The Economy Relies Upon You Being A Good Consumer!

thanksgiving turkeyYou are an individual. But you are also a member of a global community. Most important of all, you are a Consumer. As a member of this community, it is your DUTY to consume.


Because the system would collapse if you stopped spending and the consequences would be AWFUL. The system that runs your country relies upon you being a Good Consumer. This film will show you how:

I jest, of course! Before you head out at the break of dawn this Black Friday to gobble up merchandise, do yourself a favor and watch this fabulous video. (Email subscribers, you’ll need to visit my blog to view the video embedded in this post.)

Should you choose to go shopping anyway, perhaps you’ll remember the turkeys you watched here and it’ll help you curb your spending. Or print the following list of questions and suggestions and review them before exchanging your hard-earned dollars for crap products:

Before you buy, ask yourself:

  1. Will I change my mind? Advertisers and retail stores are notoriously skilled at making shoppers believe that they need something– even when it isn’t true. When I find an item I want, I leave the store to think about it for a day or two. During this brief period of time, I usually find that I stop wanting it.
  2. Can I buy it for less? Comparison shop. Find it on sale. Negotiate. Look for a recycled one in the newspaper, at garage sales or consignment stores, on ebay or craigslist. Avoid the mall. I bought all of my daughter’s Christmas gifts through craigslist last year and filled the space beneath the tree for a total of $30.
  3. How long am I willing to pay for Christmas? Your loved ones would rather spend quality time with you during the holidays than have you run up your credit card balance and pay for it all year long. Give the gift of time instead.
  4. Can I trade something for it? Swap with a friend, neighbor or family member. Ask a seller if she wants something you have in exchange for the item or service you desire. We’ve traded plumbing repairs for health club dues, computer work and pizzas. Create a toy exchange with other parents. We’ve traded “new-to-you” toys for our kids.
  5. Can I borrow it from someone? Borrow books, music and movies from the library. Ask your neighbor if you can use her seldom-used yard tools or specialty cooking appliances. Just make sure you are willing and able to repair or replace damaged or lost items.
  6. Can I share the expense with someone? Co-op with your neighborhood to buy one set of yard maintenance equipment. Consider car-sharing. Ask your babysitter for a reduced hourly rate for watching your child along with another.
  7. Can I cut back on another budget item instead? If what you want to buy doesn’t fit into your budget, choose to spend less on something else for awhile. Use the money you’re saving on that budget category towards what you want to buy instead. I often cut back on dining out the month before a vacation because I’d rather use the savings generated to enjoy special meals at our travel destination.
  8. Can I sell something to come up with the extra money? Sell an item you no longer use, then use the money to purchase the item you want. Try a sales listing on craigslist, ebay, community bulletin boards or your local classified ads. Here’s an idea for toy-hungry kids (or adults!): declutter, hold a garage sale, then buy something new with the proceeds. Better yet, make “found” money go further by using tip #2 above.
  9. Can I make a green choice? Look for products that make less impact on our environment. Choose a less toxic alternative, one with less packaging and more recycled content, or something that can be reused for something else when you’re done with it.

So don’t be a turkey… Have a Happy Thanksgiving!

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photo credit: Zellaby

Five Ways To Reduce How Much You Need To Retire By $300,000

This is a guest post written by Todd Tresidder.

If the idea of accumulating a million dollars (or even half of a million) for retirement is daunting then consider this: for every $1,000 reduction in monthly retirement spending you will similarly reduce how much money is needed to retire by $300,000. That is a big deal because most people will find it much easier to retire with bliss and happiness on $1,000 per month lower income than to figure out how to put away an additional $300,000 in retirement savings.

Enjoying Retirement

If this all sounds a little confusing rest assured it is just basic math. You can use an online retirement calculator or visit your favorite financial advisor and odds are very high that you will be told you can spend somewhere between 3% and 5% (depending on assumptions) of your savings each year during retirement and remain financially secure. To keep things simple we will assume a very middle-of-the-road 4% of retirement savings spent each year. What that means is you need roughly 25 times your annual spending in savings – otherwise known as the “Rule of 25” – to support this 4% spending habit. You may find this math mundane, but the implications can be very exciting to your retirement plan.

This same rule also tells you how much less you need to save for retirement if you are good at finding happiness and bliss in life while spending less. For example, if you can figure out how to reduce your retirement budget by just $1,000 per month ($12,000 per year) the rule of 25 says you just reduced how much money you need to retire by a whopping $300,000 ($12,000 * 25 = $300,000).

Spending a little less certainly sounds a lot easier than coughing up another $300,000, especially if retirement is just around the corner and your nest egg is not as robust as you might like. By learning to live more simply, you can enjoy financial freedom during your golden years. The key to retiring successfully on less is to find an appropriate level of spending that suits your needs and lifestyle without sacrificing happiness. The only limit here is your own creativity. If you can stay focused on your core values and determine the things that are really important you could completely transform your vision of retirement.

To help get you started, here are five easy ways to save $1,000 a month during retirement without sacrificing happiness:

1) Downsize

Since the kids are grown and out of the house, you don’t need five bedrooms anymore. A smaller house means a smaller property tax bill, lower maintenance costs, lower insurance premiums, and less hassle. Take it a step farther and downsize to a condo or townhouse close to the urban core and you can eliminate the cost of owning one or both of your cars while eliminating all yard and exterior maintenance work. Renting a car for occasional trips out of town is far less expensive than auto repairs and insurance. Following the rule of “less is more,” less stuff to care for means you have more free time to enjoy your retirement, and a combination of downsizing strategies should be able to save you at least $1,000 per month.

2) Move to Mexico

Retire to MexicoIf you’re willing to leave the country then Mexico is a logical choice since it is close (you can drive there, after all). Not only is the cost of living much lower but the climate is appealing, the infrastructure is more modern and advanced than in much of Latin America, fresh fruit is in abundance, and you can surround yourself with other expatriates if you choose. Numerous websites offer logistical advice on relocating to Mexico and other inexpensive retirement havens outside the United States.

If Mexico isn’t your cup of tea then consider relocating to any number of places, foreign or domestic, that are less expensive than your current hometown. Money Magazine lists Sequim in Washington, Dunedin in Florida, Durango in Colorado, Fort Smith in Arkansas, and Janesville in Wisconsin as some of the most affordable places to retire in the United States. If you plan to travel a lot, where you call home may be of minimal importance and the savings could make a huge difference in how much money is needed to fund your retirement. Just do plenty of research before packing your bag: there are many valuable resources on the web to help you find just the right place for your retirement needs and budget – any one of which could save you at least $1,000 per month.

3) Trade Your Home For a RV

Retire as RV FulltimerIf your retirement plans involve extensive travel, consider selling your home and living in an RV. Unburdened by the labor and costs of home ownership, you’ll be free to travel as much as you like or stay put for months on end. Getting rid of your home means no more property taxes, homeowners insurance, maintenance costs or monthly payments, and the home equity is freed to produce investment income. With an RV your home and mode of travel are one and the same. Many retirees even find seasonal employment in national parks and campgrounds that provide a bit of income and social life. The rest of the year they’re free to follow the weather or the grandkids. An RV is easy to store while you travel abroad and you won’t have to worry about home security or frozen pipes. This lifestyle change can easily lower your costs by $1,000 per month and possibly raise your investment income by the same – two for the price of one.

4) Live Healthy

Eat Healthy Save MoneyHealth care costs eat up an increasing proportion of spending as you age. Although some medical issues are unavoidable, you can significantly reduce your health care spending by staying fit and living a healthy, active lifestyle. Eating low on the food chain is good for your body as well as your budget; prepackaged and processed foods often come at high prices with lower nutritional value. Similarly, regular exercise and a low-stress lifestyle can mean fewer trips to the doctor and fewer prescription medications that can quickly break your budget.

5) Make The Little Things Add Up

A thrifty shopper can easily save $1,000 a month on things like groceries, gifts, and recreation. As a retiree your time is flexible thus allowing you to take advantage of midweek savings on green fees, matinee discounts on movie and theater tickets, and early bird discounts in restaurants. Travel off-season and you will not only save money but you’ll encounter fewer crowds.

Develop the habit of asking for discounts and never paying full price. Don’t wait until December to do all your Christmas shopping—pick up items throughout the year at sale prices and give them at the appropriate time. Buy your wrapping paper and seasonal trinkets at the after holiday sales when prices are usually less than half. Or cut out gift expenses altogether and donate a fixed amount to charities or provide a charitable service personally in honor of your loved ones.

Become a grocery store “perimeter shopper,” avoiding the center aisles that are full of sugar, processed foods, and unhealthy snacks. Almost everything you need is around the perimeter of most grocery stores—produce, bread, milk, and meat. Buying certain items in bulk also saves cash. If you pick and choose from these and many other money saving strategies you could easily figure out how to live happily on $1,000 less per month.

Reduce How Much You Need To Retire By $600,000… or more!

Now that you see how easy it is to reduce your spending during retirement by $1,000 per month without sacrificing your happiness, try combining several of these cost saving strategies to double-down or triple-down and really make a big difference in how much money is needed to retire. It’s not hard to imagine a happy lifestyle living out of a motorhome, eating healthy, and enjoying off-season travel and recreation discounts.

Or if an exotic location is more to your liking then a low-cost lifestyle somewhere down in South America might just do the trick. Similarly, if you find it hard to shave expenses by $2,000 per month you may find it easy to pick up the equivalent in part time or temporary income. The math is the same. You might enjoy being a campground host in a beautiful national park, or maybe you are good at taxes and wouldn’t mind working for a few months each year during high tax season when the winter storms are raging.

The point is to get creative and figure out ways to simplify your life so that you spend less, reduce stress, and slash the amount you need to save so that you can retire now with financial security. Once you get past the notion that you have to keep up with the Joneses, you just might discover that you can enjoy retirement a whole lot more by spending a whole lot less.

About the Author

Financial expert Todd R. Tresidder retired securely when he was just 35 years young. His ebook, How Much is Enough to Retire?, shows you the next step beyond simple retirement calculators and traditional retirement planning. Check out his web site for more free retirement planning information and resources.

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Photo Credits: goingslo, VideoVik, Koocheekoo, Aylanah

Talent And Desire Are NOT Enough: What We Must Learn To Achieve Our Goals

The traditional view of achievement assumes that results come from a combination of talent and desire. Therefore, when you fail, it must be because you are not talented enough or that you don’t want it bad enough. However, failure also occurs when talent and desire are abundantly present — but optimism is missing!

Why is optimism an important ingredient for success? What makes some people view the glass as half full while others see it half empty? How are depression and pessimism related? Are optimists born or made? Can we unlearn pessimism? What can parents do to help their children grow optimistically?

My family, at least three generations deep, suffers from a genetic predisposition towards clinical, chronic depression. It would be fair to say that I didn’t always have the happiest of role models when I was growing up. I’ve never been diagnosed with depression (other than PMS-related symptoms). Why did I escape depression while many of my family members did not?

A therapist, who my entire family visited when I was a teenager, suggested that I had learned to cope by taking on the role of “hero child” in our dysfunctional family. The hero child is the one who fantasizes that if she accomplishes enough, then the whole family will be OK. The hero child is overly conscientious, over achieving, and constantly seeks approval. As the hero child of my family, it was my “job” to help everyone see the light and function well. I became our family’s cheerleader of optimism.

Then as a young adult, my experiences as an animal trainer and behaviorist taught me some useful cognitive skills. (Apparently rats, cats, dogs and humans tend to learn in similar ways!) I discovered how to avoid learned helplessness (giving up because you feel unable to change things) and how to reinforce my sense of personal control. In turn, personal control leads to optimism; and optimism can protect against depression, better your physical and mental well-being, and increase your level of achievement.

I’m reading a fascinating book: Learned Optimism: How to Change Your Mind and Your Life by Martin Seligman, Ph.D. Using evidence gleaned from scientific research done with dogs and people, Seligman demonstrates how optimism enhances the quality of life, explains how to break an “I give up” habit, and offers advice for parents who want to help their child(ren) become empowered by optimism.

What is a pessimist? Pessimists tend to:

  • believe bad events are enduring (will last a long time)
  • believe misfortunes are their own fault
  • undermine everything they do
  • get physically sick more often
  • get depressed more often
  • give up more easily

Optimists, who are dealt the same hard knocks, tend to:

  • believe defeat is just a temporary setback
  • believe defeat is confined to this one case
  • believe defeat is not their fault: circumstances, bad luck or other people brought it about
  • perceive bad situations as a challenge and try harder
  • do better in school and college
  • do better at work
  • do better in sports
  • exceed the predictions of aptitude tests
  • be more apt to be elected into public office
  • enjoy unusually good health
  • age well
  • live longer

How can I help my child learn optimism?

My daughter’s life didn’t start out well: she was abandoned at birth by a mother who could not/would not raise her; placed in a neglectful foster care situation for nine months; then uprooted from her native country to live in a place where very few look like her. In addition to these early traumatic events, maybe her birthmother suffered from depression during her pregnancy (aware that she’d have to give up her baby), which could have affected her developing fetus. When we adopted our daughter, she was emotionally withdrawn and shutdown.

What affects a child’s level of optimism? According to Martin Seligman, Ph.D., director of the Positive Psychology Center at the University of Pennsylvania and the author of Learned Optimism, there is evidence for three kinds of influences:

  1. How parents analyze and explain everyday occurrences: If my child hears me explain things optimistically, she will too. Optimism is learned. It is important that parents serve as positive role models.
  2. The form of criticisms a child hears when she fails: If they are permanent (“You always make such a big mess”) and pervasive (“You are a slob”), her view of herself will turn toward pessimism. If the criticisms she hears have a temporary and specific message (“Your room tends to be messy after you have friends over to play“), she will be hopeful, empowered and optimistic.
  3. The reality of her early losses and traumas: If her losses and trauma are permanent and pervasive, the seeds of hopelessness will be deeply planted. If they remit, she will develop the theory that bad events can be changed and conquered.

I am incredibly proud of my daughter’s strong spirit. She inspires me to see the glass as half full every day. Together, we practice optimism… and we blossom.

Considering the far-reaching and long-lasting effects that optimism has in all of our lives, I wholeheartedly recommend reading Learned Optimism: How to Change Your Mind and Your Life. It’s a national bestseller for good reason.