 5%) for purchases.
- increase in the variable APR to 29.75 if you default.
- increase in the variable APR to 25.24% for cash advances.
- increase in the transaction fee for balance transfers to 5% of the amount of the balance transfer.
- increase in the transaction fee for cash advances to 5% of the amount of the cash advance.
- changes take effect December 29, 2009
- if you do nothing, you accept the changes

To accept the terms do nothing and earn interest back every month if:
1. Your payments are on time every month.
2. You charge $500 or more in purchases every month.

Earning interest back = a credit on your billing statement equal to 10% of your total interest charges on your PURCHASE balance.


You have the right to Opt Out.
If you do opt out

you can pay down your balance under your current terms. If you opt out, you may use your account under the current terms until the end of your current membership year or the expiration date on your card, whichever is later.

How to opt out:
Call or write "Citybank" by December 28, 2009.

Opting out:
- your account will be closed
- you will not have access to credit
- you must repay the balance under the current terms
- you will not be able to earn rewards
- you will lose any rewards you have accumulated

So what does it all mean? Join us in part 3 as we break it down for you.