| Many successful people have mentors to
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| | paying bills is not high in your
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| guide them in learning the skills that
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| | priorities. Unfortunately, tiny amounts
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| lead to achievement, and I'll do my best
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| | of debt grow with interest and penalties
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| to offer you some critical personal
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| | into seemingly insurmountable mountains
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| finance perspectives. They say that life
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| | of debt; leaving you with loathsome
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| is a school where you learn the lesson
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| | options such as bankruptcy, poor credit,
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| after the test. The same thing applies to
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| | declining lifestyle spending, and added
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| money, but you can't go back in time to
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| | stress that you bring to relationships
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| fix catastrophic financial mistakes that
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| | and work.
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| you have made over time. As long as you
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| | Rule #3 Pay attention to the finances of
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| are alive, you are a player on the field
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| | the people with whom you spend the most
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| of the money-game, and you need to know
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| | time. Whether they are relatives,
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| the basic rules before you get tagged by
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| | friends, or co-workers, these people have
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| the experienced players.
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| | the most impact on your financial life.
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| Rule #1: To earn money from money. The
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| | Do they consistently follow the first two
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| only way to escape becoming a wage slave
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| | rules of the money game? Do they earn
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| for the rest of your life is to set aside
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| | about the same money as you? If the
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| savings. The profit on your savings can
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| | answer to either of those is "no", then I
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| be used to increase your lifestyle
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| | recommend that you start spending a
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| spending, reduce the number of years
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| | little less time with them; and this is
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| until you retire, or allow you to
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| | why. If they don't consistently follow
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| actually have any retirement at all. How
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| | the first two rules, it is unlikely that
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| are you doing so far toward saving and
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| | you will either. You unconsciously model
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| getting it to earn money for you?
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| | the people around you, and the more
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| Every dollar that you spend eliminates
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| | people you are exposed to that don't
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| its ability to earn money for you in the
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| | follow the first two rules, the more
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| future. I am not recommending that you
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| | likely that you will unwittingly follow
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| stop eating at restaurants and going to
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| | them. No one thinks they are 'trying to
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| movies, I am recommending that you use
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| | keep up with the Joneses', but we all do
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| some common sense, like looking at your
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| | it to some extent, and this is the
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| four biggest expenses over the last few
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| | mechanism. On the other hand, if they
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| months and aggressively finding a way to
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| | earn a lot more money than you, you may
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| reduce them.
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| | rack up a lot of debt trying to keep up
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| The biggest obstacle for the first rule
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| | with them (meeting them at their favorite
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| is personal debt of any kind (other than
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| | expensive restaurant, joining them for
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| a mortgage for your home) or a lease of
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| | another expensive vacation, buying a new
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| any kind. Every personal debt that you
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| | car because yours is the junker among all
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| incur reduces your net worth which could
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| | of your friends, etc.) On the other hand,
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| have been working for you over your life
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| | if most of your friends earn a lot less
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| time. Acquiring personal debt is exactly
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| | than you, you will turn into the group's
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| like putting a large hole in your wallet.
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| | banker. For example, you'll find yourself
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| In the money-game, a huge transfer of
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| | in the pattern of putting your credit
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| wealth occurs between the 'Haves' and the
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| | card down to pay for dinner and they'll
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| 'Have-Nots' over the words, "I can afford
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| | all say they'll pay you back later, but
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| that monthly payment." Here is a hint:
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| | 50% of them never do; and they don't mind
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| the "Have-Nots" are the ones who make
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| | taking advantage of you because, after
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| that statement. So please don't ever look
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| | all, you earn a lot more than they do.
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| at whether you can afford a monthly
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| | Or, you and your friends need to pay a
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| payment to make a purchase; pay in cash
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| | deposit for renting a house and they
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| after you've saved for the item.
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| | expect you to write the checks because
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| [Everything that you buy with a
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| | you have the money available and they do
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| 0%-interest payment plan must be
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| | not.
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| over-priced. Behind the scenes, your
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| | The neighborhood that you live in also
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| payment contract is sold to a lender with
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| | creates financial pressure to violate the
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| an interest rate, and retailers don't do
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| | first two financial goals. Your neighbors
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| this without building-in an acceptable
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| | are likely to become friends (and I've
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| profit for themselves. Ask retailers how
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| | already gone over this), but they also
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| much the item will cost if you pay in
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| | influence the size of your home, extent
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| full, and you could get a lower price.]
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| | of your landscaping, price of furniture,
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| Rule #2 Always keep your finances under
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| | and the size of your TV. So pay very
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| control. The first step in losing
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| | close attention to the finances of your
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| financial control and spiraling into debt
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| | neighbors - if you don't like how they
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| and money problems is simply not dealing
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| | are measuring up for first two rules,
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| with personal finances. Prepare for
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| | move somewhere more in alignment with
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| catastrophic financial accidents with
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| | your financial goals. If your family and
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| health, life, disability, and auto
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| | friends, don't measure up financially,
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| insurance. Plan and save before you buy
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| | find some additional people to spend time
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| something. Create a balance sheet for
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| | with that have financial habits that
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| yourself at least once a year to see how
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| | you'd like to emulate and learn from. I
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| you are progressing. Pay every bill on
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| | have friends with a wide range of income,
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| time, or contact the creditor to tell
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| | but it is much more difficult to follow
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| them what is going on and make a partial
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| | the first two money rules when I am with
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| payment. If you are temporarily unable to
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| | the extremes from my own income. You'll
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| handle any of this, ask for some help
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| | just find it easier to reach the next
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| immediately and find someone trustworthy
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| | rule when the peer group that you hang
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| who will do this for you.
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| | out with aligns closer to your economic
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| The most common source of financial
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| | level.
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| trouble is a trauma in your life. This
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| | Rule #4 Accelerate the other three rules:
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| can be a health problem (large expenses
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| | Add to your savings by increasing your
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| or unable to work), an emotional problem
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| | income through advancing your career. It
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| (divorce or loss of loved one), or a
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| | doesn't matter whether you enjoy it; it
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| financial problem (losing a job, cut in
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| | is a means to an end - with the end being
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| pay, relocation, unexpected expenses).
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| | progress toward the fulfillment of rule
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| Whichever the source may be, it leads to
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| | #1. Increase the amount that you save by
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| three emotional problems: the first is
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| | aggressively lowering four of your
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| denial, the second is being overwhelmed,
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| | highest expenses. Start spending time
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| and the third is hopelessness. Denial
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| | with people that talk about investing
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| causes people to not open their mail and
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| | money and are systematically building
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| continue spending as usual, and being
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| | their wealth the fastest. The combination
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| overwhelmed paralyzes people from getting
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| | of all four of these rules will hopefully
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| assistance and dealing with the
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| | offer a next-step for you to take today
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| situation. For example, if you just lost
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| | to start getting more 'wins' in the
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| a loved one, balancing your checkbook and
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| | money-game.
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