Many corporations are scrambling to find ways to keep the doors open.  One of the first reactions is to cut personnel.  Save on costs.  What is your gut reaction to weather this storm?

Mine is to cut costs and not get involved in new ventures.  I scrubbed my household budget to examine where I can save some extra change.  Just four years ago, I did the exact same thing as my wife and I were saving for our first home.  At that time we found over $700 a month.  There I said this wouldn’t happen again…

Never say never.  My latest scrubbing uncovered $200 each month.  Sure this was not as bad, but the point is that I was making a conscious effort and still got up to this point again.  Even those of you who think you have no room to grow…look again with an open mind and B.E. H.O.N.E.S.T.

Bills; Essentials-Housing, Outfits, Num-Nums; and Extras-Savings, Throwaway.  Quick translation.  Break down budget into needs and wants.  Needs are bills, housing, clothing and food.  Wants are savings accounts and luxuries like travel and entertainment.  I cover making a budget a little more in another post.

My goal here is to get you into penny-pinching mode.  Really dig to see where you can save a couple of bucks each day/week/month/year.  One blogger commented, “Buy the paper towels that come in smaller sheets (the 1-2-3 sheet).  Most often you only need a small one but take a whole sheet.”  What a simple cost-cutting idea!

Over the past five years I found a collective $900 each month by pinching pennies.  How much can you find?  Instead of getting into debt over your head, get free from it.  I used my extra money to buy a home and save for my future wants and needs.

Give me some money saving ideas.  What will you do with the extra $$$$?

A comment received in another article sparked an idea in my mind…lucky for you :)  Our first instinct is to whine when we disagree with decisions made by leaders.  We all have those rules we know should be followed, but everyone ignores them.  We create cultures that actually accept these behaviors.  What can we do to make a change?

I have seen this played out a hundred times in my life, “The book says to do this, but no one does.”  Most rules have a meaning.  Some are for safety or cost-saving, and some are just “sacred cow” traditions.

When you disagree with a rule, question it.  Ask your boss why this is done.  Get the bigger picture answer first.  If there is no clear answer, change needs to happen.  I ran a quality assurance program that required detailed reports to be typed and routed to seven different people, and it took two weeks to get completed.  Why?  No reason was given to me, and I digitized it.  Everything was done through email, and the turn around time was now between two to eight hours!

To be honest with you, I really would have rather complained about it and waited for the leader to wave his magic wand and solve all the problems.  In fact, at first I did just whine.  Guess what?  Not a single benefit was gained…I still had to track this stupid piece of paper for two darn weeks.

By changing this one little thing, my life got much easier.  All those in my command chain freed up a little time, too.  AND the programs I inspected were able to fix the problems almost immediately.  My leadership really was happy, and the next time I needed some help to fix a “whine” they were all ears to my suggestion.

What can we do to solve a problem together?

Four letters will sail you past all fear…P.R.E.P. This acrostic stands for Plan, Research, Examples, and Practice.  The Planning stage is the toughest for me.  This is where you need to determine who your audience is and the route you want to lead them down.  I like to create an outline from introduction to conclusion and all the points in between.

Next, it is time to Research each point and find information to support your outline.  This is getting down and dirty to find the meat of the lecture.  Dig deep, because simply stating what everyone already knows wastes everyone’s time.  However, doing a good outline will make research much easier and faster.

Planning and research are the two most vital components of any presentation.  Finding Examples is going to add vibrance.  Nobody wants to get slapped with statistics and mere facts.  Look for interesting stories or even jokes that lighten the mood while keeping everyone on topic.  We all have been to the death by PowerPoint meetings but still are tempted to do the same thing.  Look for other visual aids such as videos, equipment, handouts, etc. to keep their attention.  An example of this is if you are pitching a new business venture for a hotel, let everyone feel the extra soft towels you want to purchase instead of just putting the costs on the board.

Finally, Practice your speech or presentation.  The more experienced you get, the less time you will have to spend here.  Regardless, you need to ensure that all of your slides are working properly and follow your outline.  Do the links actually take you to the site?  Nothing is more embarrassing and stressful than having your visual aids sabotage your presentation.  Make sure everything works.

The morale to this posting is PREPARE, PREPARE, PREPARE!

Investment portfolios can be structured into three main asset classifications, including cash, fixed income, and growth. Below are five types of investors and their descriptions.

Very Conservative Investor

Very conservative investors are typified as those whose household income is unstable or those who have no tolerance of financial loss. Your investing experience is only around 2 years or less.

Conservative

Your household income is still somewhat insecure, but you are in better shape compared to the very conservative investor. You have a risk tolerance of about 5%, but you don’t want to risk more than that. Your investing experience is between 2-5 years.

Moderately Aggressive

Moderately aggressive investors are those whose household income is already fairly stable. You can tolerate as much as 10% decline in your investment portfolio. Your investing experience is between 6-9 years.

The Aggressive Investor

The aggressive investors are those whose household income is already secure. You can tolerate up to 15% decline on your portfolio value if you are this type of investor. Your investing experience is between 10-15 years.

Very Aggressive

Your household income is very secure, if you are a very aggressive investor. You can tolerate market fluctuations, and you have a risk tolerance of 20% or more on your portfolio value. You’ve been investing for 15 years or more if you’re this type if investor.

Why do people go to Wal-Mart or dollar stores?  To buy things more cheaply than in other places.  This is a very smart shopping policy.  If you went in to your favorite clothing store and saw jeans for $0.50 when they are normally $75.00, would you panic and sell all the clothes in your closet?  Heck, no!  You would clear the racks.

Why do we all panic now when our stocks prices are falling?  This is like the ultimate holiday sale.  Sure, if you are close to retirement age or were planning on using that money for another purpose in the short term it is a real bummer.  One thing to keep in mind for the future is when you are within a few years of needing the money you have invested, put it into something solid like savings bonds or CDs.

There are actually people dumping the stock they have and placing even less into the automatic investing plans they have.  I understand it is really scary and there is no perceivable bottom to this drop in the market, but history has proven the market will rebound.  In fact, on average it has risen 13% a year over the last century.  Remember the Great Depression, Savings and Loan issues in the 80’s, etc.?  Still the average has been this high.

My advice is to find a solid company like General Electric (GE) or Coca-Cola (KO) and invest in them.  Both pay dividends and have not been hit extremely hard with the recession.  It is likely their numbers will once again drop a little lower but in a three to five years I bet they go up again.

My personal stock pick for the month is GE.  Their yields are sitting at 6.36.  This means whatever I invest today, and allow the dividends to re-invest, will double every eleven years.  Imagine investing even more over the next decade.

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If you are the owner of a business or simply a human being, this posting is for you.  When we give freely of our resources we receive ten-fold as a return.  Here is a background story.  I used to teach martial arts to five to eighteen year olds when I was in high school.  My best friend and I ran the school for four years.  As Black Belts, we were never to be questioned but we both had the same mentality in a strict rank structure.

Our policy was to treat every student with the same respect that we demanded.  We would go out of our way to make sure that this happened.  Neither of us were trying to get attention, it is how we were raised.  In fact, we never got a single penny because of this attitude.  However, we got so much more.

Ten years later Chris and I occasionally come into contact with one of our students or a family member.  The reception is always similar.  We often hear about the impact we had on the student.  It is an unbelievably good feeling to hear this.  Such a small investment has paid dividends in our lives.

When we give our time, skills or finances to others, we always get rewarded.  Those rewards are rarely a fringe benefit or financial gain.  Sometimes you will not even get a thank you.  The other person may never even notice, such as putting your neighbor’s mail in their mailbox instead of routing it back to the post office.

Our gifts and rewards come in the form of personal achievement.  When you know in your heart you are giving freely of yourself, you will feel great about yourself.  Take a moment to give.  By investing in others you are really investing in yourself.

Pastor Greg Surratt gave the example of a flat-panel plasma TV costing only a few dollars while a pack of underwear was $1,000.  We would buy the television that we did not need and ignore what we really needed.  This made me question if I ever have done this in my finances…I did.

I recall in the not-so-distant past, putting a trip on my credit card because I knew about future cash in my pocket.  I chased my wife out to Los Angeles while she was on business and made it a vacation for us also.  The whole trip went onto our credit card because I counted my chickens before they hatched.  Thankfully, they hatched, and the trip was paid off as planned.

Have you ever done this?  Acted on a hope?  We like to charge things or take financial leaps of faith all the time and often on things that don’t matter.  We must first, not spend money we don’t have.  Then evaluate what the best use for our money will be.  To do this we must think about where we place our value.  Do we focus on being entertained?  Do we focus on our family’s financial futures?

What is the most important thing in the world to you?  Your family or seeing Hollywood?  As much as I hate to admit it, the trip was not needed.  We could have waited for the money to come in and use it responsibly.  I could have put that cash towards paying off my car.  Once paid off, I could reward myself with a vacation I could afford.

More often than not, we are going to use our money for things that are not needed and ignore the things that are.  The only way around this is by evaluating our values.  What is most valuable to you?

For starters, no one is certain about what will happen to the economy, and that is scary. Change and the unknown are very scary, and that is why suspense movies make you jump out of your seat. Currently, we are in one of these movies without a script.

Why should we not be afraid? The economy moves in natural cycles. The “Roaring Twenties” was capitalizing on the stock market. People were making fortunes off of their portfolios. Then the market crashed, and all those that were over-leveraged were left with nothing. The ripple effect carried throughout the masses, and the panic further hurt those doing well and businesses collapsed. This in turn resulted in lost jobs and ultimately the Great Depression.

Then the US auto and steel industry was insanely powerful. Millions of jobs and vast economic booms were experienced. Foreign competitors kicked our complacent butts and that industry collapsed again crushing the populace. Now there is something similar happening with oil prices and the housing industry which were booming in the recent past.

Again we got over-leveraged. Greedy companies were passing out credit as if it were in the “take-a-penny” tray. We were greedy and took the credit and bought useless things that we could not afford. Mortgage companies gave us loans that forced us way out of our means. The companies experienced a boom in sales. The GDP was up and everyone was officially winning.

Until…the rise in oil prices. Now, our paycheck to paycheck strategy was collapsing. The banks started suffering and wanted their money to pay for their expenses. Interest rates were raised on the adjustable rate loans, and people began losing their homes.  They got over-leveraged.

Why shouldn’t we be afraid? Every single financial crisis in our history has been overcome, and each time we have come back even stronger.

What are you doing to protect your fiancial futures? What advice can you give our readers?

These are chaotic times of banks closing the doors and the government being looked upon to save the economy because we have fostered a mindset of buying things we cannot afford. Our economy is failing because we are relying on credit cards to buy things older generations would have saved for OR not even bought at all. Then there are banks and companies handing out credit like candy bars on Halloween. I was buying a soda at a department store one day and was asked if I wanted to save 10% by getting a store card…on a soda?

To stop our personal financial turmoil, we need to break the cycle of spending first. I did a small-scale experiment to accomplish this by tracking everything I spent. I saved every single receipt for an entire month. At the end of the month I separated the receipts into wants and needs. A need is something I can’t function without, i.e. food, soap, etc. The wants were luxury items like music downloads, clothing, and anything of the sort.

I also included all of my bills into the needs column. The total of the needs was my baseline. I then took on the cro-magnon’s advice and compared the amount coming in to the amount of needs being paid. Everything leftover went into the want pile. Once I got the money separated, I racked and stacked my wants. What did I want most? Do I have enough to buy it? If I did, I bought it. If not, I saved up to buy it.