Our position is that
debt is not Biblical and that, in the long run, it costs. However, we would be remiss if we did not
give you a more rounded view of money management.
Years ago, we were
advised that it was financially wise to borrow to pay tuition via student loans
since the government would pay the interest on the loans while we were in
school.
This was partially correct in
that some of the money was subsidized by the government. They did not pay all the interest on the
loans, just a part of it.
The advisor explained
that we should use the no-interest money now, and allow the money that we would
have used to pay the tuition now to earn money in an interest-bearing
account. Then, when the loan came due, to pay it all off.
This, we were told,
was the correct use of debt. We were
taught about the time value of money and how we spend the money today and pay
it back using inflated dollars in the future.
The thought was that
if we borrow $100 today and pay that $100 back next year, inflation would make
today’s $100 worth $103 if the inflation rate was 3%.
We were also told
about the “wise” use of credit cards: Buy today and use the credit card company’s money
interest-free for 30 days.
This makes sense in
theory. However, life
happens. The baby gets sick. The stove blows up. Tires go flat. You know the drill.
You need a new tire
for the car. The tire costs $100. You owe $100 on the credit card that must be
paid now or you will have to start paying interest.
You could go online and pay
the $100 on the credit card and then use the credit card to pay for the new
tire BUT, if you do that, it will be days before that $100 shows up in your
available credit and you need the tire now.
If you have $100
available credit on the credit card, then it just might work. But, if you are at this level of poor,
chances are you don’t have that available credit. And, if you do, congratulations, you are
working towards being debt-free.
When you are down
here in the Hardcore Poor level, this idea does not work. Although Al Zdenek’s teachings might work in
some circumstances, they do not work when you have no money for the FLOAT. We will talk about float in later lessons.
And remember, new
laws make it perfectly legal for merchants to charge you extra to use
credit. On average, it costs the
merchant an upfront charge of 30¢ to accept your credit card and then 3% of the
total cost of your purchase. That is why
you see gas stations charging one price for credit and another for cash.
You do pay extra to
use credit no matter what the experts say.
Retailers pad this in to the transaction in subtle ways. I know, I have
worked in the retail industry.
Remember, the
following guest post does not necessarily reflect the view and teachings of
this blog. It is provided to give you a
more rounded education into money management issues.
Live The Life You Want
Now And In The Future
Now And In The Future
Al Zdenek noticed early in his career that his clients, and people in general, had not received a good financial education and had not surrounded themselves with the best advisors. As a result, they were not making the best financial decisions for themselves or their families and at times were making disastrous choices.
This is what inspired Zdenek to write the book “Master Your Cash Flow” (www.MasterYourCashFlowBook.co
“Educating someone on how to consistently make the best financial decisions lets them avoid the costly mistakes most make in their lives,” says Zdenek, president, CEO and founder of Traust Sollus Wealth Management. “By consistently making the best financial decisions, they can find more cash flow to spend or save. Saving this new cash flow, they may achieve financial independence sooner, work less in life and have less anxiety and stress in their financial lives.”
Zdenek says one way that people can start reaching their financial goals is by using debt smarter, and getting away from the mindset that all debt is bad. Well-run business uses debt to increase shareholders. People can do the same to increase their wealth.
Here are some more ways to empower people to transform lives by consistently making the best financial decisions possible.
• Focus. Many don’t know where to begin to take control of their cash flow. If you don’t know, get help, says Zdenek. The busy lives that people lead can cause them to not spend the time looking at the amounts they spend and why. Those who don’t focus on where their money is going could end up wasting a lot of it, and in the long run have to work harder and longer in life.
• Don’t Concentrate On Just Saving Pennies At The Expense of Living How You Wish Now. Zdenek
and Madonna probably don’t run in the same circles, but they do have one thing in common: Neither one believes in just saving pennies and not enjoying life. While Madonna was hoping for some bling in her ‘80s hit song “Material Girl,” Zdenek says go ahead and buy that pumpkin spice latte from Starbucks. It is necessary in your life to enjoy the things that make you happy, just as long as you continue to make smart decisions on bigger issues that affect your future wealth so that you can live the way you want for the rest of your life.
• Look High And Low. There are plenty of overlooked places where people find opportunities for increased cash flow. Those include proper income tax planning, structuring debt property, finding a better job, taking full advantage of company benefits, leasing vs buying, running your business more effectively, managing property and casualty insurance effectively and many more.
“I want to educate people on how to make the best financial choices for themselves and their loved ones, 100 percent of the time,” Zdenek says. “In doing this, they are empowered to live the lives they wish, now and in the future.”
About Al Zdenek
Al Zdenek is the president, CEO and founder (1982) of Traust Sollus Wealth Management, a boutique wealth management firm dedicated to empowering people to transform their lives and live the life they wish now and in the future. This is done by consistently making the best financial decisions. His book, “Master Your Cash Flow,” (www.MasterYourCashFlowBook.co
Please be advised that all the information in this course is provided to educate, enlighten, and broaden your views in life. The information provided is not a substitute for medical, legal, dietary, financial/accounting, or religious professionals.
Always consult a professional before you act on any of the information you find in this course.
Please be sure to consult your attorney, accountant, and/or other professionals with any specific questions. There is no one right answer to any business question that will cover all circumstances.
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