Category: Money & Finance

Confessions of a Millionaire Businessman

Author and businessman, Tim Brown, knew what it was like to live The American Dream. But then everything came crashing down. A number of years ago, amidst his struggling marriage, the collapse of his ventures and his declining health, Tim contemplated ending his life while on a business trip. He spotted a location on the roof of the hotel he was staying and pondered his jump. In a fascinating interview I did with him – which captures the essence of his book Jumping Into The Parade: The Leap of Faith that Made My Broken Life Worth Living - Tim discusses how these struggles helped him truly live, take chances and become the person he really wanted to be.

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You talk in your book about becoming a millionaire by age 30 with a beautiful wife, a young son and all the trappings of success. But then things in your life started to head in a less than favorable direction. Talk to us about this

I think there are a lot of messages baked into that question. For starters, I believe the real problems we face can’t be fixed with money. This is something that we all learn at different points in our life. Just looking back at becoming a millionaire at 30, I am often reminded that whenever you connect your worth to a scoreboard, you have fallen into a really dangerous trap.

So where did ‘money’ come into this equation?

Personally, making money was never about me being rich, and it still isn’t. It has always been about not being poor. Those are two very different mindsets.

Can you elaborate on that?

Glad to. As I look back, I can honestly say that money for me was about security and safety. So much of my life was based on choices that my parents made, involving frequent family moves which left me feeling unsafe and disconnected. To me, money represents the type of security and stability that has allowed me not to be at the mercy of another person’s decisions. Moreover, it helped set the course for my own value proposition here on earth in that it kinda proved to the world that I had worth.

And as I recall from the book, you struggled with depression?

I sure did. The depth of this depression hit me hard when I was in my late 30’s. Everything I had worked on in my 20’s was successful. And I also did really well with a lot of what I worked on in my 30’s. But then the demands of my businesses really started to take their toll, and it was only a matter of time before the powder keg went off.

What about self-worth?

It is important for all of us to remember that our self-worth is not necessarily connected to our work life. Your worth is about your character and your capacity for learning, serving, helping others and growing your soul. It can be a real wake-up call when we find that the pot of gold at the end of the rainbow is empty and that we have spent much of our life being on this quest. For me as a kid, I envisioned marrying a beautiful wife, having a family, a great house and security and that all of this would be delivered through money. While money certainly helps for sure, I’ve seen just as many people with a lot of money live unfulfilled lives. It can corrupt people because they let it become their God. And it can become an enabler of ego which can cloud one’s judgement and humility.

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Windy City Debt Scenario: Blown Away Yet?

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Chicago, one of the great global metropolises, is in a world of hurt…. serious hurt; so badly mangled that if left uncorrected, the Windy City, as it is affectionately known, stands to get blown to smithereens, just like it’s fellow city to the north – Detroit.

The crux of the issue boils down to a simple phrase: fiscal irresponsibility. It’s a storm system that has been building in intensity for years. And for me, a former Chicago resident, it elicits a deep sadness for the city I truly love.

Chicagoans have a term of endearment for the frigid, sub-zero winds that come howling in off Lake Michigan during the heart of winter. They call it “The Hawk.” This term applies equally well to the cold, hard, chilling facts associated with the fiscal ‘winter’ that the city is facing. A $1 billion operating shortfall, combined with a pension crisis registering at $20 billion. On top of that, the Chicago Public School system has a cool $1 billion shortfall along with a $9.5 billion tab for unfunded pension liability.

The warnings regarding the impending financial doom have long been there. In essence, they date back to 2003, a time when Chicago’s municipal budget was adversely impacted by the Great Recession. Making a dire situation worse, former mayor Richard M. Daley engaged in a number of questionable deals that accelerated the city’s debt load. The greatest mess has been Chicago’s pension system which is heavily mired in unfunded liabilty. Closely tied to this are the chronically upside-down Chicago schools that are closing and laying off teachers at an alarming rate due to funding deficits. What makes the school issue such a joke is the position being taken by the Chicago Teachers Union; namely, let’s dig in our heels and oppose any and all fiscal reforms that might help mitigate the debt situation.

6 Reasons Why Rent is So High – and What You Can Do

For-rent-signMillennials are having a tough time finding an affordable house or apartment to rent as they start their lives and careers. A recent report found most rental homes were unaffordable for millennials in 23 of the largest 50 cities in the U.S. The reason is simply supply and demand. But what is driving the demand for rentals and what, if anything, can you do about it?

 

1. The homeownership rate is back where it was 20 years ago, before the campaign to encourage homeownership began.

A chart of U.S. homeownership clearly shows the government-influenced boom to get people to own their own homes and then the resulting bust. It appears there may be a natural rate of homeownership due to the fact that some people will always be renters, such as students, those moving to new cities or young people starting their careers. Trying to artificially increase the homeownership rate beyond this natural rate cannot last indefinitely. Once the bubble popped, all those who owned homes – who normally wouldn’t have been homeowners – came rushing back into the rental market.

2. Millennials are now competing with baby boomers for rental units.

As if it wasn’t enough to compete against other millennials and those still scarred from the housing bubble, rental demand is also being driven by baby boomers looking to downsize or have a more convenient lifestyle. According to a recent Bloomberg article, the sheer size of the baby boomer generation is likely to keep up demand on rental units for the foreseeable future.

3. The middle-aged and middle class are renting too.

Households between the ages of 45 and 64 accounted for about twice the share of renter growth as compared to those younger than 35. Also surprising is the fact that households in the upper half of income distribution contributed 43% of the growth. These are the two groups that traditionally are the most likely to own a home. It’s not entirely clear why, but it’s likely it relates to these traditional homeowners getting burned in the last housing bust and choosing to rent while they repair their finances.

Gold Update: China Releases Data & Recent Price Drop

GoldDragonChina finally updated their official gold holdings on Friday, revealing a 57% increase from the previously reported figure, but less than what most analysts were expecting to see. China’s gold reserves totaled 1,658 tonnes at the end of June of this year, up from 1,054 tonnes reported in April 2009. Bloomberg had previously estimated their holdings could be as high as 3,510 metric tonnes based on trade data. While disappointing to many gold investors, the spot price of gold declined only slightly on Friday.

Although the release was welcomed, as many have been eagerly awaiting an update to China’s data, it may have raised more questions than it answered. For example, China had been “releasing” data previously, but reports showed no change in the gold reserves every single month for six years. Therefore, the data was false. According to their official release, it now looks like China increased their gold reserves by 600 tonnes in one month, which cannot be true as the spot price of gold could not have declined as it did with that much buying.

9 Overlooked Ways To Save What You Earn

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I have a big gripe with financial advisors, namely that they howl endlessly about saving for the future. While I don’t want to minimize the importance of this, I do believe that the word ‘savings’ has a broader meaning for those of us who ascribe to the importance of livimg For today.

Either way, the end goal is to spend less than you earn. And there are plenty of often-overlooked ways to do this, as I will now share with you:

1. Increase Your 401K & SEP IRA: OK, call me a kiss-up for wanting to make good with the financial advisory world that I just smacked down! But it does make sense to build a savings nest through a defined contribution plan such as a 401K (if you are a W-2 employee) or a Simplified Employee Pension (SEP IRA) if you are self-employed. Both offer a great way to tuck away a few dollars, combined with significant tax savings.