When I was in my early twenties I made a mistake that I didn't understand until it was years later. I went out and purchased a brand new car on credit. I loved the car but realized by year two the car wouldn't be worth near what the loan total was. It was too late, I was locked into a car payment that I really didn't need. Remember, the name of the game is to build your money army to be strong. If your army is strong enough you don't need credit to purchase a car. CASH IS POWERFUL If you decide to use credit it's only to increase your credit score which should be part of your long term strategy. If you don't believe me go to the mall and drop your credit application on the floor and see if anybody takes it. Turn around and drop $100 on the ground and see how quickly someone will pick it up.
Think about it like this - how often do you see people buy cars and as soon as they are paid for end up trading them in on another one? They've purchased a car that depreciates in value - pay it off and then turn around and get rid of it to start the whole process over again. That's a path for failure... Your car is NOT an asset but more of an expense. How often do you put gas in your car? How often does your car break down? How often do you make a car payment? A car creates many casualties in your army. If you are going to purchase a car figure out how to minimize your casualties. STRATEGY STRATEGY STRATEGY
*An asset is something that will make money for you and preferably with no effort on your part.
Rule 1: Every month take a percentage of your money to invest in your army first.
Rule 2: Create a strategy
Rule 3: Improve strategy
Rule 4: Repeat steps 1 and 3
I have to say this is a serious statement! It is the truth and we need to get it. I have always been that guy who buys a car on credit and as it would get old I would trade it in for another and so on and so on the story went until last year when I lost my job. My wife lost her car and I almost lost mine too. Then I started reading and listening to Dave Ramsey and figuring out that my "army" was at its weakest point. I am in a financial crunch now and its all caused by my in ability to know what to do with money and how its suppose to be used. I have a pretty big road ahead of me to get things back in place but I have children to care for and there is no better time than right now. I have been putting a little away each month and things are starting to look better. But it is a struggle everyday for me right now to not spend, spend, spend as I once did when the month was flowing like no tomorrow. I also did not realize how quickly your bills and credit card purchases can get out of hand when you do not have an income to cover any expense. It has been over a 18 months since lost my job and a year since I found another and I am still in over my head in bills for everything! I feel as if it will never stop but I do have one bright star and that is knowing that I do have hope. With each passing paycheck I feel there is hope. But now I need to focus on not just the regular bills (utilities, etc.) But starting all over again from scratch with nothing almost. I did not loose my car, but maybe it would not have been so bad to lose it considering out of destruction would come creation. In the ashes of losing my old job I have found new responsibility in my new job. I have also for the moment put aside my indulgences and looked at the larger picture. Its not about me and what I want right now. Its about leaving some type of legacy for my children to know and aspire too. Its about the way you do business. Not in the normal sense of a transaction. But to have each situation that you are placed give you a light into you and what you are really about. Are you greedy as I was? Are you selfish and only want to get ahead of the next guy or girl? Maybe you are just a pawn and not really a queen or a king in the game of chess or is that life? Well all I can say is now is my chance to seize this moment and turn a new chapter in my life. SO HERE GOES....
ReplyDeleteThank JH for the continued inspiration!