Your Spending Habits: Are You Buying For Your Future

A recent post on a social media site (actually it was a group comprised of alumni from my Alma mater) queried the group: Has the recession changed your spending habits? A majority of the respondents replied: We refuse to spend unless absolutely necessary until things turn around I felt compelled to reply with the following:

Nothing wrong with spending money, it's how you spend it & what you're spending it on. The idea is to make your money work harder for you than you did to earn it. As a nation it is our own fiscal irresponsibility that has proven to be our worst enemy not that guy hiding in a cave in the Middle East.

Fact: 1 out of every 20 people become wealthy, which means 95% of the public will wind up needing Govt. assistance & other sources (family, friends, church groups) to keep them alive. Debt has removed us from Reality. Borrowing $ w/out the understanding of the long term effects is the ultimate trap & we do it voluntarily. We seemingly can rationalize every purchase, when in fact it is truly the gateway to poverty.

Fact: Poor Habits w/Money: we've used cash unconsciously....spending decisions in the moment robbed us from our future...we have spent credit like it is cash & didn't feel it (until recently of course). Our homes were used as ATM's instead of wealth creators. Simply stated it is our own relationship w/money that has led to crisis stage for many citizens. Think about it: Where did you learn about handling your finances? Surely, not from our school system. Perhaps around the home front watching & listening to mom & dad as they tried to ensure we had everything they didn’t, & mortgaged their futures to do so. We were wired early on for a time that truly doesn’t exist anymore (i.e. working for a company for 40 years for that gold watch & pension). We have had an unhealthy emotional relationship with money.

So when it comes to spending, perhaps take note of what the wealthy do. They use assets to create wealth, which they can convert to cash; & convert cash to assets. Assets create value which pays you even while you sleep. There has been no better time in our lives to create wealth. This is not the time to act like a squirrel storing nuts for the winter. Example: More than half of the U.S. filthy rich (as well as many of you on this site) have increased their net worth substantially during this recession. As our 401k's have turned into 101K's most are still resigned to let it sit & have no clue how to regain their losses or to utilize it wisely to increase their holdings. Truly unfortunate. The majority of defaulted properties in the U.S. are now being purchased by international buyers, w/ Canada, UK, & Mexico @ the forefront. While the American public holds on to what we have left, the world is buying us up for pennies on the dollar. New world order indeed!

This was not written to be a "Doom & Gloom" portrayal, rather a "Wake up & Smell the Coffee" slap upside the head. Get away from the newspapers, televisions & any other media outlets. Find the truth inside yourself, stop waiting for things to get better. Make a plan to develop new skills, create/find a mastermind group that shares your dreams & passions & are truly taking action . Make a plan to find mentors who can assist you to move forward. Make a plan to create value & acquire wealth. Take Action & remember: Money Follows Actions; Value follows Action; & Wealth follows Action

I submit to you the following: You NEED to treat the current economic climate as you would a terminal disease. Extreme, I don’t think so. If you were told you had a terminal disease what would you do? Unless you are ready to surrender & die, you would seek every possible solution, right? You would spend your last dollars in order to find a cure & learn everything you could about the disease to find a solution to it. Wouldn’t you? This is exactly how individuals & businesses need to respond. The economy is sick & it is no longer important how it got that way or who is to blame. The only thing of importance is: What are you going to do to find a cure?

There are only three possible actions to take & only one is correct. 1) Ignore (isn’t that what got you here?) 2) Retreat: i.e. cut back, contract, & get smaller or ultimately cease to exist or 3) Attack i.e. do everything possible to expand, live & thrive.

Individuals, businesses & entire governments have already been thru the Ignore stage. Can you say Foreclosure crisis anyone? While it may seem counter intuitive to expand & attack at this time, it is truly the only solution that will ensure you are a winner on the other side of this economic scene.

Remember this: you can’t win a race by not running, you can’t hit the ball without swinging, you can’t win in life by quitting & you will NEVER find a cure by ignoring or retreating. What are you waiting for? Now is the time to approach your personal & business challenges the same as you would a terminal disease; attack with all your resources & every tool at your disposal.