The Golden Mailbox
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Good day wealth builders!

      I have submitted this article in response to the earthquakes in the Oregon/ Washington areas. Why would I have any interest in that, and what does it have to do with this forum? There is one major parallel, and that is emergency preparedness. Just like an earthquake or other natural disaster, there are perils that can come into your financial life with almost no warning, and leave you in a sorry state. I will address a few major factors in being prepared to face these challenges. They are:

1) Develop a sound plan
2) Get expert advice
3) Look at history
4) What can you sell?
5) Start today

First, you need to develop a plan. This is so crucial! It is like the old saying, "if you fail to plan, you should plan to fail." To borrow from a previous edition of the newsletter, our life is like a railway. If we don't know which way to go at the switches, we can get somewhere, but where? You need a plan to help you navigate through life's challenges. If you lose your job, what should you do? How much should you invest for retirement? Where should you invest for retirement? When do you plan to retire? What kind of lifestyle do you want at retirement? What kind of lifestyle do you want before retirement? These are all important to your future. The value of having a plan is to know what you are doing now, what you are doing in the future, and most importantly, WHY you are doing what you are doing.

Second, get the advise of an expert. Who is an expert? It's simple.....it's the person who has the answers that you are looking for. If you don't plan to pay for your son or daughter's college education, then you need to find someone who understands that desire. If you are convinced that the stock market is the best place to invest, talk to someone who can advise where to put your money for the returns that you are looking for. Most importantly, find someone who is willing to practice what they preach. That doesn't mean that your advisor has to be independently wealthy, but if someone is selling a product or service that they don't personally own, it MAY be a red flag. There are exceptions, but if someone tells you that they want you to do something that you don't understand, don't do it. Get some education before you make a decision. Once again, the way to get educated is to seek expert advice. To sum up, ask the questions until you hear a great answer; you have then found your teacher.

Third, those who don't learn from the past are doomed to repeat it. Unfortunately, I don't know who first said that, but I heard it from my 10th grade history teacher. It's time to face the facts; this nation's economy is slowing. How do we know this? People are being laid off from their jobs almost daily. Huge corporations are terminating thousands of jobs at a time. The days of the Great American Job are over. You can be cut off at any time. It's not your business. Because of the slowing economy, we need to position ourselves to be on top ASAP. Let's take a look back to the Roaring 20's. People were making more money than ever before, right? Or were they? Actually, the late 20's are much like today. Yes, the average family is making a good income. But what happens to all that money? Here it is folks, Finance 101. What you are about to learn is from "Rich Dad, Poor Dad", by Robert Hiyosaki. In this book we learn that you need to learn the difference between an asset and a liability, and how they relate to income and expenses. Here's the short form of the book: If you lose your job (income) an asset will FEED you; a liability will EAT you! Your home mortgage is not an asset. Sure you may have some equity, but if you have to make a monthly payment on little or no income, you will get eaten. A house is a liability. Deal with it. So, most families are putting a lot of money into a home. Also, we spend too much on frivolous items. Junk debt is usually created by satisfying a want for something you really don't need. Now, to make the comparison to the 20's..........it is the same now as it was then: people are in too much debt, they have investments in places that they don't understand, and they are living high. What happened in the 30's? The Great Depression. I won't get into the details of how people were forced to change when it hit. We know. It could happen again.........soon. I suggest that we combat this in our own homes. I will explain more in item 5.

Fourth, what can you sell? We escaped the Great Depression by producing products to sell. It is what drives our economy. Everyone sells something, whether product or service. I am a skilled carpenter, and I am also a financial analyst. What do I sell? Many things, really. I sell my boss at my carpentry job my time. I work for him, and he pays me. I sell a service. He sells a house. When I work as a financial analyst, I sell products and services. My service is education, but my products are home refinance, life insurance, securities, health care, etc. The question I pose to you is, if we were to enter into very bad times again, what would you be able to sell? I don't want to make anyone think that I am apocalyptic. I just realize that during the Depression, a lot of "professionals" were out of work and had to learn a new trade. Learn all you can about all you can, and you will be fine. If you can specialize in something, that is the key for today. Tomorrow you may need to know something else. Education! Education! Education! The more you know, the more you are worth.

Finally, number five, start today. I have painted a grim picture of the future, and I have done it on purpose. I want to make you have the desire to be financially secure when bad times hit your family. I don't know if we will be in an economic depression soon or ever. I know this; we have to be prepared as soon as possible, just in case. For my family, I want it done yesterday, because I could be in trouble tomorrow. Just as we would practice a fire evacuation at work or how to protect yourself during an earthquake, we should practice living as if we have no income. See how much lifestyle your family can give up to save money. Grow a garden and harvest it. Leave your car home and carpool for a week. Turn down the thermostat. Don't let your family be in foreign territory if you have hard times. You will find that with enough practice, you can be very happy and very comfortable without all the amenities. Still, some people will say, "I'm too old. If it took me 10 years to be financially secure and debt free, I would be 70 years old." I say, How old will you be if you don't? It's time to get our houses in order. I don't mean the structure we live in, I mean it's time to develop a plan to ELIMINATE AND EVADE debt. It's time to start building for tomorrow. I hope you will.

You see, I am in the business of helping people get out of debt. I subscribe to the Godenmailbox newsletter because I am a business owner. I have to work in the construction industry until I build my financial analysis business big enough to hang up my hammer. I get to see, first hand, just how bad the average family's debt/ income ratio is, and how uneducated they are. My crusade is to get people out of debt before a financial disaster gets them. I don't have to be a salesman to do that, do I?

In conclusion, I hope that I have helped you to develop a desire to become prepared for the economic future by planning, getting education, and making the necessary changes in your life to get that done. What's more, it's not just about what security can do for you.............it's what you can do for others when you become free! I want to include a message I received that sums up my feelings pretty well: Hard to believe this was written by a high school student... So well written, and so very true...

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A Columbine High School student wrote:

The paradox of our time in history is that we have taller buildings, but shorter tempers; wider freeways, but narrower viewpoints; we spend more, but have less; we buy more, but enjoy it less. We have bigger houses and smaller families; more conveniences, but less time; we have more degrees, but less sense; more knowledge, but less judgment; more experts, but less solutions; more medicine, but less wellness.

We have multiplied our possessions, but reduced our values. We talk too much, love too seldom, and hate too often. We've learned how to make a living, but not a life; we've added years to life, not life to years.We've been all the way to the moon and back, but have trouble crossing the street to meet the new neighbor. We've conquered outer space, but not inner space; we've cleaned up the air, but polluted the soul; we've split the atom, but not our prejudice. We have higher incomes, but lower morals; we've become long on quantity, but short on quality.

These are the times of tall men, and short character; steep profits, and shallow relationships.These are the times of world peace, but domestic warfare; more leisure, but less fun; more kinds of food, but less nutrition. These are days of two incomes, but more divorce; of fancier houses, but broken homes. It is a time when there is much in the show window and nothing in the stockroom......

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Let's fill our stockrooms and not worry about what people think of our show windows, shall we?

I can be reached at jamesvail@juno.com for answers to your questions. I would especially like to hear if you have a contrary opinion, so we can learn together. I can even advise you on home building, too.

Your friend and fellow wealth builder,
Jim

Jim and Jara Vail are the proud parents of three children. We live in northern Utah. Our dream is to be free together, and since we are in our mid twenties, we should have lots of years to be double-full-time parents, 24-7-365. If you choose to be free, we will see you at the top. If not, we will see you from the top.