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Greetings!
This is the monthly newsletter of Sherer Financial Coaching, we hope you find it useful and entertaining. If so, please forward it to someone you know who might like to be on our mailing list.
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Money can't buy happiness .....can it?
 There's a saying that money can't buy happiness, but can it? Well...maybe. If you think happiness can be bought in the form of a new 50" plasma from Circuit City or some retail therapy at Macy's (Oooh girl that top is you! Buy two!) Or that shiny new Lexus you've had your eye on at the dealer...probably not. As soon as the first scratches show up or the TV picture doesn't seem quite as impressive or the style starts to change, the happiness will fade.
Recent studies suggest that money spent creating fond memories with family can in fact make you happier than "stuff".
Recently, my wife's parents were visiting from Colorado. We piled everyone in the car for a trip to the shore. We snuck out on a weekday in early June so there were no crowds. The weather was beautiful and my daughter had the time of her life playing with her parents and grandparents, something she doesn't get to do very often. The outing was maximum fun and minimum hassle and expense due to the timing and the fact that we brought our own food and drinks to cut down on the need to purchase items from expensive convenience stores.
We were fortunate to have another opportunity to build some fond memories when we received word that my brother Jeff, who had moved to England was going to be in New York City for a few days. I hadn't seen my brother in 15 years and had never met his wife. They had also never met my wife and daughter. I had a terrific time getting reacquainted with my brother and meeting his wonderful wife Sadie. Everyone else had a great time getting to know each other as well.
Before leaving the city, we wandered around Times Square enjoying the weather, taking in the sights and sounds of the city. The walking tour was free ... well, almost free. There was $3.50 for some nuts from a street vendor and we did walk by the Hello Kitty store. My wife and daughter tell me it's a punishable offence to walk by the Hello Kitty store and not stop, look over the whole store, rearrange most of it, and not come out with at least a little something cute.
On both of these occasions, we created fond memories that will last a lifetime. For a relatively small investment, we "bought" happiness.
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Let's play a game
 Games are fun! Remember as a kid all the fun we had playing tag, hide and seek and duck,duck, goose? Well, those games were, well... child's play compared to this game. This game is a bit more complicated, but a lot more fun, well, for me anyway... "Moo Ha! Moo Ha! Moo Ha Ha Ha Haaaa!" ...ahem..sorry.
Alright, here's how this goes... Oh, I should mention I can change the rules anytime I want... The name of this game is "Follow the money". I'll lend you money to buy things that get consumed or diminish in value to the point that they become worthless, and you try to pay me back before I raise your interest rate or charge unfair fees. See, I told you it'd be fun!
Now, here's where it gets complicated... I can raise your interest rate to 30% if you don't send my money when I want it or if I think you're borrowing too much money, or, if the pastrami on rye gives me heartburn.
You might send my money on time, but if I open the envelope too late in the day, I'll tell you you're late. I might start teasing you, calling you "late payer" and then my friends might raise your interest rate to 30% also!
Oh.. and don't worry, if we get bored, I'll think of some more interesting fees I can charge you.
Did I mention if you catch me cheating there's not really much you can do about it?
What's wrong? You don't like games where I make up all the rules and you have no rights? If you've got a credit card, that's exactly the game you're playing.
A while back, you received one of those cute little pamphlets from your credit card company..you know, the ones that nobody reads...the ones you could open from atop the Empire State building and it would reach the ground...yes, that one. That pamphlet advised you of something called an arbitration clause.
The arbitration clause basically took away all of your rights. You agreed, by not sending back an objection (Upon receipt of which the company would have closed your account.) to waive your right to sue the credit card company in a court of law if you felt they violated your rights. You agreed instead to have any disputes settled by arbitration, and the credit card company picks the arbitrator! That's sort of like having the opposing side pick the judge in a trial, but don't worry, the credit card company will also pay the arbitrator's fee... uhhh wait a minute... is that a good thing?
Arbitrators know if they don't play ball with the credit card companies, they won't get picked to hear more cases, so guess who usually wins cases that go to arbitration ..... yup.
Credit card companies are the best there is when it comes to playing games, you just can't compete! To further stack the odds, they even managed to buy congress when they recently had the bankruptcy laws changed. Now that's power!
So, how do you win at this game? There's only one way... don't play it. If you don't have any credit cards, you can't get cheated by the credit card companies. You won't have to contact customer dis-service and wander the electronic maze to fix an error, or find out why a payment didn't post on time, or why you were charged a fee. Just skip the whole thing. Spend the time playing a game you actually enjoy! Tennis anyone?
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What are you willing to do for success?
 What does it mean to win? Webster's Dictionary defines winning as A: to gain possession of by effort or fortune. B: to obtain by work. In other words, we have to earn it. Winning by accident is not likely. Winning means being better than average, pulling away from the pack.
So, if normal in America is broke, how do we set ourselves apart from the rest? How do we pull ahead? One answer is - margin.
What is margin? In business, margin is the profit to the seller from sales of a product, the difference between the cost of the product and it's selling price.
In personal finance, margin is what we need to put us over the top. If a full time job provides just enough income to provide basic necessities such as food, clothing and shelter without anything left over for debt reduction or savings, then there is no margin, no profit, no way to win.
In his book "The 5 lessons a Millionaire taught me" Richard Paul Evans describes getting ahead by "winning in the margins".
How do we win in the margins? there are two ways. The first way to win in the margins is to look for additional ways of generating income. Continue to work your full time job to pay for necessities, but work the side jobs to get ahead. You might start a business, have yard sales, get an extra job, learn an additional skill that can provide income.
Ask yourself what you want to be when you grow up, then find out if there a way to learn the skill required to get into the field you're interested in. Always thought web sites were cool? Perhaps you might take a class in web design, intern with a web design firm, gain experience and before you know it, you're earning some extra money and winning in the margin!
Is there a hobby or idea you have that you can put to work?
In "The 5 lessons a Millionaire Taught me", Evans describes how his wife's grandfather, a poor immigrant, worked at a facility near Salt Lake City that processed gold from a mining operation. Pietro Deserra worked with the furnace that melted the metal so it could be poured into the molds for bullion. Pietro noticed that every now and then, the liquid gold would "pop" sending bits of molten metal onto the hood of the furnace. Pietro saw an opportunity to win in the margins. He asked his foreman if he could stay after work and clean the furnace hood on his own time, keeping any bits of gold he found. The foreman agreed. Within months, Pietro had two coffee cans full of gold, nearly Twenty Pounds!
The other way to win in the margins is to save money. Consider every single purchase. Ensure the purchase in needed and that it is being made at the lowest possible price and at the right time. Make sure you're not being lured into making impulse purchases, buy what you mean to buy. Take any saved money you've "won in the margin" and put it into savings. If you can save just $100 extra dollars a month and invest that at the S&P 500 index average rate of around 10%, after 40 years, that money would be worth almost three quarters of a million dollars!
"Success is not the result of spontaneous combustion, you must set yourself on fire."
- Reggie Leach
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We'd like to hear from you!
We'd like to know how you're doing on your journey to becoming debt free. Drop us a line and let us know! We'll include it in upcoming newsletters to encourage others!
Have a question? Send it to us and we'll answer it in an upcoming issue of the newsletter.
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Events If you enjoyed our last "Dumping Debt and Building Wealth class, tell your friends! We will be running another class at Northampton Community College in August. The class will meet the first two Thursdays in August from 7 - 9 PM. For more information contact Northampton Community College or click here.
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Whatever your goal, strive to be great, then help others!
Sincerely,
Eric Sherer
Sherer Financial Coaching
Phone: 610-570-0948
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