Car Loan Crisis


If you have been listening to any of the headlines recently then you have most likely heard about the “student loan crisis”. I think there is another underlying issue here, and that is a car loan crisis. Keep reading for my theory on how the two are inter-related.

According to Experian Automotive, the average monthly car loan payment is $482 with an interest rate of 4.56% financed over 5.5 years. A whopping 84% of new vehicles are purchased using financing.

Here’s a solution to the student loan crisis. What if you, as a parent, did not have the latest and greatest vehicle with the touch screen navigation and air-conditioned seats? That’s right, I am suggesting that you use what you would have put as a down payment on that new $30,000 car and buy an entire vehicle with the down payment. There are plenty of cars for under $5,000 and they will get you to work and activities just as well as the new car.

Now for some fun math:

Since you now have no money going toward a car payment, you can open up a 529 college savings plan or a Coverdell Education Savings Account (ESA) for your child. These college savings accounts work a lot like a health savings account or a Roth IRA. Let’s assume you do this around the time that they are born, which is an excellent idea. Also, the money in these accounts is tax-free if used for education purposes.

Okay, you are going to take that $482 per month would be car payment and put it into your child’s college savings account.

If you do this for 18 years, instead of having a car payment, assuming an interest rate of 7%, your child would have $196,650 saved for college!

“But 7% is an unrealistic return”, you may say. Okay what about 5%? They would still have $162,717. Plenty of money to go to 4 years of college at a reasonably priced school.

This does not even take into consideration if both parents have a car loan, which most usually do.

Pay for your cars in cash! Start out with something that you can afford and month by month save up so that you can upgrade later, but with CASH. You won’t look back and say “I’m so glad I drove that new car for a few years and now have nothing to show for it”. NOW you could have the opportunity one day to look back and say “I’m so glad I had the knowledge to invest and save so that my child could go to college DEBT FREE!”

Parents, I urge you to think ahead about the future of your child! This could possibly be the greatest gift you can ever give them. Graduating with a college degree, debt free.

So which would you choose, nearly $200,000 to go toward your child’s education or the latest and greatest vehicle that just lost the majority of its value as soon as you drove it off the lot?

As Dave Ramsey would say, “I hope you liked the car!”

Common Traits of Millionaires


“Motivation is what gets you started. Habit is what keeps you going.” – Jim Ryun

  1. They Love to Read

Most millionaires read 30 minutes or more per day for self-education or self-improvement. They tend not to read fictional books. Books read by millionaires consist of biographies of successful people, self-help or self-development books, and history books.

I usually rotate between these three categories. Right now I’m reading “Good to Great” which is about what sets apart “great” companies from “good” companies, and “13 Bankers” which is about what happened on Wall Street to cause the last financial crisis. I’ll admit, this has very technical writing and may be good to read if you’re having trouble falling asleep at night, but I am trying to persevere through it.

  1. They Get Up Early 

I wrote about this in a previous post, but this is a very common theme among millionaires. Most of them get up around 3 hours before their workday.

  1. They Have a Mentor

A mentor is a great resource and a wealth of information for your journey to become a millionaire. A great mentor is somebody you look up to and who you think has been successful in life.

I have 3 mentors that I utilize for advice and life lessons. My parents, my realtor, and my boss. All of those people have accomplished in their lives what I hope to one day achieve so I am very fortunate to have them to guide me along the way.

  1. They Rarely Watch TV

Only 23% of millionaires watch more than an hour of tv per day, compared to 77% of non-millionaires. Of those 23% who watch television, only 6% watch reality tv, compared to 78% of non-millionaires.

  1. They Surround Themselves With Other Successful People
  1. They Are Frugal

Millionaires typically do not play the lottery. As Dave Ramsey would say, “the lottery is a tax on the poor”.

A significant amount of millionaires have lived in the same house for more than 20 years.

Over one-third of millionaires buy used cars, which tend to be a typical domestic brand. 86% of luxury vehicles are bought by non-millionaires.

  1. They Live Healthy Lifestyles

It is reported that many millionaires exercise for 30 minutes or more every day and are healthy eaters.

  1. They Have Multiple Sources of Income

Most millionaires have at least 3 different sources of income. Some examples include rental property, a salary, a business, or investment income.

9. They Never Stop Learning

As mentioned earlier, millionaires love to read. 63% also listen to audiobooks or podcasts on their commute to work.

  1. They Write Down Goals

I’ve previously written a lot about goal setting, but it is a recurring theme among millionaires and successful people. If you write down your goals, you are much more likely to achieve them.

In addition to writing down goals, many millionaires also make daily to-do lists.

  1. They Make Their Children Read & Volunteer

I remember when I was younger my parents would sign me up for so many activities, some of which included volunteering. I used to think they were making me do too much but now I’ve grown to appreciate having the opportunity to be involved in so many experiences.

I think I always enjoyed reading so they didn’t have to “make” me do it.

A good childhood memory of mine is on Super Bowl Sunday, my dad would be watching the game, but my mom created “Super Book Sunday” where she would read my sister and I all the books we wanted while the game was on. Not surprisingly, my very first sentence was “Read the Book”.

  1. They Stick to a Budget & Pay Themselves First

It is hard to become a millionaire if you don’t know where your money is going. Little expenses can add up very fast and before you know it, the money that could have gone toward savings or an investment has been squandered away.

At the top of your budget, you need to allocate the amount of money you want for saving or investing. I do this, and then at the end of the month if there is any leftover money in another category, I move it over to the saving/investing category to pay myself even more.

You need to give every dollar a name so that it has somewhere to go, otherwise, you won’t know where it went! Track every single expense. After a few months, you’ll be so used to doing it that it won’t be a hassle any longer.

Term of the Day – “Rule of 72”


The “Rule of 72” is a formula used for approximating the time that it will take for a given amount of money to double at a given compound interest rate. The formula is very simple. It is 72 divided by the given interest rate. Ex.) 72 divided by 12 (interest rate) equals 6:  In 6 years $100 will double at a compound annual rate of 12%.

Mutual Funds


What exactly is a mutual fund?

A mutual fund is a fund that is operated by an investment company that raises money from shareholders and invests it in stocks, bonds, options, futures, currencies, or money market securities. These funds offer investors the advantages of diversification and professional management. A management fee is charged for these services. This can range from 0.5% – 2% of assets per year. Funds may have other fees such as 12B-1 Fees, Exchange Fees, and other administrative charges. Funds sold through brokers are called Load Funds, and funds sold to investors directly from the companies are called No-Load Funds. Mutual Fund Shares are redeemable on demand at Net Asset Value by shareholders. All shareholders share equally in the gains and losses generated by the fund.

Mutual funds come in many varieties. Some invest aggressively for capital appreciation, while others are conservative and are designed to create income for shareholders. Investors need to assess their tolerance for risk before they decide which fund would be appropriate for them. The timing of buying or selling depends on the outlook for the economy, the state of the stock and bond markets, interest rates, and other factors.

Summarized and in simpler terms, a mutual fund is like a bucket that multiple people put their money into and the bucket of money is invested into multiple combinations of companies, bonds, securities, etc.

Mutual Funds are often divided into categories based on their market capitalization. This is the total market value of a company determined by multiplying the stock price by the total outstanding shares of the company.


Large Cap mutual funds consist of companies with a market cap greater than $10 Billion Dollars.  These funds will have a slow and steady growth rate and pose less risk due to the size and stability of the companies. Companies in large cap funds will be those such as Wal-Mart, Microsoft, and Amazon.


Mid Cap mutual funds consist of companies with a market cap between $2 billion and $10 billion dollars. These companies have more potential for growth and therefore are higher risk than large cap. These funds are made up of companies such as Tupperware and Goodyear Tire.


Small Cap mutual funds consist of companies with a market cap between $250 million and $2 billion dollars. These funds are made up of new companies and pose the most risk. Since these companies are newer, they have a high growth potential and can also be very volatile. Since small cap funds are very risky, they also have the potential to be the most rewarding. These aggressive funds are recommended for a young person who plans on being in the market for a long time and will not be needing to take the money out anytime soon. An investor in this type of fund needs to be willing to stay on the roller coaster that is the stock market. An example of a company that would fit this category is Buffalo Wild Wings and Papa John’s.

*In addition to the above three categories, it is recommended to also have some international funds in your portfolio to maximize your diversification.

There are many advantages of mutual fund investing but there are also some disadvantages.


  • Advanced portfolio management
  • Dividend reinvestment
  • Risk reduction through diversification
  • Convenience


  • Expense ratios can be high
    • If your expenses are exceeding 1.2% you are overpaying
  • Tax inefficiency through paying capital gains taxes
  • Poor trade execution
    • Cannot trade in real-time. Share prices are determined as whatever the closing price was that day.

There are a multitude of companies that offer mutual funds as a form of investment:

  • Vanguard
  • Fidelity
  • JP Morgan

Vanguard typically has the lowest expense ratios and the lowest minimum balance required to open an account. Vanguard has what they call their “STAR” Fund which only takes $1,000 in your account to get started and has an expense ratio of 0.34%.


Success Through Self-Discipline


“Success can only occur when opportunity and preparation meet.”

I came across this quote while reading and it really made something in my mind “click”. Success needs two things in order to occur. Opportunity and Preparation. You must be prepared so that when an opportunity arises, you can jump on it while it’s there. This is true for all types of successes. Athletes, celebrities, stock market investors, real estate investors, job promotions.

A lot of times the “opportunity” portion of success may be somewhat beyond your control, but you can almost always control your level of preparation. A big part of preparation is related to self-discipline. Athletes utilize self-discipline with vigorous training and healthy diets. Investors utilize self-discipline by putting their money into the stock market or other various investment accounts instead of blowing it on a vacation or consumer goods.

Successful people stand apart from unsuccessful people by their level of self-discipline. At some point in their preparation, they told themselves “no” to all the temptations so that later, they could tell themselves “yes”. Begin with the end in mind. Whenever you think you might stray from your path, think of the goal you are working towards. It might take some time to reach your goal of being successful. Success is a journey, not a destination. You don’t just wake up one day and you’re suddenly a huge success. (Unless you won the lottery). You have to work toward it. All of this preparation will allow you to seize an opportunity whenever it comes knocking.

My personal self-discipline is saving money so that I can purchase investment rental property and also so that my retirement will be taken care of in the next 40 years. I’m “beginning with the end in mind”. I don’t want to wake up one day when I’m 60 years old and say “Woe is me. I spent all my money on car payments, restaurants, and vacations in my working years and now I have no retirement. I sure hope the government will take care of me in my old age.” Sadly, this is what happens to a lot of people

It’s important to have self-discipline in every area of your life. You need self-discipline for your physical appearance and fitness. It’s easy to eat junk food and cookies all day and much harder to eat vegetables and salad. You need self-discipline to eat healthy and to exercise. It’s so much easier to sit on the couch and watch tv after a long day at work. It takes true dedication and self-discipline to change from work clothes to running clothes and go outside on a run after work. I promise that the benefits of taking care of yourself will outweigh the short amount of “feel good” you might get from another cookie or watching the next episode of Lost instead of getting in your workout.

“You’ll never achieve more than you think you can. So create a big dream.”

This quote ties back to the self-fulfilling prophecy that I talked about in previous posts. I always try to make my dreams and goals a little bit bigger than I think is possible so that I’ll have to work even harder to achieve them. One of my goals is to run a full marathon. I barely survived running a half marathon but since I have that marathon goal written down, I keep trying to achieve it. Another “stretch” goal for me is to have $5,000,000 by the time I retire. This is very lofty, but seeing this written down on my goal sheet, every day, helps me to take the preparation and self-discipline steps necessary to achieve this. So what if I retire with only $3,000,000? I will still be perfectly happy and content because who wouldn’t with that much money? Because I had a large goal, I worked harder trying to achieve it than I would have if my goal had been $1,000,000.

I hope that this post has encouraged you to dream big and be willing to do whatever it takes so that when you are presented with an opportunity that will help you achieve your goal/dream, you will be well prepared to seize that opportunity.

Health Savings Accounts


If you’ve never heard of a health savings account or don’t know exactly what it is, then this post is for you.

Depending on what type of health insurance you have, a health savings account can be a great idea.If you are a fairly healthy person and do not go to the doctor often then you should choose a plan with a high deductible and open a health savings account. A benefit of a high deductible plan is these are the plans with the lowest premiums. Many banks such as First Bank and Trust, offer Health Savings Accounts.

A health savings account is an account that you use to pay for qualifying health and medical expenses. Say the deductible on your insurance plan is $3,000. Once you have saved up $3,000 in your HSA, then you are 100% insured. Below I have outlined some benefits of an HSA.

  • All contributions that you put into the account are tax-deductible. This means that if you itemize your deductions and file a schedule A with your tax return, you can lower your adjusted gross income by the amount you put into your HSA. For individuals you can put in $3,350/year and a family can contribute $6,550/year.
  • Some employers have what is known as a cafeteria plan which would allow contributions to be made to your HSA directly from your paycheck. Your taxes on that paycheck would be calculated after your contribution was made, making the contribution tax-free. This allows you to pay for qualifying out-of-pocket medical expenses using tax-free dollars.
  • Any unused funds in the account at the end of the year continue to remain in the account year after year, unlike the flexible spending account which is a “use it or lose it” account.
  • To access the funds in your HSA is very simple. Once the account is established, you get a debit card that you use like a regular card. You can present this card at stores or doctor’s offices to pay for a co-pay, pay for medical services, buy prescriptions and even some over-the-counter medications.

Morning Routines


“The early bird catches the worm”

If you ask any highly successful person what time they get up to start their day, chances are the answer is sometime before 6AM.

Your morning sets the tone for the remainder of your day. If you are stressed and running around trying to get out the door on time, then it is likely that the rest of your day will be stressful. However, if you wake up early you actually have time to collect your thoughts and plan out how your day will go.

Waking up in the morning is the signal that it’s a new day, a new opportunity to make a difference, to think of a new idea. You should be leaping out of bed with a smile, ready to conquer anything that comes your way!

Morning is my favorite time of the day. I usually get up around 5AM. As soon as my alarm goes off, I’m up and out of bed making coffee and eggs. After breakfast I’ll have the news on in the background while I read a business related book. While I’m reading I’ll jot down any thoughts or ideas that come to me. Occasionally I might exercise in the morning by jogging or doing yoga. I’ve been doing this same routine every morning, even on weekends, for over a year now and it has drastically changed my life.

I recently listened to a podcast that featured Hal Elrod, author of “The Miracle Morning”. In his book he stresses the importance of having a morning ritual. He researched all of the morning routines that successful people do and combined them all into one routine that he calls “the miracle morning”. He compiled everything you should be doing in the morning into an acronym called “SAVERS”. I’ll go into detail about what each letter stands for.


Start your day off with silence. Many people’s days are filled with noise and hectic activity. You need to take some time to just be with yourself and reflect on any thoughts that may come to mind during this time of silence. You can do this through yoga, meditation, or prayer.


Affirmations are like chants that you say over and over to yourself to get in your mind that you can do anything that you set your mind to. They are like a self-fulfilling prophecy. Creating an affirmation is a 3-step process.

Step 1: What Do I Want?

Step 2: Why Do I Want It?

Step 3: What Am I Committed To Doing In Order To Get There?

Here is an example of one of my affirmations:

“I want to be financially independent so that I can live the life of my dreams, therefore I am committed to working hard and being as successful as possible.”


You need to visualize yourself doing the process of achieving whatever your goal is. Don’t just think of the end result. You need to actually see yourself doing the steps necessary to get there. So if your goal is to run a marathon, visualize yourself lacing up your shoes and going out the door for a run. This visualization process will help you realize that the end result is dependent on the process necessary to get there.


Some people just aren’t morning exercisers, and that is fine. If you like doing your workout in the evening, continue doing that. The point of exercise as part of your morning routine is to get your blood flowing and getting you energized. You can go out and run 5 miles if you want to or just do one minute of jumping jacks. Either one of those activities will get your heart rate up and your blood flowing.


This is what I spend most of my morning routine on. I need to start dedicating more time to the other categories. Reading in the morning will give you so many ideas and get your thought process flowing which in turn will allow you to have a more productive day. Reading allows you to learn from people who have already accomplished what you dream of accomplishing. The point of reading in the morning is to learn insights and new ideas from successful people and businesses, so you probably shouldn’t be reading Harry Potter or 50 Shades of Grey. Nothing wrong with those books, I’m a huge Harry Potter fan, but for your morning reading, you should be reading something more educational.


Keep a journal or notebook and just write down anything that comes to mind. You can write about what you did yesterday or write down any new accomplishments you hope to achieve during the day or anything you learned from reading during your morning routine. Allotting just 5 minutes to writing something down is a stepping stone to becoming successful.

With that, I will leave you with this quote that I read in one of Robert Kiyosaki’s books.         “Whatever you can do or dream you can, begin it. Boldness has genius, power and magic in it. Begin it now.”