The Young Wealth Blogcast by Jason Hartman

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Today, Jason welcomes geopolitical expert Peter Zeihan to the show today to discuss the ongoing war between Russia and Ukraine.

Peter discusses Putin’s motivations, Russia’s demographics and energy exports and if the response from the West will be enough to stop this conflict. What are the short and long term economic and agricultural implications of the Russian invasion? Peter and Jason discuss Russia’s army and nuclear weapons, NATO and America’s involvement.

All royalties from Peter’s book sales between March 1 – May 31 will go to Ukrainian charities to help with medical needs of the refugees and the people who decided to stay behind. www.Zeihan.com

Key Takeaways:

Three major thrusts in Russia’s war against Ukraine: Belarus, continuing attacks on Kiev, southern front
Partisan conflict guerrillas
Argument that Russia doesn’t want Ukraine in NATO doesn’t hold water
Putin’s endgame and will sanctions be effective?
Can Russia afford this war? Russia’s current economic reality
Is Putin just a desperate tyrant who wants to leave a legacy? And will the US intervene directly?
Response from NATO; Russia is seeking a multi step expansion
Most of the Russian soldiers are draftees
China and Taiwan conflict and the economic and agricultural implications: widespread famine
Oil and gas

ABOUT PETER ZEIHAN:

Peter Zeihan is a geopolitical strategist and the founder of the consulting firm Zeihan on Geopolitics. His new book is THE END OF THE WORLD IS JUST THE BEGINNING:

Mapping the Collapse of Globalization (Harper Business; on-sale: June 14, 2022). His clients include energy corporations, financial institutions, business associations, agricultural interests, universities, and the U.S. military. He is the critically acclaimed author of The Accidental Superpower, The Absent Superpower, and Disunited Nations, which have been recommended by Mitt Romney, Fareed Zakaria, and Ian Bremmer. Peter is also a highly sought-after public speaker. He lives in Colorado. For more on Peter Zeihan, visit: https://zeihan.com/. Follow him on Twitter: @PeterZeihan

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Join Jason today as he welcomes Dr. Peter McCullough, MD. Dr. McCullough has over 50 peer-reviewed papers and is an extremely credible person in the medical field.

You can also watch the video NOT on YouTube (having been censored) but on Jason’s other video sites:

JasonHartman.com/Rumble

JasonHartman.com/Bitchute

JasonHartman.com/Odysee

After receiving a bachelor’s degree from Baylor University, Dr. McCullough completed his medical degree as an Alpha Omega Alpha graduate from the University of Texas Southwestern Medical School. He went on to complete his internal medicine residency at the University of Washington, cardiology fellowship including service as Chief Fellow at William Beaumont Hospital, and master’s degree in public health at the University of Michigan. Dr. McCullough is a practicing internist, cardiologist, epidemiologist in Dallas Texas and the Chief Medical Advisor of the Truth for Health Foundation.

Listen in to hear another side of this whole pandemic/vaccine debacle and discover what you can do to protect your liberties!

Follow Dr. Peter McCullough, MD at Twitter @P_McCulloughMD and listen to his podcast America Out Loud: The McCullough Report

Key Takeaways:

0:10 Who is Dr. McCullough

2:15 Misinformation and censorship

3:50 Booster concerns and the vaccine numbers tell the story

5:10 Why the misinformation?

5:40 Data, death and deception- is there any end in sight?

7:53 What is truly important

10:45 A collapsing house of cards

12:32 Numbers are grossly under-reported

17:00 Data: The vaccines are causing great harm

20:15 World Council for Health and post vaccine issues

22:58 Inflammation and post vaccine metrics

25:23 Fertility side effects, tin foil hats and dating sites

29:37 Fracturing of decisions- the wall begins to crumble

33:01 Vaccines don’t work

Watch, subscribe and comment on Jason’s videos on his official YouTube channel: YouTube.com/c/JasonHartmanRealEstate/videos

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JasonHartman.com/Odysee

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The legendary Mark Victor Hansen, best selling author, real estate investor and entrepreneur is Jason's guest today, talking about his new book, Ask!: The Bridge from Your Dreams to Your Destiny. Most people have beautiful dreams deep inside—the things they would like to have, the relationships they’d love to enjoy, and the wellness and well-being that would help them express their best, in every way. But often those dreams lie buried inside us. Hidden by fear or unworthiness or a lack of awareness of what could be. Asking is the only language to which the Universe can deliver a solution, understanding, illumination, or plan.

There are three distinct channels through which we can ask: Ask Yourself, Ask Others and Ask God.

You were born with a destiny. Your job is to discover it. Once you begin to practice the art and science of asking to discover your destiny and start to move toward it, you can manifest innumerable blessings for yourself and others. This isn’t a complicated process; in fact, it’s a simple gift that lies dormant within you. Once you learn to access that gift, everything changes for the better. Ask! will help you access your hidden dreams and reveal them to be recognized and fulfilled in miraculous ways.

You matter. The world needs you to find your destiny and live it. This book is your guide. Start crossing the bridge to your destiny today!

Key Takeaways:

Introducing Mark Victor Hansen
The triangle
Unlocking your potential
Wakes up at 2:58am
Affirmations
Goal versus affirmations
What's holding you back?
The 4 principles
Do everything you desire
Be consistent and a "Master Asker"
The Top 3 favorite books you've published
Final Comments

Mentions:

The Collective Mastermind

AskTheBookClub.com

MarkVictorHansenLibrary.com

Watch, subscribe and comment on Jason’s videos on his official YouTube channel: YouTube.com/c/JasonHartmanRealEstate/videos

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CYA Protect Your Assets, Save Taxes & Estate Planning: JasonHartman.com/Protect

What do Jason’s clients say?: JasonHartmanTestimonials.com

Free Class: Easily get up to $250,000 in funding for real estate, business or anything else: JasonHartman.com/Fund

Call our Investment Counselors at: 1-800-HARTMAN (US) or visit JasonHartman.com

Free white paper on the Hartman Comparison Index™

Guided Visualization for Investors: JasonHartman.com/visualization

Jason’s videos in his other sites:

JasonHartman.com/Rumble

JasonHartman.com/Bitchute

JasonHartman.com/Odysee

Ask!: The Bridge from Your Dreams to Your Destiny

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Not long ago, we worried a lot about the lack of jobs. We talked about rising unemployment rates and worried about students graduating into an economy that had absolutely no jobs to offer. We saw individuals with years of work experience and advanced degrees getting laid off, struggling to find any work.

The problem we seem to be facing now is similar–still troublesome, still limiting. Now we’re left wondering where exactly the wages are. We’ve got the jobs–the labor market is approaching full employment–but wages remain the same. Logically, an increase in the number of jobs should put more pressure on wages, which would then rise. The unemployment rate is below six percent, which is a huge improvement. Unfortunately, earnings growth is nonexistent.It’s a strange occurrence, leading many to question why exactly that’s happening.

Place

When employment studies come out, they’re spread across an entire population. They mean that “overall” employment rates are higher. So what happens if people are getting jobs in one place? It alters the overall statistics. The same is true of wages–while they may be increasing in areas where jobs are growing, they aren’t increasing everywhere. Thus, the numbers are distorted.

There are also a few industries that are experiencing wage growth, but it isn’t universal. While mining and energy are boasting more jobs and higher wages, retail and food service workers have experience little to no wage growth–and they represent a much larger portion of the labor market. There are a lot of jobs being added to industries that lack wage growth, which causes the overall numbers to be down. Jobs in goods-producing industries have grown significantly since the recession, but jobs in service producing industries (the lowest wages and slowests to grow) are also growing.

Discouraged and Part Time Workers

Unemployment statistics obviously don’t account for everything, which makes it hard to get a real grasp on what is actually going on. It leaves us with a class of invisible unemployed people–discouraged and part time workers who desire more hours. Technically, they’re employed, though they likely aren’t working the number of hours they’re hoping to. They’re also potentially working at jobs that are well below their skill and experience level.

The official unemployment rate is around 5.8 percent excludes these folks who are still not making ends meet with their part time hours. In reality, the number of unemployed Americans has declined twice as quickly as the number of discouraged and part time workers. If we break it down, the difference becomes even more clear. In 2002, official unemployment accurately reflected what was happening in the labor force, with numbers far higher than more “invisible” types of unemployment. Since, the spread has lessened. Essentially, unemployment rates are not at all accurate representations of the actual condition of the labor force in America.

It’s also important to note that the workforce is aging–which leads to a difference in visible and invisible employment rates.

A shift in the workforce

Recently, there’s been an increase in work completed by companies in America by workers who are not American. An emphasis on heavy production for low labor costs have changed the way many companies do business. They’ve led to an increase in productivity and a higher profit margin–but they aren’t good for American businesses.

Expansion and hiring abroad have controlled labor costs within the United States and have greatly benefited investors–but wages are not growing.

What it means

Unfortunately, there are stories all across the United States that echo these findings–people earning low wages who are technically employed but whose salaries have failed to keep up with the rising cost of living. Healthcare is more expensive than ever–double what it cost a family only a decade ago. Gas is twice as much today, and higher education has risen from around $7,000 to approximately $17,000. And it’s leading Americans into debt. To be more specific, around $15,000 on the credit card and approximately $32,000 in student loans.

So what do we do to compensate?

If wages fail to expand (no matter the reason) many people are going to struggle because nothing else is getting significantly less expensive. Attempting to make ends meet can be difficult in a flourishing economy and becomes nothing short of a struggle in the aftermath of a recession.

As a member of the workforce, you’ve got a couple different options–and some are easier than others.

Pick up a part time job

A lot of young people are picking up a nontraditional part time job–think writing, photography, social media management. These jobs allow flexibility of schedule, involve some creative thinking, and allow a person to work from home.

These types of positions can be great for supplementing income if you’re struggling–and they can open the door to other things.

Invest

One of the “other” things they make way for are investments, which is what Jason Hartman recommends. While it is never a good idea to gamble your money with risky investments (like stocks), there are other, more permanent, forms of investments that can supplement your income considerably. With the money you make from a temporary extra job, invest in something that isn’t going anywhere. Everyone needs a place to live, so real estate is generally a low risk form of investment. But don’t buy for yourself–consider your investment an income property and find a way to make your money work for you.

Your tenants will pay mortgage and you’ll collect some extra money on top of that. Your investment will make more of the money you’re earning, no matter your wage. While the economy often fluctuates, people will always need a safe, comfortable place to live.

It can be difficult and ultimately frustrating to read the job reports, especially if you’re employed part time and struggle to find full time work. Unfortunately, these types of reports don’t reflect the often devastating reality of unemployment and partial employment. While you may have to work harder for awhile and things may seem grim, keep your chin up–you’ll get through this and be on your way to creating a future of wealth and prosperity.

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The millennial generation is known for a lot of things–tech savviness, high student loan debt, a reluctance to spend forty plus hours a week in a windowless cubicle working for a boss you don’t particularly care for. The millennials and the generations to follow have the entrepreneurial bug and it shows no signs of disappearing.

There’s this idea that working for yourself is the way to go, and ultimately it’s not a bad one. By taking charge of your strengths and interests, you’re responsible for your own future–your own wealth. In a still struggling job market, the idea of being your own boss can be an appealing one.

What many fail to recognize is the responsibility, time, and dedication that such an undertaking requires. If you’re considering starting a business, you’ll need to be a good boss–but first you’ll need to be a good employee. There are a lot of other things you’ll need to be, too–and here’s a look at some of them.

To the responsible go the spoils

Sure, it may sound a little obvious, but you’re going to need to be a highly responsible person to be your own boss. People that are concerned only with marketing themselves will struggle in a boss role–it’s responsibilities first, branding second. Your personal brand isn’t important if your business can’t deliver.

You’re also going to need to be extremely committed. This can mean canceling plans to tend to the needs of your business, giving up weekends, and suffering a less than ample bank account for a few years. You’ve got to believe in your business with your whole heart and be willing to do whatever it takes to make things happen.

You’re naturally optimistic

(Or at least optimistic about your business.) People who are the boss (of themselves and others) have to have a generally positive attitude, even when things aren’t going too well. Other employees, if there are any, may get down about the process–as the owner, you can’t. People are greatly impacted by the attitudes of others, so maintain a good one.

Your company is probably your passion project, but that doesn’t mean it exists to serve your needs–ultimately, you’re serving your customer, whoever they may be. You can’t whine about things that happen to your business, be they fair or unfair. Work to lead by an example of positivity and hard, tireless work.

Similarly, your attitude about how to get ahead should be a positive one. If you’ve got a good idea for a business and you’re willing to work hard to be successful, you want to be the kind of boss (if only for yourself) that succeeds because you are achieving and not bullying. Power may come with your position, but it probably won’t be the thing that you’re after. You’ll listen to the ideas of others, educate yourself, and move forward with optimism and leadership.

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There’s a lot of talk about the rising cost of energy, and you’ve probably heard discussions about solar power. Perhaps you’ve seen solar panels or billboards advocating for one side or the other. But what exactly is solar power? Simply, it’s the conversion of sunlight into electricity.

Concentrated solar power systems rely on lenses and mirrors to narrow sunlight into a small beam, while Photovoltaics convert light into electric current–and both work to produce solar power. While there are still a few things to figure out in the area of solar power, we do know that the cost is falling and the potential for low-carbon energy is increasing.

A brief history

Commercial concentrated solar plants appeared for the first time in the 1980s. Currently the largest solar power plant finds its home in the Mojave Desert, where there’s plenty of sun. Spain, India, and the United States all have a variety of solar power plants producing at relatively large volumes.

In the 1860s, development of solar technologies began when people predicted that there would be a lack of goal. In the early 20th century, the development stopped because of the abundance of coal and petroleum. In the early 70s, there were only six homes in North America that relied on solar power exclusively. The 1973 oil embargo and the 1979 energy crisis brought new attention to the potential of solar energy technology and efforts began to more fully research and produce this form of power.

The early 80s saw oil prices fall, which again limited the growth of solar power. Then, issues with oil and natural gas supplies as well as new discoveries about global warming renewed our excitement about solar power. Since 2000, it has experienced a 40% growth rate and many more plants have been built or are under construction.

A look at the future

So, historically speaking, cheaper fossil fuels mean that we care a little bit less about solar deployment. But that may be about to change–solar power is getting even cheaper and is on track to be the cheapest form of electricity. While you might think about solar power as being something only the wealthy can afford, times are changing.

Solar energy is becoming something that is accessible for everyone, and prices will likely continue to drop. Technology is finally trumping fuel, and it means that efficiency will likely increase. Fossil fuel, on the other hand, is becoming more expensive and less efficient.
Experts predict that, by 2050, solar electricity will be the world’s single largest source of electricity–shocking, since it accounts for just a fraction of one percent at present. Interestingly (and understandably) the small market share that solar energy currently has means that, even with rapid expansion, other forms of energy will not be impacted, at least price-wise–but they’re losing their power, so to speak.

Some cool applications

You may have seen an increasing number of electric vehicles roaming around the streets–but some of them are now being powered by sunlight. By installing solar panels on a rooftop, it is possible to generate enough energy to power a vehicle. The panels aren’t cheap, but they’re increasingly affordable–the vehicles, on the other hand, are pretty pricey.

Expect to pay about $7,200 for a gas-electric hybrid vehicle with solar capabilities than you would for an average car, even with the federal tax credit. It’s an investment, but advocates are confident that its going to pay off.

While we’re not sure how many electric cars are actually being powered by the sun, we can provide a look at how many electric and plug-in cars are being sold–97,563 last year alone in the United States. That number is up 83% from the year before, which is pretty significant.

About 500,000 homes and businesses in the United States have some form of solar installation. To give you an example–enough panels for an average house might be 41, which will cost $51,865. The federal tax credits received bring that number down to $29,205. The panels will produce about 14 megawatt hours of electricity, around 8 of which a family might use. If you add a solar powered car into the mix, you’ll use an extra 5 megawatt hours approximately.

And If you’re not by a charging station, you can use gas too–but your costs are significantly reduced. It is estimated that solar power will pay off for such a family in only six years. Without the car, it will take almost 12 years to pay off.

A few things to consider

As with anything, there are a few things to consider. You’ve got to have a roof for solar panels and it has to be a sunny one. A big clear roof is best–chimneys can be pretty pesky. Also, while costs are significantly down, it’s still a pretty significant investment. You may be able to lease too–and there are a lot of tax credits available for both solar powered homes and solar powered cars.

You’ve got to think more about your location too. While cities may provide a number of electric charging stations for your car, more rural areas may be lacking. There are cars that can suite your needs virtually anywhere though–some offer gasoline backup in case of emergencies and may be a better choice for those in more “out of the way” areas.

Solar power is getting cheaper, and it promises to change the way we consume things going forward. While it might be an initial investment, it promises to make your property more valuable in the long run.

Whether you own your own home, rent from someone else, or manage a variety of income properties, solar paneling is the wave of the future. So far, it seems like a great way to increase the overall value of your home while doing something a little friendlier for the environment.

What do you think? Is solar power the way of the future? Is it going nowhere? Would you consider installing solar paneling to power your house, vehicle, life? Let us know!

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Lottery winners have become collectively famous for their inability to manage their money upon winning. New lotto millionaires misspend and misuse, fail to invest, end up with less money than they started with. The same can be said for NFL athletes–men who beat up their bodies for wealth that frequently ends in bankruptcy or corruption.

Of course, anyone can spend their money poorly–the rules of proper investing cross all levels of wealth. Jason Hartman believes in the value of real estate in building wealth–but what then?

If you’re a student with a part-time job or a professional athlete with a ten year, $80 million contract, there are rules for managing your money, so take note.

Rules for acquiring wealth

Acquiring wealth isn’t easy–very few people strike it rich and many never experience the level of financial comfort they had once dreamed of. But it isn’t impossible–with some hard work, education, and careful investing everyone is capable of financial freedom.

It isn’t about your income

A hefty paycheck is great, certainly–but it isn’t the only factor that determines your ability to build wealth. People who have significant wealth have it because they’ve saved appropriately–no matter how much they’re bringing in. Focus less on the number on that bi-weekly check and more on what you’re doing with it.

And if you’re wisely managing your money and still struggling to save, look at alternative ways to make a couple of bucks. Real estate investing is a great way to passively make income, and collecting rent is a great way to build your personal fortune. While stocks and bonds can be a bit of a gamble, there are plenty of investment opportunities that promise high returns with little risk.

Look past the initial lack of sparkle

We get it–investing doesn’t initially seem as sexy as other ways of making money. You don’t immediately get a big car or a fancy new house. But everything in time. Good investors are patient and don’t spend a lot of time messing around with their investments. They invest in areas that make sense and not just those with a little flash. They spend time reading and researching. They show a level of patience that differentiates them from those that never quite build wealth.

Find the people who fail

It’s interesting to look at people who have done well with their money, but it doesn’t tell you all that much. It’s unlikely that your path to wealth will follow someone else’s very closely, so while it might be enjoyable to attempt to follow in the path of the elite, it is helpful in a limited way.

Instead, look for the people that have done a pretty bad job of managing their money. This way, you work toward avoiding bad choices. You make fewer mistakes because you’re aware of what those mistakes actually are–and you’re going out of your way to make sure they never happen to you. As a beginner, avoiding mistakes will be more beneficial than making amazing choices. Everything in time.

Rules for living with wealth

Once you’ve made a few great choices and acquired wealth, you’ve got to live with it. Don’t worry–it shouldn’t be that hard.

It’s more about the things you can’t see

Wanting to look rich is a poor reason to become wealthy. Resist the initial vanity that comes with money and work toward wealth that isn’t as visible. Lottery winners, athletes, and celebrities live extravagantly because they want to prove their success with expensive items, and many go bankrupt as a result. If you’ve got the stuff but not the cash, how real is your wealth?

Focus on building assets that will last a lifetime–and produce income.

It’s all about perspective

You’ve probably heard that it isn’t good to compare yourself to those around you–while this may be true in some areas of your life, it can be helpful in others. Because wealth in America is different from wealth in India is different from wealth in the UK, it can be useful to look at yourself in comparison with the people immediately around you.

So compare yourself, and then remember that it doesn’t actually matter. If you’re financially free according to your own standards, you’re doing just fine.

Rules for dying with wealth

Maybe you’ll spend your money and maybe you won’t before you pass on–but establishing a means of lifelong wealth is a pretty cool feeling. It requires planning, sure, but much of it relies on your feelings about wealth and even more is all about the attitude.

Learn to do things because YOU want to

Wealthy people think differently, so stop caring what other people are thinking about you. The general public is generally bad with money, so you’re operating on a whole different level. While many people are going for the “get rich quick” scheme, your wealth will take longer to builder. But it will last longer, too.

Remember to educate yourself

Investing isn’t always intuitive, so take the time to learn all you can about the things in which you wish to invest. Remember that education is a continuous, lifelong process. Don’t assume anything, seek advice, and think carefully about your decisions.

The world is an unpredictable place

We get it–a lot of things happen in this crazy world of ours. As such, it’s important to recognize this. Perhaps you’ll work very hard for your money and then lose it in the unpredictable stock market. Perhaps you’ll win the lottery. Jobs are lost, salaries increased, divorces finalized. Life is expensive and unpredictable.

But wise investors are as prepared for these events as one can be. They’re capable of surviving financial crisis because they’ve been smart with their money. Accept the inevitable, but prepare for it too.

By following these rules (and making up a few of your own as you go along) we know that you have the great potential to be successful. Remember that it is okay to make mistakes–as long as you learn from them–and it’s okay to celebrate your victories. Live financially free–and happy investing!

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Jason Hartman has often said that Wall Street is the modern version of organized crime. And he’s not wrong–the things that happen on Wall Street are beyond deplorable. Masquerading as the place where our financial heart beats, where our cash arteries thrive with the life force of money, Wall Street is instead a bit of a hole down which we flush our financial dreams.

Some pretty crazy things have gone on there, but what are the worst among them? Quite honestly, it can be hard to tell–but allow us to provide a look at some of the highlights or, more accurately, low lights.

Richard Fuld

You’ve probably heard Fuld’s name tossed around, and never affectionately. Initially patted on the back for his handling of the sub prime mortgage crisis, Fuld was the longest tenured CEO on all of Wall Street. While other bigwigs were forced to resign, Fuld kept his job though he drastically underestimated the spiraling housing market in the United Stated and the effect it might have on Lehman’s business.

He failed to complete deals that many thought would prevent Lehman Brothers from bankruptcy on the basis that he thought the firm was worth more–it wasn’t. But in 2008, Fuld (along with twelve other Lehman Brothers higher ups) were summoned by the grand jury in connection with three investigations related to securities fraud.

Fuld was nicknamed the “Gorilla” because of his competitiveness and rumors circulated that he was once punched in the face at a company gym. He’s made a lot of Worst CEO of All Time lists and is one of Time magazines top 25 people to blame for the financial crisis.

Jamie Dimon

This J.P. Morgan Chase CEO was head of an extremely mighty bank, though much of his corruptive acts were born of the Federal Reserve. The Fed has twelve regional offices in which officials from that regions banks make up the board of directors. This meant that Jamie Dimon was on the board of the New York Fed, who was supposed to regulate J.P. Morgan.

Is this a conflict of interest? Certainly. Does it happen with regularity? Absolutely. And Jamie Dimon didn’t even have to try very hard to help his bank out, negotiating a bailout package with the New York Fed during his time on the board. On Wall Street, Dimon’s otherwise criminal behavior was likely celebrated.

Phil and Wendy Gramm

Why do alone what you can do with a loving partner? Texas Senator Phil Gramm helped push through the Commodity Futures Modernization Act, which banned federal regulation of poker chips and state enforcement against anti-gambling laws against derivatives trading. Enron was a lobbying force, though they later memorably collapsed under fraudulent derivatives trades.

At the time the bill passed, Wendy Gramm served on the Enron board of directors and, while the company collapsed, Wendy made her share of cash.

Phil left the senate for the vice chairmanship at UBS, a Swiss bank. Since, UBS has been involved in a number of scandals. A lot of folks have gotten in trouble, but Phil and Wendy seem to be doing alright.

Warren Buffett

Not to be confused with Jimmy, the more fun Buffett, Warren was once a spokesperson for many, speaking out about class warfare. Now, he actively lobbies against Wall Street reform. He’s used his wealth to buy friends who will do the same–a Nebraska Senator filibustered on reform for Buffett. Buffett has defended Goldman Sachs–he is, after all, an investor.

In 2008, he put a casual $10 billion into Goldman Sachs. He’s since acknowledged that he did that only because he thought Goldman would be bailed out by the government. He was right many times over and was handsomely rewarded with the help of taxpayers.

Robert Rubin

Robert Rubin was a Goldman Sachs chairman who happened upon the position of Treasury Secretary under President Bill Clinton. Rubin ruled over a time of great deregulation and was a heavy political influencer. He helped repeal Glass Steagall, a law that banned banks from gambling with taxpayer money in securities. In 1998, Citibank merged with Travelers Insurance group, which was illegal–but Rubin repealed the law in 1999. The two companies merged to form Cigigroup.

That year, Rubin hit the road, taking up employment with Citi where he earned a salary of $120 million. When the company collapsed in 2008, they required a bailout. With a terrible public image, Rubin decided to attempt repair by speaking about Social Security and government spending.

Alan Greenspan

Yet another familiar name on the list, Federal Reserve chairman Alan Greenspan was a buddy to Rubin, backing his deregulatory plans and squashing efforts to regulate derivatives. He left office in 2006, when the derivatives market had become a multi-trillion dollar casino. Greenspan accepted a position with PIMCO and later Paulson & Co, a hedge fund. You’ve probably heard their name too–they worked with Goldman Sachs to ruin their own clients through unregulated derivatives.

In the 80s, Greenspan was linked to a series of financial criminals.

Stephen Friedman

When the financial crisis reached it’s peak, around fall of 2008, Stephan Friedman was chairman of the New York Fed and also set on the board of directors at Goldman Sachs. The Fed paid to keep AIG from collapse and then paid AIG’s counter parties 100 cents on the dollar for AIGs bets. Friedman bought 52,600 shares of Goldman stock, which doubled (and then some) his holdings.

The public didn’t find out which banks received money until much later. Friedman made millions of dollars from his Goldman stock (they were the number one beneficiary of the bailout). If he knew it, he’s a criminal and if he didn’t–well, he’s an idiot.

The bottom line

As you can see, corruption runs deep down Wall Street. This list, while long, could be a lot longer–and nothing is changing. While stocks can be a seemingly fun option, you’re putting your money at great risk and you’re dealing with risky people. This kind of investing is little more than a gamble. Investors beware!

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You’ve probably heard a number of children respond to the question—what do you want to be when you grow up? And the answers vary, if only slightly. Many children want to be firefighters or doctors—and still more want to be professional athletes. Whether they’re gunning to drive a racecar or dribble down the court, from an early age, kids want to be professional athletes.

As children, we’re probably more into it because of the cool factor—the very idea that a person could play a sport for a career is astounding (and still is). As adults, the paychecks associated with such a career may make the idea even more appealing. Professional athletes make a ton of money, though they don’t always know what to do with it.

So what athletes are the highest paid in the world?

Floyd Mayweather is the top earner, and he’s been making significant money for over a decade. His fights are among the most popular in history, and he earns as much as $32 million for only one fight. He’s widely considered the most popular boxer in the world and he promotes fights, further driving up his paycheck.

Cristiano Ronaldo is a soccer player and he ranks second overall for athletic earners. He’s pulling in $80 million and is often paid for endorsement deals with major companies—think Samsung and Toyota. Combine that with his soccer salary and he’s making almost as many dollars as he has social media fans (83 million on Facebook).

LeBron James unsurprisingly comes in at number three, earning $72.3 million. His endorsement deals include Nike and McDonalds and his shoe and jerseys sales reflect this popularity. He’s also making a ton of money through Beats by Dre, which he outfitted the entire 2008 US Olympic basketball team in.

Next is Lionel Messi, a soccer player who earns $64.7 million. He’s the face of a franchise, and his paycheck certainly shows it. He’s on his seventh contract in 11 years and is the beneficiary of a lot of sponsor dollars. He’s doing his fair share of endorsements too, which include companies like Adidas and Gillette.

And finally, Kobe Bryant comes in fifth with a casual $61.5 million. He, like Jason Hartman, is an investor, though his product of choice is sports drink BodyArmour. He’s got a super high salary and is working with companies like Nike and Turkish Air. Overall, his jersey is the third best selling in the NBA and he’s raking in the cash.

Of course, these represent extremes. Many and most athletes fall somewhere in the middle.

And what is it they’re doing with their money?

As you might have guessed, the money of the rich and famous is passed through a lot of hands. They’ve got someone to invest it, someone responsible for paying the bills, an accountant monitoring everything, and perhaps a secondary accountant for just in case. Oh, and there’s at least one lawyer to make sure everything is on the level. The money of famous athletes is juggled between a lot of people and places, to say the least. That is, if they’re smart, they are enlisting the help of financial professionals. But that isn’t always the case.

For many athletes, particularly the young and reckless, this sudden wealth can be a bit of a burden. There’s so much money to be had, which is a lot of pressure for someone young and newly wealthy. Some money goes to bad investments or perhaps worse, casual and excessive spending.

It is a shame—those with access to a lot of easy money squander it so quickly, leaving themselves penniless for later years. Estimates indicate that as many as 35% of professional athletes end up penniless as the result of poor money management. And, while some of the spending is undoubtedly related to ego, a lot of the poor decisions can be linked to a simple lack of financial education.

Part of the problem is in the way professional athletes are asked to view the world. They’re required to focus on the immediate future, the task in front of them at this moment. As they sacrifice their bodies on the playing field, they sacrifice their bank accounts in much the same way.

While some organizations have put forth efforts to increase the financial literacy of their players, the struggle is ongoing. Classes and seminars are certainly a step in the right direction, though the solution isn’t a quick one.

If you’re curious about what it is these athletes are spending all of their money on, we’ve got a list. First, vehicles. Fancy cars that cost upwards of $80,000 portray the image athletes hope to relay to their fans. They’re also big, luxurious cars meant to accommodate the tall and muscly.

They’re also buying stereo equipment for both their homes and cars, satellite dishes, and—you guessed it—clothes. Professional sports have also become more fashionable, and all of those fancy clothes come at a high cost. From sweat suits to ties, athletes make up a large portion of the clientele at high-end clothing stores.

They’re also, if they’re recently out of college, looking to buy at least one home, and then they’ve got to furnish it.

So it is easy to see where a financial professional might come in handy, if only to act as a keeper and distributor of money. Because many athletes come from lower or middle class backgrounds, this type of assistance can be so vital. We are all pretty good about living within our means—some of our means are just more significant than others.

The average salary for MLB, NFL, and NBA players is $507,600, but that takes into account extreme highs and mediocre salaries. About 30% will go to income tax and the rest will go to a variety of other expenses—hopefully, they are the right ones.

How would you spend all of that professional athlete money? We’d recommend some smart investments in something like real estate!

photo credit: Artur Potosi via photopin cc

Read more from Young Wealth: Unemployment, Wage Growth, and Making Ends Meet

The Lesson of Pacific Property Assets

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We hear about it all the time–scams aimed at swindling money from innocent people. Especially targeted are the elderly, who may not be (though this is certainly changing) as familiar with technology, making them easier to take advantage of. This is happening across the country–no city, large or small, is immune to this troubling behavior.

John J. Packard, of Long Beach is accused of this type of conniving behavior. He’s the co-founder of a failed apartment investment firm and will be pleading guilty to federal fraud charges. The US Attorney’s Office claims that hundreds of investors, mostly elderly, were scammed out of nearly $91 million by Packard and Pacific Property Assets–a Ponzi scheme.

What exactly is a Ponzi scheme?

While you’ve probably heard the term, you might not know much about a Ponzi scheme, except that it’s generally a bad idea to get involved in one and something worth staying far away from. You’re not wrong–but there is a little more to it than that.

A Ponzi scheme is an investment operation in which an individual or organization pays returns to investors fraudulently by using new capital paid to the company by other new investors instead of paying from profit earned by the company.

So why would anyone become involved with such a company? It all comes down to money. Companies operating Ponzi schemes offer higher returns than can be found with other companies or types of investments. Jason Hartman often says that if it sounds too good to be true, it probably is–wise investment advice, no matter your industry.

The charges

Victims have been notified that he will plead guilty to charges, though the case prosecutor declined to comment, maintaining that the documents relevant to the hearing were all under seal. There are no details about whether or not Packard will get a plea deal should he testify as a witness against former Pacific Property Assets CEO Michael Stewart, who has relocated to Arizona.

Federal courts have charged the pair with 16 counts of fraud, including mail, bank, and bankruptcy fraud. Initially following their February arrests, both pleaded not guilty. Now, they’re set to go to trial on April 14, and Steward could be sentenced to up to 320 years in prison.

A timeline

Packard and Steward created their business in the late 90s to requisition investments to purchase, refurbish, and operate apartment buildings in Long Beach, Riverside, and Phoenix. But in spring of 2009, the firm essentially collapsed in on itself, taking with it the money of around 700 investors. The losses, which include mortgages on Pacific Property Assets buildings, amount to nearly $115 million.

Pacific Property Assets solicited new investments for something they called an “Opportunity Fund”, which promised to pay up to 30 percent interest before the default in May of 2009. Steward and Packard, the ever dynamic duo, looked for new investors even after the company went bankrupt, which did not sit kindly with investors.

The firm is said to have been in financial struggle since 2005, though they claimed to have been making a profit. It is thought that both Steward and Packard were using the money of their investors to pay the interest payments of existing investors–until the money ran out. Of course, they also managed to, with company funds, purchase an interest in a Newport Beach yacht and pay themselves a casual $750,000 per year. Attorneys also accuse the duo of spending additional millions on a variety of things.

How to avoid schemers and scams

Making any sort of investment can be scary given the prevalence of wrongdoing in the industry, but investments should be exciting! Knowing how to protect yourself against companies that are looking to take advantage of you is crucial in this situation.

The key to investing is in understanding a few quick commandments, brought to you by real estate expert Jason Hartman.

Become Educated

The best way to make smart investment choices and avoid being scammed is to educate yourself. Be your own best advisor by seeking out information that makes you the expert on your own finances.

Seek Guidance

While you can get a lot of information by educating yourself, you’ll eventually need to look for a little bit of expertise. At this point, find the help of a professional you trust who will be with you for the long term. Build a relationship of trust and find someone who will produce results.

Stay in Control

The place where most investors encounter trouble is when they turn over control to someone else. Someone else should never make decisions for you–always be a direct investor.

Remain prudent

Before making any decision, you’ll want to keep your long term goals in mind for investments. Set an investment plan and then follow it to ensure that you’re still on track. Think about your long and short term goals for wealth, your risk tolerance, and your own financial situation.

Do not gamble

If you’re looking for ways to get rich quickly, you’re more likely to get scammed–see the above story for an example of what we’re talking about. Don’t flip houses, speculate, or take other risks.

Always diversify

The least risky portfolios are those that are diverse, both in type of investment and location. Remember that real estate is always a local investment–but you can be local in a lot of different places!

Be area agnostic

Don’t limit yourself only to areas you are familiar with or have preconceived ideas about. Look at opportunities everywhere.

Use borrowed money

If you use a lot of your own money, it isn’t free to do other things. Borrowed money is repaid by tenants. In this way, borrowed money works for you and reduces personal risk.

Identify universal needs

Real estate is a great investment (particularly residential real estate) because everyone needs a place to live. Look for investments that share these qualities and address universal needs.

Purchase tax favored assets

We get it–taxes aren’t the most interesting things to deal with. But get excited about taxes and see how much money you’ll be able to save when you own income properties.

Follow these commandments and prepare yourself for a life of solid investments and a serious lack of scams.

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If you participate in social media, you’ve likely seen the memes that put millennials under the microscope. Statements like they’re uncommitted or they spend too much time indoors have a way of downplaying the types of jobs and job market they’re being presented with. Then again, social media has a way of taking everything to one extreme or another.

In actuality, millennials do change jobs a lot. But it isn’t because they’re perpetual job hoppers without the ability to see anything through. Instead, they’re career-minded individuals with an eye for the future. When they’re moving jobs, they’re doing it for about 25% more money—every time. And what to do with this extra money? Well, Jason Hartman recommends investing in real estate.

By moving from job to job, millennials are developing a diverse skill set that will serve them well in the future. The reality of the job market has been that it is difficult to immediately get a high paying job out of college—so millennials are taking lower paying jobs for shorter periods of time. An education simply isn’t enough. Employers are seeking employees with demonstrated on the job skills, even if that job doesn’t require a college degree.

Wages have stagnated across the board, increasing only in health care. There are pay cuts everywhere and annual pay is about $10,000 less than what we saw ten years ago. It’s causing mimllennials to stick with jobs (when they’re able) and to switch when they’ve developed the skills (and when an opportunity opens up). Because of this, growth requires them to switch jobs if they hope to advance.

Baby boomers had pensions that encouraged them to stay with one particular company for a long (or even life) time. Now, we aren’t seeing that and millennials risk becoming more financially at risk than their parents were years ago. And there are ways to combat that (becoming financially literate, exploring investment opportunities, saving), but the risk is real.

Overall, millennials are more educated than generations before them but they’re more likely to live in poverty and be unemployed. Some attribute this to their need to find a job that corresponds with what they are passionate about—but it has more to do with the massive student loan debt they’ve been saddled with. So, we’re seeing millennials who, despite popular opinion, are focusing less on passions and more on the money they’re struggling to make.

As the job market begins to turn around and hiring is on the rise, millennials are also increasing a drop in unemployment numbers. There are, and not just among millennials, more people changing jobs, which is a positive sign for the job market. For millennials who wish to develop their skillset by moving jobs, there are a few things to keep in mind.

First, changing companies too frequently can inhibit growth because it doesn’t allow employees to develop connections and meaningful relationships with colleagues. If you leave before you have time to complete a large project, you may not have as good of a reference, making it more difficult for you to move up in your career. As a sort of compromise, you can always ask to push back your start date a month or so—it give you time to wrap up any projects you might be working on while allowing you to develop a new set of skills.

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So what athletes are the highest paid in the world?

Of course, these represent extremes. Many and most athletes fall somewhere in the middle.

And what is it they’re doing with their money?

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Like rats leaving the Titanic, billionaires’ Warren Buffett, John Paulson, and George Soros have been quietly divesting their portfolio of of stocks. The question is why? The stock market is in the midst of a historic rally, real estate prices have been showing signs of strength in some areas, and unemployment, if not exactly improving, at least seems to have stabilized somewhat. So why the rush for these financial titans to get out of stocks? Is it possible they don’t know what they’re doing?

Ha! Possible but not likely. The more probable reason is that they’re paying attention to something that the majority of investing schlubs haven’t noticed yet. In fact, there is a specific bit of research from a well-respected source that indicates the stock market is set to correct itself soon, perhaps by as much as 90%. Before you dismiss the number as ludicrous, consider the source. This prediction comes from Robert Wiedemer, the man who correctly called the most recent housing market collapse and published his research in a book called America’s Bubble Economy.

A variety of financial experts, drawn from sources like Dow Jones, Standard & Poor’s, and Goldman Sachs, believe we should be paying close attention to Weidemer’s newest book, Aftershock. While Weidemer acknowledges that a drop of 90% is a worst-case scenario, he believes some sort of large drop is almost guaranteed.

Here’s why. By the way, followers of Jason Hartman’s predictions will find the following reasoning very familiar. Jason has been saying the same thing for years.

The problem starts with the Federal Reserve’s continuing quest to stimulate the economy by printing massive amounts of money. Weidemer is quoted on MoneyNews.com: “These funds haven’t made it into the markets and the economy yet. But it is a mathematical certainty that once the dam breaks, and this money passes through the reserves and hits the markets, inflation will surge. Once you hit 10% inflation, 10-year Treasury bonds lose about half their value. And by 20%, any value is all but gone. Interest rates will increase dramatically at this point, and that will cause real estate values to collapse. And the stock market will collapse as a consequence of these other problems.”

The logical result of the preceding scenario is that businesses will stop expanding and begin either laying off workers or at least freeze hiring, actions which will result in lower profit margins and lower dividends. No self respecting billionaire will accept these eventualities on his holdings. That’s why the big boys are dumping stocks. You might be wise to assess whether you should do the same.

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A property management scam is when someone claiming to be a property manager implements a purposeful scheme to deceive and defraud you out of money. As heinous as that thought is, Jason Hartman reminds you that, as a landlord, you should keep in mind that there is a difference between the incompetence displayed by a legitimate manager who is simply bad at his job and the illegality perpetrated by a scam artist.

While there are many different types of scams circulating in the property management industry, one of the most effective is also one of the simplest. Here’s how it works. Your newly hired “property manager” saturates the local media in order to draw the most interest in renting your unit. Anyone who has ever just missed landing a great apartment knows the frustration of multiple people vying for the same property. What if, rather than renting to a single tenant, the property manager carefully spaced out the showing and move-in schedule so that he could sell the space to five different tenants, collecting five different sets of first and last months’ rent in the process?

Obviously, this is completely unethical and illegal but this “property manager” might easily put $8,000 to $10,000 in his pocket over the course of a few hours and skip town before either the landlord or his new tribe of unrelated tenants knows what hit them. It’s kind of icky to think about, but the only way to beat this kind of scam is to think like a scammer and don’t give him the opportunity to take advantage of

you.

As a landlord, the easiest way to avoid being scammed by a fake property manager is to take the time to conduct a background check. It’s actually not hard to establish a management company’s bona fides, and if the individual you want to check out seems evasive, be very concerned! Research state and county records to make sure the company is legitimate. Ask to see identification and then search local government websites and the Better Business Bureau to insure there’s nothing fishy associated with that name.

The bottom line is that any honest property manager who has been in business for even a short length of time will have some sort of track record that can be easily located. If nothing else, ask for references. While it’s a fact of life that every business has to start somewhere, it’s not your responsibility to risk your own money and reputation giving a brand new guy or gal a try. Let someone else be the guinea pig. You should only entrust your rental properties to a proven property manager.

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Irish playwright George Bernard Shaw claimed that youth was wasted on the young. When it comes to finances, whether or not a young investor appreciates the advantages of having logged fewer years on planet earth is irrelevant. What matters is that a savvy twenty-something can build a substantially larger portfolio over time simply on the basis of recognizing his youth and allowing that to dictate an investment strategy. Here are three reasons it’s great to be young.

Take More risks!
Don’t interpret this to mean that you should put every last nickel to your name in a penny stock company founded by Bernie Madoff’s secret cousin, because we’re not saying that. What we are saying is that an investor in his or her mid 20’s has, theoretically, about 40 years until retirement. When you don’t need to touch your money for four decades, it affords the luxury of being able to create a portfolio with a slightly riskier mix of assets. Normal market volatility should not be as much of a factor because you have time to recover from a sharp downtown.

Compounding Really is a Miracle
We’ve said it before and we’re never going to stop saying it. The miracle of compound interest is the single greatest financial tool/strategy ever invented. You could be an absolute moron in every other aspect of your life, but if you simply contribute $5,000 every year (beginning at age 25) to an IRA that earns, on average, 7 percent annually, you will arrive at age 70 with more than $1.5 million waiting for you. Start at age 35 and the age 70 lump sum drops to about $800,000. Put off investing until age 40 and you’re looking at $546, 891. The lesson here is threefold:

Start investing early
Be regular
Reap the fruits of your wisdom with a more awesome retirement lifestyle

Create a Financial Plan
The truth is you probably won’t reach your financial goals by simply wandering through life. You’ve got to create a plan that includes:

Contributing enough to receive any employer matching 401(k) contributions that might be available.
Getting rid of high-interest debt – anything above 9 percent is killing you economically. It might even be a good idea to extinguish the higher interest rate debt with extra savings.
Contributing the maximum amount to your workplace 401(k) and then looking into opening a personal IRA like a Roth.

Last but not least, set up automatic investment plans to reach other financial goals. While working your way through these three steps, don’t forget to tell George Bernard Shaw to stick his words where the sun don’t shine. While youth may or may not be wasted on the young, fewer candles on the birthday cake could mean much more money down the road.

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In a perfect world, we would all have the following critical financial ideas pounded into our heads at the earliest possible age, preferably before 10. However, the reality of parenting and the educational system is that few of us are exposed to proper thinking about money early, if ever. Young Wealth is here to rectify the situation so, in the likely event your parents forget to cram the financial wisdom of the world down your throat – here it is. Don’t say you were never told.

1. It takes money to make money: Teens may be taken aback when the Bank of Mom and Dad eventually turns off the spigot and the realization sets in that, ughh, it’s time to think about working for your money. It’s a tough lesson but that’s how the cookie crumbles. Unless you’re a trust fund kid, Disney tween star, or plan to invent the next world conquering computer operating system, you’re going to have to slave for your wages. That’s okay. Learn the value of work and how much you don’t want to do it the rest of life. Therein might be the motivation to save and invest!

2. Set a Goal: It’s tough to get anywhere in life without setting a goal. It could be as simple as buying a new iPod or more lofty like retiring before the age of 30. Either way, learning to set goals is an invaluable part of finances. Set a price tag and time frame and let your industriousness take care of the details.

3. Income is a good thing: The reality of life is that the majority of us are going to have to go to work every day to make ends meet. The sooner we internalize and accept that fact, the better. The important idea here is to learn to make the connection between effort and achieving the goal. Plus there’s the small matter of being able to afford to put food on the table and gasoline in the car.

4. Motivation means reward: To accomplish anything of substance in life requires motivation. That’s where goals and rewards come in. Though our first goals might be a new bicycle or Wii, eventually we move on to more substantive life accomplishments like retirement or a new car. That’s when the lessons of childhood pay off in a big way. Motivation takes you to the reward, which provides more motivation for the next goal and an even bigger reward. Rinse and repeat.

These financial lessons might seem simplistic to those out of college or in the work world but, if you find yourself experiencing money hardships, maybe it’s time to go back to these very simple financial lessons and re-apply them to your life. It’s normally the basic, simple ideas that carry the most power.

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Conventional wisdom says, rightly so, that commodity investing is a risky pursuit. The capacity for a new investor to get badly burned is higher than in the stock market. Generally speaking, the commodity market is more volatile than stocks. Driven to a large extent by speculator demand, prices can rise and fall in the blink of an eye on news of natural disasters around the world, poor crop, great crops, or even for no particular reason that anyone can discern.

In short, danger, Will Robinson; very much danger!

So how can we at Young Wealth suggest a method of low risk commodity investing and still sleep at night with a clear conscience? The trick is to, “Unlearn what you have learned,” as Yoda would say, not that we suggest basing critical financial decisions on the unhinged ravings of a fictional Jedi Master. What we’re talking about is an approach sometimes called Packaged Commodity Investing, which is another word for real estate.

You might have never thought of it this way but basic commodities are the building blocks of the houses we live in: lumber, copper, steel, gold. The advantage to investing in commodities already pre-packaged into a structure is that you’ve taken an investment with no real useful value – are you ever going to actually take delivery of that pork belly contract – and transform them into a product (home) that everyone uses and demands. Humans need water, food, and shelter. By investing in real estate, then renting it out, you provide one of the most sought after commodities around – shelter.

And think of this, at the time of purchase you have locked in the cost of the commodities that went into construction of your investment forever, or at least a good 50 years if the thing was built stoutly. So while your cost is fixed, a rising demand for commodities causes the value of your house to continuously increase while, at the same time, you create cash flow from the investment in the form of tenant rent.

A pork belly contract is made up of 40,000 lbs worth of 12-18 lb frozen pork bellies. If you can figure out a profitable way to rent those things out to create cash flow and still retain ownership, please let us know. All investment requires some risk, or it wouldn’t be investing, but a conservative approach to commodity investing in the form of real estate has the potential to return a heck of a lot of return for your dollar.

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If you’re a young investor who has been following the Young Wealth blog for a while now, you might have noticed a slight intemperate tone, at times, when the subject of the stock market is broached. For several reasons, which we may get into at a later date, our two plus decades of investing experience has revealed gaping holes in what used to be Wall Street’s unassailable position as Middle America’s primary path to building wealth.

Suffice it for now to say the stock market, driven by irrational speculation, amounts to little more than taking a spin at the roulette wheel in Vegas except it’s not as much fun. About now, you might be saying to yourself, “Well, where does that leave me, the young investor, most pious and pompous editor? If not the stock market, then what?”

Good question and it just so happens we have an answer for you. It’s called income property and it so happens to be the most powerful method we know of to create wealth in America today. We’d like to present, as an example, a single family residential property in Atlanta that would make an excellent starter property for your portfolio.

The purchase price for this piece of real estate is $102,000. If a young investor has decent credit and stable employment, a lender will likely ask for a 20% down payment, which works out to a little over $20,000. The home is red brick, built in 1999, located in a nice neighborhood, and will be fully rehabbed and rent ready for the new owner. Rent in the area is about $1,150 monthly – we’ve run the numbers because this is the kind of deal we love to jump on – and the cash flow AFTER the mortgage and all other expenses have been paid is about $151 monthly. No one here will try to convince you that the amount is a fortune because it’s not but cash flow is only part of the range of benefits. In addition, you’re getting your mortgage paid off by someone else (the tenant), while your investment appreciates over time.

The icing on top of the cake is that this income property will be owned outright by you at the end of the mortgage term. Considering you only put down 20% to buy the thing and someone made payments on it, the result is same as if you bought the property outright for twenty cents on the dollar. If you are one of the fortunate few to read through this short description and latch onto the possibilities, congratulations, we’ll be seeing you on Lifestyles of the Rich and Famous before it’s all over.

By the way, don’t try this strategy on Wall Street; it doesn’t work.

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Contrary to popular belief, the Small Administration (SBA), a federal government agency, does not normally make loans directly to small businesses. Instead, the SBA acts as a guarantor against risk for banks and other lenders to offer loan funds by agreeing to pay back some of the loan if the borrower defaults. While the SBA is an excellent source of general information about starting or expanding your business, if money is what you seek, go directly to your local bank or lender to start the process. They will have the forms you need.

There are three separate programs a small business owner might consider if he finds himself in need of working capital, each designed to address a separate situation. In no particular order, they are:

1. Basic 7(a) Loan Program: This is the one to look for if you want to start a small business or already have one but need general purpose money to keep the ball rolling. This is the most used loan program available that is backed by the SBA. Qualified borrowers receive a quick turnaround decision on their application, normally within 36 hours.

2. CDC 504 Program: This loan program is for established, growing businesses who need a steady source of long-term, fixed rate financing for acquisition or improvement of major assets like land, buildings, or who find themselves in need of major equipment for expansion. As a Certified Development Company (CDC), if you qualify for financial assistance under the CDC Loan Program, the SBA will help you locate private, non-profit foundations looking to provide money to improve a community’s economic base.

3. Microloan Program: The SBA microloan program operates a bit differently and does actually provide funds indirectly to qualified small businesses, up to a limit of $35,000. Small or start-up businesses wishing to access this program still should approach their local lender because all approval decisions are made at the local level – SBA merely provides money for local lenders to distribute.

There you have it. A nice, simple description of what the Small Business Administration does, and more importantly, does not do. As you can see, your time would be better spent approaching a local bank who works with the SBA rather than wasted chasing your tail in circles trying to tap into the agency directly.

Prospective small business owners – good luck!

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It’s getting more expensive to own a checking account these days. Young Wealth wonders if the sudden rash of fees and penalties is a surreptitious last ditch effort by banks to recover from years’ worth of hideously poor decision making in regard to mortgage loans? In this Twilight Zone-esque drama known as the sub-prime mortgage crisis, we’re reluctant to say anything is impossible, but recent data released by Bankrate.com makes us wonder exactly how far the industry can go before citizens rise up in revolt? There are plenty of good mattresses out there that could serve as a cash repository also.

Prime offenders for fee-hiking are, as one might reasonably guess, ATM convenience fees and overdraft “protection,” though we wonder how the lowly consumer manages to differentiate between protection and a gouge. You know, a hard working bank’s gotta make a living somehow.

First up, out-of-network costs for using an ATM. By now, you’ve probably realized that accessing cash on the road is not as simple as inserting your card into any old machine and drawing out a few bucks. Sorry, but no pay means no play. The average fee to use an ATM that isn’t hosted by your local bank was $2.33 this year, up five percent from 2009. Meanwhile, the average overdraft charge for not having enough money in the account to cover a check or withdrawal is over $30! And what used to be all the rage in banking commercials, free checking, is slowly going the way of the brontosaurus, with institutions that offer the service dropping from 76% to 65% over the course of the last twelve months.

Since the bank really doesn’t care if you hold your breath until they change their fee structure, you’re going to need to hit upon another alternative. Save big on ATM fees by using the “cash back” option when you’re shopping. Most grocery stores and other big box retailers offer the service at no cost. Remembering this simple workaround solution could save you a few hundred dollars a year in out-of-network fees. As far as overdrawing your account; the only answer we have to that one is keep a close eye on your balance and simply don’t exceed it. If you’ve ever lost track of your checking account and added up the steady line of thirty dollar charges at the end of the month, you realize that this sort of checkbook balancing scheme can go wrong in a hurry.

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If you happen to be one of the umpteen million Americans who have constructed a nice, fat mountain of debt due to non-existent budgeting and a life devoted to impulse shopping, welcome to the club. You’re not alone. Resolving to get your finances under control is not simply a matter of doing what’s right – debt can effect areas of your life you might not have realized like:

The ability to get a cell phone
The ability to rent an apartment
Getting hired for a great job

Let’s take #2 (apartment) and see how it plays out. With the high rate of deadbeat tenants, landlords have realized that it saves them headaches to try and weed out problem rentals before they ever hand over a set of keys. A stable rental history helps but what if you are just out of college and have no past rentals to fall back on? The sort of landlord who gladly takes your one month security deposit and welcomes you into his complex might be the one you should have second thoughts about.

These days it’s become the normal course of events to have a credit check run before you can rent that great apartment you really want. Guess what? Bad or spotty credit might mean you either are politely told, “Thanks, but no thanks,” or find yourself faced with an outrageous security deposit that would make Bill Gates blanch. Remember, there is more than one way to keep out the “undesirables.”

The point of this exercise is to remind you that it’s never a good idea to let debt accumulate until one day you snap out of your walking coma and realize you have a serious problem on your hands. Luckily, getting out of debt is not complicated. It’s hard for many people but the steps themselves are infinitely easy.

1. Stop spending and start paying off debt. Remind yourself that the easy way to get rich is stop spending money. The same goes for reducing debt. Stop spending money and apply it to debt instead.

2. Honest assessment. Take a good long look at your finances and admit to yourself what got you into trouble. Like an alcoholic, the first step is admitting that a problem exists. Often spending is done for emotional reasons and we’re of the opinion that retail therapy is hardly ever a good idea.

3. Set goals. Even modest goals help you get started. Pick the smallest debt you have and throw everything at it with furious vengeance until it is gone. Now pick the new smallest debt and repeat the process.

Before long you’re going to be what they refer to in technical terms as debt free and that’s a great place place to inhabit.

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All we can say to the reports that Americans appear to be regaining control of their previously out-of-control credit card spending habits is…no…way. Way! It’s crazy but true. Apparently the recession is a better financial education than everything else put together. Thanks, Mr. President. Without you, we’d still be spending money we didn’t have and wondering how we were going to pay the bill later? Wait a second – that strategy is still being used by someone, somewhere. We just…just…can’t…quite…remember…who.

Get back to you on that one.

But for the good news, Consumer Reports brings us amazing news that the percentage of people carrying more than $10,000 in credit card debt shrunk from 30% last year to 23% today. The median balance is also down by $1,100 over the same time period. It’s official. We’re using our cards less and even reducing debt loads. These are significant numbers that might even be said to reflect a basic change in attitude toward the plastic devil cards. The woefully inadequate financial education in public schools insures that younger Americans will leave high school and college with not even a smidgin of common sense related to how freaking fast a credit card will eat your lunch and leave you wondering what the heck just happened.

Why the sudden restraint among credit card users? Well, we could point to new regulations that force parents to co-sign for card holders younger than 21, or how the terms of payback must be spelled out more explicitly than before. All that is poppycock. People are people. No smarter or dumber. The truth is a healthy dose of fear did it. We’ve got no sense that this recession thing is going to end anyone time soon and self-preservation mode just kicked on. Nothing says financial education like kick in the proverbial teeth.

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When it comes to investing strategies, better to stick with the age old wisdom than jump on the newest flash-in-the-pan idea. New and different doesn’t automatically equate to better. After you’ve made your money, then it’s okay to put a small chunk on a crazy new scheme. Better yet, take it to Vegas, have some real fun, and maybe get a free lobster dinner.

The first exchange that approximated today’s stock market appeared in Belgium in 1531. Since then, successful practitioners of the art and science of the stock trade can tell you a few things. Whether you listen or, better yet, incorporate them into your own investing strategies remains to be seen. The following simple statements are the wisdom of the ages when it comes to participating in financial markets.

Time is Money: This means invest early and hang on for a long time. According to research by the Wharton School of Business, since 1802 a broad market portfolio would never have lost money for a stretch longer than 17 years. The short version – buy and hold.

Diversify: So utterly boring to contemplate but so intrinsically true. Sectors and entire industries rise and fall. So far, the only sure bet has been that the United States economy will continue to grow, sometimes fitfully and only after wicked pullbacks but always moving forward. If you guess wrong on this one, your portfolio will be the least of your concerns.

Gambling is not investing: Young whippersnappers sometimes think they have a gift for stock picking. Actually it’s called being delusional. Old timers know the market goes where it wants to go. Smart money hangs on for the ride.

There you have it. Nearly five hundred years of market wisdom wrapped up in three neat little investing strategies. Now go forth and conquer the world. Of course, there’s more to it than this but at least you’re facing in the right direction now.

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The phrase “Write about what you know.” is sometimes credited to Mark Twain but there doesn’t seem to be hard proof of that. And it doesn’t really matter who actually said it or even if the advice is valid but perhaps investors can learn something about how to build wealth by transferring the sentiment to the financial markets. If you happen to be an expert on a particular industry, why not take advantage of that fact?

Let’s look at the stock market, specifically the video game industry, though this idea works anywhere. Some factors that contribute to a company’s worthiness are easy for anyone to track – revenue, profit, growth. But then there are the intangibles that come along with intimate knowledge or interest. Maybe you’re a huge gamer with knowledge that can work to your advantage to build wealth through savvy stock picks.

Here’s a real world example. Take Two (TTWO) and Activision-Blizzard (ATVI) are competing NASDAQ companies who sell video games. At a cursory glance, they seem about even for potential investment. Maybe their side-by-side numbers look dead equal. However, what if you, as a hard core gaming addict, knew that Take Two was about to release another in it’s uber-popular series of games called Grand Theft Auto (GTA). GTA sales have always been through the roof and no one would expect this time to be any different.

You know about GTA’s imminent release down to the hour because you’re wet-your-pants ready and have already pre-ordered it from Amazon. That simple bit of “insider” knowledge could make the difference in how much wealth you build off a gaming industry investment. In this instance, Take Two clearly becomes a better bet at this point. So, when it comes time to pick stocks, what are you interested in?

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Are you familiar with the name Elon Musk? The Potomac Institute for Policy Studies is and gave Musk their 2010 Navigator Award for propelling advancement in the fields of science or engineering. Let this be motivation to the young investor – Musk is only 41 years old. What has the guy done? Quite a bit. He founded a little company by the name of PayPal, the online payment service used by everyone and their grandmother.

Next up was his role as founder of the private space travel company, SpaceX, and the electric vehicle company, Tesla Motors. Mr. Musk also created his own charitable foundation, the Musk Foundation, that supports education and research in the fields of space exploration, pediatric care, and renewable power. So far, his life has been a testament to the power of thinking outside the box when it comes to generating a return on investment. This young investor saw the potential in finding profitable ideas in answering the problems he observed in the world around him.

A multi-millionaire by the age of 31, he wasn’t content to sit around on a beach the rest of his life, basking in the bliss of the next margarita. Nope, it’s always been onward and upward for this young investor and, perhaps more than any other attribute, shows us what is possible if you have enough energy and thirst for conquering the unknown.

Way to go, Elon. Excellent job. We’re excited to see what he’s going to get into next. Time travel? A non-aging pill? Whatever it turns out to be, we’re betting it will make a splash.

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The renowned physicist, Albert Einstein, may or may not have given the world the following quote: “Compound interest is the most powerful force in the universe.” Whether or not Mr. Relativity spoke those words or someone attributed them to him, investing young and doing just that will go a long ways toward building the kind of wealth that financial independence is made of.

The concept of compound interest is simple. No matter the asset you invest in, take the profit every year and, rather than running out to buy an iPad and drawer full of video games, turn around and plow it right back into the investment. Let’s assume an anemic 5% rate of return. After 5 years an investment of $20,000 has grown to $25, 525. After 10 years $32,577. After 20 years $53,065. And that’s without ever adding another cent to the pot above what you’re making in profit from the initial investment.

If you decided to add an additional $1,000 per year over that two decade span of time, you’d end up with $85,000 for your $40,000 investment. Pretty darn good, even assuming a terrible rate of return and very little follow up investing. The idea of compounding interest is why you need to start investing young. Most people spend their lives working hard for their money. The smart ones figure out how to make their money work hard for them. The magic of compounding interest is one way to go about it.

Another benefit to the reinvesting of dividends strategy is that you pay no tax on the dividends when you do so and most brokers will do it at no charge. They want more money in your account because it means more for them to skim with fees. If investing young can be this good with mediocre assets like stocks, imagine the possibilities with a standout asset like real estate.

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In these stormy economic times, you might be called upon by a friend in crisis for a loan. Young Wealth would normally say “Bad idea!” at the top of our voices and remind you that doing so would qualify as dicey money management on your part. There is, however, one situation where we don’t think this kind of loan is risky. We’ll get into that later.

It’s not that loaning money to a friend is always a bad idea. After all, you may have a better idea about their propensity (or lack of) for paying off debt incurred. Actually, you should put on your banker’s hat when considering the request. Maybe it’s a loan to get out of debt, cover the month’s rent or open a business. Maybe it’s your friend’s money management skills that should be called into question. Do you believe it’s a one time occurrence or is there evidence of a continuing pattern?

If it’s a pattern, you might not want to get involved. After all, it’s easy to tell a little white lie and claim financial exhaustion yourself from “unexpected” expenses. But it’s long been an American tradition to turn to friends and family when economic times get tough. It’s part of the informal economy. Do a good favor and it might be returned down the road.

The downside is that there is a distinct possibility the money will never be paid back. Keeping that in mind, we suggest that any money you decide to loan to friends or family should be considered a gift. Don’t expect to ever get it back and don’t get touchy if you never see it again. Better not to lose a friendship over a little money. If you can’t afford to never have it paid back, you can’t afford to loan it in the first place. That’s real money management.

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In case your school forgot to include this in a financial education lesson plan, we’ll introduce COLA to you right now. COLA is an acronym that stands for Cost Of Living Adjustment and is an annual figure calculated by the government that measures how much inflation has gone up in the past year. But we don’t care about inflation, right? It doesn’t really have an effect on anything. Wrong. It has everything to do with your purchasing power and ability to create wealth through investing.

Assume that each year brings at least some amount of inflation, which causes a decrease in your purchasing power. For every rise in inflation, there is a corresponding drop in the value of a dollar. That’s why the idea of the COLA is critical to those living on fixed incomes, like retirees. But how does the COLA apply to a young whippersnapper just out of school?

Pay attention. Here comes another financial education lesson plan that was probably neglected by your school. It has to do with investments. At the end of the year, when you add up your total return on investment, it had better be higher than the COLA or you’re not making any money at all. Here’s an example. The government reports an annual increase in inflation that is usually around 5%, a laughable number, in our humble opinion. We believe it’s more like 10% or maybe even higher.

The point is that if you have a mutual fund that performs at a decent rate and returns about 10% per year, you’re only breaking even. Yes, the number of dollars in your account might be increasing but, in terms of purchasing power, unless you’re making more than the real inflation rate of 10%, you’re not coming out ahead. You’re actually losing money by investing, even if it shows a profit on paper.

What you need is an investment asset that profits in the face of inflation. Don’t think it exists? Wrong. Real estate investors who employ an income property strategy correctly could see annual returns in the 20% to 30% range, a high enough level to overcome inflation.

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We’re not going to recommend a single stock, bond, mutual fund, or commodity to you today but this topic still is critical to getting your youth investment off to a rousing start. Beginning investors often get tied up trying to analyze and understand 100 different stocks all at once. Nothing wrong with this if you have plenty of free time but at Young Wealth we assume you do have other interests in life besides permanently burying your nose in the Wall Street Journal.

We’re talking concepts here. In almost any educational endeavor, get the concepts right and the rest follows naturally. The concept at hand is universal demand. Learn it, live it, put it in your youth investment tool box for safekeeping. Universal demand can be defined as those items humans can’t live without. Notice we didn’t say “don’t want to live without.” It’s true you (and 12 kazillion other people) don’t want to do without an iPad but the truth is life will continue in the absence of one.

Examples of true universal demand items are food, water, shelter, clothing. These things will always be in high, consistent demand because we must have them. Perhaps food is the biggest universal demand item of all. Unfortunately, to invest in it requires you buy stock from Wall Street or a commodity exchange brokerage. Recent years have shown that the stock market is one of the least effective mechanisms through which to invest. Learn it now or learn it later. Now is preferable. Too much of your money is siphoned away through administrative fees and commissions.

Let’s look elsewhere to invest in a universal demand product. We suggest you consider shelter for your youth investment dollar, specifically shelter in the form of houses which can be rented to tenants, or what is called in the industry “income properties.” Great appreciation plus cash flow. Don’t try that with the stock market. With income properties you also cut out the middleman and administrative fees.

Trust us, the concept of universal demand can make you a lot of money.

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How important is it that you make money young? If you claim it’s very important, you’re in luck because if you want to do it, there are predictable ways to make it happen. The trouble we usually run into when teaching the younger generation about building wealth in the early years is a lack of focus and tendency to indulge in rampant consumerism. Don’t get us wrong – we’re all for consuming. Unfortunately, too many young (and old) workers get a credit card and that’s all she wrote.

The end result is bad debt, which multiplies like rabbits at an all night sex party. What do you get? Too many bunnies!

But if you really want to make money young, the first thing you should do is forget about the stock market. An unhealthy obsession with this second rate class of asset investments will not serve you well in the long term. Pay close attention here. No matter what the shrieking, babbling heads say on television and radio, the stock market is not where Americans go to make fortunes any more. At least not on the investment side of things. You need to get yourself on the other side of the desk.

There is still certainly wealth to be created if you start a massive Ponzi Scheme (Bernie Madoff), employ criminal accounting techniques (Enron), or simply become a broker for a firm that reimburses you quite well to funnel clients into their recommendations, churning accounts with superfluous trades that earn extra commissions for – lucky you – the broker.

See? You can make money young!

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Ah, to be young and insanely rich. You can do it, you know, no matter how crappy the current economy is. The truth is that young wealth can be built while you’re…uh…still young. This website’s founder and namesake, Jason Hartman, is a perfect example, having become a real estate millionaire several times over while still in his twenties.

Today let’s cut through the feel good about yourself junk and learn how to get rich while you’re still young:

Invest early and often

Skip Wall Street and focus on real estate

Income producing properties are the key

That’s really all you need to know to reach the land of young wealth. Start in your early twenties and you, like Jason, should be into millionaire status before you reach 30. The basic strategy works like this. Use whatever equity you can find to finance income producing properties tied to long-term, fixed-rate mortgages, putting as little actual money into the deal as you can. While cash flow from tenants pays your monthly note, the effect of inflation actually erodes the amount of the loan you have to pay back, in real terms.

After about seven years, when property values have doubled, refinance your properties using the same strategy, employing a cash out principle to buy even more income producers. At this point, you are standing firmly in the land of young wealth and at the head of a mini real estate empire.

Enjoy life, young millionaire. It’s only going to get better.

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Trust Facebook with your life and the cost might be that primo job you just landed. Seriously, dudes and dudettes – it could happen. Lately, it has been a well publicized fact that the social media giant’s almost non-existent security standards are akin to advertising your most intimate personal information on the moon in 100 mile high blinking red letters.

The question becomes this: Do you want EVERYTHING from your FB account to be available to EVERYONE on planet Earth? When we say everyone, that includes your boss. And co-workers. And next door neighbor.

Security consultant Ron Bowes used a simple piece of code to troll 100 million unprotected FB personal profiles and posted the results on BitTorrent for all to see. Even though it was only a publicity stunt and there was nothing illegal about the action, it served the purpose of illustrating exactly how porous FB is. Or “was” if you choose to believe the FB moguls’ claim that everything has been tightened up and it’s all hunky dory now.

The important part is this – a prospective boss could quickly scan your profile to read your posts, learn your hobbies, religion, and whatever else you were injudicious enough to post there. Think they might make a snap judgment about your employability if your favorite relaxation involves midget bowling, and you are a hardcore scientologist? Hey, right or wrong, people have lost great jobs by being a little too free and easy with their personal junk.

Don’t lose your first great job to stupidity and a porous social media interface. The very first thing you should do to prevent this is set your FaceBook settings so that un-registered users like Mr. Bowes can’t have surf your stuff. And give a really long thought to not being so damn personal all the time.

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One of the fundamental decisions a young investor must make is whether they are a trader or an investor. Most people tend toward one or the other, and choosing one certainly doesn’t preclude dabbling in the other, but it’s good to know which side you primarily come down on. The difference is simple.

A trader plans a strategy around short term market fluctuations. He might jump in and out of positions several times (or several dozen times) each day. The trader believes there is money to be made in the ebb and flow of the market day. Most traders prefer to be flat at the closing bell, which means they don’t hold open positions over night.

The investor looks at longer term market direction – months, years, decades – and employs a buy and hold strategy that, like the trader, takes advantage of a trend. The difference being that this trend takes much longer to play out. The investor does not concern himself with the daily hiccups that pull prices back and forth. They prefer to step back, look for quality positions, and add to them regularly.

One could extend this analogy to real estate. A trader would be a person who buys undervalued houses and flips them quickly for profit. An investor is one who acquires a property and holds onto it, allowing for long term price appreciation to create wealth. The young investor will likely be drawn to one side or the other and it makes sense to pay attention to your preference. Trading/investing against your natural style could make you a little crazy. Here’s an idea from Young Wealth. If you can’t make up your mind, try this – put most of your portfolio in investments and keep a small percentage, say 10%, to play short term trends. This is one way to satisfy both desires.

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If you want to build wealth and keep it, you’re going to have to get serious about financial management, and better sooner than later. What is financial management? It sounds like a fuddy duddy term that only old dudes in three-piece suits should be bothering with. Wrong! Unless you like the idea of working the drive-thru window at McDonalds the rest of your life and burning through every penny as soon as you make it – you need to learn about financial management.

Let’s define what we’re talking about. Financial management means taking the actions necessary to insure that your personal cash flow remains positive. That sounds like a good thing, right? Positive cash flow is an idea we all should be able to get behind. Most of us have experienced the opposite at some point in our lives. Maintaining positive cash flow is possible at any age but the sooner you learn it, the more likely you are to have extra cash to throw around as you get older.

Financial management is about managing risk. Risk is what can destroy your assets. Protecting them should be job number one. And wandering blithely through life waiting for the risks to wave a red flag normally doesn’t work. You’re going to need the knowledge to identify them, which comes only with education and experience. Experience – well that kind of unrolls at it’s own pace. Education is something you can accelerate on your own. When should you be in stocks? Bonds? Real estate? How can you protect assets from the tax man? These are all questions that you answer on a day-to-day basis as you go about the financial management of your growing portfolio.

We’re not big fans of turning all this over to a financial planner. That’s just adding another set of fingers to the mix and another chance for a screw-up. Manage your own finances and watch the wealth rise.

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Maybe you’ve been studying stocks for a while now but, as a young investor, find it difficult to pull the trigger and risk real money in the marketplace. Never fear, your friends at Young Wealth have an idea that might help.

The trick is how to get a close approximation to live trading conditions without losing real money. Currency market brokers had this figured out a long time ago and now we’ve begun to notice stock brokers taking the cue – practice accounts are what we’re talking about.

A practice account with an online broker is exactly what it sounds like. You register at no charge, open an account, and are immersed in a real world computer screen with charts, graphs, news, live streaming quotes. There’s money in your account even though but it’s not real. This is how to simulate trading and not lose a penny.

In almost any endeavor, practice makes perfect, or at least a lot better than you were before you started practice. With a simulated trading account you can execute trades, lose or gain money, test strategies, or just find out if you’re ready for the big time of making trades with real money.

We think it’s a great idea for a young investor to use his practice account as long as it takes to prove himself a profitable trader. If you can’t trade profitably on a practice account, why the heck would you want to move on to a real one? Be patient. Sooner or later, you’ll get there.

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We’ve been hearing the economic and laid-off worker horror stories for a while now, and most of it is true, but what if you happen to be young money, one of those fortunate few twenty-somethings with a great job and nice income. You want to invest it somewhere besides that train wreck of a stock market.

The housing market has crashed and burned in many areas, or so says conventional wisdom. Well, the Young Wealth Team is here to tell you this is the very time you should be looking to invest in real estate. We’re not talking about randomly buying any old house in any old bottomed out market. Chances are you should stay away from those.

What you should be looking for is single family residential real estate that you can rent out. If you haven’t heard it before, let us be the first to tell you, there is no overall “housing market.” Like politics, all housing markets are local and there are plenty of them offering great investments for young money ready to invest right now.

Our sister company, Platinum Properties Investor Network, finds real estate deals every day and shares them at no cost via our free membership services. If you’re interested in learning how to uncover safe, profitable property deals on your own, listen to the latest episode of Jason Hartman’s Creating Wealth Show to learn how we are finding properties right now in places like Indianapolis, projected to earn 23% annually. You’re not going to beat that burying your cash in mayonnaise jars in the back yard.

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At the start of your working life, it may be hard to imagine where exactly you’re going to pry loose a few dollars to invest when you’re living paycheck to paycheck and barely paying all the bills. True, it’s not easy. Nobody promised that but clever money management skills can go a long ways towards finding extra cash to put to work building wealth for later.

The secret to finding money to invest in a tight budget? Learn to save first. Even if you make a modest salary, say $30,000 and live in an expensive city, you can develop the habit of saving by practice, practice, practice. It’s just like exercise. Get used to doing it and soon it will be second nature. Don’t start with the intention of putting back some crazy amount that equals half your income.

That’s a recipe for failure.

Pick a sane amount and stick to it, even if it’s only $25 a month. Soon you’ll realize that you can create a savings account, and there are all kinds of nifty uses for that extra money. Save for a new car, house, or…INVESTING! See how easy that little bit of money management can be? You may be living paycheck to paycheck now but it doesn’t have to be forever. Change your financial future by learning how to save.

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At some point in this walk through life we begin to think about the impact our decisions have on the next generation, namely, our kids. If you happen to start a family early, it’s critical to teach the fundamentals of financial literacy from the start. In this culture of buy now and pay later or never, cultivating a sense of financial responsibility in the little ones is one of the most important roles of a parent.

After all, do you want them to grow up and spend money they don’t have, like the government? Or worse, start printing it when they run out, once more, like the government? The obvious answers to these questions are “No!” and “Hell, no!” The temptation for financial irresponsibility is even greater if you happen to have a moderate amount of wealth and can afford to spend on non-essentials.

So what are you going to do about it?

Our first suggestion is set limits. Teach them to understand the difference between needs and wants. Other ideas are:

1. Discuss how money works in an age-appropriate way. Explain the bills and everyday expenses your money pays for.

2. Get a piggybank and have your child divide the contents into spending and saving. This helps instill the idea of long term planning. Don’t get frustrated if it takes them a while to catch on. Some reach the age of ten before internalizing the idea.

3. Playing is learning. Even pre-schoolers enjoy a game of shop that simulates a retail environment complete with play money and receipts.

Hopefully, by now you get the idea. The goal is to send your kids out into the real world with a solid grasp of how being a good money steward will improve their lives forever.

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Is your junior or senior year in college a good time to begin investing? At Young Wealth, we’d say “Absolutely!” That assumes your bad debt is paid off first. Yes, we realize we’re beginning to sound like a broken record with this “Pay off your debt!” mantra. We don’t get paid for saying it but we do believe it’s that important. It’s a critical component of your financial education. The part you’re likely NOT to get in school.

Think of it this way. Most of your consumer debt is attached to a high interest rate. What’s the point in making a nice investment return when the new profit is running out the back door to pay for debt? Your profit is already taking a hit from inflation and taxes. Tack on debt payments and it’s the very definition of spinning your wheels.

Be patient, grasshopper. The time for investing will come. Pay off debt first, however long that takes. Throw every spare dime and penny at it until the debt beast is dead, dead, dead. Then it will be time to crank up the investments – stocks, bonds, mutual funds, real estate – go crazy with it all, though we would seriously suggest you visit http://www.JasonHartman.com to learn how we make money with our investments no matter what the economy or inflation is doing.

Use the time spent eliminating debt to learn how to invest so you’ll be ready to hit the ground running when the time arrives.

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Winning the investment game is not for the faint of heart but it is critical to realize early on the necessity of embracing the idea that you MUST invest in some way in order to build wealth. Choose the stock market (probably your worst option), start a small business, or invest in real estate (your best choice to succeed). When it comes to investing, the water is murky and current strong, and we don’t want you to get eaten by the first shark that swims your way.

To succeed, you’ve got to stay alive, financially speaking of course. Before you sink your first dollar into an investment, consider the following three factors that have derailed many a young investor career. Watch out for these sharks and maybe you’ll stay alive long enough to actually make some money.

1.Transaction costs – it’s easy to overlook these when perusing a mutual fund prospectus or calling your broker and telling him to “Sell, sell, sell!” or “Buy, buy, buy!” Pay attention to the transaction costs. If it’s too much, go somewhere else. If all your profit is being eaten up by the broker’s cut, find another broker.

2.Your broker is a crook – sad but true. The stories are out there…Enron…Bernie Madoff. Stay alert for crooks in the financial business because they will always be there. Don’t be the next poor sap to see his nest egg disappear in a poof of chicanery.

3.Your broker is incompetent – crooked dealing isn’t the only way to lose money. Your broker could be straight as an arrow but simply not cut out for the job. Maybe he’s in the wrong field. Maybe he doesn’t have the IQ for the gig. The lesson is don’t trust your future to an obvious incompetent.

While we can’t give you an entire financial education in one blog, keep your eyes open for these three pitfalls and your chances for success just increased astronomically.

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There’s a reason people look to franchises when thoughts of entrepreneurship enter their head. Owning a franchise removes much of the guesswork from starting a business. The company provides you with a blueprint to success. They’ve already done the hard work of testing and tweaking to see what works. The problem is that buying into most franchises can require big time money.

Take McDonald’s for instance. This ubiquitous burger chain won’t even talk to you unless you have $250,000 cash on hand. As in cash – borrowed collateral doesn’t count. So do you have to already have money to build wealth?

Not quite.

There are plenty of tried and true franchises, many of them geared toward providing services, that allow you to buy in with $9,000 or less. Here are a few:

1.Bonus Building Care – this commercial cleaning company has been franchising since 1996 and now has over 2,400 franchises. For as little as $9,000 you can work out of your home and even have the option to purchase an exclusive territory.

2.Breath Testers USA – this brilliant little idea franchises machines for you to place in bars, restaurants, anywhere people might have a drink. For a small fee, they can blow in it and find out their blood alcohol content before driving. Great idea? We think so. This buy-in opportunity also costs about $9,000.

3.Global M.A.R.S – this is a great franchise if you’re interested in making cars look good and really don’t have much money to spend. Offer customers a quick, economical way to remove scratches, dings, burns, or any other discoloration on paint, plastic, leather, vinyl, velour, metal, carpet, or glass on their car while they wait. Buy in for $500, a price that includes comprehensive support and full training.

There are literally dozens of other low cost franchise opportunities. We suggest you use your good friend Google to find them.

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There’s more than one way to reach the land of financial independence. Investing is a popular method and can work well, especially if you focus on buying rental properties. But others exit school with an entrepreneurial bent, ready to start their own business.

At Young Wealth, we say “Go get ‘em!” Entrepreneurs are the lifeblood of capitalism. But starting a business isn’t something you should do off-the-cuff or on whim. The most creative, high-flying imagineers will do better with a of basic grounding in reality and elbow grease applied to creating a solid business plan.

Why do you need a business plan and what is it for anyway?

In our point of view, a business plan accomplishes three critical tasks.

1.Communication – a well-developed business plan must communicate the potential for success of the idea to people with investment capital, bank loan officers, possible business partners, and prospective employees.

2.Management – consider your business plan to be a roadmap, with every possible contingency planned for. This living document will allow you to track, monitor, and evaluate your progress along the route. Include milestones, even if they have to be adapted along the way.

3.Planning – one of the business plan’s most valuable attributes is in planning. Map out in advance roadblocks and obstacles you foresee arising. Maybe they will come to pass, maybe they won’t. Certainly you can’t predict the future but beginning with a blueprint will put you that much farther along the path to profitable success.

Does a small business need a business plan too? Absolutely! Plan it out. Write it down. Make a million dollars or two.

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It’s hard to build wealth when your credit is screwed up beyond belief. If you find yourself tormented by debtors, welcome to the club. It’s become a way of life for many young adults. How does it happen? Buy a car, take a vacation, put a killer stereo in your car – put it on plastic. These are a few ways to find yourself dodging dinnertime phone calls from angry collection agents. You might be able to put up with it for a while but they’ll wear you down eventually because they…will…never…stop.

Until you finally cry “Uncle!” and begin looking at your credit repair options.

If there’s one thing you can count on in America, it’s that scammers find desperate people like Tiger Woods finds women who aren’t his wife. Don’t let your overwhelming desire to make your credit problems disappear in a POOF of smoke affect your good judgment. The following are warning signs that you’re about to be snookered:

1.The credit repair company wants you to pay money before they do anything. This is against the Credit Repair Organizations Act.

2.The company “forgets” to tell you your rights and what you can do yourself for free.

3.The company recommends you not contact the Big Three national credit reporting companies directly.

4.The company tells you they can get rid of most (or all) negative credit information, even if it’s accurate and current.

5.The company suggests you create a new identity by using an Employee Identification Number rather than your Social Security Number.

At Young Wealth, we’d much rather see you visit the Federal Trade Commission website here to learn legitimate ways to repair your credit.

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Many good business ideas revolve around the idea of tapping into a market that never goes away. That’s why we like investing in residential income properties so much. No matter what else, people want a place to lay their head at night. That makes it a universal demand. Another universal demand you might consider when pondering business ideas is something relating to kids. Adults tend to engage in the activity that creates them on a regular basis. We’re going to go out on a limb and predict that men and women aren’t going to be giving it up any time soon.

You can figure there will always be a market for things relating to kids like:

Day care
Personal tutoring
Secondhand clothing
Toy kiosk
Instructional classes
Targeted amusement parks/restaurants

The first thing to consider is whether or not you actually can stand to be around the little rug rats all day every day. Some people can’t. If this describes you, recognize that fact and don’t even try. For the rest, a bit of research into the possibilities might be in order. The kid industry is not going anywhere and moms and dads tend to open up the wallet when it comes to satisfying little Johnny or Jane’s every mad whim.

It’s something to think about.

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A rising minimum wage is good, right?

Everybody working at or near the bottom of the payment scale likes to think government enforced upward pressure on wages is a good thing. In a perfect world, where small businesses had unlimited resources, that might be true. Unfortunately, that’s not the real world. For several reasons, a higher federally mandated minimum wage is likely to make it harder for young workers’ to find a job.

Why?

It costs a lot of money for an employer to hire, train, and then pay a new worker. Being forced to pay a higher minimum wage makes it more likely they will decide to go with the current work force in place and implement a hiring freeze. It’s easier to toss more work at current workers than bring in new ones. As minimum wage rises, it makes jobs more attractive to retired or out of work people with experience and a proven track record of work. They migrate into the job force and snatch positions from young workers.

Don’t believe us?

Before the last minimum wage increase in July 2009, the rate was $6.55 an hour and teen unemployment was 24.3%. Three months later, with a federal wage of $7.55 in place, teen joblessness has risen to 27.6%, and this was AFTER the Obama administration assured us the worst of the recession had passed.

Minimum wage does not make sense for you.

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You’ve got a handful of prospectus’s from your favorite mutual fund companies, and it’s time to sit down and give them a critical read. As a newbie investor, you don’t want to screw things up from the start. When you get to the part that discusses expense ratios, don’t raise your eyebrow and skip past it. This is a big deal and could radically change your bottom line return in the years and decades to come.

The first thing to know is that all funds have expense ratios. The second thing to know is that they are not all created equal. An expense ratio is a percentage of your portfolio that goes back to the mutual fund every year to cover their (mis)management and administrative fees. When you invest in stock funds, you’re not going to avoid this fee. Sorry. Whether you make or lose money, you pay the fee. That’s why we prefer real estate, though we won’t complain too loudly if you want to dip your toes in an index mutual fund first.

Just keep this in mind. Expense ratios vary from 0.75% to 1.75%. Here are some numbers to put it in perspective. If you invested $5,000 in a fund with a 2% expense ratio for five years and averaged 10% return, you would pay the fund a total of $642 over that time frame. While that’s not a bloodcurdling amount, it’s a chunk – a chunk of your money that you handed over to someone else.

That’s why we like the direct investment model of real estate. Cut out the middleman and keep all the money for yourself. Regardless of how you choose to invest, you now know what an expense ratio is.

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Here’s an easy way to score some free cash, especially if you’re opening a bank account for the first time. As you might guess, banks are scrambling for your business and some of them will even pay a bonus to get it. The process is incredibly simple. Just open up a savings or checking account, sometimes a Certificate of Deposit will count, and wait for 90 days or whatever other period of time imposed by the bank and, voila, a free cash deposit will be made into your account ranging from $125 to a $1,000 or more.

Keep in mind there are restrictions!

A typical scenario is this: Be a first time applicant to open a checking account at Bank X. Minimum deposit is $100. You have to make at least five debit card transactions and keep the account in good standing for at least 90 days. Do all this and Bank X pays you $125 in cold, hard cash.

Obviously, the details regarding such an arrangement can vary greatly depending upon the bank you’re using. National chains tend to all have some sort of comparable program but read the fine print closely. If you have to jump through too many hoops for a small return, maybe it’s not worth it. A little bird told us that Internet banks have the best deals when it comes to cash back accounts.

The secret is do your research and don’t go with a bank you have a bad feeling about just because they’re giving you free money. Ultimately, you’re in it for the long haul, so choose a suitable partner.

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We love entrepreneurial thinking and startup business ideas. It’s the American Dream. If you’re one of those creative types itching to get out of the regimentation of traditional schooling spread your wings, we say – beware! Not because starting your own business is a bad idea, but because sneak attack factors can derail your grand plans faster than we can say, “I told you so.”

Here are a few dangers in particular.

1.Family Concerns – Like it or not, the whole family is going to be involved in your business venture to one extent or another. Keep them in the loop. Let them help if they want. Lay out beforehand the time drain and sacrifices that you will have to make, especially in the early days. This should help nip the “I didn’t know it was going to take THIS much time” whining in the bud.

2.Isolation – When burning the startup candle at both ends, it’s easy to let business and personal relationships suffer. Remember there is a world outside your eternally churning brain. Take time out to participate in it every once in while. And don’t let your networking skills lie fallow. Networking could turn out to be the make it or break it factor in your venture.

3.Don’t network too much – Having just said you need to maintain your business network relationships, that doesn’t entail hitting the golf links every sunny afternoon at 2 pm with a friend. It’s easy to murder productivity. There will be time for that later, after the business is up and running and you hire a competent manager. Then go golfing all you want.

There are, of course, other spots of quicksand to be wary of along the way. Ultimately, it comes down to the fact that a new business needs time, attention, and loving care. Don’t abandon it to the vagaries of the world too soon or you might kill it.

Now get out there and start something!

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When you’re a young gun, full of vim and vigor, just out of school, looking for a job is part of the game. You figure you’ll find one sooner or later. But what about those crazy unemployment numbers? The Atlantic Monthly claims there are six people looking for each single job that opens. Without intervention by the federal government, millions of people will have run out of unemployment benefits within a few months, which opens up yet another can of worms – can/should the government be throwing money they don’t have in that direction?

Everyone agrees unemployment is bad but here are some specific reasons why.

1.Outsourcing of white collar jobs to countries where labor is cheaper causes U.S. Unemployment to keep climbing.

2.Higher depression rates, which leads to drinking, drugs, marital stress, poor nutrition and health.

3.Anti-immigrant feelings towards those who will do the job for less money.

4.Residents of high unemployment neighborhoods may turn to illegal ventures (drugs and crime) for income.

5.Less happiness at work because you’re afraid to leave the job no matter how much it sucks.

And the biggest result of high unemployment might be less tax money for states. Think about it. With so many people out of work, less comes into the coffers via income tax, and less is spent by consumers to be collected on the back end of sales tax. This thing is a vicious cycle. That’s why politicians talk incessantly about creating new jobs with every election cycle. It matters to us all that as many people as possible can find gainful work.

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Chances are that even the most clueless among us have at least heard the name of uber-investor, Warren Buffett. If you’ve had a few too many margaritas, you might be thinking about Jimmy, who makes a pretty good living himself singing songs about warm places and palm trees. Back to Warren though, who is generally credited as perhaps the most successful investor today.

When Warren Buffett took control of the company Berkshire Hathaway in 1964, its market capitalization was $22 million. 35 years later that has grown to $115 billion. Obviously, Mr. Buffett knows a little about creating wealth through the stock market but where did he learn his tricks?

Turns out that Buffett’s mentor was a man by the name of Benjamin Graham, who was working as a partner in a brokerage when the stock market crash and subsequent Great Depression hit in the 1920′s and 1930′s. He lost all his personal fortune but went on to gain it back and learned a little about investing and human nature in the process. Graham’s skills at financial analysis were superlative. At the age of 25 he was already earning $600,000 yearly – keep in mind this was in early 20th century dollars.

The important thing to remember about Benjamin Graham is that he and David Dodd wrote a book called Security Analysis, in which the pair proposed their belief that investing takes research, training, and experience to be successful, and that speculating was nothing more than irrational gambling.

Though written in 1934, the fundamental wisdom holds rock solid today. You would be well served to begin your investing career by finding a copy of this financial masterpiece.

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There is no better time in life for investing than immediately out of college or a few years into your career. The numbers will never be more in your favor. Time is on your side and simple arithmetic can make you rich. You have two decades to save for the kids college fund and probably four decades until you retire.

Yes, we said the “R” word. Retirement sounds so old and settled to young ears full of, well, young stuff. When you hit middle age, wouldn’t it be nice to do so with a stuffed portfolio and not still scrounging coin slots at the local laundromat for beer money?

The beauty about investing early is you don’t have to rely on spectacular returns to retire comfortably. It only takes $7,400 invested annually (beginning at age 20) at 10% to make you a millionaire in 40 years. Actually it will net you $3.26 million, which considering the under-reported government inflation rate of 3%, would allow you to live comfortably in retirement.

If you wait 10 years to start (age 30) you’re going to have to invest $20,000 annually at 10% to hit the same mark by retirement. Lesson? Save early!

The wild card in all this is the 10% yearly return on investment. We can show you a reliable, low-risk way to do better. Conventional wisdom tells you to head for the stock market. That’s a sucker’s bet. When you’re ready to learn how the quietly rich invest, head over to www.JasonHartman.com. You don’t need huge amounts of cash but you do need to be able to unlearn much of what passes for investment advice today.

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Recent graduates are notorious for not having a freakin’ clue where their money goes. If you’re going to thwart financial disaster in the adult world, you need to have a budgeting plan. Seriously, don’t even think about investing until you get a handle on this subject.

It’s not hard. Just do it.

The first part of any budgeting process is to figure out where your money is going right now. Keep track of every penny you spend for a month. Hit Burger King (or the fast food franchise of your choosing) twice a week and you’re coughing up over $500 a year. Toss in a couple of daily sodas from the vending machine and you’re looking at another $300 annually. Geez, you could have taken a modest vacation with that coin. Or maybe began saving for investments.

It doesn’t mean you’re a bad person; just that you have a few bad habits to break. Tracking your expenses for a month will give you an idea of how to handle routine expenses but you can’t ignore the unexpected. It’s a lack of planning for the sudden expense out of left field that will waylay your financial plans.

Here are some items to think about: car repairs, medical costs, holidays and birthdays, weddings and baby showers, emergency travel, office parties, broken appliances, job loss, and much, much more.

In the coming days and months we’ll revisit basic budgeting. It’s that important. For now, get busy with your 30 days of logging expenses.

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Americans like to flaunt real or imaginary social/financial status with cars. To prove this fact of life takes no more effort than a drive through the “other” side of town – chances are you’ll find driveway after driveway displaying tricked out, ramped up, and chromed over examples of vehicles that seem out of touch with the surroundings.

As a newbie to the professional world, get over that silliness now!

Drive the sort of car your budget can afford and no more. Your investments will thank you for it later. Before the economy tanked, budget experts suggested that your total outlay of car expenses, no matter how many you own, should never be more than 20% of your net monthly income.

These days, you might even want to shoot for a more modest number than that. Remember the cost of owning a car doesn’t magically stop at the sticker price. Factor in fuel, repairs, and insurance for a more accurate picture.

When car shopping, consider obtaining a pre-approval letter that you can show to dealers. Put down at least a 15% down payment and the payoff will be a lower monthly payment. These days, house mortgages aren’t the only thing people can get “upside down” on. You don’t want to end up owing more than the car is worth.

Is a new car absolutely necessary? “Used” is not synonymous with “junk.” There are plenty of perfectly snazzy previously owned vehicles across the street from the new car dealer. Take a look at them and save about 30%.

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If you spend much time listening to the bobble-heads on cable television’s business channels, you would think that the only form of investing that exists on this planet involves Wall Street stocks. For reasons we’ll go into later, Wall Street is not your best investment, if you want to consider it an investment at all. To determine why bobble-heads like Jim Cramer continually pump the latest and greatest stock you need only follow the money.

Big Business owns his show. One hand washes the other. He (and others like him) pimp for Big Business. It’s really that simple.

Here are three solid reasons we prefer real estate to the stock market:

You might be investing with a crook: Do names like Enron, World Comm, or Global Crossing, or Bernie Madoff ring a bell? They should. Criminal behavior on Wall Street is institutional, entrenched, and devastating to the average investor that gets blindsided by the latest scam.
They might be incompetent: It’s not difficult to become a stock broker. Yours might unintentionally cost you a fortune. Maintain control over your investments!
Administrative fees: Another reason we say maintain direct control over your investments is you don’t need someone else to manage your deals or make your investments for you. The entire stock market game is built on management fees paid to brokers that come straight out of your profit.

So ignore the hype on television. It’s nothing more than flash and misdirection. Stay tuned and we’ll demonstrate why we love real estate, proven the best investment in history, and why you’re never too young to start.

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While Electronically Traded Funds (ETF) aren’t the best investment in history (look to real estate for that), they are something the beginning investor should be aware of, if for no other reason than beneficial tax consequences when compared to other stock market strategies.

As a collection of investments like stocks, bonds, commodities, or even real estate, an ETF is similar to a mutual fund in that it can be purchased through an investment company or brokerage house. Compared to mutual funds, ETF’s have a lower turnover rate of their holdings which, in turn, reduces your tax burden. Remember, any time a fund buys or sells a holding it triggers:

taxes
commissions
transaction costs

All the above are passed on to the investor so, all other factors being equal, it makes sense to invest where there is little turnover. With a mutual fund, you can normally expect to pay about 1.5% of your total yearly return just for the management fees. An ETF is substantially lower. ETF’s also offer the ability to target certain segments of the economy with your investing.

There is a transaction cost of $10 to $50 every time you buy or sell an ETF, so keep in mind this should be a buy and hold type of investing. Hyperactive traders need to look elsewhere for their gambling fix.

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If you thought that the only benefits to serving in the military were travel to exotic places and running gunfights with the locals, you would be wrong. Your Uncle Sam thinks that enlisted or warrant officer U.S. military personnel should not have to pay federal tax on any income received during any month they are assigned to a combat zone.

You read right.

If you’re getting shot at, you don’t owe Sammy a single cent. While maybe not enough of an incentive to actively seek a combat assignment, if you’re already there or on the way, it could help when you get back. The Iraq, Afghanistan, and Kosovo theaters all apply. Even better, you can use this tax free pay to contribute to your Individual Retirement Account (IRA). Since you don’t have to pay taxes on IRA holdings until withdrawal, it makes a lot of sense to contribute as much tax free dinero as you can today.

There are a few other tax related items to keep in mind when taking shelter behind that Iraqi sand dune. While engaged in combat operations you qualify for up to a 180 day extension to:

File your return
Pay your taxes
Claim a refund
Contribute to an IRA

Other tax deductions you should investigate are related to 1) moving expenses 2) transitioning back to civilian life 3) free tax assistance.

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Are you still a slave to your hard copy portfolio, lugging binders, folders, and pictures with you on the job interview circuit? Here’s some advice. Stop. In this brave new cyberworld of ours, some companies have turned to online portfolio banks to scout new talent. We don’t suggest you make a beeline for the trashcan to dump all those folders. As with all technology, not everyone is an early or even middle to late term adapter.

But for those eager to make an early and positive impression on potential employers, check out the following websites:

Carbonmade
Knowledge Genie
Jobrary

Carbonmade allows you to post your portfolio/resume by category and skill. Use Photoshop, Illustrator, Flash and more to make yourself stand out in a sea of bland. Knowledge Genie lets you track the users who visit your account and even offers the option for people to buy your work through PayPal, Google Checkout or Amazon.com. Jobrary is a user friendly option that allows easy navigation via preview thumbnails.

These three websites are especially handy for those looking for art or graphic media oriented e

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No, it’s not Underdog this time. Today we’re going to talk about a simple little financial survival technique that you should get busy on whether a recent grad or still in school. Think you’re too cool for an emergency fund? Think again. Unless overwhelming stress and financial Armageddon are things you crave, listen up to this one.

Every single person on this planet other than Bill Gates and Warren Buffett need an emergency fund. Okay, maybe we can add most professional athletes to this list also but you get the point.

Let’s say you’ve started with the baby step of recording every expense for a solid month to find out where it’s all going. Let’s even say you took that information and came up with an honest-to-goodness budget and you’re even sort of sticking to it.

Congratulations! You’re ahead of most of us. The trouble is, unless you have an emergency fund ($1,000 is a good number), your budget is a ticking time bomb waiting to get blown to smithereens. What happens when you or your car gets sick? Or you have to book a last minute plane ticket to bail your mother out of a Tijuana jail? You gotta do it – get the car fixed, bail her out, whatever IT is.

These count as emergencies. If you have an emergency fund, life goes on. If you don’t, your budget gets destroyed, you have to sell blood plasma for grocery money, and bad luck multiplies.

Don’t be a doofus. Make saving until you have a $1,000 emergency fund a HIGH priority.

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Entering the work force after college is a great time to develop good budgetary habits. In the beginning, you may not be able to control how much you earn but you sure as heck can get a grip on how much you spend. The following items are a sequel to the recent list of ways to stop the money hemorrhage. Yes, you will probably shriek and curl up in a ball on the floor when first contemplating these changes but give it a change to bounce around in your cranium.

Kill the Friday afternoon/evening Happy Hour. In case you haven’t noticed, even the cheap drinks are expensive, especially if you end up with a DUI on the way home. Why not limit yourself to one drink, gather at a friend’s house, or give it up completely and spend the extra money on a gym membership instead?
Speaking of gym memberships, if you haven’t noticed, March attendance is but a shadow of January. Don’t fall for the high-pressure, multi-year sales pitch. If there’s even a smidgin of a chance you’re going to bail on workouts, opt for the month-to-month plan instead.
Tony Stewart driving habits. Jack rabbit starts, slamming stops, and speeding can decrease your gas mileage by 30%. Try the speed limit in town and 60 mph on the highway. Sure, everyone will hate you for the slowpoke that you are but drop that extra moolah in a savings account instead. Take that, speed bunnies!
Shoes. How much footwear does one human being need? Probably less than you might think.

Put one or all of these suggestions into practice and you’re going to be light years ahead, financially speaking, of your boozing, speeding, shoe abusing, lazy compadres.

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Is Bill Gates financially successful? Uh, yeah Captain Obvious, most people would give an unqualified “Yes!” answer to that statement. But do you have to have access to billions of dollars to qualify as financially successful? Maybe. The truth is every person is going to have to answer that question for themselves.

To some, only a Bill Gates type fortune is acceptable. For others, we can lower the bar a bit and phrase it something like:

“A comfortable feeling that your financial resources will be adequate to fulfill any needs you have as well as most of your wants.”

Are you looking to have a nest egg saved and invested and absence of debt? More? Less? Whatever the ultimate answer is, only YOU can define it. The Jason Hartman Foundation believes you need to have some idea of where you’re going before you start off. If you’re just finishing school or find yourself in the early stages of real-worldism, take a moment and think about what financial success means to you. Seriously. Get a cool beverage, an adult beverage if you must and are of legal age in your state, then sit down and think about it.

One thing we can say with almost complete certainty. If you haven’t taken the time to define financial success, how the bloody heck are you ever going to know when you get there?

Just our opinion.

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We recently discussed the large bite that dining out can take from your budget but it doesn’t stop there. Oh no, not even close. Take a look at the following budget busters and think about changing them too.

Smoking: Coffin nails cost the serious smoker about $1,600 yearly. Not to mention turning your lungs the consistency of the track at Daytona after a long day of racing. If you want to ever be taken seriously as a thinking human being, give up this habit.
Drop the pop: We talked about this one already. Daily liquid sugar overdoses are about as good for your immune system as smoking is for your lungs. Have you noticed how expensive pop drinks are at your favorite fast food franchise?
Lattes: This fancy caffeine injections costs about $4. Is this a good business decision for the young wealth builder? We say no.
Turn off electronics: Ignore the computer geeks. It saves noticeable money to switch off the gadgets before going to bed or when you’re gone. Opt for energy star models when you can.
Television: Do you really watch all those extra channels in the nose bleed subscription and, if so, should you? Go with the basic package or, better yet, none at all. Crack a book and find some real entertainment. Seriously, you won’t die if the television is off.

That’s probably about all the budget busting a person can be expected to handle in one sitting but we’re not done yet. Come back tomorrow, if you dare, for five more habits that are killing your budget.

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Maybe you think the idea of leverage, when it comes to investing, is sort of boring and the kind of thing only old guys in suits worry about. We’re here to tell you, if you ever want to be rich beyond your wildest dreams of avarice, you better understand leverage.

In case you have Attention Deficit Disorder, are busy cramming for finals, or simply partied too much last night, here’s the short version. Stick it in your brain somewhere where you can get at it in the coming years.

In this example, we’re going to pretend like two surfer dude friends, Bill and Ted, have $10,000 to invest. Bill’s been drinking the Wall Street Kool-Aid and puts his money into an S&P Index fund. Ten years later, his nest egg has grown to $17,000. Nice but not too impressive. That’s less than 10% a year. Where we come from, that’s small potatoes and certainly not going to make you wealthy.

Ted, advanced leverage expert that he is, uses his $10,000 to put 10% down on a house and property worth $100,000. Even in the terrible California market, ten years later his property is worth $159,000. He’s only been making interest payments, which were covered by rent collected from tenants. Ted sells the house, pays off the $90,000 loan, which leaves him with $69,000. Subtract the original $10,000 he used to get started and he’s got a cool $59,000 for his efforts.

Compare Ted’s $59k profit to Bill’s anemic $7k. That, boys and girls, is what leverage is all about.

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Are you dining out as much as you used to? New workers still in the process of trudging up the pay scale may find there’s simply not enough money in the paycheck to grab a sit down meal at their favorite restaurant as often as they used to.

It’s no crime. Just reality. Cheap comfort foods are in (Spam, Kraft Macaroni & Cheese) and expensive restaurants are out. The driving forces behind this new deal in American society are higher food prices and the recession. According to the Chicago Tribune, white flour and dried beans are hot sellers as more people cook at home.

Recession or not, scaling back your “eating out” fund is a great way to save money for investing. Do you seriously need to eat out twice a day every single day? Have you ever sat down and done the math about how much it costs? Try trimming yourself back to a single daily convenience store Mega Gulp. Even better, buy drinks from the grocery store and pack them with you to work.

Here’s a simple example. Two drinks per day at $1.50 each add up to nearly $100 a month or $1,200 a year. By cutting your consumption in half, you can add $600 every year to your investment fund and improve your health at the same time.

What a deal!

Now stop thinking about it and do it.

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Now we get to the good part. Here’s what you can control about your financial success. Believe us, when used correctly, the information here is way stronger than the stuff you can’t control. Here’s a quick rundown.

Interest – Surprise! We included this in both sections. While you can’t control the interest rate, you can control whether you pay it or not. You can also take extra care to develop a great credit score from the very beginning so you don’t get stuck paying outrageous rates just to get a real estate loan. In fact, with a good enough credit score, banks will be begging you to borrow from them.
Time – We can’t repeat this enough. Start early and invest often. Even if you don’t have the knowledge to implement a sophisticated investment strategy right out of school (chances are you won’t), you will be light years ahead of others who wait until they are 30, 40, or older before getting serious about it. The leverage you gain by an early start could put you well on your way to millionaire status even if nothing extraordinary happens.
Education – We all can recite stories of high school or college dropouts who amassed incredible fortunes. Yes, it can happen. Odds are, it won’t. All the studies show that higher education means higher income. If you have completed or are working toward a degree right now, good job! It should pay off big time.
Career – Self explanatory. Don’t wait until you’re a senior to start thinking about this. Get busy as a sophomore or junior networking and attending informational interviews. Figure out what you want to do and go get it!
Benefits – This can be as important as salary, especially in this day and age of the incredible dwindling benefit package. Things like medical insurance, personal leave, sick leave, vacation leave, marital counseling, legal services. If you don’t have it as a benefit, you’ll be paying it out of your income and your salary will go down accordingly.

All this stuff is under your control. Choose wisely.

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ason Hartman would like to remind you that you’re a statistic to the auto insurance industry. They don’t care that you can salsa better than anyone on your block, or how many old ladies you helped across the street. The entirety of your life experience will be reduced to statistics that will determine how much you pay for car insurance.

You are going to get car insurance, right? Don’t be the uninsured motorist goober who messes up the system for everyone else. To the insurer you are a “set of risks” that will determine the premium you’ll pay if they decide to insure you at all. Yep, sometimes they turn people down as being too high of a risk.

Shop around. There can be a great deal of price difference between insurers, even for basically the same coverage. It’s easy to comparison shop online to narrow down choices, then call around to nail down details. Remember it’s not ALL about price. Pay attention to the insurer’s reputation for claim service and financial stability.

Most states have a minimum level of insurance that drivers are required to carry. You might consider bumping up your coverage. Often the price increase is not too drastic. Increased coverage could actually pay to have your car repaired if you cause an accident. This could be very handy if it is your only means of transportation. Lastly, don’t forget to ask for discounts. Insurers might offer a variety of discounts for safe driving, good grades, and more. You’ll never know if you don’t ask.

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Sorry, but, in case no one ever told you, there are some things related to your eventual financial success you cannot control. At least until you get yourself elected Galactic President for life. Even then, you might have trouble controlling the following factors. Some things are simply too amorphous to yield to dictatorial whims.

But don’t get too bent out of shape. Later we’ll talk about the things you can control. Here’s what you can’t:

Business Cycle – The eternal cycle of expansion, recession, and recovery are not anything you can do very much about. It’s important and affects lots of other things but, as Mr. Obama is finding out, does not lend itself well to ham-handed intervention.
Gross Domestic Product – Reflects the economic activity and financial health of the nation. Less than 2% growth is anemic. More than 4% is vigorous.
Index of Leading Economic Indicators – This average of 21 key economic components is intended to predict the near term future direction of the economy. When the index falls for three straight months, we associate it with slow growth.
Consumer Price Index – The CPI index measures the prices of an array of consumer goods and services. The eight major groups are: food and beverages, housing, apparel, transportation, medical care, recreation, education and communication, and other goods and services.
Inflation – As inflation goes up, purchasing power goes down. Most investments get killed by inflation. A critical part of your financial literacy is about the unique method of investing that actually thrives in inflationary times.
Interest – This is the percentage you will pay to borrow money. Unless your last name is Bernanke or you happen to be one of the puppet masters pulling his strings, you can’t do much about this either.

But never fear! There are plenty of things you can control that will set you on the road to incredible financial success. We’ll talk about them next time.

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We recently looked at the process of foreclosure from the perspective of the homeowner and the lender. Neither are thrilled to be going through this process. The homeowner is losing a place to live and probably will take a huge hit on his credit. The lender will likely take a loss on the property after it sells at auction, if it sells at all.

But is a foreclosure a good idea as an investment opportunity? Not in every case. The house might be trashed but, if it’s not, you might want to take a closer look.

The first step is pre-foreclosure. During this period you can offer to buy the property outright from the homeowner. You have time to research the title and condition of the property and could acquire it at a price 20% to 40% below market value. If there is no interest during the pre-foreclosure period, the property goes to public auction.

At the auction, the opening bid is set by the lender holding the mortgage and is usually equal to the outstanding balance on the loan plus any additional fees associated with the sale. If there are no higher bids, the attorney for the lender buys the property and it is considered bank owned. While public auctions can offer incredible bargains, you will be expected to pay cash at the time of sale (or within 24 hours) and will have little opportunity to research the title of condition of your prospective purchase.

Obviously, this is not an investment technique for beginners but, at some time in your career, you may be interested in taking a closer look at investing in real estate through foreclosures.

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Hopefully, none of our readers have found themselves on the homeowner side of a foreclosure. While foreclosures can be an incredible investment opportunity (which we’ll talk about soon), let’s take a moment to review exactly how the process of foreclosure works for the bank and homeowner.

Step 1:
After three to six months of missed mortgage payments, the lender orders a trustee to order a Notice of Default. This officially notifies the homeowner that they are in default and starts the clock ticking on a reinstatement period, known as pre-foreclosure, that runs until five days before the home will be auctioned off.

Step 2:
During pre-foreclosure the homeowner can sell the house to a third party. The benefit to this is it allows them to pay off the loan and avoid having their credit tainted with a foreclosure. A foreclosure will follow you around for about ten years. If the default isn’t corrected within three months, a foreclosure sale date is announced. The Notice of Sale is recorded at the County Recorder’s office, posted on the property, sent to the homeowner, and published in local newspapers.

Step 3:
Just like in the movies, the property is auctioned off to the highest bidder on the county courthouse steps. The transaction must be made in cash within 24 hours of the sale.

And that, ladies and gentlemen, is how foreclosure works.

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