The Butler Project

A Buddhist perspective on debt and happiness:

“Herein, householder, these four kinds of happiness are appropriate for one who leads the household life and enjoys the pleasures of the senses. They are the happiness of ownership, the happiness of enjoyment, the happiness of freedom from debt, and the happiness of blamelessness.

“And what is the happiness of freedom from debt (ananasukha)? Herein, a son of good family owes no debt, be it great or small, to anyone at all. He experiences pleasure and happiness, reflecting. ‘I owe no debts, be they great or small, to anyone at all.’ This is called the happiness of freedom from debt.

And Buddhism’s take on how we should think about money:

the Buddha stresses four areas in which householders may relate skillfully to wealth [D.III.188; A.V.176-182]:

Acquisition — Wealth should not be acquired by exploitation, but through effort and intelligent action; it should be acquired in a morally sound way.

Safekeeping — Wealth should be saved and protected as an investment for the further development of livelihood and as an insurance against future adversity. When accumulated wealth exceeds these two needs, it may be used for creating social benefit by supporting community works.

Use — Wealth should be put to the following uses: (1) to support oneself and one’s family; (2) to support the interests of fellowship and social harmony, such as in receiving guests, or in activities of one’s friends or relatives; (3) to support good works, such as community welfare projects.

Mental attitude — Wealth should not become an obsession, a cause for worry and anxiety. It should rather be related to with an understanding of its true benefits and limitations, and dealt with in a way that leads to personal development.

It is the Buddhist belief that our circumstances at birth stem in large part from how we behaved in previous lives. This excerpt discusses how that belief relates to our actions in the present:

…the Buddha praised the quality of goodness and benefit more than wealth itself. The common tendency (in Thailand) to praise people simply because they are rich, based on the belief that their riches are a result of accumulated merit from previous lives, without due consideration of the factors from the present life, contradicts the teachings of Buddhism on two counts: Firstly, it does not exemplify the Buddha’s example of praising goodness above wealth; secondly it does not make use of reasoned consideration of the entire range of factors involved.

A favorable birth is said to be a good capital foundation which affords some people better opportunities than others. A good “capital foundation” can easily degenerate. If it is used with care and intelligence it will lead to benefit for all concerned, but if one is deluded by one’s capital foundation, or favorable situation, one will use it in a way that not only wastes one’s valuable opportunities, but leads to harm for all concerned. The important question for Buddhism is how people use their initial capital. The Buddha did not praise or criticize wealth; he was concerned with actions.

Finally, the article discusses the highest and best use of wealth:

According to the Buddhist teachings, wealth should be used for the purpose of helping others; it should support a life of good conduct and human development. According to this principle, when wealth arises for one person, the whole of society benefits, and although it belongs to one person, it is just as if it belonged to the whole community. A wealthy person who uses wealth in this manner is likened to a fertile field in which rice grows abundantly for the benefit of all. Such people generate great benefit for those around them. Source

Lately I’ve been doing some reading about the financial tenets of different organized religions. It’s interesting to see that all of the religions I’ve researched so far (Buddhism, Hinduism, and Islam) have specific instructions for their believers on the relationship between their soul and their wallet.

For me one of the most interesting discoveries so far is the Muslim view of debt. Although I had heard faithful Muslims are forbidden from paying or charging interest on loans, I had mistakenly taken this to mean that they couldn’t borrow or invest money. That’s really not the case.

I found a report written by a couple of Muslim scholars about how different the world would be if the wealthy nations of the world were to abide by the teachings of Islam, and cancelled debt owed them by the poorest of the world’s nations. I’d encourage any of you to go and read the report in its entirety. Just Google “does Islam fobid debt” and you should find the pdf.
I’m going to publish several excerpts from the report. I can’t say I agree with every aspect of Islamic finance as I understand it from this report, but think about how different our country’s collective financial situation would be if we employed these practices.

Islamic commands to refrain from charging interest and to share financial risk seek to avoid the concentration of wealth and the economic exploitation of the weak and thereby prevent situations such as the current debt crisis from arising in the first place.

The core belief in Islamic finance is that money should not in itself be an earning asset; therefore Islam prohibits any and all forms of interest. There are several passages in the Qur’an which clearly condemn the practice of interest…

Interest is considered an unjust and exploitative instrument of financing since the lender is assured a return without doing any work or sharing in the risk, while the borrower in spite of hard work, is not assured of a positive return. Furthermore, if the borrower’s investment is unsuccessful through no ault of his or her own, it is unfair for the lender to demand repayment. The prohibition of interest is therefore a mechanism to establish justice between the lender and borrower.

For westerners (or for me, anyway), it’s hard to think of interest as an unjust and exploitative instrument. Islam is not opposed to wise investing, but it advocates equity financing as opposed to debt financing. In other words the person who would ‘lend’ the money instead shares in the risk of the venture.

“Islam encourages legitimate commerce, trade and wealth creation but only on the basis of equitable risk sharing. Importantly, Islam does not allow gain from an economic activity unless the financial capital is also exposed to the risk of potential loss. Therefore, Islamic finance promotes investment on the basis of profit and loss sharing between the lender and the borrower10. Financing methods that share risk encourage more responsible lending since both parties share in the reward or failure of the investment and have, therefore, an interest in ensuring that funds are invested wisely and productively.”

Islam discourages heavy debt as much as possible – indeed it is something that is considered to have a serious and direct effect on a Muslim’s belief or conviction because it can lead to harmful consequences. The Prophet Muhammad (peace be upon him) used to regularly supplicate “Allah, I seek refuge with You from sin and heavy debt”. When someone remarked, “how often you seek refuge from heavy debt”, he replied, “when a man gets into debt, he speaks and tells lies, and he makes a promise and breaks it” (reported by Bukhari and Muslim). The Prophet Muhammad (Peace be upon him) also said, “Whoever dies free from three things – arrogance, cheating and debt – will enter Paradise” (reported by Tirmidhi), and “The soul of a believer is held hostage by his debt in his grave until it is paid off” (reported by Tirmidhi). Clearly, from an Islamic point of view, accruing debt is a serious matter and should not be undertaken except in cases of real necessity. Importantly, it is incumbent upon on those providing finance to do so in a responsible manner and to not overburden borrowers.

It is worth emphasising that incurring debt to fund luxury and extravagance is contrary to core Islamic values that condemn excess and waste. The Qur’an has in very strong words condemned and prohibited extravagance and prodigality:

“Eat and drink, but waste not by excess, for God loveth not the prodigals”. (7:31)

“Squander not wastefully, surely the squanderers are the devil’s brethren.” (17:26-27)

I had my sister read a draft of this post and she said “Seems a little too socialist for me.” I agree. For me this philosophy puts and undue burden on the lender to try to evaluate the borrower’s ability to repay. Any responsible lender should be able to perform that evaluation, but for me it goes too far to cancel the debts of a borrower when they can’t make their payments.

While I find this ideology interesting, and think it would have merit on an individual case by case basis, enforcing it on the entire financial system could cripple us. After all, our economy, and the economies of the many nations we trade with, depend in large part on the fact that money on its own IS an earning asset.

Yeah, Mark usually writes about his own millionaire interviews, but this is Emily today. And this segment of Todd’s interview is packed with good stuff.

First, a little background: Todd and his partner own a network marketing business that brings in about a million dollars a year. During his interview, Todd shared with Mark some amazing insights about who he is and how he has built himself into a millionaire.

Mark started out a little sensational, wanting to know if, at the young age of 26, Todd could reasonably retire and actually maintain or even increase his income without ever making another business phone call or holding another meeting. Todd acknowledged, yes, he thought that was a pretty reasonable assumption. In fact, he did take an entire month off recently when his first child was born and his income increased $6,000 that month. But as he thought about retirement, his question to Mark was:

Todd: What the heck would I do? Just sit around and do nothing? I’d just . . . I’d die off I think.

Right now [we’re] in a very incredible growth phase . . . I want to participate in that as much as possible.

I see the opportunity much larger than what it is, and that doesn’t mean I’m only driven to make more and more money, but I’m driven to help a lot of the people within our groups make more and more money, and I really feel like . . . we’re changing a lot of people’s lives . . . it’s not just me and my own efforts, it’s built on the efforts of now you know, 10000 + people!

Mark: What does it feel like to wake up in the morning and, if you know what I mean, know that you don’t have to? You’re 26, you’re not like someone who worked for 40 years and hated it and finally you’re free of it. You can get up every morning and say, “Well, I don’t have to, I choose to” What does that feel like?

Todd: Well, honestly, that’s the thing I think everybody should experience because most people go through life completely begrudgingly; they hate what they do. Because of that, everything else in their life suffers: their relationships suffer, their own personal happiness suffers, their growth and development suffers. You know, I, by no stretch of the imagination have a perfect life, but I’m very, very happy. . . my wife loves the fact that there are days when she and I plan — a couple of weeks ago it was her birthday and she wanted to go shopping, so half of one day, when . . . most people would be working, we went and did that and went to a movie. . . [we] have that freedom to be able to do that.

At the same time I think that’s been created because of the passion and the work ethic that I have created for it, and that passion drives me to keep doing it. You know, I wake up excited to do it. . . . I don’t dread when I have to call somebody or when my phone rings or when I have to go meet with people. I really love it. I love people. I love going out and meeting with new people, seeing their lives change, introducing them to a whole new way of thinking and a new concept, and that’s really where my passion lies.

That’s the reason why I want to do more speaking and more teaching and I want to write books, is because I really believe that if people understood and were empowered with the right knowledge and they would apply that and develop in themselves their own purpose, I really think people could have everything they wanted. I don’t think that there’s just a luck factor why some people succeed and some people don’t.

Did you read that?! Todd doesn’t get up in the morning because if he doesn’t he won’t get paid; he gets up in the morning because he is changing people’s lives. He’s introducing them to a whole new way of thinking and how to apply knowledge and understanding to help them have everything they want. What is your passion? What could get you out of bed each morning excited to be up and get going?

Todd: People need to really know their “why,” and that “why” needs to be bigger than any obstacle that they have. They need to have a reason for doing it. And what I’ve found is that money is not a big enough why. What you’re going to do with the money and things you’re going to help and where your life’s going to change, maybe, but they really need to understand their purpose in what they’re doing.

The other thing is if you look at the way . . . Brian Tracy . . . back in the day when he was one of the first people that really started talking about goals, . . . one of the steps that he had was “who has done it?” And so you look at, what is it you want to accomplish [and] somebody [who has already] gone down that road . . . you look at what they had to do to do it and . . . learn from their mistakes.

For example, in [my organization] there are certain people, my sponsors, who I looked at and knew what kind of money they were making . . . I watched them and saw exactly what kind of work they had to put into it, and realized, you know, they were much further down the road in terms of their business experience, their maturity, their credibility, their contact base, and so I probably had to put even more into it than they did just because of my age. And . . . that was the price I had to pay if I wanted to have what they had.

But when you do that, you know what you want and why you want it.

You need to know why. And if you don’t have a big enough “why” in your life right now, you need to start planning how to get to that point. To the point where you’re excited and to the point where you’re doing the things that matter to you.

Our family’s eccomerce site sells trailer hitches. We’re not passionate about selling trailer hitches. So what keeps us going? A few things:

• All four of the Butler siblings live in different states. We’re all in different stages of our lives (some married, some single; some with kids, some without, some going to school, others moving up the corporate ladder, etc.) Working on the business gives us a reason to get together. Our business purchased each of us a MacBook Pro so we could ichat (video conference). We get together at least once a week to work on the business and catch up with each other’s lives.
• The business pays for family vacations. Two years ago we enjoyed “the best snow on earth” for a week over Christmas. Sometimes it just pays travel expenses when we all get together at somebody’s house. Eventually we plan to extend our Christmas vacations to two or three weeks.
• We’re having fun. Our eccomerce site is like a game for us. Higher search engine rankings, getting links, making sales, are all small victories we enjoy together.

The above reasons are all part of the “Why” for each of us. They’re the reason we can spend hours entering new products or tweaking our site design. They’re what keep us going when taxes are due or our drop shippers fail to deliver on time. We have our why, it got us through a year of making very few sales, it will get us through this year when we are growing at a fast rate, and it will keep us going when the challenge is gone and trailer hitches are still boring.

How about this site? We didn’t start this site to make money or for all the fame it’s got us (wink, wink); we started this site because we looked around and saw a lot of people struggling. Struggling with money, struggling with decisions, unhappy with their lives. After Mark did his first millionaire interview and shared it with me, we knew we were onto something powerful. We knew we needed to share.

This site is not about becoming a millionaire. It’s about living the life you want to live. It’s about you making the difference, the positive change, that you can make. Money simply makes your change easier, and, often, bigger. We’re passionate about getting this message out, sharing the experience and wisdom that financially successful people have to offer. And that’s what keeps us going, because if you think it’s easy to get someone who’s busy, passionately working out his or her own dreams to take a minute and sit down to talk about him or herself, well . . . you just haven’t read enough interviews yet.

Let me leave you with the advice Todd said he would give to people just starting out.

Todd: You need to find what your purpose is. You need to find what is it you really want to accomplish, what you want to do. And then you set out and do it. There really are limitless opportunities out there, and the ability to go and create whatever life you want to create, it’s not going to be easy by any stretch of the imagination. The focus that I would put on [you] is to become the person that then will attract the success that they’re looking for. Change the whole thought process from “What is it that I want to have?” to “What is it that I want to become?” Because when [you] do that, everything else really falls into place.

Wow. Let’s quote that again:

Change the whole thought process from “What is it that I want to have?” to “What is it that I want to become?” Because when [you] do that, everything else really falls into place.

Here is more from my interview with Todd, network marketing millionaire. One of the things I love about Todd is that he’s very aware of his own actions–the how and the why he does things.

Mark: What do you feel has been your key attribute that has contributed most to the success you’ve had?

Todd: I think more so than anything is my ability to communicate. You know . . . you can be involved in any different type of business, but you and I and the majority of people out there are involved in the exact same business and that’s the people business. Whether you’re selling x product or whatever it is or you’re selling . . . a service . . . whatever it may be, the ability to communicate clearly and to get your point across and to understand people and develop relationships . . . I think that’s been definitely the most important piece for me.

Mark: Do you feel that is something you were born with? Or even if you were born with it, how did you magnify that ability? How do I help myself develop the skill?

Todd: There are a couple of things. I do feel like, for me personally, I feel like that’s one of the God given gifts that I was given, but I feel like any gift that you’re given, if you don’t develop and hone that skill, it’s going to go away.

I think [there are] a couple of ways you can do that: one, I personally read probably more than anybody I know in terms of leadership books, books on communication, tapes, all those types of things, and so I’m constantly trying to learn from other people in that regard.

The other thing that I’ve done is I have spent a lot of time recording myself and recording other people and going back and listening to it and practicing in assessing my ability to communicate and trying to make that better. You know, I know that in what you do, you have sales calls and . . . I’ve done millions of conference calls and recruiting calls and . . . I’ve recorded hundreds of those and gone back and listened to them and said, “OK, where can I be better? That didn’t make sense. Why did I stutter there? How can I say that a little bit clearer? How can I answer those questions? When I came across those objections, how did I handle it? Did it work? Did it not?”

And then [I] also listen to other people who I respect, who I believe . . . I want to work with them, and spend quite a bit of time assessing what they’ve done, and then try to incorporate that into what I do.

I think that you learn best, and you’re probably the best judge or the most honest judge of your ability to communicate when you listen to yourself, more so than getting feedback from anybody else because you actually listen to it when you give it to yourself.

As I was listening to Todd talk about the value of communication skills and analyzing his interactions with people, it made me think of a good friend, who is now also a business partner of mine. When I first met him, he had been working in sales at the same company as I and he was terrible. You couldn’t point to many other people in our sales force that were worse than he was. He was probably making about $50 per 40 hour work week. Yeah…Fifty Dollars.

But he was determined to succeed in sales, and told me later that he would never have quit. The only way he was going to leave the job was if he was forced out (something I had lobbied for coincidentally).

To make a long story short, he ended up being one of the most successful sales reps in the history of our company, and he has now moved on to pursue our business full time.

How did he go from being so bad to being one of the best? Every week he would go to the Quality Assurance department of our company (we worked in a sales office where all our calls were recorded) and he would ask for recordings of both his own calls and those of the most successful sales reps. He took those CDs home and studied them for hours every night. He wrote down every word the successful rep said, and then practiced saying it how they said it. This went on for weeks and then months, and he started to improve.

An additional benefit of all this study was that he became one of the best listeners I’ve known. As he listened to all these sales calls he started to understand the meaning behind the clients’ tone of voice, and their non-verbal communication.

Now my friend has these skills forever. They served him well in his previous job, they’ll help our company immensely, and he’ll use them to enhance his personal life for a long time to come.

Like Todd said, we’re all in the people business. Whether you’re a stay at home mom, a school teacher, or a construction worker, you interact with people every day. Your communication skills determine how well that interaction goes and the relationships you’ll form.

One of the interviews I’ve done was with Todd, an incredibly successful network marketer. Todd is 26 years old; he’s been working at this for 5 years now, and he brings in over a million dollars a year with his partner, who also happens to be his brother.

Mark: Having been on the path that you’re on for a while now, and having accumulated some money, if you could only give me one piece of financial advice, or a couple, you know, what would the advice be?

Todd: You know, it really comes, my perspective also comes down to understanding the type of money I’ve made because when you make money in network marketing, it really is a different vehicle. And I guess my advice would be to create an income or incomes that are not completely dependent on your showing up. Whether that be through becoming a manager of a sales office where you’re getting paid a percentage of the sales of the other sales people that you have or a percentage of profits, or whether that be investing in things that are going to pay an annuity or a residual income or whatever it may be.

The fatal flaw that most people have in their idea of creating wealth is to work a job to where they make a good income and to save that and put it away, and the majority of people just don’t do that.

If you can create an income that is ongoing; it’s a hard thing to do, but there’s a lot of ways to do it, and I’m not saying that network marketing is the only way to do it. You can do it in real estate, you can do it by owning a parking lot, you can do it by building your own company; I mean there’s a lot of ways to do it. But creating some type of passive, residual income or multiple forms of it is really the only way to create total retirement freedom for yourself.

Mark: And, network marketing, there’s no question that’s a tough business; that’s a business with a lot of rejection in it on a daily basis, but you’ve had success there. Looking back now, five years later, thinking of all the crap that you did have to deal with and go through; was it worth it?

Todd: Oh, absolutely, I mean if you were to do it from a numbers perspective . . . if it were 8000 people that had rejected me in the last five years, I get paid more than 10 dollars for every one of those people who rejected me every single month.

I’m laughing.

Todd: I mean if you break it down to actual numbers, I’d say I’d probably been rejected realistically by maybe 1000 people so I’m making [more than $80] a month off of each of those people

Mark: (Still laughing.) That’s 80 grand!

Todd: You know, if you look at it from that perspective, oh yeah, who cares?!

Mark: That puts it in some pretty amazing terms . Maybe that’s gonna turn some of us on to network marketing.

Todd: Yeah, [you] could definitely do worse.

Let’s face it, getting out of debt, sticking to a tight budget, or building a new business is not always fun. In fact, many days you might feel downright depressed about it. And that’s OK because it’s hard work to make up for past mistakes, delay gratification, and keep at it when results are few and far between. Does that mean you should quit? No! That just means you accept that some days will be hard and you’ll figure out how to deal with them.

Try some of these solutions; they work for me.

1. Do something physical.

Lift weights, go for a walk, take a hike, ride your bike, run around the block, go for a swim, play Frisbee in the park, whatever you enjoy doing, do it! Physical activity will not only distract you from your cares, but it’s scientifically proven to boost your mood.

2. Play.

I have kids, so I always have someone to play with. It’s amazing how a short game of pretend, Chutes and Ladders, or kick ball can improve my mood.

3. Serve others.

Nothing is a quicker antidote to a pity party than helping others. Do something nice for your spouse, your children, even your mother. Send a card, perform a secret act of kindness, help a neighbor with yard or house work. It doesn’t have to be a big thing, just think about someone else and act on their needs for a minute.

4. Gratitude.

Gratitude goes right along with service. You can’t help but feel better as you count your blessings, and nothing makes your blessings more apparent than serving people in tough situations. Oprah made gratitude journals famous a few years ago. It’s not a bad idea to start a little notebook where you write down the things you are grateful for. It’s amazing how many things you start to notice when you’re paying attention.

5. Avoid sugar, caffeine, and other stimulants.

Yeah, yeah, we all know we need to eat well. But junk food tastes so good, especially when you’re having a bad day! Did you know stimulants, including sugar and caffeine actually increase anxiety? Check out what not to eat here

6. Make a visual.

Sometimes we need a visual reminder of where we’ve been and how far we’ve come. I’ve made a simple one to show how much debt I’ve paid off (remember my vending machine venture?) and have that reminder that I’ve done a good job. The visual reminds me that by continuing to do the hard work, I’ll be through with debt soon. If you don’t have debt, make a net worth visual or a bar graph showing your business’s improvements over the last few weeks, months, or years. Include your goals in the visual and post it somewhere you’ll see it often.

7. Get to work.

I loved this post about whining. Quit whining. Get to work. If all your work is done, play; play hard.

8. Surround yourself with Success.

If you remember Dan, one of Mark’s interviewees, he read books every day:

Dan: [Read] self help books– it could be anything, it could be Tony Robbins, it could be sales books, it could be Zig Ziggler, Tom Hopkins, whatever . . . Just get in the habit of reading, even if it’s only for 20 minutes a day or a half hour a day where you wake up and you start your day with that and it just gives you ideas; it gets you in the right mind set. [Basically] you need a personal mentor, and I use a lot of those books kind of as that to get me upbeat and get me going.

Read blogs about other people who are working at doing what you’re doing. They’re proof it can be done.

Read the Butler Project. Every time I listen to or read about a millionaire interview, I am inspired and feel like I can take on the world. They did it. So can we!

9. Reward yourself.

When you get to a certain point, you’ll have some financial and business breathing room. Think about a “sunny” day fund. Even if you’re just saving $10 a week of your grocery money so you can go to lunch with a girlfriend or buy a pair of shoes in a few weeks, it’s a good idea to have plans for you.

10. Remember, it takes time to change your life.

Whether you’re working on paying off debt or building a business, expect that it will take a significant length of time to produce significant results. Our family owns an ecommerce site. Last summer, after working on it for a good 10 months, we were all pretty much ready to throw in the towel. We were doing a lot of work for a very little money. We took 2 months off. After the break, we got together and decided to make some significant changes on the site and with our suppliers. Then we got to work. It was a lot of hard work and still, the results were meager.

Then the Christmas season began, and business picked up. We were enthusiastic and eager again. January came and we expected the same serious slump we had experienced the previous January. It didn’t come. In fact we held steady through January and February and now we’re setting new records for traffic each week.

Remind yourself it takes time. All the hard work we did months ago (setting up accounts with new suppliers and entering literally thousands of products into our database) is paying off now. We’re not entering new products anymore, but we are enjoying the results of that hard work months later. The little things you do today (saving that 10 bucks, or advertising your business, whatever you’re doing) can make a big difference tomorrow or next week or next year. It takes time.

Wow. There are so many good blogs out there right now. Here is a look at a few of the posts I read and enjoyed this week.

Frugal Dad wrote a great article entitled Language of the Perpetual Poor. It’s an interesting look at how our thoughts/beliefs influence our money decisions and therefore our financial lives. I bet many of us have had these thoughts at one time or another, and all of us have been exposed to people who believe them. The thing is, it’s easy (and entertaining) to read an article like this and think, “Oh yeah, that’s dumb.” What we each need to do is look at ourselves and see where we are suffering from similar thinking and make a change!

Shanti at antishay.com gave readers a first hand look at her efforts to make money on the side. What I liked most about this article is that she’s doing it, and she tells us about it honestly. Her enthusiasm is infectious and she’s really trying to help.

For a laugh, check out The Orange Paper’s Fuel for Thought. It will be the first time you’ve ever been grateful your car didn’t run on printer ink. (Sorry, the money values are not in dollars, but you’ll get the idea).

And, on a serious note, check out Steve Olson’s post, Satisfaction is the Death of Desire Here’s my favorite quote:

Somehow, when we were kids, we began to believe we needed our desires satiated to be happy, but we don’t, and this mind set cheats us out of many happy moments.

Recently Oprah did a show about Living With Less. She introduced her viewers to two families who live wasteful and, I think somewhat unconscious lives. I recommend you follow the link above and check the story out for yourself, but I’ll give you a quick recap here too.

The Dominguez Family

First was the Dominguez family. They admitted to being wasteful in many ways:

• heating or cooling the house to the same temperature outside
• throwing leftovers and other perfectly good food away
• cooking three or four different meals for dinner because the kids are picky eaters
• drinking half of a water bottle and then throwing it away

Oprah also highlighted the fact that the family spends a lot more time with their personal electronics (ipods, dvd players, Tvs, video games, cell, phones, etc) than they do with each other.

The Keegan Family

Next was the Keegan family. They waste a lot of electricity and food; they go through a roll of paper towels and many paper cups and plates a day. The kids are addicted to consumer items including vanilla steamers from Starbucks and video games.

Oprah challenged each of these families to live with less–to turn off the TV, to take the bus to school, to share the same meals, to drink tap water, to eat out less, to use less electricity, and to generally think more about their consumption.

After the week long challenge, the families ultimately found they were happier and more connected. They both claimed they would continue to make changes and live a simpler, less consumer oriented life.

I loved that one of the moms, Kriss Keegan said, “We were checked out. We’re checked in now.”

Shannelle

After the families, the viewers were introduced to Shannelle, who had been living a life centered on consuming just a few years ago. She was making 6-figures, eating out most nights, wearing the best and most expensive clothes, and was completely unaware of how her lifestyle was affecting her. “Before I saw the Debt Diet show, I was focused on just consuming and not really knowing what I was consuming,” she says. “I had the hottest, the latest, the cutest, the best. I lived in 675 square feet, and I couldn’t understand where my money was going.”

Shannelle, after watching Oprah’s Debt Diet show, made serious changes to live on less, and do more for herself (like styling her own hair). Her new philosophy: “I want to make sure that I only use what I need, not what’s available to me,” she says. “Life is not about spending. It’s about living.”

Harpo Studios

At the very end of the show, Oprah told the viewers that her studio goes through about $41,000 a year in disposable cups. After staging a “no paper cup” day at the studio, she decided to make it permanent.

What can we learn from this show?

What struck me about the families highlighted was how unaware they were of their lifestyles. It seems to me that their lives were lived in reaction to what was going on instead of deciding how they wanted to live and making it happen. They weren’t considering what was going on and if that was really how they wanted to live.

In Business

Take Oprah, for example, she feels very strongly about “going green,” recycling and not wasting precious resources. I’m sure it was a shocker to her when she realized how much money she was spending and how much trash she was creating through the use of paper cups. That’s not okay with Oprah, so she made the conscious decision to change the situation and bring it in line with how she wants to live her life.

In Parenting

If you’re a parent, think about how often you just let your kids watch TV, play video games or spend hours texting because it’s easier? When our kids are engaged in electronics they are quiet, they’re not making any trouble, they don’t require any brain power from us . . . we parents can do what we want. But we’re reacting to life instead of looking at the situation and thinking about how we really want it to go. If you’re looking at what’s really going on, you know you are the parent; it’s your job to raise this child into a responsible adult. You know video games and TV do little to help with that responsible adult role. You know you only have a limited time with your child. So, you decide to put down what ever you’re doing and take a few minutes with your child: read a book, ride a bike, help with homework, do a science experiment.

In Finances

Same with finances. Mr. Dominguez’s comment at the end of their segment was “Some months, I have to borrow money. If I get a bonus, I can pay back my mother or friend. Right now, I’m on the brink of, borderline, where I’m going to lose everything.”

I’m sure it’s not really okay with Mr. Dominguez to ‘lose everything’ over cell phones, half empty water bottles, a thermostat set too high, and a garbage can full of perfectly good food. I’m sure he and his family could sit down and make some decisions about how and where they want their lives to go and then figure out what role money needs to play in getting there.

Thank You

We can all learn from these examples; we can all take a minute or an hour or a week to examine our own lives, our own spending, our own family time and consider if we are really living the lives we want to live.

Thank you Oprah, and thank you Dominguez and Keegan families for having the courage to share these stories.

Back in October of 2006, when Ford announced it would no longer be making the Taurus,  Saturday Night Live’s comment was, “Now, people in their 30’s will have to find another way to announce to the world that they have given up on their dreams.”

While a lot of people bought the Taurus, it did always fall short in the style category.

What does your car say about you?  What do you imagine people think as they see you climbing in or getting out of your car?  Do  you hope your car tells the world you’re successful and smart?

Does It Matter?

Maybe, maybe not, you’ll have to decide that for yourself, but one thing that matters to all of us (whether you want to think about it or not) is the bottom line of owning a car: How much will it cost, and how will you pay for it.

Your Plan

How does a car purchase fit into your financial planning?  Are you preparing for it by socking away a car payment each month in your savings account?  Or is your plan to sell some stock or other asset to come up with the money?  Will you take out  a loan and “figure out” how to pay for it as the need arises?

If there is one thing I’ve noticed about the millionaires we’ve interviewed, it is that they don’t like debt.  They think about their finances and plan more than the typical person how to make and how to spend their money.  They stay out of debt.

What does this say about buying a car?  It’s pretty much all about what you can afford.  How much car can you afford?

A Car Is Not a Good Investment

We all know cars depreciate–they lose some of their value every day, at an average of 15-20% each year, even more the first year.  That means that a car that was worth $24,000 new will lose approximately $4800 of it’s value the first year you drive it.  Would you invest in an investment that was guaranteed to lose 15 to 20% every year?  I think not.

A car is an expense. And not just the purchase price, everything about a car is an expense.  When you’re planning how to pay for a car, remember after you buy the car you pay tax, license, and registration, you fill the tank with gas, you pay for insurance, repairs, and maintenance.  You pay to wash it; you pay to park it.

I’m not telling you this to depress you, I’m telling you this to open your eyes to the way a car fits into your financial plan.  Avoiding unpleasant thoughts, like all the extra expenses associated with a car is the way we get ourselves into debt and other financial troubles in the first place.  Taking the time to examine your feelings and the total cost of ownership is actually the way to take control of your finances instead of being controlled by them.

So, Think About It

How will  you pay for the car?  Will you go into debt?  Will you really go into debt to lose a guaranteed 15 to 20% of your money each year?  Ouch.  You don’t have to go into debt.  You could be saving money each month in anticipation of your next purchase.  You could find ways to spend less and choose a less expensive car to drive.

There Are Ways To Make Purchasing A Car Smarter

Here’s how one of the millionaire couples featured in The Millionaire Next Door does it: As farmers in cotton country, they shop for quality, late model, used Japanese cars every 2 to 3 years.  They find they can get better prices in the city from private owners, they drive those cars for two or three years and then sell them in their rural community for close to the price they paid.

Why Japanese cars?  It seems they hold their value well and require few repairs during those first 5 to 6 years.  This millionaire couple lets someone else drive the worst of the depreciation off the car and then finds cars that will sell well in their area when they are done.

You too could figure out a system where you’re not taking the brunt of the cost of owning a car.  The Internet is full of information to help you. Sites giving new and used car prices abound.  Edmunds.com has listed cars by depreciation rates.  There is great cost of ownership information at the Internet Autoguide.  Many auto insurance sites will give you a quote if you’ll give them your specifics.  Use that information to find out which car models you’re considering cost the most or the least to insure.  Cars that cost less to insure typically cost less to repair.

Points to remember:

• Don’t be defined by what you drive.  Get a car you like, but don’t let your emotions take over the car buying process.  Driving more car than you can afford might look good on the outside, but having control of your finances feels good inside and out.
• A car is not generally a good investment.  You can, however, find ways to minimize your depreciate costs through researching depreciation rates, insurance costs, and total costs of ownership.
• Take the time to plan how you will pay for your next auto.

On Monday we featured John, who spent his career in corporate America and now runs his own company. These excerpts showcase how integrity, networking, and surrounding yourself with the right people are so important to your success.

Mark: What is the one attribute you feel is crucial to your success?

John: I’d have to say integrity. Integrity takes a lot of different forms. If you’re working hard when the boss isn’t watching…if you say something is going to get done then it will be done. There’s no room for excuses, it’s all about results. I found that by becoming known as a person of integrity, being an honest person, it just has so many different tentacles.

People will be more open with you. they won’t have their guard up as much because they won’t feel like you’re trying to stab them in the back, that you’re trying to take their job, that you’re trying to do something to self-promote. You just get a lot of leeway and a lot of freedom. With that leeway and that freedom you’re given the opportunity to really shine and that’s what you have to do.

So I’d have to say the one word would be integrity because integrity is power. I work a lot with vendors, vendor management, and supply management. When you tell somebody like a supplier or a customer that it’s going to happen, it just has to happen. And then when you say something people just check it off as it’s done. You don’t need to have a boss following you up, and what follows out of that is a lot of additional responsibility, opportunities and projects.

Mark: Is there anything else you would share with me about getting ahead?

John: After I read [your] email it caused me to think a little bit, and there are a couple of other things that we haven’t touched that I think are really important.

[First], the importance of networking. Networking expresses itself in a lot of different ways. Look in your career for mentors…people that are a little bit ahead of you in their careers that can kind of take you and they can point you and open doors for you.

I’m kind of past that now but I used to do it quite a bit. [Let’s say] you’re looking somebody to hire, you call somebody that’s credible. They help you here, and then you help them. [Maybe] you’re looking for work or if you’re looking for suppliers or manufacturers. That’s where your network comes in. A network in a big corporation is so important because that’s where you get opportunities to move your career.

The last thing I’d say that we haven’t talked about is the importance of surrounding yourself with good people. It’s a real skill to be able to recognize talent and skill and in others. You have to look beyond hiring people just because you like them.

If you’re a a white 40 year-old male and that’s the people you hire…you’re pretty vanilla - you really lose out. I have a good friend, a partner; he’s not college educated. He’s very bright, and he’s extremely business savvy; he just has an innate business sense.

He’s made millions and millions and the way he’s done it is through the people he hires. He hires the best in every field. People that have their Harvard MBAs…that kind of thing. That has been his leverage.

You have to be confident in yourself and not be threatened by that. I have seen in corporations and corporate America…people get threatened by people below them and so they will hire down so they feel safe and secure that somebody won’t come and take their job.

What I learned was quite the opposite in my career. My approach was “I’m going to hire the very best and if they push me then we’ll all win.”

I honestly believe that if you hire the best not only do you come out better but the organization raises up and everybody gets opportunity. I have seen in corporations and some cultures where the incentive is to hire down so you look good. In time you don’t win, because in time you can’t do it all. As you move up the ladder and the responsibilities get big enough, you’ve got to have people you can trust underneath you.

If you’ve established a pattern of hiring down…you’ll mentally implode, and that’s just the way I’ve seen it so many times.