Multi-Level-Marketing

Definition, what is, Multi-Level-Marketing:

Multi-level marketing (MLM/network marketing/matrix marketing) is a marketing structure used by businesses where a sales force is created by compensating promoter(s) [distributor(s) or any number of terms used] of company products not only for sales generated personally, but also for the sales of other promoters they introduced to the company, creating a down-line of distributors and a hierarchy of multiple levels of compensation.

Distributors represent the company that produces the products or provides the services they sell. They are awarded a commission based upon the volume of product sold through their own sales efforts as well as that of their down-line organization. One of the draws or hook to MLM, distributors can buy wholesale, sell retail, and recruit other distributors who can do the same.

This arrangement is similar to franchise arrangement--commissions are paid to distributors according to the company’s compensation plan; individuals can be at multiple levels of the structure receiving royalties from a single person's sales.

If a plan offers to pay commissions for recruiting new distributors, watch out! This is pyramiding, a multilevel marketing plan should only pay commissions for retail sales of goods or services, not for recruiting new distributors. Pyramid schemes are defined as plans which concentrate on commissions earned for recruiting new distributors and which generally ignore the marketing and selling of products and services.

MLM businesses are legal; also known as "affiliate marketing". However, many pyramid schemes try to present themselves as legitimate MLM businesses. [Pyramiding is illegal in most states, to remain legitimate a company that uses multi-level marketing has to make sure commissions are earned only on sales of the company's products or services if they cross state boundaries. With pyramiding money is received from new recruits, or they are required to buy more product than they are likely to sell.]

Another key to legality of MLMs is the 70% rule--prevents members from "inventory loading" in order to qualify for additional bonuses. The 70% rule requires participants to sell 70% of previously purchased inventory before placing new orders with the company. In most cases distributors may be asked to pay for their own training and marketing materials, or to buy a significant amount of inventory; hence, the 70% rule. As for the FTC, are the revenues generated from purchases incidental to the right to participate?

Criticism of MLMs:

When one looks at MLM, it has to be remembered where it all began. What started it all?

The most prominent case concerning MLMs, In re Amway Corp., 93 F.T.C. (1979), determined that multi-level-marketing was not an illegal activity. [Amway was found guilty of price fixing.] The roots of multi-level-marketing are intertwined with those of the Amway Corporation and its Nutrilite product line; the concept originated during the early 1930s. First ran afoul of the law in 1947: FDA accused Lee S. Mytinger and William S. Casselberry of misbranding. Potential customers were being given a booklet, "How to Get Well and Stay Well" which claimed the Nutrilite product line as a cure all for what ever ails you. (A 1951 Court case permanently forbid anyone who sold Nutrilite products from referring to any of the booklet.) Some time in the 1950's Rich DeVos and Jay Van Andel formed a new company, the American Way Association, later renamed Amway.

Two points form from the FTC:

• multi-level marketing organizations with greater incentives for recruitment than product sales are to be viewed skeptically
• the practice of getting commissions from recruiting new members is outlawed in most states as "pyramiding"

Some argue that some MLMs engage in cult like behavior, or are rife with unethical behavior.

MLM's are also criticized for being unable to fulfill their promises for the majority of participants, the success rate for breaking even or even making money are far worse than other types of businesses.

From the US Postal Inspection Service:

Fraudulent pyramid schemes typically violate the Postal Lottery Statute (Title 18, United States Code, Section 1302). They contain all three elements of a lottery: prize (expectation of monetary or other gain from participation in the pyramid); chance (the monetary return you may receive from your participation is entirely up to chance, that is, dependent on the efforts of those below you in the pyramid), and consideration (the fee you pay to become a distributor).

Seven tips from the FTC when deciding on a MLM:

1. Avoid plans that includes commissions for recruiting additional distributors
2. Beware of plans that ask new distributors to purchase expensive inventory
3. Use caution if the plan(s) claim you will make money through continued growth of your "down-line"
4. Beware of plans that claim to sell miracle products or promise enormous earnings
5. Beware "decoy" references paid by a plan's promoter to describe their fictional success in earning money through the plan
6. Don't pay or sign any contracts insist on taking your time to think over a decision to join
7. Do your homework! Check with your local Better Business Bureau and state Attorney General about any plan you're considering

Some online resources, in other words use common sense:

12 Tests for Evaluating a Network Marketing (MLM) 'Opportunity'

• THE OPPORTUNITY TEST--Were you approached primarily on the basis of the actual value and need for the products or for the opportunity? Keywords to watch for "getting in on the ground floor," or "riding the wave" of opportunity.
• THE MARKET REALITY TEST--MLM recruiters point to the huge growth potential of their programs without considering the normal dynamics of supply and demand. Key point: Is an up-line of five or more levels of distributors allowed; market saturation.
• THE PRODUCT TEST--could the products be sold successfully on their own merits without going through a MLM distribution system? Is the focus on legitimate products of value to consumers? Are the products priced competitively? And other things.
• THE COMPENSATION TEST--Can you as a distributor make a good income for the time you spend selling the products without recruiting a single person? Or is the commission paid by the company for selling the products so low that you have to recruit a down-line in order to earn a significant income?
• THE INCOME DISCLOSURE TEST--If an MLM recruiter touts huge income figures of top distributors, request that the company disclose average payout to distributors by percentiles (highest 1%, second highest 1%, and so on to the lowest 1%), so that you can determine your chances of success. (Another acid test of the profitability of an MLM distributorship is to ask the person recruiting you to show you his/her last year’s tax return.)
• THE PAY TO PLAY TEST--Find out how high the expectation is for you to purchase products, services, training, etc., over a period of time, in order to be a serious participant. In other words, what will it cost you to play the game?
• THE PRICE TEST--Are the company’s wholesale prices low enough to allow a respectable profit? Or are retail prices so high that they must be sold at wholesale to achieve any volume?
• THE GOLDEN RULE TEST--How did you feel about the way you were recruited to do the business, and how do you feel about approaching your family and friends in the same way?
• THE TIME FREEDOM TEST--If a recruiter promises that by working hard for a brief time period you will never have to work again, ask what percent of their top distributors are no longer actively involved with the company and never attend opportunity meetings.
• THE HONESTY TEST--Has the recruiter been devious or up front in his or her inviting attempts? And can the products and opportunity be sold without making exaggerated product and income claims? Ask for validation of each of the claims made.
• THE CREDIBILITY TEST--MLM promoters who don’t command respect themselves may lean heavily on the credentials or character of others involved in the opportunity.
• THE SUPPORT TEST--Does the company offer an adequate support infrastructure to handle a temporary burst of volume? Will your up-line be there when you need them, or do they have a history of jumping ship when the next hot MLM deal comes along?

See also: 5 Red Flags for Identifying Exploitative Product-based Pyramid Schemes, or Recruiting MLMs and 30 Typical MLM Misrepresentations

As you can see there really are no get rich schemes out in the world. Always use caution and I can't say it enough--DO YOUR HOMEWORK!!!

__________
An interesting article to look over.

Considering using the internet to search for a job,,,read on

Important points to keep in mind when searching/considering an internet job offer:

The obvious:

• Research the prospective company
• Do not divulge personal information--bank account, Social Security numbers, PayPal or credit card numbers, driver's license, or passport
• Never forward, transfer or "wire" money to an employer
• Be aware of work-from-home opportunities--promises of quick cash and a lot of it--especially if you have to pay a "registration fee" or a fee for training and/or equipment (ie. Envelope Stuffing Scams)
• Watch for misspellings and grammatical mistakes in the job ad
• Key words "no experience necessary" or "will train" (Yes I do realize that to companies that I am considering have both)
• Do not be fooled by official-sounding corporate names--research
• A lack of interest in meeting the employee--all interaction is via e-mail, fax, telephone

The not so obvious:

• Research the prospective company
• Avoid listings that use these descriptions: "package forwarding," "reshipping," "money transfers," "wiring funds" and "foreign agent agreements"
• Don't partake in cross-border action
• Avoid payment-forwarding or payment-transfer scam--do not transfer money and retain a portion of the payment (ie. Nigerian Check Cashing Scam or Secret Shopper)--see my posts SCAM ALERT!! and More Information--SCAM ALERT!!
• Reshipping--these scams begin with an employment offer for a job forwarding packages; usually packages are received at home and then instructions to repackage/reship to another location
• Avoid a request to "scan the ID" of a job seeker, scammers will say they need to "verify identity"
• Check contact e-mail address, is it a primary domain or a company domain (for example my prior employer had it's own domain name)
• Phishing scams are cleverly hidden attempts to get your account information. These e-mails appear legitimate and often claim that there is an urgent need for you to log into your account and verify personal information. If you receive one of these e-mails, check the destination URL on the provided link before attempting to log-in or submit any information; the links could actually lead the recipient to a false Web site. (PayPal is one company that is a "victim" of phishers. From experience PayPal always addresses their correspondences using your full name registered with. Earthlink is another company I have received phishes about as well as numerous banking institutions that I have no connection with. If your not sure CALL them!!)
• Medical Billing--be weary of these prepackaged businesses, they always contain an initial financial investment. The ad or solicitation explains that the market for medical billing is wide open. (The medical billing industry is fierce and revolves around several large and well-established firms. Few consumers who purchase medical billing business opportunities are able to generate enough revenue to profit, and usually can't earn enough to recover initial investment. Please note that I am not saying medical billing as a profession is not legitimate, it is the prepackage work-at-home kits to be leery of.)
• Work-at-Home Job Lists--these scams claim to sell lists of companies that are hiring for work-at-home positions. These lists are rarely updated and often yield a list of worthless leads. (There are well researched lists available you just have to look, avoid ones you have to pay for!!)

Be proactive:

• Do Your Research!! You have to do a little investigative work--the Better Business Bureau, your state's Attorney General, and other state business offices to see if the company is licensed and registered to do business in your state. Most fraudulent companies will not go through the work of filling out the paperwork and registering with the appropriate organizations.
• Insist on a Face-to-Face Meeting--you should always ask for a face-to-face meeting before taking on a business opportunity.
• Ask lots of questions--Who will be paying me? How often will I be paid? What exactly will I be doing? Is this contract-based or permanent work? Where is your company's physical location? Does your company operate under any other names? What is the total cost for me to participate in this program? What is your company's privacy policy?

Hopefully these tips will keep us all safe!!

Tips for writing a cover letter

Some good points to keep in mind for writing a cover letter. Not in any particular order as I noted them as I read numerous articles:

• If cover letter is e-mailed keep it 2-3 paragraphs in length
• If written 3-5 paragraphs
• Start strong--briefly describe how you heard about the position and why you're interested in it; purpose
• If someone mentioned the job opening to you, be sure to use his or her name in the introduction
• Don't seem desperate--hire me or else,,,
• Connect dots between resume to cover letter--The body of the letter should expand the key points in your resume
• Highlight skills and experiences relevant to the job opening, provide examples of how you can benefit the company
• Don't focus on what you want, focus on what value you can bring to the employer--what does hiring company want, what are the benefits of hiring you
• Find out the name of the person who will be reviewing your resume by contacting the company's human resources department
• What position you are applying for--many companies advertise more than one position at a time
• Learn as much as you can about the potential employer,,,
• Demonstrate your knowledge of the company,,,
• Tailor each cover letter to each specific job/company
• Be proactive--state when you will contact hiring manager to follow up; reinforces your interest for the job
• Don't forget to include a phone number or e-mail address where you can be reached
• thank the hiring manager for time and interest
• Thoroughly proofread!
• Thoroughly proofread!!
• Thoroughly proofread!!!

Wood: Full Cord vs Face Cord

Just a little tidbit to pass along. My partner and I do not use wood for heat but her parents do (as do many families in my neck of the woods.) Being a city transplant I never fully understood what a cord of wood was, here's the answer:

• Full Cord= 128 cu. ft= 4'x4'x8' (2'x4'x16')
• Face Cord= ? --the face of the stack is 4'x8' but depth varys which can reduce the amount of wood your actually getting 3'x4'x8'=75% of a full cord

Update--Doing the Wash

I'm going to using one of the tips mention in this article--Frugal Laundry / Clothing Care

"...you don't have to buy dryer sheets. I bought a huge bottle of the cheapest fabric softener I could find about 2 years ago (less than $2 for the bottle) I bought some sponges from the dollar store (4 per pkg) and cut two of them up into 8 pieces each. I soak the pieces of sponge in a mixture of about 1 part softener to 8 parts water...

Today I purchased a 30 fl oz Ultra Downy @ $4.50 it is said to do 35 loads. I also purchased a 4-pk of O-celo sponges @ $2 which I cut into 16 pieces; total cost $6.50. I then measured out a single load amount of approximately 1/4 cup of fabric softener and added 1 c. of water and added the sponge pieces. They are now soaking and awaiting the dyer.

Al tho the original article used an 8:1 ratio I am starting with a 4:1 and will see how that works. I will then try a 6:1 ratio and then 8:1. So for less than 2 pennies/load I'm am figuring a 7 cent savings (35 loads/bottle x 16 sponge pieces = 560 loads--$6.50 cost/560 = .012 cents). The only variables in my equation would be the final ratio I use and how many loads I get out of each batch.

I will be keeping track of both variables to see what the actual cost may be al tho the final cost will be well below a penny in my estimation.

**Ultra Downy may be a bit pricey but it's the only fabric softener my partner and I both really like. Personally I don't mind the generic/store brands but my partner doesn't like them . With this new approach it should alleviate that difference of opinion.

Doing the Wash

Frugal Laundry / Clothing Care. Previously mentioned in "Articles of Interest--3"

• ...washing things to frequently--In my opinion yes. My dilemma, my partner is neurotic (a legitimate OCD issue) about cleanliness, personal and clothing. Altho I will admit she has adjusted where her jeans and sweatshirts are concerned. It's a small "victory" but one I will gladly take. She really is trying and has accepted some of the frugal ideas I have been trying, and I love her for that .
• ...keep hangers on the knobs of our high dresser and anything that is going to be used again for another day I hang up overnight to 'air out'--this is something to adopt, our clothes usually end up in a heap as kitty beds; really furry kitty beds!!
• ...taking prompt care of the clothes that you have--I'm a bit wishy-washy on this point. I would say that 50% of the time I am good about treating stains; I'm not always aware of the need to pre-treat.
• ...keeping a small sewing kit on top of my fridge. It is a kids zippered pencil case I picked up for pennies at the thrift store. Inside are 3 spools of thread (white, black and white button thread) a seam ripper, a small pair of scissors, a few safety pins, a thimble and a piece of cardboard with three threaded needles pushed through it--Interesting idea one I might add to my repertoire.
• ...Do you use a clothes line?--Uhm nope!! May be a lame excuse but I don't have time. I also do laundry at 100 AM, a bit difficult to hang clothes at that hour. I don't foresee any changes in this area unless I utilize an indoor line system.
• ...you don't have to buy dryer sheets. I bought a huge bottle of the cheapest fabric softener I could find about 2 years ago (less than $2 for the bottle) I bought some sponges from the dollar store (4 per pkg) and cut two of them up into 8 pieces each. I soak the pieces of sponge in a mixture of about 1 part softener to 8 parts water--Think I may try this one as I do use dryer sheets. Money wise tho I do not find dyer sheets to be expensive so I'm not sure if the savings would be worth it. Anyone know the price breakdown of this method compared to dyer sheets? Might be something to research!!

Articles Of Interest--2

Articles I found of interest to share whilst I'm home visiting mom in ICU:

• From Pennies One Million Dollars Grow

As we learn in grade school science, everything on this Earth is composed of many smaller things, which in turn are composed of even smaller things, etc., etc., etc. The same principle applies to finance and fortune.

• How you can start building alternative income streams 40+ Alternative Income Ideas and Resources
• Super Sensational Savings with Salt - Part 1 by Rachel Keller. Going to have to try this one--Mix half a cup of salt and baking soda to a gallon of water to wash away stains and odors inside your refrigerator.
• Super Sensational Savings with Salt - Part 2 by Rachel Keller. More to try-->Set the color in new towels by adding a cup of salt to your wash water the first couple times you wash them-->Protect colors of new clothes from bleeding by washing them in a cold wash with 1/4 cup salt-->Soak colored cottons overnight in salt water to reduce fading of the colors.
• Super Sensational Savings with Salt - Part 3 by Rachel Keller

Frugal Cleanning Challenge--PT 2

Found a few more cleaning tips using white distilled vinegar. Visit 1001 Uses for white distilled vinegar for even more.

Following taken directly from preceding site:

• Make your own scouring cleanser by combining 1/4 cup baking soda with 1 tablespoon liquid detergent. Add just enough white distilled vinegar to give it a thick but creamy texture.
• Clean the microwave by mixing 1/2 cup white distilled vinegar and 1/2 cup water in a microwave-safe bowl. Bring it to a rolling boil inside the microwave. Baked-on food will be loosened, and odors will disappear. Wipe clean.
• Clean up pet accidents by first blotting up the area and then adding a white distilled vinegar-and-water solution. Blot until it is almost dry. Then sprinkle baking soda over the area and let it dry. Vacuum up the residue the next day.

Clutter, What's That?? Part 2

This if the first of two print articles that I happened to come across recently that deal with the issue of clutter.

Happiness How-to: Freedom from Clutter! First, July 9, 2007

Surrounded by too much stuff? Your best trait could be to blame! Identify the healthy quality behind your hoarding, and read on for the quick fix that will evaporate clutter for good.

One way of thinking about clutter as presented by author Judi Culbertson (The Clutter Cure:

Clutter is a visual representation of chaos...It's both a cause and a sign of stress.

Why you hold on #1: YOU'RE A SOFTIE--also known as a "sentimental saver". These are people that believe that if they discard things they'll lose the related memories. (Overcoming Compulsive Hoarding: Why You Save & How You Can Stop (New Harbinger Self-Help Workbook) by Fugen Neziroglu, PhD.)

Solution presented: realize that memories are not dependent on objects so you can toss them guilt free. For a less cluttered trip down memory lane, utilize a digital camera to take pictures of your soon to be discarded items. Or, create a "memory jar" by jotting down a thought about each item then toss in the jar; you keep the memories not the clutter. (The Well-Ordered Home: Organizing Techniques for Inviting Serenity into Your Life, Kathleen Kendall-Tackett PhD.)

Why you hold on #2: YOU'RE THRIFTY--you can't throw something away until you feel you've gotten your money's worth.

Solution: must accept that an item isn't going to become useful to you especially after months or years of storage. This opens the door for discarding the item(s).

Why you hold on #3: YOU'RE IN THE KNOW--also know as "instrumental saving" these folks worry that if they toss something, they may be throwing away a crucial piece of information that could change their lives.

ME!!! Altho I am getting much better. My biggest problem is I have a dream of writing for a living and I am an information junkie. One thing I have changed in the last year or so--instead of saving whole newspapers or magazines I just save articles/URLs. A "new" tool I have "discovered" is blogging--by using my blogs to store information for later use, or in case of this blog linking articles both print and online with information I feel is important. My paper clutter has definitely decreased, but more improvement is needed (ie. more time to review the articles I want to "save".)

Solution: Change your thinking from "I'm going to need this..." to "My guess is that..." and finish the sentence with why you may need that item. Using this self-talk makes you realize that your thinking isn't based on fact but "just-in-case- reasoning." Instant access not a necessity: "I am enough. I do not have to be an expert on everything."

Clutter, What's That??

The Relationship Between Clutter and Debt. This I can definitely relate to. Our home is definitely cluttered BUT we have absolutely no storage space which is the biggest problem. My information hunt currently is to find a solution to our problem(s) clutter and no storage.

Two thoughts from from this post that struck a cord with me:

First there's the obvious: most clutter consists of items purchased. And that costs money. While some things come into our lives for free, many are things that at one time we wanted or thought we needed and so we purchased them. More purchases eventually equal more clutter.

and

By choosing to have less (de-cluttering) I tend to value it more. Letting go of things creates a feeling of contentment and satisfaction rather than a desire to have more.

---

Two print articles I also found concerning clutter:

• Happiness How-To "Freedom from Clutter" (Women)First; July 9, 2007
• Good Advice "Failure to Discard" by Amanda Robb, Good Housekeeping; July, 2007

Both of which I will be writing about shortly.

Is Debt Reduction Finally Getting It's Due Recognition?

While channel surfing the other day (7/8/07) I caught this program on CNBC. Seeing that I actually was able to watch from the beginning I was able to tape (yes I still use a VCR) it in order to "study" the full contents. Following is an outline of what was presented.

[Note: there are four seperate but connected programs in this series. I happened to catch the show dealing with debt.]

The Millionaire Inside--Debt Free hosted by Erin Burnett. Mentors for this episode include:

• David Bach author of The Automatic Millionaire: A Powerful One-Step Plan to Live and Finish Rich
• Robert Kiyosaki of Rich Dad, Poor Dad: What the Rich Teach Their Kids About Money--That the Poor and Middle Class Do Not! fame
• Larry Winget is the author of It's Called Work for a Reason!: Your Success Is Your Own Damn Fault
• and Jennifer Openshaw author of The Millionaire Zone: Seven Winning Steps to a Seven-Figure Fortune and founder of WFN.

Introduction

• becoming a millionaire has two key components--get out of debt and use debt to build wealth
• MI looks at the new face of debt...debt doesn't discriminate, it touches everyone...Americans are spending too much and saving to little
• recognize your mistakes, debt can creep up when you lest expect it
• controlling $$ means controlling destiny

Q: What does it take to motivate most people to change?

• before things can get better they must get worse
• it's OK to feel bad about what you've done BUT turn the negative into a positive change

Q: What are the first steps that will get people out of debt?

• figure out exactly where your $$ is going
• find a way to make more $$ and pay yourself first, save even while paying down debt

Q: Is bankruptcy an option for someone in debt?

• NO--bankruptcy should not be your first choice
• bankruptcy will destroy your credit and your future
• BUT if you do go bankrupt, don't despair, there is hope

Q: What can people do to avoid making financial mistakes?

• investing in financial education is very important
• rich or poor, smart or not smart we all use $$
• the more you know, the more money you'll make
• take responsibility for your actions, have integrity
• stand by agreements and honor your word
• doing the right thing always pays off in the long term

PROFIT POINTS

1. control your money & your life
2. plan your future now
3. avoid bankruptcy
4. you can get out of debt

You keep turning to plastic and plastic keeps turning you upside down--we are a maxed out nation

Credit Card Debt

• Sharon Epperson author of The Big Payoff: 8 Steps Couples Can Take to Make the Most of Their Money--and Live Richly Ever After
• CC companies prey on people who make $$
• average person carries way too much debt, most have carryover monthly balances
• CC companies don't want you to pay, that's how they make money (ie. late fees, over limit fees)
• CC companies profit from penalty fees, it's big business, don't get sucked in
• how can you beat the CC companies at their own game? implement a plan to help you reduce your debt
• Americans love to overspend--a lobster lifestyle on a tunafish budget
• if you have to charge it, do you really need it?
• don't stoop to competing with the neighbors
• do what's right for you and live on a budget
• only spend $$ on things you really use--every penny counts, think about every purchase

Tips that will get you out of debt

• start by paying debt with highest interest first
• ask for a lower interst rate, especially if your a long time customer
• wipe out CC debt as fast as you can
• use other CC offers to negotiate better rates
• know your CC rate
• be persistent, be firm and stand your ground
• it's important to knock debt out fast, attack debt that you know you can eliminate

Q: Is consolidation a good way to reduce debt?

• plastic isn't the problem, your spending is
• consolidation is an option, but paying more than the minimum is better
• consolidation scams are everywhere, BE CAREFUL
• don't use a home equity loan to pay down debt--that's converting a short term debt into a long term debt

Q: Is it smart to borrow on CC to invest?

• only borrow to invest IF your return rate is higher than your interest rate

Q: Should you use your retirement savings to pay down debt?

• NO--under no circumstance should you cash out a 401k
• change your habits and cut back
• there are penalties for cashing out a 401k early
• your 401k should grow, leave it alone
• make contributions to your 401k so your comapny matches (if an option), it's free $$

Q: What kind of CCs are the worst to have?

• department store cards are the worst, they are designed to rip you off; high interest rates and they will not negotiate
• get rid of all CCs but one, use only for emergencies

PROFIT POINTS

1. call and negotiate interest rates
2. tackle small debts first
3. beware of debt consolidation scams
4. don't waste $$
5. mistakes are OK, learn from them

Medical Debt

• the #1 cause of bankruptcy
• the US is in a health care crisis, people with no insurance or the under insured drowning in medical debt
• need to make health insurance a priority
• cut spending and get yourself health insurance

Q: Should medical and consumer debt be treated the same way?

• debt is debt, make payments and work it off
• try and negotiate a payment program; if you have been delinquent explain it on your credit report
• scrutinize your medical bills for mistakes and/or over billing
• try to communicate with your creditors, this will help you deal with your debt
• with 44 million people without insurance check with your states high risk insurance programs

Q: How can people cope with aging parent's healthcare issues?

• reverse mortgage
• a VIATICAL can be used to get cash for medical bills
• long-term insurance(s) for parents a must

Q: How does medical debt impact your credit?

• medical debt can destroy your credit
• medicare/medicaide don't cut it anymore, keep yourelf healthy and avoid getting sick

PROFIT POINTS

1. negotiate with medical providers
2. consider long-term care insurance
3. carefully review medical bills
4. stay healthy

Student Loans

Debt can make ou rich, the secret is knowing how to leverage to build wealth.

Q: Are student loans good debt?
Q: How should people approach paying down student loans?

• take our time especially on low interest loans
• prioritize--home purchase, consumer debt, etc.
• consolidate to cut costs

Other ways to use debt to build wealth

• eliminate bad debt and take on good debt
• BAD DEBT--debt you have to pay for
• GOOD DEBT--debt other people pay for
• your home is a good investment, but a bad debt; buy an affordable home that you can pay down
• invest in rental properties, let tenants pay the mortgage

Q: When is the right time to buy a property?

• by a property when tenants can pay the loans

When it comes to real estate, timing is everything.

• real estate is a finance deal
• owning a property is a way to get tax deductions
• know the rules of the game and play it well

Q: Is it smart to save and invest as you pay down debt?

• get a business partner, this will allow you to invest as you get out of debt

Q: How should savings be invested?

• place your savings in interest bearing accounts
• gear up to find good deals on home purchases
• always invest in yourself first, get educated and make smart decisions
• you want high returns, so think through investments

PROFIT POINTS

1. don't rush to pay of student loans
2. leverage to build wealth
3. save and invest as you pay down debt
4. educate yourself on the rules of money

Closing

Q: What is one thing we can do tomorrow to start getting out of debt and on the road to wealth?

• make a list of all the "people" you owe money to and hang it on your frig--decide which debt you are going to get rid of first and start making lines through each as you eliminate them one by one
• open up your checkbook, take a look at your top five expenses and look for ways you can free up $300 and put it in a savings account until you can make your first investment purchase or start a business
• call all your credit cards and ask what your interest rate is--then negotiate for a lower rate, be persistent and keep calling
• figure out how much money you are making, then figure out how much you owe, cut back your lifestyle so what you owe is less than what you earn

Upcoming Programs

• Your Guide to Wealth 8/8/07
• Your Guide to Retiring Rich 8/13/07
• Debt Free 7/24/07 & 8/20/07
• Get Inspired 7/28/07

Two Interesting Articles

Frugal For Life posted this gem of an article Surviving (and thriving) on $12,000 a year.

"...I'm accustomed to lean living. Here are some of the mantras that have kept me going thus far:"

It's not what I have, but how much of it I can keep--the question often asked "can I do without this?" if not...
How can I get it free, or almost free?--thrifty shopping is the key.
Enough is as good as a feast--filet mignon is not an option!!
Every day is casual Friday!--Versace is out, Goodwill is in.
Announce my intentions, "put it out in the universe," which is also known as "prayer."--your faith can be your strength in times of trouble
$20 to feel rich, increasing my monthly church tithe--priorities are important

This article can be found in its original forum at Surviving (and thriving) on $12,000 a year

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The first article was was originally referenced by Frugal For Life. It is a must read along with the follow-up article:

I make $6.50 an hour. Am I poor?--Here's how I slipped from the middle class into near poverty, and what I'm doing about it

and

Back from the brink: Poor no more--A Montana woman finds new opportunities and new optimism as she rebounds from a crippling job setback.

All I can say is WOW!!

An Interesting take on a Familar Topic

I found this How to Stop Accumulating Debt back in March when I was first started looking for information and guidance.

The pointers given to stop accumulating more debt:

Cut up your credit cards--keeping one card for emergency use is OK (ie. car rentals).
Leave social status at the door--Wish I could get my partner to understand this concept--we don't have to keep up with the Jones. I could care less about what other people have and comparing my situation to others is a deadly game.
Don’t borrow money from friends--Now that I have a second income this is no longer an issue, altho the most I borrowed was $20 for two days. Most times I would go without whatever, and if I did borrow money it was usually used for food items.
Use cash all the time--This is something I am doing I do have a CC but it's only used in emergencies (I don't even keep the card in my wallet.) With my second income I haven't had to use it. I do use my check card tho as I do not like to carry cash on me when I shop. I also have stopped using paper checks for the time being. I have/had a terrible habit of trying to "float" checks. Again with having a second income the "need" to do this has lessened, but why tempt fate. Some far this game plan seems to be working OK, I just need to be more disciplined.

I Like the "Debt Journal" Idea

I found this post back in March How I focused on getting out of debt. As I re-read it now after a few months into my debt clean-up efforts I find that the the simple concepts presented can be more than helpful for those of us just starting out in the debt reduction game. I especially like the "debt journal" idea.

First I created a debt journal. This was a notebook that I kept with me at all times. I listed all of my credit card, student loan, and car loan balances in it. Everytime I made an installment payment I updated the outstanding balance in the journal. I also listed any income made during the month in the journal and noted how it could be used to pay down the debt.

I haven't yet created a physical notebook per se as my debts are fairly simple when compared to others I have seen; in essence my blog has become my debt notebook. I do use a notebook tho to help stay on track so I do not need to rely on my stored computer info. I use my notebook to list what payments I need to make, for tracking my grocery/household shopping and make notes as to future payments coming due. As I become better organized this may change.

As I write this I realized that organization is my biggest problem. Not just in regards to my finances but life in general. Working 2 jobs has been casuing havoc and most times I do not know if I am coming or going. I have discovered that if my life in general is frazzled my control on my finances is just as frazzled. Something that a debt journal as mentioned in bostongals post may help with.

Check Your Unit Pricing

Don't Make This Shopping Mistake at the Grocery Store - It'll Cost You

This is so very true:

Watch what you buy at the grocery store. We've come to expect that the super large size packages of different products are the best deal on a cost per unit basis. It's one of those common knowledge kind of things. Everybody just takes it for granted that the larger containers and packages are a better deal. Except that, in more than a few cases, it's just not true. The larger containers are not a better deal. In some cases they're substantially more expensive. So, in effect, you're getting hit from both sides. Not only are you paying more for the product, you're also buying more of it. Sometimes far more than you need, or would typically buy at one time.

I have discovered that Walmart is about 50/50 on this issue. Dollar General you definitely have to watch as the packaging is "deceptive" on some products (ie. candy). Our local store's prices are horrendous to begin with, I dread even going in the store.

Another Useful Article

Efficient and Frugal Food Shopping

Be Picky--since I love to cook using prepared items is not an issue. Altho I do use some packaged meals (ie. Hamburger Helper) I am trying to develop good alternatives that I can make myself.

Use What You Have--Not a problem for us. Everything I buy has a reason I am usually good at purchasing just what I need AS LONG AS I HAVE A LIST!! That is the key.

Make Lists--I am finding that currently this is the KEY to controlling my grocery bill. It's when I don't make a list I have a tendency to "buy stupid."

Shop Online--not even an option. Where we live there are no stores that that allow online ordering with delivery.

Make A Game of It--not an option for as written in the article. But I do try to make a game by seeing how well I can stay on budget. Wish they would develop a way for us rural folks to be able to do this without having to drive hours away. No stores in our area take internet coupons, even those further away are iffy on this issue. I wish we could use internet coupons, but not much that can be done.

Link to original article: Shave$150 a week off your grocery bill: Attention shoppers: You're paying too much for food

Wow

This post really struck a chord with me.

How to stop nickel and diming yourself into the poorhouse!

Found at Kirby on Finance

After looking at my monthly expenses there are only 2 that could possibly be considered "unnecessary"--DirecTV and Earthlink. But can they be eliminated??

Currently our DTV bill is about $90/month; we do subscribe to Showtime and I do have "insurance" on our equipment. Regretfully the only other alternatives to DTV is either Dish Network (similar in price) or Zito Media (formerly Adelphia). Both have major drawback so DTV was our only choice. The sole purpose for Showtime--the L Word. So after the season is over Showtime will be canceled for the remainder of the year. That will save us about $75/yr.

As for Earthlink. The only way I could save a little bit of money is to pay full year up front, which at this point in time is not feasible. Some would say get rid of internet, but being that it is my only form of entertainment, it is not something that is so easily parted with.

Other than DTV and Earthlink, the remainder of my "big" monthly expenses (ie. living expenses) are necessary.

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"While those big expenses were hurting me, I found it was the little expenses that were killing me. Eating out a couple of times a week, even though it was at cheap places, began adding up. All of the times I’d stop to get a Red Bull during the week were adding up too. Basically, at $2 to $3 per expense, I was nickel and diming myself into the poorhouse."

Now this I can definitely relate to and I believe this is where a majority of my problems are. If it's not soda, its cigarettes. If not those two, it's "fast" food items. Or a quick run into the store and I come out with $50 worth of stuff. Oh it's stuff we can use, but not necessarily stuff we need.

Steps I need to follow:

1] Get real with yourself! Before you can even begin to do anything seriously with your finances (or really life in general), you have to “get real” with yourself and be honest and somewhat critical with the financial choices you’ve made.

For me it is time to seriously consider the smoking habit. I am giving it serious consideration, I just ordered a freebie of Nicorette gum to try. If this is successful I could eliminate $23/wk ($1183/yr) of unnecessary expense. I am crossing my fingers and toes.

2] Identify where you’re nickel and diming yourself.

I think I have a good idea of where I am nickel and diming myself (see above), but it is something to definitely keep tabs on. One thing I have changed prior to this blog is taking my lunch (including snacks and enough soda for an 8 hour shift) to work. Just the soda saving alone has been enormous-- $8/day vs $1.23/day.

3] Once you realize you’ve got a “problem,” promise yourself you’re not going to make the same mistake twice.

One way I have helped myself is by not taking any more than $2 to work with me. then I make a "game" of it by seeing if I can go without spending it. I have done very well with this. It works the best when I pack enough in my lunch bag that I have no need to look at the vending machines.

4] Stay “real” and hold yourself accountable. Just making decisions like these are only half of the solution. Action is often meaningless if you’re not going to set out to hold yourself accountable in the end.

As the saying goes "actions speak louder than words." Something I need to keep in mind.

I Have Always Wonder if This Was Possible

Was surfing the net checking out some sites I found and came accross this tip: Uses for Little Pieces of Soap. Even though my partner and I do not use a lot of bar soap, we do have left-over and I always hated throwing it out. I was never sure how not to waste it. Here are some suggestions that sound easy enough to try--

An inventive way would be to melt all the little pieces of left over soap with about 3 table spoons of distilled water, add any desired food coloring if desired or even any oil essence such as rose or jasmin for example. Then pour the now liquid soap into containers with some sort of decorative shape that has been oiled a little.

Another is to let the soap cool a little and make balls the size of golf balls around some sting and you've made soap on the string. There is so much you can make with different colored soap and use it to make decorative soaps for your bathroom or even to smell up closets. Another option is to use brown grainy sugar in your soap too to use as an exfoliator later on. By Crpdiem

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I take all my small pieces of soap and put them in a microwavable safe container and melt them in the microwave. Remove Then pour them in a container. They will harden as they cool. Remove them from the container and you have a whole bar of soap. You want to use a small container, so the soap will be easy to hold in one hand when you bathe. If it is difficult to remove the soap, put the bowl in hot water for a couple of minutes. By sissa12

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Liquid SoapDon't throw away bar soap that dissolves into those little irritating pieces. Save them and add water, then slowly melt them down on the stove and use as liquid soap. Or melt them down without water and pour into greased jar lids or anything you want to use for the a mold and you have new bars of soap! By Tracey from Thomasville, GA

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What I do is take one of those pump bottles that liquid soap originally came in and break the pieces of soap up even more so they will fit inside the bottle. Add some water and shake well. You shouldn't have to get any more liquid soap for a while! By Tracy in Watauga, TX