How Do You Know When You’re Really RICH?

Written by Barbara Huson

Here’s an interesting question. How much money does it take to be rich? What would you say?

Of course, you may argue, there’s more to being rich than having money—there’s love, health, freedom, etc. All true. But for the purpose of research, let’s stick with a specific figure. How much money do you think you need to feel rich?

Despite a myriad of studies, no one can agree on a single number. The responses range from a mere $1.4 million to a whopping $100 million…and everything in between.

One thing that struck me. The amount is always more than the respondent had. As one researcher put it, “People always give a number that is twice their current net worth or income. Those with $100,000 in income say $200,000, while those worth $5 million say $10 million.”

This got me thinking. There’s no universal number because ‘rich’ is an attitude, not an amount. When you can say “I have enough to live my life on my own terms,” you can, indeed, call yourself rich.

Ain’t Never Too Late!

Written by Barbara Huson

I was on a book tour, giving a yet another speech. But this one I’ll never forget because of what happened afterwards.

An older woman, leaning on a cane, waited patiently to purchase a signed book. She was 84 years old, she told me when it was finally her turn, and had been married to a very wealthy physician. He was always on the phone, yelling at his broker, which made her very uncomfortable. So she let him handle all the finances.

Ten years ago, he died. He not only left her no money, but all his investments were on margin (he used borrowed money), so he left her saddled with debt.

Before the shock even wore off, she said, she found a financial advisor, started taking classes, learned about investing.

“I’m a very wealthy woman today,” she told me proudly, announcing she’d just returned from a round-the-world cruise.

In one of those crazy coincidences, I bumped into her 7 years later. She had just turned 91. When I asked how she was doing, she responded with what I could only describe as a devilish grin: “I’ve done better in the market than any man would’ve done for me.”

It’s never, ever, ever too late to start!

The Real Meaning of “Risk”

Written by Barbara Huson

Ask a novice investor to define risk, and most will say losing money. They look at market fluctuations and all they see is the likelihood of loss.

An educated investor, however, looks at those same market fluctuations and sees opportunity for gain.

The truth is, our biggest financial risk is not market volatility. Our biggest risk is to do nothing at all.

Sure the market’s ups and downs are scary. But you can dramatically cut your losses with due diligence, a long term approach, and good diversification.

On the other hand, if all your cash is sitting in the bank, your purchasing power will shrink like a wool sweater in a hot dryer.

At least a portion of your savings needs to be in assets that grow faster than inflation and taxes eat it away.

Otherwise your greatest risk, as a woman, is that you’ll outlive your money.

Spending Exercise, Part II

Written by Barbara Huson

Create a chart of all your expense categories: mortgage, car, groceries, dining out, entertainment, child care, insurance, medical, etc. Include categories you might be neglecting, like vacations, clothing, personal care.

You can do this either by hand or on the computer, using programs like mint.com.

Record every expenditure, down to the penny, putting them in their respective categories. At the same time, record incoming cash, and where it’s from.
Ask yourself these questions:

How did you feel doing this exercise?
Did you notice any resistance to doing this?
Did you discover anything you didn’t expect?
Did you make any changes? What are they?
Do you see where you can make cuts to your spending?

Spending Exercise: Part 1

Written by Barbara Huson

Here’s a powerful exercise to get clarity on your finances as well as your quality of life. For at least a month, track your spending.

In a small notebook or empty checkbook register, write down every single penny you spend. Whether you pay cash, check, or credit, write down the item and the amount.

If you forget to jot some things down, don’t let that be an excuse to quit. Just start again and record each expense.

As you do this, notice what you’re buying, how you’re feeling at the moment, and any other observations you may have. Also notice how your spending patterns reflect your values and priorities. The question is, do you like what you see?

Be Done With Debt!

Written by Barbara Huson

Over the years, I’ve witnessed an inverse correlation between earnings and debt. As debt goes down, income increases. And vice versa.

Perhaps it’s because, as one person explained, “Now that I’m not worrying about how I’ll pay my bills, it’s like I’ve freed up all this energy to be so much more creative, strategic and successful in my career.”

Want more success? Tear up your credit cards and start paying them off. Then watch what happens!

Hey, Let’s Show a Little Respect Here!

Written by Barbara Huson

Money is a lot like a good man. Its greatest desire is to serve and support you. In return, all it requires is to be respected and appreciated.

You respect money the same way you would anything else you value, be it a work of art, a treasured friend, or cash in hand.

If you want it to last, you’ve got to take care of it. Throw it around carelessly or ignore it completely and guess what’s going to happen?

How do you respect and appreciate money? Follow the Four Rules of Money:

Watch What You Say

Written by Barbara Huson

Language is powerful. There is a direct correlation between the words that you use and the life that you have.

Words tend to become self-fulfilling prophecies, so watch what you say.

Talk about what you’re committed to (i.e. financial freedom), not what you’re worried about (spiraling debt).
Stop apologizing unnecessarily or belittling yourself in any way.
Tell people what you want and have them hold you accountable.
Change the conversation going on in your head, the little voices telling you what you can and can’t do, urging you to play small, be safe, hold back.

God Bless Those Naysayers

Written by Barbara Huson

There’s a form of support you may not recognize: the Naysayer.

These pessimists have a purpose. Every time you decide to do something new, the beloved Patron Saint of Risk sends down her Angels of Gloom to shower you with disapproval.

The loftier your goal, the worse their negativity. The more tentative you feel, the gloomier they sound.

If they succeed in dissuading you, be glad. Your commitment simply wasn’t strong enough to do what it takes to get what you want.

If you’re still determined, regardless of their bad tidings, then you win the Saint’s blessing. You’ve got what it takes to break new ground.

And if you’re really sharp, you found some food for thought in the crumbs of their criticism.

You Are The Average Of The 5 People You Surround Yourself With

Who Are You Hanging Around With?

Written by Barbara Huson

Whatever you achieve (or don’t) is significantly affected by everyone you associate with on a regular basis.

Just as it takes a village to raise a child, I’m convinced it takes a supportive community to raise your income.

If the people around you are going to frown upon your success, if there’s a chance they’ll reject you, it’s way too easy to throw in the towel. Why risk abandonment when you’ve got so much support for just staying put?

It’s a well known fact: “You become who you’re with.”

Blog

How Do You Know When You’re Really RICH?

Ain’t Never Too Late!

The Real Meaning of “Risk”

Spending Exercise, Part II

Spending Exercise: Part 1

Be Done With Debt!

Hey, Let’s Show a Little Respect Here!

Watch What You Say

God Bless Those Naysayers

Who Are You Hanging Around With?

Meet Barbara Huson

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