Legacy Financial Group

HOW TO FILE TAXES FOR THE FIRST TIME

As I travel across the country speaking at high schools and colleges, here’s something I hear from young adults all the time: “So . . . taxes. Where do I even start?”

Dude, heck if I know. I’m kidding. But let’s face it: Filing taxes is confusing. It’s intimidating. It’s one of the not-so-fun parts of being an adult. But it has to be done, especially if you want to build wealth (and, you know, be a U.S. citizen).

If you’re worried about when and how to file taxes for the first time, don’t stress—it’s actually not as complicated as it sounds. Here’s how to do it the right way.

1. FIGURE OUT WHETHER YOU NEED TO FILE.

Honestly, you might not even need to worry about filing taxes yet (praise hands)! But before you breathe a sigh of tax-exempt relief, there are a few basic details you need to know to figure out whether or not you need to file.

Here are some common questions you might have about this step:

DO DEPENDENTS NEED TO FILE TAXES?

Even if you’re technically still dependent on your parents (you live with them, they pay your bills, etc.), and even if your parents still claim you as a dependent on their own tax return, you might still need to file based on how much money you earned in 2019. Read on, my friend.

HOW MUCH MONEY DO I NEED TO EARN TO START PAYING TAXES?

So, let’s say your parents claim you as a dependent on their tax return, you’re not married, and you’re also not blind or over the age of 65. You should file taxes if one of these situations applies to you:

  • Your earned income was more than $12,200.
  • Your unearned income was more than $1,100.
  • Your gross income (the money you earn before taxes are taken out) was more than whichever of these totals is bigger: either $1,100 or your earned income plus $350.

If you’re living that single life, your parents don’t claim you as a dependent, and you’re under 65, then you’ll need to file if your gross income in tax year 2019 was at least $12,200. If you’re married and filing jointly (meaning you and your spouse are putting all of your details on the same tax return), you should file if your gross income was at least $24,400. (Nothing’s more romantic than filing taxes together, am I right?)

HOLD UP. WHAT’S EARNED AND UNEARNED INCOME?

Earned income is any money made from working a job, like your salary and wages, bonuses, commissions, and tips. Unearned income is money earned without working—interest earned from a savings account, for example.

Some other forms of unearned income include alimony, dividends, capital gains, etc. But if this is your first time filing taxes, I’d be willing to bet that interest is the only type of unearned income that applies to you.

IF I’M A FREELANCER, DO I NEED TO PAY TAXES?

If you earned at least $400 from freelance work during the year, then you need to pay taxes on it (bummer). My main man Dave Ramsey suggests setting aside about 25–30% of every check you get from freelance work, so you aren’t left hanging when tax season rolls around.

2. GET YOUR DOCUMENTS TOGETHER.

There are a few different documents you’ll need in order to file your taxes. (This is the fun part.) You’ll need at least one of these:

  • W2 form: If you earn a salary or wage, your employer will send you this.
  • 1099 form: If you’re a freelancer or self-employed, you should get one of these from every client who paid you at least $600 during the tax year.
  • Charitable donations: If you donate to a nonprofit religious, educational, or charitable group, make sure you get a donation receipt because you’ll need that at tax time!
  • Mortgage interest statements
  • Investment income statements
  • Form 8822: You’ll need this if you moved in the past year.
  • SS-5: You’ll need this if you changed your name in the past year.
  • W-4: If you had a job change and started making a new income in the past year, this form will adjust tax withholdings.

Again, if this is your first time filing taxes, then the W2, 1099, and charitable donation forms are probably the only ones that apply to you (unless you already have a bunch of investments or own a house at 16 years old or something, in which case—what?). But it never hurts to double-check with a tax professional.

3. CHOOSE YOUR FILING STATUS.

As a first-time tax filer, this step should be pretty easy. Your filing status will help you know what your standard deduction is, how much you’ll owe, if you qualify for certain credits, and other official-sounding stuff like that.

There are five different filing statuses:

  1. Single: Your filing status is single if you’re not married (duh), divorced, legally separated, or widowed before the tax year.
  2. Married Filing Jointly: We’ve been over this one. This is for you lucky married people who choose to file a joint tax return. You can usually save more this way!
  3. Married Filing Separately: This one is for you married people who choose to file separate tax returns for whatever reason. That’s up to you guys, but make sure you look at both joint and separate options and pick the one that’s most affordable for you.
  4. Head of Household: If you’re not married, have paid for more than half the household expenses for the year, and can claim a dependent on your tax return, this is the filing status for you. This mostly applies to single parents.
  5. Qualifying Widow(er): You can still file jointly with your spouse if they passed away and you don’t get married again in the same tax year. This filing status is available for up to two years after the year of your spouse’s death.

Note: There are a bunch of other tax rules for special situations, like if your spouse is in a combat zone and can’t sign, you’re married but your parents still claim you as a dependent on their return, etc. I don’t have the time or energy to cover all of that in this blog. (Would y’all want to read a 20-page blog about taxes? I wouldn’t.) But you can find all of these details—and a lot of other answers to your questions—on IRS.gov, the official website for all things tax-related.

4. DECIDE IF YOU WANT TO TAKE THE STANDARD DEDUCTION OR ITEMIZE.

The standard deduction is a specific dollar amount that lowers the income you’re taxed on. Like we’ve touched on already, for single filers, that dollar amount is $12,200. For qualifying widow(er)s or people who are married filing jointly, that dollar amount is $24,400.

So, for example, if your filing status is single, you made $30,000 in 2019, and you decided to take the standard deduction, you would only pay taxes on $17,800.

To take the standard deduction, there are no extra steps you have to do—just file your taxes like normal and the IRS will let you know when or if you get any money back. With this option, it’s still possible for you to get a deduction (which means you might owe less money), even if you don’t have any itemized deductions you can claim.

Your other option is to itemize all your deductions. People who choose this option keep receipts of qualifying expenses throughout the tax year and record them in Schedule A (Form 1040).

Some examples of these types of expenses would be:

  • Out-of-pocket medical or dental expenses
  • Charitable donations
  • Large, work-related expenses that you weren’t payed back for (for example, some people can claim money spent on gas if they had to drive a lot for work)
  • Paid mortgage interest or real estate taxes

Depending on which tax bracket you’re in, a certain amount of money will be taken off your tax bill based on the total amount of your itemized deductions.

Most people go for the standard deduction because it’s easier and faster, but for some people, itemizing can save a lot more money. Talking with a tax pro can help you figure out which option makes the most sense for you.

Have a headache yet? Don’t worry, we’re almost done.

5. FILE YOUR TAXES FOR THE FIRST TIME LIKE A BOSS.

Okay, fam. You’ve got your documents. You know your filing status. You decided if you’re taking the standard deduction or itemizing all the way. Now it’s time to actually file your taxes.

There are a few different ways to do this:

  • You could get the help of a tax pro, which can seriously help with the stress and confusion (this is what about 58% of Americans do).
  • You could use tax software (which can be a good option if your tax situation is pretty simple).
  • You could fill out all the paperwork yourself and mail it to the IRS.

But listen up: No matter which method you go with, your 2019 tax return is due on Wednesday, April 15, 2020.

Once that’s done, it’s time to run a couple victory laps because . . . You. Just. Filed. Your. Taxes. For. The. First. Time! I’m so proud.

6.  WATCH FOR A REFUND (AND ADJUST WITHHOLDINGS IF NEEDED).

Within about a month of Tax Day, the IRS will let you know if you’re getting a tax refund—which is money back in your account. Y’all, this is not the time to go out and treat yo self. It may sound great, but this actually means that too much money was withheld from your paycheck throughout the tax year—all that money was yours in the first place, and you should get to keep more of it during the year.

There’s also a chance you’ll owe money to the IRS instead of getting a refund (this is actually better than getting a huge refund because it means you got to hold onto more of your money each month.) Just know you might have to take some money out of savings to cover that cost, so be intentional about budgeting and having your emergency fund in place.

If you get a really big refund or owe a lot to the IRS, you’ll want to adjust your withholdings (the amount of money that’s taken out of your paycheck for taxes).

Once you adjust your withholdings as needed, all that’s left to do is get organized for next year by buying a folder for all your tax documents and receipts (you’ll want to hang on to them for at least three years just in case).

Congrats, y’all—this means you’re officially an adult. Remember: If you need help figuring out whether to use a tax pro, use tax software, or file on your own, this quiz will help you out!

Written by Anthony O’Neal from AnthonyONeal.com

Underdogs Win Too!

Just about everyone loves a good comeback story or a feel good story. We love the drama. We tend to get energized when we hear about a person or a team that was outmatched, undersized, or even counted out, pull off a surprising victory. Psychologists say, “We often associate ourselves with the underdog because sometimes it is difficult to identify with the winner since we don’t win all of the time. The truth is a lot of people consider themselves underdogs so it’s easy to identify with a team we see as being an underdog [1].” But if you look closely at underdogs that win, you see a consistent theme; they don’t beat themselves and they are very opportunistic. In other words, you could say underdogs that win are good stewards of the situation.

The same truth applies to underdogs that win with money. This is good news; it means if you were not born with a silver spoon in your mouth, or you don’t have a rich family member that is grooming you to take over the family business, you can still win with money! You may have an uphill battle to fight, but it can be done. But we don’t have time to waste. We have to turn things around right now. We have to stop beating ourselves and cease making decisions that are moving us away from our goal of becoming financially free. To do that, first, we have to avoid debt. Avoid it all cost; especially credit card debt. I know credit card companies try to tempt us with reward points or bonus miles, but it simple is not worth the risk. All it takes is one missed payment, and you can reap the whirlwind of months of unpaid back interest that puts you further in debt and moves you further away from winning. We also have to avoid the urge to go invest in the “hottest stock”, or try to get in on the latest craze, or buy into the latest “investment product”. Don’t get distracted and keep your eye on the goal. Those are money traps and I’m going to tell you why. Often the product or business model being pitched is oversimplified or, just as worst on the opposite side of the spectrum, are really complex and confusing. These ventures can have hidden or complicated fee structures that lead investors to misguided expectations. Hard pass. If you hear things like, “this is a revolutionary new product” or “act now on this special offer”, you should immediately be alarmed. You don’t need the latest gimmick to win. Millions of people were winning before the latest gimmick and millions of people will win after the next gimmick. But winning always comes at a cost. One of the things it will cost you is discipline (No. That is not a cuss word! It’s in the bible!). If you discipline yourself to stop burying yourself in the hole of debt, focus on paying off your creditors, and commit to saving; you will win! How do I know? Because the Word of God says so! What? You don’t believe it? Are you calling God a liar?

Underdogs that win are usually extremely opportunistic. Let’s take football for example. If the favored team suddenly fumbles or misses a key opportunity to score, the underdog, more often than not, will take advantage of that mishap and use it to their advantage. Now, let me tell you how that relates to money. There are times when opportunities will come, but if you aren’t prepared to take advantage of them, move with wisdom, and steward the opportunity well, you will miss out. An opportunity may come in the form of a chance to earn extra money for paying off your debt or increasing your savings. Or it may come about as a chance to reduce unnecessary or frivolous spending. I don’t know what your chance, or chances, will look like because I’m not the God. But they will come. But those opportunities don’t mean anything if you don’t recognize them and act. That’s on you. God will create opportunities. God will prepare you. But God will NOT act for you! He will require you to move (in faith) and actually participate. And the value you get out of the opportunity, many times depends on your stewardship of the opportunity. Testimony time. Years ago, when we had a lot of debt, an opportunity to take a second job presented itself. This second job didn’t pay much and really didn’t seem to help us make much progress toward our goal of being debt free. But I tried to be a good steward of the opportunity and didn’t discount the small job (even though it came with a small check). But, after about 6 months, my stewardship was rewarded. That job led to a second job that paid almost 5 times more! It was as if God was using that first job as a gateway to the second, higher paying job. He created the opportunity. He prepared me. But He didn’t walk the path for me.

Underdogs can win with money in the real world, but it’s probably not going to just happen if all we do is pray about it. I have noticed, in my own life, God has used the process of struggle to develop resilience and hone our stewardship skills to transform our [financial] character. He permitted us to struggle to remind us there are consequences for our actions while, at the same time, making us better steward which grows our capacity for increase. After all, how can we be trusted with more if we are poor stewards over the few he has already given us? (See Matt. 25:14-40). So things must change. We must change. For an underdog to overcome the odds and take down the giant, they can’t hinder their progress by getting distracted, and they can’t afford to miss the God-given moments. Is it easy? No. But the real question is, “are we willing to get it?” I trust God will do His part, but we have to be willing to do our part. The choice is yours. God Bless.

[1] https://www.bcm.edu/news/psychiatry-and-behavior/why-we-root-for-underdog

4 Things to Know Before Investing in Cryptocurrency 

Have you ever traveled in a different country? One of the first things you probably did was visit a bank and exchange your money for the local currency. A Benjamin can buy you a nice dinner in the States, but if you want to enjoy fine dining in Italy, then you’ll need some euros!

Investing in cryptocurrency is similar to exchanging your money in a new country. Bitcoin, Litecoin, and Ether are a few examples of “foreign currencies” that work in a very specific context within certain online communities.

Exchanging any type of currency is built upon shared trust. We value dollars and Euros because we know that we can purchase goods or services with them.

The question is, can you trust cryptocurrencies? And should you jump into the world of crypto investing?

WHAT IS CRYPTOCURRENCY?

Cryptocurrencies are digital assets people use as investments and for purchases online. You exchange real currency, like dollars, to purchase “coins” or “tokens” of a given cryptocurrency. There are many kinds of cryptocurrencies. Bitcoin is the most famous, but Ether, Bitcoin Cash, Litecoin, and Ripple are a few others. All sorts of big tech and finance companies want a slice of crypto pie. Even Facebook has created a cryptocurrency called Libra.

The word cryptography means the art of writing or solving codes. (Sounds like the setup of an Indiana Jones movie, doesn’t it?) Each “coin” is a unique line of code. Cryptocurrencies cannot be duplicated, which makes them easy to track and identify as they’re traded.

You’ve probably heard of people making (or losing!) hundreds of thousands of dollars by investing in cryptocurrencies. It feels like a modern-day gold rush. But cryptocurrencies have actually been around for about 10 years. The earliest cryptocurrency was Bitcoin, created in 2009 by an unknown person who goes by the name Satoshi Nakamoto.

HOW DOES CRYPTOCURRENCY WORK?

Cryptocurrencies are exchanged from person to person on the web without a middleman, like a bank or government. It’s like the wild, wild west of the digital world. There’s no marshal to uphold the law.

Here’s what I mean: Have you ever hired a kid in your neighborhood to mow your lawn or watch your dog while you were out of town? Chances are, you paid them in cash. You didn’t need to go to the bank to make a formal transaction. That’s what it’s like to exchange cryptocurrencies. They are decentralized: No government or bank controls how they’re produced, what their value is, or how they’re exchanged.

As a result, cryptocurrencies are worth whatever people are willing to pay or exchange for them.

Now hang with me, people. We’re about to get techy! You store your cryptocurrency in a digital wallet—usually in an app or through the vendor where you purchase your coins. Your wallet gives you a private key—a unique code that you enter in order to digitally “sign off” on purchases. It’s mathematical proof that the exchange was legit.

Cryptocurrencies operate on what is called blockchain technology. A blockchain is like a really long receipt that keeps growing with each exchange. It’s a public record of all of the transactions that have ever happened in a given cryptocurrency.

WHAT CAN YOU BUY WITH CRYPTOCURRENCY?

At this point, most people still see cryptocurrencies as an investment. But cryptocurrency spending could become popular as these currencies gain trust. There are online retailers, such as overstock.com, who accept cryptocurrencies. And of course, any two individuals who value the tokens can exchange them for goods or services.

Some major retailers, such as Whole Foods and Nordstrom, are experimenting with accepting Bitcoin as a valid source of payment.1 But for the most part, cryptocurrencies are still on the fringe.

4 THINGS TO KNOW BEFORE INVESTING IN CRYPTOCURRENCY

Okay, y’all, I’ve got my coaching hat on. I might even get a little riled up! Before you say good-bye to your dollars and hello to Bitcoin or Ether, there are a few things you need to know.

  1. Cryptocurrencies are volatile. The value of cryptocurrencies goes through extreme ups and downs. In 2017, the value of Bitcoin swung between $900 and $20,000!2 Someone sneezes and the price drops! Investing in cryptocurrency is risky, to say the least. Of course, all investing carries a degree of risk. But you should always avoid unnecessary risks, especially when it comes to your hard-earned money. Don’t play poker with your financial future.
  2. There are lots of unknowns. There’s still a lot that needs to be ironed out with how cryptocurrencies work. Think about it: Nobody even knows who the founder of Bitcoin is! Relatively speaking, only a small percentage of people in the world understand the system and know how to operate it. Ignorance makes you vulnerable. I always advise people that if you can’t explain your investments to a 10-year-old, you have no business investing in them to begin with. You’re setting yourself up to do something stupid.
  3. Cryptocurrencies can be used for fraudulent activity. People who want to remain anonymous and avoid regulation from banks or the government will use cryptocurrencies to make shady deals on the black market. Money laundering is also a problem in the crypto world. Now hear me on this: I’m not saying that everyone who uses cryptocurrency is a bad person. But I am
  4. saying that if someone wants to commit criminal activity and avoid being tracked, the crypto world is an ideal place for them.
  5. Cryptocurrencies have an unproven rate of return. Trading in cryptocurrency is like gambling. Because it’s exchanged peer to peer without any tie to regulatory standards, there’s no pattern to the rise and fall of its value. You can’t predict changes or calculate returns like you can with growth stock mutual funds. There just isn’t enough data, or enough credibility, to create a long-term investing plan based in cryptocurrency.

SHOULD I INVEST IN CRYPTOCURRENCY?

Here’s the deal: If you’re out of debt, have an emergency fund that will cover three to six months of expenses, and you’re already investing 15% of your income in growth stock mutual funds—which are hundreds of times more secure than crypto—then you may make the choice to play around with cryptocurrencies.

But I want to warn you: When you invest in crypto, be prepared to say good-bye-o to your money. It’s not a good way to build wealth. There are thousands of millionaires who agree with me.

Don’t give in to stupid just because there’s a lot of hype. I’ve personally talked to people who have taken out a mortgage or cashed out their entire 401(k) early to invest in cryptocurrency! No, no, no! Don’t put it all on the line and risk your financial future, your retirement dreams, and your family’s well-being.

At some point in the future, cryptocurrencies might become legitimate and widely used. But for now, be safe and be smart.

INVEST WITH CONFIDENCE

Get-rich-quick schemes seem too good to be true because they are. The reality is, the road to building wealth is slow and steady. Millionaires don’t build wealth through risky investments like cryptocurrencies. In fact, in The National Study of Millionaires, we found that the number one wealth-building tool of millionaires is their workplace retirement plan, like a 401(k).

Written by Chris Hogan from ChrisHogan360.com

 

Curbing the Christmas Compulsion

I don’t know of many people who don’t love Christmas time. This time of year, believers remember the birth of our Savior and celebrate by giving gifts to others, just like the wise men brought gifts of frankincense, mirth, and gold to baby Jesus. And non-believers….hmmm….well, I don’t know why non-believers celebrate Christmas, but I do know they love this time of year as much as we do like to buy and exchange gifts too.

Everyone celebrates Christmas time. Christians. Non-believers. But especially retailers. Yep, the most celebrated time of the year is also the most critical time of the year to stores and retailers, as it means there is a lot of opportunities to make a lot of money. According to an article on USAToday.com [1], customers are projected to spend over $1.1 trillion this time of year! While we customers are thinking about Santa’s red sleighs and candy canes, retailers are thinking about the “green” customers are going to spend at their stores or on-line. That is why internet sales and holiday specials start so early — businesses want to give you plenty of opportunities to spend your money. And there is nothing ethically wrong with that. It’s just business.

Nowadays, if you haven’t started your Christmas shopping by the beginning of December, you’re behind! Black Friday weekend sales are over, and Cyber, Monday One-Day opportunities, has passed. So, if you missed it, what are you going to do? The first thing you need to do is relax. There is still plenty of time. Secondly, you need to know what you are willing to spend on Christmas gifts this year. And once you’ve come to that number, you need to be resolved not to spend more than that amount. Developing a plan will help (calm down, I didn’t say a budget). Next, ask yourself some hard questions. Like…
“Does it make sense for me to spend this much money on Christmas, given my financial situation?”
Or……
“If I spend this much money on gifts, what is it going to cost me later?”
Or……
“If I spend this much money on Christmas, will I have any trouble paying my bills?”
If there is any hesitation to truthfully answering these questions, you might need to reduce the amount you plan on spending. I know everybody wants to give gifts, and retailers are more than happy to help you with that, but you have to know your limitations. Maybe this year, you will need to give more cards than gifts. Or perhaps all you can give this year are text messages! That’s OK!

Don’t let the fear of people’s potential reactions make you do something you will regret later. Sometimes we let ourselves get carried away with silly fears and make bad choices. We worry ourselves with thoughts of how others will feel if we can’t get them the gift we think they are expecting. We fear our failure to meet their expectations will somehow damage the relationship. But if it does, what does that say about the relationship in the first place? And when it comes to children, did you know not one kid in history was emotionally damaged because they didn’t get what they wanted for Christmas? Nope. Not one (trust me, I researched it). Kids are pretty resilient. They’ll live. Does that sound kind of harsh? Not sorry. The truth is not nearly as pleasant as often as we’d like to believe. We have to exercise some restraint. When Christmas has passed, YOU will be the one left to deal with your spending choices.

I want you to have a good time and celebrate Christmas with all your family and friends. But, even more so, I want you to celebrate wisely and not be burdened with any financial debt months later because you “went all out.” Besides, Christmas is about Jesus, not gifts! Enjoy the holiday season. But at the same time, know YOUR season. You can’t reap and sow at the same time. Merry Christmas and God Bless!

[1] https://www.usatoday.com/story/money/2019/09/17/shoppers-expected-spend-more-than-1-trillion-holiday-season/2311725001/

PLANNING FOR COLLEGE WHILE YOU’RE STILL IN HIGH SCHOOL


All right, if you’ve followed me for any length of time, you know that I’m passionate about a couple of things. Number one, I’m passionate about helping young people start on the right foot with money—and in life. I’m also passionate about tackling anything that leads young people to make terrible choices with their money. I always say that the caliber of your future will be determined by the choices you make today.
Listen, guys, that is so true—especially when it comes to college. For some of you, college may be just around the corner, while for others it may still be a long way off. Either way, it’s never too early to start planning!
But planning for college while you’re in high school is just one of those things that not enough people talk about. I know for a fact that nobody ever talked to me about it, and I ended up making a lot of mistakes as a result. There are so many things I wish I would’ve known before I ever hit the college campus.

THE HUGE FINANCIAL CRISIS THAT’S THREATENING STUDENTS
Here’s one thing I wish someone had told me about: not taking out student loans for college. But no one told me not to take out student loans, so I did—I took out a bunch! The sad thing is that I didn’t even need student loans because my college was paid for with a scholarship and my dad’s military benefits. But someone told me I could get some money by filling out the student loan form. (That was a stupid idea.)
Let me be real with you. I didn’t even understand what a student loan was at that point. And I certainly didn’t know about the dangers of debt. I’m telling you: taking out student loans was one of the worst money choices I made as a young man. And it took me years—YEARS—to pay back those student loans. That bill showed up in the mail every. single. month. And I hated it.
It wasn’t just a problem for me—student loans are a huge problem in our country. Today, the student loan crisis is the number one thing holding students back from achieving their dreams after college. It’s true. According to the Federal Reserve, the national student loan debt is 1.5 trillion dollars .1 Y’all, that’s trillion. Not million or billion. Trillion. Dude, that’s a lot of money.
Having to pay back student loans is causing millennials to delay some things in their lives. For example, did you know that 55% of millennials who are paying on student loans say they are postponing having children? Or that 41% are delaying getting married? Or that 86% have made career sacrifices because of their student loan payments?2 Y’all, that’s ridiculous.
In my opinion, the biggest college money danger is the lie that student loans are the only way to pay for college. Bump that! That’s just not true.
It takes some hard work and sacrifice, but it is possible to get a degree without borrowing a dime. There are some specific things you can do (and should be doing) throughout middle school and high school that will kick-start your debt-free college journey! Here are a few of them.

HOW TO LAY AN ACADEMIC FOUNDATION IN HIGH SCHOOL
1. GET GREAT GRADES.
One of the most important things you can do to prepare for college is get killer grades. Listen, I get it. Grades may not be your thing. The reality is, though, that when it comes to planning for college, grades are super important.
When it comes to looking for scholarships, some of them require a certain GPA (grade point average) for you to be able to apply. So your grades can end up making you some money for college. Does that change how you view those assignments and tests now?

2. LEARN HOW TO STUDY.
In addition to your grades, just learning how to study better will be a huge help in getting ready for college. And honestly, it’s going to help you in high school too. That means setting aside the right amount of time to get your homework done. It means spending time studying for a test—and giving yourself time to get some rest too.
There are lots of ways to study: Some people want to study alone, while others prefer to study with friends. Some people want it completely quiet, while others need some music or some noise in the background. Some people want coffee, while others need flaming hot cheese puffs. Find what works best for you.

3. PREP FOR THE TESTS.
Don’t forget about the ACT and SATs, you guys! Use prep books, take practice tests, and get a tutor if you have to. And don’t be afraid to take the test multiple times. Your score really can make a big difference when it comes to earning scholarship money and figuring out which college courses are right for you.

HOW TO LAY A FINANCIAL FOUNDATION IN HIGH SCHOOL
I get frustrated all the time when I hear, “Anthony, the only way to go to college is with student loans.” No, it’s not. That’s just what culture wants you to believe.
Don’t get me wrong, I know college can be expensive. But I also know there are ways to save on some costs, get free money with financial aid, and pay cash for your education. It’s not going to be easy, but it can be done. Really.
Besides student loans, which I want you to avoid, college financial aid also includes scholarships, grants, and work-study programs. Let’s break those down:

1. SCHOLARSHIPS
Scholarships are free money to pay for college expenses. You don’t have to pay back scholarships—that’s dope! Most scholarships are merit-based, meaning you have to do something to earn them—like get good grades or be an athlete. And you do have to meet certain criteria, fill out an application, and write an essay (usually). But it’s worth your time.
For example, let’s say you spend an hour completing four scholarship applications. Later, you find out that you got one of the $500 scholarships. That was $500 for an hour’s worth of work. You’re not going to get that much money flipping burgers.That’s why I tell high school students to spend some time every day—at least an hour—searching for college scholarships. Make that your part-time job. Make it a priority. I’ve personally known several students who were awarded scholarships that not only paid their tuition, but also paid them money each semester just to go to school. That’s right! They got paid to go to school. How awesome is that?

2. GRANTS
Grants are also free money to pay for college expenses. Grants are generally need-based and typically awarded based on your family’s financial situation. Grants may be more difficult to find. They have stricter rules and criteria, but that doesn’t mean you shouldn’t search for them.You may find a variety of federal and state grants. For example, a Pell Grant is one of the most common federal grants. Some states even have grants specifically for students going to an in-state school. Make sure to check all available grants to see if you qualify.

3. WORK STUDY
Work-study opportunities through a college involve . . . work. Yep, that’s why it’s called work study—you work and study. Don’t be afraid of a little work while you’re in college. Some of the jobs may even let you study when you have downtime working at a desk. You won’t get rich with work study, but you’ll earn a little cash that can help cover some of your expenses.One great way to work on campus is to become a Resident Assistant (RA). RAs monitor the dorms and help out with student activities. The trade-off is that you may get free room and meals, as well as a small amount of money. That can help you save a ton!

YOU CAN GO TO COLLEGE DEBT-FREE
Do you know what my answer is whenever anyone asks me, “Anthony, is it possible to graduate from college completely debt-free?” Absolutely! Do you know what it takes to get that debt-free degree? A plan. And a decision.
I wish I could go back and do some things differently, but I can’t. What I can do is help you avoid the same mistakes I made. My new book, Debt-Free Degree, will guide you through all the things you should do throughout high school to get on track for college—and graduate with no debt. You can to do it all without the burden of student loans. You’ve got this!

Written by Anthony O’Neal from AnthonyONeal.com

WHAT IS KEEPING THE MIDDLE CLASS FROM BECOMING MILLIONAIRES?

Middle-Class Millionaire.
No, that’s not a typo. And it’s not a myth or a fairy tale.
A middle-class millionaire is a real thing—or, rather, a real person just like you and me.
Despite what you’ve seen on the news or social media, middle-class people can become millionaires. In fact, anyone can—yes, even you. I have the stats to prove it. And I have a plan you can follow to get there.
HOW DID MOST MILLIONAIRES GROW UP?
This year, my team released the findings from the largest study of millionaires ever conducted—more than 10,000 people. One of the things we discovered is that most millionaires didn’t grow up in wealthy families. Rather, 8 in 10 millionaires we surveyed said they come from families at or below the middle-class income level.
When we break that down, 48%—almost half of all millionaires—described their parents’ household as middle class, 27% described it as lower-middle class, and over 4% of them described it as lower class.
Let those stats sink in. Half of millionaires come from middle-class homes. And one in four come from the lower-middle class. America, this is your wake-up call. The American Dream is alive and available. You just have to work for it.

HOW TWO PEOPLE LIKE YOU BECAME MILLIONAIRES
As a part of our research, we asked these everyday millionaires to tell us their stories. Here’s one such story that proves your background doesn’t matter:
Thomas grew up in the Midwest and started with literally nothing. In fact, he remembers only having two shirts and two pairs of pants for a long stretch of his childhood. He came from a dysfunctional family with an alcoholic father and a mother who struggled with mental health issues. As a result, he was in and out of three or four different foster homes as a child, and both of his parents died far too young. Those early years taught him two important lessons: First, he learned that drinking alcohol would lead him away from future success, and second, he knew that he did not like being poor. Despite coming out of poverty, loss, and hardship, Thomas had a clear vision for where he wanted his life to go, but he knew he’d have to work for it.
Thomas went to college in the 1960s and graduated with a math degree before being drafted into the Vietnam War. After serving four years, he returned to school to pursue a Ph.D. in math, which he planned to use working for the Department of Defense. Instead, Thomas got sidetracked by a new passion: teaching. He taught math in a few different colleges for his entire career, spending thirty-seven years in education before retiring with a net worth of $2.6 million.
Did Thomas come up with a new mathematical breakthrough that revolutionized education? Did he use his math skills to make a killing in Vegas? No. Thomas made his millions slowly and steadily, working in a job he loved and designing a life that allowed him to build wealth on his own terms. What was his secret? He says he stayed away from debt, paid for everything he bought with cash, worked extra hours, and made wise investments. Sophisticated stuff, huh?
I know what you’re thinking: Hogan, this guy built his wealth decades ago, when the economy was better and the cost of living was lower. You know what I call that? An excuse.
But just to show you that his story isn’t an exception, let me tell you about another everyday millionaire:
Larry came from humble beginnings. His parents were Wisconsin dairy farmers who had never gone past the eighth grade. They were hard workers who hated debt—and who taught their children to hate debt, too.
Becoming the first person in his family to graduate college, Larry left the dairy farm and began a thirty-five-year career in insurance. Throughout his working years, Larry kept his spending in check, just like his parents taught him. He avoided all forms of debt except a mortgage.
He and his wife lived well below their means throughout their marriage, making saving a priority from Larry’s first full-time paycheck. Even when he was only making $5,500 a year early in his career, he still prioritized his saving and managed to save $100 a month. When he got a raise, he increased his savings. When he got an annual bonus, he saved it. When his company introduced the 401(k), Larry maxed it out. He never played around with debt, and he never got distracted by risky investments that others tried to push on him. He worked hard, stuck to his plan, drove old paid-for cars, and didn’t pay any attention to what other people had.
The end result? He retired early at age fifty-five and has a current net worth of over $4.2 million. Now, he gets to travel, play golf and tennis several times a week, visit his children and grandkids whenever he wants, and enjoy long walks and bike rides with his wife.
Did you notice the similarities in their stories? They didn’t let their family upbringing stop them. They took control of their finances and determined to live, work and save on their own terms. And both of their stories are, well, ordinary. These millionaires are everyday people—just like you and me.
HOW TO BECOME A MILLIONAIRE ON ANY INCOME
So, how can someone who didn’t grow up wealthy become a millionaire? As the stories showed us, there is a familiar pattern. Here’s a quick outline:
1. GET OUT OF DEBT.
Think of debt as a ball and chain wrapped around your neck, slowly choking you. I know it’s a violent visual, but I want you to understand just how bad debt is. You have to hate it enough to get rid of it. Period.
2. FOLLOW A BUDGET.
The research revealed that millionaires stick to the budgets they create. Did you catch that? Millionaires budget their money! They also use coupons when they shop. In fact, our research found that 93% of net worth millionaires use coupons all or some of the time when shopping. Those are my kind of people!
3. INVEST CONSISTENTLY.
The millionaires we interviewed said their company’s retirement plan was the number one contributor to achieving high net worth. As their income increased, so did their monthly contributions to their retirement plan. They invested money month after month, year after year.
4. STAY FOCUSED—FOR A LONG TIME.
Here’s the bottom line: becoming a millionaire is a marathon, not a sprint. On average, our survey participants hit the million-dollar mark at age 49. If they started working right out of college, they kept saving, budgeting, and working toward their financial goals for almost three decades. Staying focused for that long takes discipline.
I know these steps aren’t flashy. They won’t grab headlines. But they work. I know thousands of people (about 10,000 of them!) who will tell you it worked for them. The process will work for you, too.
Are you in? Let’s do this!
If you want to learn more about building wealth, check out my new book, Everyday Millionaire: How Ordinary People Built Extraordinary Wealth—and How You Can Too. You’ll find lots of other stories about people just like you who hit the million-dollar mark. You’ll also learn about other myths that are keeping you from reaching that goal yourself. So, get your copy today!

Written by Chris Hogan from ChrisHogan360.com

 

3 MILLIONAIRE MYTHS THAT KEEP YOU FROM BUILDING WEALTH

Written by Chris Hogan from ChrisHogan360.com

 

 

Somehow, our culture has come to believe some myths about millionaires that just aren’t true. We’ve been fed a lie and swallowed it like cotton candy at the county fair. And that makes me mad.

Why? Because I want you to reach your financial goals. And if you believe the millionaire myths floating out there, you don’t think hitting that seven-figure milestone is possible—and you won’t even try.

But those millionaire myths are just that: myths.

You and I have been lied to. You can become a millionaire. You can enjoy financial security. You can reach your money goals. Don’t believe everything you hear or see.

Let me share some millionaire myths and tell you why they’re absolutely wrong.

MILLIONAIRE MYTH #1: BIG RISKS LEAD TO BIG BUCKS

One of the biggest myths out there is the idea that you have to take big risks to make big money. If you believed every commercial or online article, you’d think the path to wealth is paved with start-ups, Bitcoins, day trading and single-stock investments.

Think about it. How many late-night promos focus on a small investment that “guarantees” a big payoff? How many day-trading offers do you get online? I don’t think I’ve ever seen an infomercial about investing in a Roth IRA or a 401(k) as the best way to build wealth. That’s because it rubs against our instant-gratification culture that says you can get what you want when you want it. We don’t want to wait the 20 or 30 years it takes to build wealth the slow way.

But the majority of millionaires didn’t strike it rich by buying into an “opportunity.” They didn’t find a gold mine that nobody knew about. They invested in their company’s 401(k). Every month. Every year. For decades.

Building wealth is a marathon, not a sprint. And slow and steady will win the race every time.

MILLIONAIRE MYTH #1: BIG RISKS LEAD TO BIG BUCKS

Most TV shows and movies propel the myth that successful people got a leg up by having a degree from a fancy school or by having a high-paying job. That couldn’t be further from the truth. I know millionaires who worked for decades as janitors and teachers. And I know CEOs and high-power executives who have debt in the seven figures.

One look into the bank accounts of celebrities will prove my point. Michael Jackson. Nicolas Cage. Stephen Baldwin. Kim Basinger. Curt Schilling. Burt Reynolds. MC Hammer. All of these people blew through their money and found themselves in deep financial holes. (1)

Their stories are living proof that it’s not about the amount of money you make. It’s about what you do with the money you earn. If you live debt-free, if you put away 15% of your household income every month, and if you do that for 20–30 years, you’ll find yourself sitting on a pile of cash come retirement time. But it’s up to you to take those steps.

MILLIONAIRE MYTH #3: WEALTH WITHOUT WORKING

There’s an old commercial with a punch line that said, “We make money the old-fashioned way. We earn it.” And guess what? That’s absolutely true for everyday millionaires. Very few wealthy people inherited the bulk of their money. I’ve never met a millionaire who got their money from a lottery ticket—and I’ve talked to a lot of millionaires.

The millionaires I‘ve met at events and talked to on my show didn’t have some long-lost uncle who made them wealthy. They didn’t go hunting for food, strike oil by accident, and move to Beverly Hills. Instead, they tell stories of hard work, perseverance, sacrifice, and focus. Those are the real ingredients for building wealth. There’s no accident, luck or inheritance involved.

Here’s the truth, so listen up: Myths are excuses. If you think becoming a millionaire is due to outside forces, then you don’t have to take responsibility for your financial future. You can put the blame on something or someone else. You can sit back and wallow in frustration when wealth doesn’t land in your lap. But that doesn’t cut it, folks.

Your ability to become a millionaire is dependent on one thing: you. It’s not up to an inheritance, a big executive job or a fancy degree. You have to set your goal, create your plan, and do the freaking hard work it takes to hit that goal. This is the land of opportunity, not the land of “do nothing and expect to become a millionaire.”

But here’s the bottom line, and it’s good news: You can become a millionaire. I’ve met with and talked with thousands of people. People who turned $1 million in debt into $1 million in net worth. People who took smaller vacations and bought used cars. People who focused on their goals instead of the neighbor’s newest toy. People who didn’t listen to millionaire myths.

The big question is this: What do you believe about becoming a millionaire? Because what you believe determines what actions you take. And your actions will determine your future.

Believe in yourself and believe in your abilities. Believe in hard work and the power of time and compound interest.

Then get to work!

Between The Red Lines

Although I am typing this session of Money Matters on a laptop in the Denver airport, I grew up in an era when this was not always as practical as it is now.  When I was in high school, my English assignments were not typed, but they were written out on notebook paper (yeah, we actually were required to know how to write).  Do you remember standard or college rule notebook paper with the blue horizontal lines and the red vertical line down the side?  I understand the purpose of the blue horizontal lines.  They were there to make sure the writing was straight on the paper.  Without those blue lines, everybody’s writing would have an angle, a slant, or an arc which would make it completely frustrating to read.   But those red lines; are they really necessary?  I had a problem with this.  These lines were to provide margins.  The standard margins on notebook paper are 1 inch on each side and you were to only write between the margins.  Why was I being restricted from writing from one edge of the paper to the other?  I didn’t need margins.  I could do more without them. If I was able to use the whole sheet of notebook paper, I could get more done with less paper.  I would be more efficient, right?

I used to think I would be better off without margins.  I see things a little differently now.  Margins are a good thing.  Yes, they are restricting, but they are meant to be.  Margins provide structure, and structures introduce order where there is chaos.  The structure margins create to bring a sense of “alignment” that is badly needed but is missing.  Think about someone you know whose finances are a wreck.  I would be willing to bet (and I live in Vegas) that they spend without margins or their margins are a way to close to the edges.  I know, everybody thinks more money would fix their money problems, but, although popular, more often than not, it just isn’t true.  Everybody wants more money, but what are they doing with the money they already have?

Financial margins are a must if you plan to be successful with money.  How else will you know who much you spend on the essentials?  How will you know who much you can save?  How will you know how much you can afford to invest?  How can you ever expect to be consistent with anything if you don’t have defined boundaries?  You need a plan. A plan that is built on systems and defined by structures or margins.  And these margins are created in a budget.  That’s right, the dreaded “B” word rears its ugly head again. I get it, just the word “budget” is draining and brings up thoughts of mind-numbing pointless boredom.  While I admit, it can be that way, it doesn’t have to be.  Budgeting allows you to see, on paper, where your money is going.  They allow you to tangibly see what you are actually doing with your money on paper.  Now, you might not like what you see, but sometimes the truth is ugly.  But you still need to see it.  There is a simple test you can perform to give you an idea of how well you are doing handle money.  Ask yourself, some simple questions. How much money do you spend on food?  How much do you spend on bills?  How much do you spend on paying off debt?  Now, you may be able to answer those questions easily, but here come two or three questions that most people with money issues cannot answer.  Ask yourself, where is all this written down?  Can you account for all the money you earn?  Is there any money that is wasted or unaccounted for?  At your current rate, what is the exact date you will be debt-free? Uh-oh.  I heard a hush come over the readers.  Those are the tough questions to answer because an honest answer demands a different level of stewardship and greater attention to detail.  But those are the questions you need to be able to answer if you want to win.  A written budget gives you a picture, albeit in numbers, to answer these tough questions.

A life lived without margins is surprisingly unfruitful and often ends in tragedy.  The same is so with our finances.  Our spending habits need structure, and this structure actually turns out to be more enabling than restrictive.  A structured plan, or budget, helps bring clarity to a financial situation.  And with clarity, financial progress can be made.  Haven’t you compassed this mountain long enough? (A reference to Deut. 2:3 for you bible scholars).  It’s time to move forward.  It’s time to take your dreams and turn them into goals (goals are nothing more than dreams with a deadline).  It can be done, but it will take introducing a different level of order and discipline to your finances.  We serve a God of order (1 Cor. 14:33), and he expects us to do everything decently in order (1 Cor. 14:40).  Shouldn’t this apply to our finances too?  It’s time.  It’s time to make financial progress.  It’s time to break down and do the uncomfortable things we dread to get the results we want.  Are you willing to make that sacrifice?  Are you willing to do it God’s way?  God Bless.

The Magic Lottery Ticket


In an effort to raise money, many states have adopted a clever, but legal, plan that tantalizes people to pay just a little amount of money for the chance to win a lot of money in return. In common cases, the winner of the prize money must produce a specific combination (which is usually a numbers combination) to claim the prize money. But if no one comes forward with the winning numbers, more and more people continue to invest with the hopes that they will be the winner and pot grows. Just recently, in California, the pot to be claimed reached over $1.6 billion (that’s with a “B”). Amazing isn’t it? With no effort, no work, and no skill, you can instantly become a billionaire!

People who are having money issues may see this as a chance for them to get back on their feet. I mean, they don’t have to win the whole lottery; just winning a small portion can be life-changing. Well, if you don’t know, buying lottery tickets is a terrible, terrible idea. It is so bad; I don’t think it can even qualify to be considered an investment. The ticket buyer has absolutely NO control over the outcome and the chances of winning are almost zero. It is an absolute waste and a sure guarantee to lose your money.

But, do you know what is even worse than losing money in the lottery; developing a mindset that causes one to chase after the “winning lottery ticket”. What do I mean? Well, in the case of the lottery, I’m speaking of a mindset that starts with desperate people thinking the right combination of numbers, will instantly make their money problems disappear like magic. They think the right combination will be the “quick fix” to all their money problems. It’s just a matter of finding the right combination. So they forgo good judgment and Godly stewardship principles in search of the quick-fix magic lottery ticket.

I’ve noticed, as people, we love the spontaneous and the sensational. It’s exhilarating! Think about it. In sports, the most exciting plays are the big plays that change the momentum of the game in a few seconds. In baseball, everyone loves the home run. The tide of a game can be changed with one swing of the bat. In football, it is the long run or deep pass for a touchdown. It gets everyone out of their seats. Well, the same goes for money situations. We are drawn the lure of the immediate; even us Christians. We Christians do the same thing except we tend to use more “holy” words. For example, instead of searching for a combination of inputs or numbers for a winning lottery ticket, we will try a different combination of prayers. But a fallacy is a fallacy, irrespective of the language in which it is spoken.

If we want the blessings of God, we have to be willing to do it God’s way. And His way is outlined in His Word. When it comes to honoring God we cannot rob Him of what is His (Mal. 3:6-10, Proverbs 3:9-10). When it comes to our debt, we should try to get out of debt ASAP (Proverbs 6:2-6), and plan carefully to avoid debt (Luke 14:28-30) because we become servants to our creditors (Proverbs 22:7). When it comes to managing our money, we have to pay our bills (Romans 13:7), save for that proverbial “rainy day” (Proverbs 21:20), and carefully plan our next money move (Proverbs 21:5). And when we are ready, when we have paid our debts, we can then invest (Ecclesiastes 11:2-4). It’s not enough to just tithe and expect God’s blessing to dwell over our finances; there is so much more to God’s financial plan for our lives than just tithing. If you want ALL His blessings, you have to follow ALL His instructions. And I can guess what some of you are thinking. You are saying to yourself, “It will take me years to get where I want to be financially. I don’t have time to do it that way!” Well, it may take you years. But when are you going to trust what God has outlined in His Word? His way is better than you praying for the magic lottery ticket. Your way isn’t working. Aren’t you tired of doing the same things and seeing no results (Deuteronomy 2:3)? If you want to see a change, you have to change. It may take time. But you need that time. Why? Because the financial character you need to manage the wealth God has for you is forged in time. Time is expensive, so the process is not cheap. But nothing of any real value is cheap. It will cost you more time and probably some frustration as you break some bad money habits, but it’s worth it. Take God at His Word and do it His way. Your blessings are on the other side of your obedience. God Bless.