One of my favorite books that I read from time to time is Napoleon Hill’s “Think and Grow Rich”. There are a lot of great inspirational and thought provoking stories. There’s a statement on one page that I really like and thought I’d share with all of you:

“Anybody can wish for riches, and most people do, but only a few know that a definite plan, plus a burning desire for wealth, are the only dependable means of accumulating wealth.”

If you believe that there is truth in this statement, then there are a few questions you need to ask yourself. Do you have a “definite plan” for accumulating wealth and can you articulate it succinctly? Whatever your goals and aspirations are, you need to have a plan that will get you there. I think the Cheshire Cat says it best: “If you don’t know where you are going, any road will get you there.”

The other question you need to ask yourself is do you have “a burning desire for wealth”? If you don’t, how can you get this? I’m a big believer in finding your Why To Wealth. You need this motivation because wealth accumulation is a lifelong pursuit and steady process. If you want to be rich one day, start by cultivating the desire and formulating your plan to achieve it. It is possible, but just wishing for it won’t get you there.

There are so many offers, promotions, sales, deals and opportunities all vying for your money and participation. Some of these deals are one time expenses while others lock you into “low monthly payments”. Take that new car you’ve been eyeing for example. You debate whether or not it’s a good deal, what the price is you’re willing to pay, and if you can afford the monthly payments.

As another example, you want to get a new iPod or perhaps the new iPhone or ______ (insert your favorite gadget here). You’ll try to determine if it’s worth the price that’s being asked and you’ll ask yourself if you can afford to buy it at that price.

We don’t just stop there though. We don’t just ask ourselves if we can afford these things; we want them so badly that we either figure out a way to afford them (strain any budget we had) or realize we can’t and buy on credit anyway.

How come very few people ever have the same zeal and ask these questions: How can I afford my financial independence? How much would such a thing cost? What would be the monthly payments?

All too often we are more than willing to sign up for a $300 monthly car payment or shell out $200 or more on a new cell phone. When we borrow from a bank or a finance company, they expect to get paid back. What about when we borrow from our future?

Can you afford a $300 monthly payment towards your financial future. What about a one time payment of $300 instead of the latest XBox. Is such a thing worth it to you?

I hear a lot people complain about their financial situation. They don’t have enough money, can’t make ends meet, never have anything left over at the end of the month, or are swamped with bills and credit card payments. This is unfortunately a fairly typical scenario, but what bothers me the most when I hear people complain about it is the lack of effort to proactively make changes and the unwillingness to realize that it’s their responsibility.

Too often we blame our problems on external entities instead of taking issue with ourselves which is where the problems actually reside. If you’ve ever heard anyone complain about the fees and interest rates that credit card companies charge, you’ve experienced what I’m talking about first hand. Who made these people go out and buy things with their credit cards? I assure you no one forced their hand. But apparently their financial problems would be solved if the interest rates weren’t as high (sarcasm intended).

Another common problem that we hear about today is the whole mortgage dilemma where people are “suddenly” unable to afford their payment because their one time low teaser rate is now adjusting upwards. Again, no one forced them to take out such a mortgage. While it is true that the mortgage company may qualify you for an outrageous amount, who’s decision is it really to actually sign the papers and accept such a loan amount? If you’re caught in this situation and truly were unaware of it, realize that complaining about it isn’t going to solve the problem. It’s your responsibility to figure out a proactive solution.

Realize also that you may have to make some sacrifices in your life in order to bring your finances in order. It’s a harsh reality that if you’re spending everything you earn, you can only make progress by earning more or by spending less. Ask yourself if cable TV is necessary. Do you really need to hire someone to cut your lawn or can you do it yourself? If you bought more house than you realistically can afford, you might seriously think about moving into a more reasonable situation.

Hopefully what you’ve gotten from this article is that no one else but you is responsible for your financial situation. Complaining will not solve your problems, but seeking proactive solutions will. The sooner you accept this as your reality, the sooner your situation will improve.

Coming up is the annual Microsoft MGX convention in Orlando, Florida. For those of you who don’t know what this is, it’s their annual Global Exchange conference. For those of you who are traveling to this event, or are considering it, the International Plaza Resort and Spa, located in Orlando, is offering a Microsoft MGX Special Rate for your stay there.

It is a world-class resort that’s located within walking distance of the convention center. The typical rate is around $200 and up, but if you take advantage of this promotion, you can get it for $119 per night. Not bad for such a nice place. All you have to do is enter the promotion code MGX on their website.

The resort boasts three expansive, palm-tree lined swimming pools and several on-site dining options. I, however, would probably be most interested in their multi-level lounge that features live entertainment. That’s just me though. If you’re headed to this conference, definitely check out this resort.

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Today was a really long day at work. I started at 6:30 this morning and didn’t leave until 6:00 this evening because of a problem that cropped up in the afternoon. After work I drove downtown to meet my wife and her two sisters for dinner (a belated birthday celebration) at a Cajun place that was having an open-mic nite. It was a good time (especially since I love live music), but I really wanted to change out of my work clothes and into something more comfortable.

Why am I telling you all this? I’m not really sure actually. I will tell you that we did use a gift certificate from Restaurant.comthough.

I’ll have more to say tomorrow since I’ve got to get up early again to go to work and need to get some sleep. If you haven’t yet, now is a great time to check out some of the archives or look at some of the categories that interest you. Anyway, more tomorrow…

There are a lot of important aspects of personal finance, and each of us places greater emphasis on certain things rather than others. I talked before about the importance of knowing your expenses and that it would be a good idea to have the number memorized.

Today I want to emphasize another key number, or ratio, that you ought to be aware of. It’s known as your expense ratio. Not only should we know what are expenses are costing us every month, but we should also know what percentage of our income is tied to our expenses. They are very similar, but the ratio provides key information that will help us improve our financial information.

It should be obvious that the lower the expense ratio, the better. If your ratio is somewhere around 80%, it means that your discretionary income is only about 20%. In order to lower your expense ratio, we come back to the two ways to increase your free cash flow.

It’s a great exercise to calculate what this ratio is for your personal situation. If you find out that it’s around 90% or greater (hopefully not more than 100%), you may want to consider some ways to bring it down.

Reducing this ratio has a couple of key benefits of which you should also be aware. The lower this ratio, the more you will have to save and invest. You can build your emergency reserves quicker and greatly increase your investment portfolio. You may also note that your emergency fund won’t need to be as big so you’ll be able to assemble it that much quicker.

By lowering this ratio, you’ll also have less of your income to replace by investment income. So many financial gurus tell us to try and have about 70% of our income in retirement. I would say that you should strive to have enough income to replace all your expenses and then some. If you can manage an expense ratio of about 40%, you should be able to replace this income in relatively short order.

If you can’t quickly put your finger on this ratio, maybe you should try calculating it for your particular situation. It’s a very telling number and one that you should work to decrease as best you can.

Insurance is one of those things that most people hate to look into, shop for, or even deal with. Most people don’t even want to really think about it. It’s one of those set it and forget it situations. Because of this, a lot of people are paying way too much for their insurance needs.

One of the easiest ways to save on insurance is to increase your deductibles. This is the money that you have to pay before the insurance kicks in if you file a claim. By raising this amount, you’ll be able to significantly reduce the amount of your premium. If you do need to pay the deductible, that’s what an emergency fund is for.

Insurance products are changing all the time. If you haven’t looked at your polices for a while, it’s probably time to review them and see if they are still the best option for your current life. Maybe you don’t need as much life insurance anymore. If you’re car is a little older now, you may want to consider dropping some of the coverage or the comprehensive part altogether. You may also just want to shop rates since companies are always changing them to try and stay competitive.

You also might want to check on your health insurance coverage. If you get this through your work, check and see if another option might be more cost effective. If your situation has significantly changed, make sure your insurance actually meets your needs.

Insurance is not exactly the most exciting topic and it’s definitely not something most people are interested in. However, it’s something that can cost you a lot of unnecessary money if you’re not careful. Now’s the time to review things if you haven’t in a while. If you don’t even know what your policy covers or how much you pay for it, that may mean that you need to take a look.