Big companies like Apple, super successful websites like Facebook, and bestselling books like The 4-Hour Workweek all have one thing in common:  They begin with a million dollar idea.

The big question is:  How did their creators come up with these ideas?  Did they sit around waiting for an inspirational flash or a mystic spell of luck?

The answer is:  Spontaneity and luck had little to do with it.

In this article, we’ll take a brief look at 20 tried and true techniques that some of the brightest and most successful entrepreneurs have used to generate million dollar ideas.

You don’t need to have a 100-person company
to develop and execute a good idea.
– Larry Page (Google)

1. Generate lots of ideas. – The more ideas you create, the more likely you are to create an idea worth a million bucks.
2. Fail a lot. – All of the ideas that don’t work are simply stepping stones on your way to the one idea that does.  Sometimes you have to fail a thousand times to succeed.  No matter how many mistakes you make or how slow you progress, you are still way ahead of everyone who isn’t trying.
3. Consume information consciously. – Some of my friends think it’s wasteful that I spend so much time reading books and blogs.  It’s not.  It’s what gives me an edge.  I feel engulfed with new ideas and information.  And I’ve actually used what I’ve learned to launch a few successful websites.  When you read things and interact with people, take off your consumer cap and put on your creator cap.  There are million dollar ideas (or at least some really good ideas) all around you waiting for discovery.
4. Focus on topics and ideas with large markets. – A million dollars is not a lot of money in the grand scheme of things, but it certainly is if you’re trying to earn it in a small market with limited opportunities.  Even if you put Steve Jobs in the role of CEO for a new venture with a maximum market size of 100 people he wouldn’t make more than a few cents.  ‘Big bucks’ result from high demand in a substantial market.
5. Make sure there’s money in your market. – Bank robbers rob banks because that’s where the money is.  Before you become emotionally attached to an idea, do a little market research.  Make sure the idea you’re pursuing is where the money is.  Who are the clients and consumers?  How much disposable income do they have?  Etc.
6. Keep your eyes, ears and mind wide open. – Oftentimes one idea’s failure will open a door to a new idea.  Don’t get so hung up on one failed attempt that you miss the opening for many more.
7. Test variations of the same idea. – Think about the iPhone and the iPad for a second.  One is just a variation of the other.  Both are multi-million dollar ideas.
8. Figure out what works well in one market and tailor it to another. – Find an idea that’s already proven and think about how it could be applied in a different context.  Take a formula that works in one niche and apply it to a new niche.  Or take the best aspects of one product and combine it with another product.
9. Put the pieces together. – YouTube’s creators didn’t invent Flash.  They didn’t invent modern digital cameras that can record computer-ready mpeg video.  And they didn’t invent broadband Internet connections, cheap web hosting, embedded website content, or one-click website uploading technologies either.  What they invented is a technology that takes all of these existing pieces and combines them into an online video sharing portal.
10. Spin a new twist on a previous breakthrough. – A new twist on an old idea can still be a million dollar idea.  Take Facebook for instance, it wasn’t the first big social networking site, but Mark Zuckerberg and company added twists and features the others did not grasp.  How can you take an existing million dollar idea, or even a common idea, and give it a new twist, a new direction and journey?
11. Systematize a popular service into a reproducible product. – A service is productized when its ownership can be exchanged.  Think about Alienware and Dell back in their infancy.  Both companies simply systematized the service of building IBM compatible PCs and then sold them as a packaged product.  If you can convert a high demand service into a scalable, systematized, efficient process and sell it as a packaged deal, the million appears.
12. Play with opposites. – When something becomes extremely popular, the opposite often also becomes popular as people turn away from the mainstream.  When WordPress, Blogger and Movable Type exploded in popularity by giving anyone with an Internet connection the ability to share long, detailed blog posts with the world, Twitter and Tumblr came along and started the micro-blogging revolution – for people grasping to share extremely short content snippets.  There are hundreds of other examples.  Just remember, the opposite of a million dollar idea can paradoxically give birth to another million dollar idea.
13. Look for problems and solve them. – There are many real problems in this world.  Like a business owner wondering why his profits are sinking.  Like a golfer worrying about his slice.  Like a young man who is growing bald at 26.  Like a mom whose child is suffering with allergies.  Like a new dog owner who’s unsure what to do about her puppy barking all night.  Solving problems like these can make millions.
14. Design new products that support other successful products. – How much money do you think iPod, iPhone and iPad case manufacturers are making?  Millions?  Billions?  What about companies that jumped into the market of manufacturing LCD and Plasma TV mounting brackets eight years ago?  You get the idea.
15. Keep it simple. – Don’t over complicate a good idea.  Business marketing studies have shown that the more product choices offered, the less products consumers typically buy.  After all, narrowing down the best product from a pool of three choices is certainly easier than narrowing down the best product from a pool of three hundred choices.  If the purchasing decision is tough to make, most people will just give up.  So if you’re designing a product line, keep it simple.  (Read Made to Stick.)
16. Exploit the resources and skills you already have. – It’s not as much about having the right resources as it is about exploiting your resources right now.  Stevie Wonder couldn’t see, so he exploited his sense of hearing into a passion for music, and he now has 25 Grammy Awards to prove it.  If you pursue a new venture that involves leveraging your resources and skills, you’re ahead of the game.
17. Surround yourself with other thinkers. – You are the sum of the people you spend the most time with.  If you hang with the wrong people, they will affect you negatively.  But if you hang with the right people, you will be more capable and powerful than you ever could have been alone.  Find your tribe and collaborate to make a difference in all your lives.  Bounce ideas off each other, etc.  (Read Tribes.)
18. Be enthusiastic about what you’re doing. – Enthusiasm is the lifeblood of creativity.  Big ideas blossom when you’re passionate and enthusiastic about what you’re doing.  It’s nearly impossible to pioneer ground breaking solutions in a domain where there is not passionate intensity.  But when your mind is stimulated by a fundamental curiosity and interest in the subject matter, your creativity will run rampant and your motivation will skyrocket.
19. Accept constructive criticism, but ignore naysayers. – When someone spews negativity about your idea or product, remember, it doesn’t matter how many people don’t get it, it matters how many do.  No matter how much progress you make there will always be the people who insist that whatever you’re trying to do is impossible.  Or they may jealously suggest that the idea or concept as a whole is utterly ridiculous because nobody really cares.  When you come across these people, don’t try to reason with them.  Instead, forget that they exist.  They will only waste your time and energy.
20. Actually do something with your ideas! – A million dollar idea is simply a good idea given the chance to grow.  On paper, Google and Facebook sprung from fairly ordinary ideas: ‘a search engine that’s accurate’ and ‘a website where friends connect with each other.’  Remember, neither of these companies were the first ones in their market.  Their ideas weren’t groundbreaking at the time.  Many people had the same ideas even before Google and Facebook existed.  But Google’s and Facebook’s creators did something with their ideas.  They worked hard and one-upped the competition.  Their initial success was in their execution.  Remember, it’s not the ideas themselves that count, it’s what you do with them. With the right execution, a simple idea can evolve into a million dollar idea.  (Read Making Ideas Happen.)

Photo by: Noah Coffey

Money can buy freedom – freedom from trading hours for dollars.  Money can buy options – the option to do what you want to do instead of what you have to do.  Money is great to have as long as you manage and spend it wisely.  But most of us never do – we waste it and we don’t even realize it.

How?  Why?

Because many of the items and services we buy aren’t worth what we pay for them.

Here are 18 common money wasters to beware of:

1. Bottled Water – Water is one of the most abundant, freely available resources on planet Earth.  So is air.  If I bottled some air, would you pay 2 to 3 dollars a bottle for it?  I doubt it.  Bottom line:  Buy a water filter for your tap and stop wasting your money.
2. Magazine and Newspaper Subscriptions – The same exact articles are online for free.  I can read them right now and I didn’t pay a dime.  Why are you?
3. Printer Ink Cartridges – If you’re buying brand new ink cartridges every time you need new ink for your printer you’re paying about $8000 a gallon for ink.  Yep, that’s right!  Computer printer ink is one of the most overpriced consumer goods.  For home users, instead of buying new ink cartridges, take your old ones to a store that will refill them for half the price.  For businesses that do lots of printing, consider outsourcing the bulk of your printing.
4. More House Than You Need – When you buy or rent a house that’s bigger than you need, you end up wasting lots of money on larger monthly payments, higher upkeep costs, higher utility bills, and lots of random ‘stuff’ to fill up the extra empty space.
5. Insurance – Car insurance, homeowner’s insurance, title insurance, etc.  Insurance companies love to rip us off.  And while you can’t totally avoid them from a legal standpoint, you can shop around and save yourself a boat-load of cash.  Don’t get comfortable paying what you’re paying simply because you’re used to it.  Make sure you’re getting the best deal.
6. Premium Cable or Satellite Television – Hulu.com offers thousands of television shows and full-length movies – all for free.  And Netflix charges $9 a month for access to hundreds of thousands of television episodes and movies on DVD, or you can stream them live to your computer.  So if you’re paying more than $9 a month, you’re wasting your money.
7. Retail Furniture – Most people don’t realize that home furniture has a 200% to 400% markup on it.  A typical retail furniture store must maintain warehouse inventory, a showroom, commission salesmen, etc. which all equates to a fairly high overhead.  For this reason it is normal for furniture retailers to maintain extremely high markups.  A typical piece of furniture that has a ‘suggested retail price’ of $500 will usually cost the retailer less than $200, so even when they put it ‘on sale’ for $400, they’re still making over 100% profit.  The best way to save big money on furniture is to buy from an online furniture store with low overhead, buy wholesale, or buy slightly used on eBay or craigslist.
8. Restaurants and Prepared Foods – I don’t need to tell you this.  Eating out is ridiculously expensive.  So is buying prepared foods at the grocery store.  Buy both every once in awhile as a treat, but learn to cook and prepare your own food on a regular basis.  It’s not just cheaper, it’s healthier too.
9. Nutritional Supplements – Protein powders, vitamins, sports drinks, etc. – all of them are overpriced and have been proven by doctors to be mediocre sources of nourishment.  The answer to good health rests not in a once or twice a day supplement solution, but in an integrated approach to good baseline nutrition though healthy eating habits that give us the energy we need to enjoy our lives and the best chance of warding off illnesses.
10. Luxury Name Brand Products – A car gets you from point ‘A’ to point ‘B.’  A purse holds your personal belongings.  A pair of sunglasses shades your eyes from the sun.  A shirt keeps you warm.  If you’re paying premium prices just to get a fashionable brand name labeled on each these products without any regard for how efficiently the products actually serve their practical purpose, you’re wasting your money.
11. New Cars – See my previous point.  A car is a means of transportation to get you from one place to another.  If you’re buying a new car every few years even when your old car works perfectly fine, you’re likely trying too hard to impress the wrong people… and you’re going broke in the process.
12. Electronics Warranties – When you buy new electronics a warranty might seem like a decent thing to invest in.  After all, a warranty covers everything from technical problems to spilling soda on the circuits.  But don’t be fooled.  Most of the time the numbers just don’t make sense.  For instance, a two-year extended warranty on a $400 laptop at Best Buy will cost you upwards of $280 – that’s about 70% of the original price.  You’re better off saving your money and taking your chances.
13. Retail Computer Software – Most retail computer software is marked way up.  You can easily find OEM copies of the exact same software online (on eBay and similar sites) for 25% – 50% less.  Also, look into free open source software alternatives.  For instance, Microsoft Office Professional 2010 costs $300 at Best Buy, but you can download OpenOffice.org’s professional office suite which has all the same word processing, spreadsheet, etc. capabilities for free.  And OpenOffice.org is 100% compatible with Microsoft Office files.
14. Medical Issues that Can Be Avoided – Eat right and exercise regularly!  Keep your body and mind healthy!  Major medical problems drain back accounts, increase insurance rates, keep you from working and earning money, and generally guarantee that you will have long-term financial problems.
15. Prescription Medication – The previous bullet leads directly into this one.  Prescription medicine has one of the highest markups of any consumer good. The sky high cost of prescription medications is crippling parts of the US economy and keeping necessary medicines out of the hands of those who need it most – people living on fixed incomes with acute or chronic health issues.  Unlike other countries, there are no price controls on prescription medications here in the US.  So we end up paying 200% – 5000% markups on essential medicines and drugs such as Prozac and Xanax.  The solution is to buy wholesale at wholesale resellers such as Costco.  Costco’s prices are typically half the cost of the local retail pharmacy on many popular prescription medications.
16. Jewelry and Precious Gems – All jewelry is subject to volatile changes in price and high markups.  The industry average markup varies widely – 100% to up to over 1000%.  And jewelers thrive on the uneducated buyer, so do your research.  Also, jewelry is almost always an emotional purchase, so you need to think logically about what you’re getting, how much you’re paying for it, and what your other options are.  And even then, you probably won’t get a great deal.  Buying and wearing less jewelry is always the smartest choice.
17. Second-rate Entertainment – The best things in life are free.  Stop wasting your money on movies, games, and other second-rate entertainment and take a good look around you.  Mother Nature offers lots of entertainment free of charge.  Go hiking, go skinny dipping, play in the rain, build a bonfire with your friends, watch the sunset with your lover, etc.
18. Nasty Money-sucking (and life-sucking) Habits. – Smoking, drinking and gambling are all perfect examples of bad habits in which you choose to trade short term pleasure for long term debt and discomfort.  So light one up, shoot one down, and toss another chip across the table.  It’s only your life and livelihood.

Photo by: Tracy O.

The only way to get out of debt is to understand why you’re in debt in the first place.

And the truth is…

You will not save money when you get your next raise.  You will not save money when your car is paid off.  You will not save money when your kids are supporting themselves someday.  And you wouldn’t even save a dime if I handed you $100,000 in cash right now.

How do I know this?

Because saving money has very little to do with the amount of money you have.  In fact, you will only start to save money when saving becomes an emotional habit – when you start treating the money you handle everyday differently.

So this is why you are in debt:

• You buy miscellaneous crap you don’t need or use. – Stop buying ‘stuff’ on impulse!  Avoid the mall!  The mall is not a source for entertainment.  It’s a source for personal debt.  There’s no reason to tease yourself by staring at a bunch of brand new crap you don’t need.  And as you know, the novelty of a new purchase wears thin long before the credit card bill arrives.
• You use credit to purchase things you can’t afford to buy in cash. – If you can’t pay for it in cash today, don’t buy it today!  It’s as simple as that.
• You think of certain product brands as fashionable status symbols. – A car gets you from point ‘A’ to point ‘B.’  A purse holds your personal belongings.  A pair of sunglasses shades your eyes from the sun.  A shirt keeps you warm.  If you’re paying premium prices just to get a fashionable brand name labeled on each these products without any regard for how well the products actually serve their practical purpose, you have a problem.
• You buy a brand new car every few years. – See my previous point.  A car is a means of transportation to get you from one place to another.  If you’re buying a new car every few years even when your old car works fine, you’re likely trying too hard to impress the wrong people… and you’re going broke in the process.
• You buy things you could have borrowed from a friend or rented. – After you bought that DVD, how many times did you actually watch it?  Do you really want a 20 inch chainsaw collecting dust in your garage?  So you own a pressure washer you only use once every three years?  You get the point… borrow and rent when it makes sense.
• You pay retail prices on everything you buy. – If you’re paying retail prices, you’re getting screwed.  You can easily save well over $1000 a year on general purchases by waiting for sales and shopping at discount outlets.
• You own (or rent) way more house than you need. – When you buy or rent a house that’s bigger than you need, you end up wasting lots of money on larger monthly payments, higher upkeep costs, higher utility bills, and lots of random ‘stuff’ to fill up the extra empty space.
• You don’t follow any sort of formal budgeting plan. – Do you assume that if you wait around and make more money your finances and credit debt will magically resolve themselves?  I’m sorry to say, you’re dead wrong!  It takes a lot of planning and proactive budgeting to erase a pile of debt and build a nest egg of wealth.  So start now!
• You don’t automate 401K or savings deposits. – We’re ten years into the new millennium.  If you aren’t using simple technology to automate savings deposits, you pretty much deserve to be broke.
• You don’t leverage the small investments you do have. – You have to give your money the opportunity to make money.  Any capital you do have, no matter how small, should be invested using a basic, long-term investment strategy.  If your capital isn’t invested, it’s just losing value as inflation rises.
• You’re married to (or dating) a spend-thrift. – You’ll never get out of debt if you’re married to a person who spends every dime you make.  So help your soul mate become financially responsible, or except life in the poorhouse.
• You’ve never educated yourself on basic money management. – Responsible money management is not an innate human instinct.  You have to properly educate yourself.  If you don’t, you’ll stay exactly where you are now, in debt.
• You have a ‘get rich quick’ mentality. – For 99.99% of us, wealth doesn’t come instantly.  You’re far more likely to be struck by lightning twice than win the lottery once.  If you’re spending your time and money on a ‘get rich quick’ scheme, the debt will just keep piling up.
• You have nasty, money-sucking (and life-sucking) habits. – Smoking, drinking and gambling are all perfect examples of bad habits in which you choose to trade short term pleasure for long term debt and discomfort.  So light one up, shoot one down, and toss another chip across the table.  It’s only your life.
• You waste too much of your own time. – They say “time is money,” but I think time is way more valuable than money.  It’s the single greatest constituent of life.  If you fail to properly manage your time, you’ll absolutely fail to properly manage your money… and you’ll likely fail in every other aspect of your life as well.  So focus your time and energy on the important stuff and forget the rest.
• You aren’t taking care of your health. – Keep your body and mind healthy!  Major medical problems drain back accounts, increase insurance rates, keep you from working and earning money, and generally guarantee that you will have long-term financial problems.
• You aren’t enjoying life’s (free) simple pleasures. – The best things in life are free.  Stop wasting your money on second-rate entertainment and take a good look around you.  Mother Nature offers lots of entertainment free of charge.  Go hiking, go skinny dipping, play in the rain, build a bonfire with your friends, watch the sunset with your lover, etc.
• You went through an unfortunate divorce. – This final point might seem cruel, but it’s impossible to discuss the major reasons why people accumulate financial debt without mentioning divorce.  Divorce absolutely destroys the finances of both parties involved.  So the best advice I can give you is:  Don’t get married until you’re certain you want to spend the rest of your life with your significant other.  And don’t get a divorce until you’ve truly exhausted all of your other possible options (marriage therapy, etc.).

Please remember, financial debt can be avoided and erased.  It just takes a little effort, education, and determination on your end to make it possible.  So as I’ve said before, live a comfortable life, not a wasteful one.  Do not spend to impress others.  Do not live life trying to fool yourself into thinking wealth is measured in material objects.  Manage your money wisely so your money does not manage you.  And always live well below your means.

Live a comfortable life, not a wasteful one.  Do not spend to impress others.  Do not live life trying to fool yourself into thinking wealth is measured in material objects.  Manage your money wisely so your money does not manage you.  Always live well below your means.

A penny saved is a penny earned.
– Benjamin Franklin

1. Redefine your definition of “rich”. – I remember sitting in a cubicle at my first professional job staring at a picture of an SUV I wanted to buy (and eventually did).  Now, I sit in my office and look at the pictures of my kids, and just outside my window I can see the beater I drive sitting in the company parking lot.  What a difference a decade makes!  To sum things up, my definition of being rich is having enough money to meet my family’s basic needs, a few of our wants, and to be able to give some away to others.
2. Borrow and share. Everyone wins! – We borrowed a DVD from a friend instead of renting or buying and had a little snack from our own fridge!  Way cheaper than using gas to drive to the theater/rental place, paying for a movie or Amazon Prime, and paying for a snack.
3. Avoid the mall. – Going to the mall is not entertainment!  We used to go when we were bored.  Of course, we usually ended up spending money while we were there.  If you need clothes, then shop sales or go to stores that offer name-brands at a discount.  You can save a ton on these items if you are a smart shopper.  Dave Ramsey says, “Never pay retail!”  We probably save $15 to $30 per month by staying away from the mall.
4. Limit your intake of advertisements. – Advertising sucks.  That’s the cold, hard truth.  It’s engineered to make you feel like you’re incomplete, that you have an unfulfilled need, that you’re not good enough.
5. Buy with cash. – You can’t spend money you don’t have.  Many bank accounts provide overdraft protection, so even with a debit card, it’s easier to go over your account balance than you think.
6. Find a better deal and actually SAVE the difference. – Regardless of what they sell, if you’ve switched companies for price reasons, save the difference.  Think of phone companies, internet access, cell phones, credit cards, and others.
7. Adhere to a long-term investment strategy. – I’m a long-term investor.  The stock portion of my portfolio is spread over several mutual funds, a few ETFs and a few individual stocks.  Each and every one of these holdings was carefully chosen, after thorough research.  I believe in these stocks and funds.  I consider them as my best bet in growing my money – LONG TERM.
8. Curb your consumerism! – Have you ever watched how a child can play with a cardboard box for hours, and leave the toy that came in it by the wayside?  How is it that children can enjoy themselves without a lot of “stuff”, but we as adults feel the need to reward ourselves by buying more stuff?
9. Stay Healthy!  Medical problems drain bank accounts. – James M. Rippe, M.D is a best-selling author, world-renowned cardiologist, and founder of the Rippe Lifestyle Institute.   He explains that if you look at all the risk factors for dying, the one that is most predictive is fitness level.  In addition, an older person with high cardiovascular fitness is healthier than a younger person who is physically inactive.  By increasing your fitness level, you can actually roll back your biological clock.
10. Stay in and relax. – So, think about it the next time you go out.  Are you going for with a purpose?  Maybe the solution is to not go out at all.  Stay home and save!  Save up for something you really want or need.
11. Gradually prepare yourself for a rainy day. – Even when things are going great, and you feel on top of the world, you must always be prepared for a change.  If you take the time and patience to set yourself up properly, then when things to take a turn for the worse, you will be prepared to handle it.  If you live above your means, then when the slightest change occurs, you will not be prepared to adapt.  Financial flexibility is more important then keeping up with the Jones’.
12. Stop competing.  Forget about the Jones’ altogether. – If getting rich makes us happy, then why don’t countries as a whole get happier as they grow wealthier?  They discovered that as a country gets wealthier there’s no overall increase in happiness.  Why?  We continually compare our wealth against that of others.  We are competitive and envious. Add to that the fact that Western countries encourage people to strive for more and more, and you have a formula that spins many into depression.
13. Get out of the “easy street” mentality. – I think there is too much emphasis on the quick fix or the easy option in today’s society.  For example taking diet pills to lose weight instead of the “hard option” – exercising and eating well…. money is sometimes being used as a substitute for hard work.  Do you think there is an increasing expectation that you can get want you want by throwing money around instead of working hard and “earning” it?
14. Avoid impulse buying.  Buy things you truly need. – Don’t you just love the excitement you feel after coming home with a new TV?  Driving home in a new car?  Opening the box on a new pair of shoes?  I sure do.  But, from watching the behavior of myself and my friends I’ve found that the new quickly becomes just another item.  The excitement of novelty passes quickly.
15. Time is money.  Properly manage your time. – The fewer tasks you have, the less you have to do to organize them.  Focus only on those tasks that give you the absolute most return on your time investment, and you will become more productive and have less to do.  You will need only the simplest tools and system, and you will be much less stressed.  I think that’s a winning combination.  Focus always on simplifying, reducing, eliminating. And keep your focus on what’s important. Everything else is easy.
16. Find ways to give without spending. – Want a quick, easy and (almost) free way to be guaranteed that you’ll make someone’s day special?  Send them a letter.  Why not set aside some time this weekend to sit down and write to a few people?  If you don’t enjoy writing, try buying some nice postcards of your home town.  If you’ve got an artistic streak, why not design your own note cards?  You don’t have to write a long letter for it to be effective.  It’s the thought that counts and the personal touch that makes it special.
17. Don’t let greed and deceit get the best of you. – According to Stephen R. Covey, if you reach an admirable end through the wrong means it will ultimately turn to dust in your hands.  This is due to unintended consequences that are not seen or evident at first.  The example he gives in The 8th Habit is:  The parent who yells at their kids to clean their rooms will accomplish the end of having a clean room.  But this very means has the potential to negatively affect relationships, and it is unlikely the room will stay clean when the parent leaves town for a few days.  Now, to return to the topic of wealth, I think it is possible to see much of the world’s current financial problems as stemming from people who wrongly believe the ends justify the means.  My advice?  It is fine to aspire to wealth, but don’t lose sight of the means to accomplishing it.
18. Never ever pay retail. – You can easily save hundreds of dollars a year on clothing purchases by waiting for sales or shopping at discount retailers like Marshalls.  Better yet, avoid name brand clothing all together.

Also, check out these best selling books for more financial tips:

• I Will Teach You To Be Rich
• The Money Book for the Young, Fabulous, & Broke
• The 4-Hour Workweek: Escape 9-5, Live Anywhere, and Join the New Rich

Photo by: CayUSA

Either way, if you’re not doing well financially, you’re probably ready for some advice that makes sense.  Here are 28 unique bits of financial brilliance from around the web, each linking back to a source article containing further instruction and insight.  Enjoy.

I have enough money to last me the rest of my life, unless I buy something.
– Jackie Mason

1. Stop buying “stuff” you do not need! – “Purchases of a few hundred dollars add up quickly to thousands of dollars.  On top of that, if you carry a balance on your credit card, you will pay on average 12% to 14% interest.  These rates can skyrocket quickly if you are late on even one payment.  In addition, you may become subject to late fees and penalties.  All this to get something that isn’t even used or enjoyed.  No thank you!” – via My Super-Charged Life
2. Start rolling an income snowball. – “Most people know how they’d make money in an ideal world. The problem is that most of these “ideal” schemes require lots of time, planning, risk taking, etc. On the other hand, most of us have skills that we could implement tomorrow to make money independent of an employer (this could be anything from doing landscape to hiring ourselves out as a consultant).  So the first step in creating an income snowball is to write a list of things you can do to make money in ascending order of difficulty and speed of implementation.” – via The Growing Life
3. A car lasts longer than 5 years.  Stop wasting your money! – “Cars are simply a method of basic transportation…that’s all they are. They are assembled hunks of metal sitting on four tires designed for the purpose of transporting us safely from point A to point B. I doubt Henry Ford ever envisioned the kind of luxuries we see in today’s automobile – voice activated radio controls, heated leather seats, heads up displays, and backup cameras installed in bumpers. If families invested the $400 a month wasted on new cars into a good, growth stock mutual fund for 30 years they could easily retire millionaires. Hope you like the car!” – via Frugal Dad
4. Live within your means. – “When you spend less than you make, you are buying flexibility and freedom. You gain the ability to change jobs or move to another area of the country. You are buying the ability to say yes to the things that matter because you save on the areas that aren’t as important to you.” – via Productivity501
5. Debt can make you money.  It’s called good debt. – “Would you take a million dollar loan at 1% interest? I would. I’d immediately put it in a few interest baring accounts that are FDIC insured (I say a few because FDIC insurance doesn’t cover a whole million). At today’s rates, which are historically pretty low, you can make a guaranteed 3% on that money. That means the debt naysayers would be missing out on 2% of a million dollars, $20,000 a year.” – via Lazy Man and Money
6. Money management can have many positive side effects. – “My husband and I both work out our finances together. I’m still the budget maker and bill payer in the family, but since we make the decisions on how the money is allotted, we have to make the time to communicate, come to an agreement, and project our monthly financial plans. We’re more unified in our marriage than we’ve ever been.” – via simple mom
7. If you don’t have an emergency fund, start one now! – “It’s better to be safe than sorry.   Nobody can anticipate when the roof will have to be repaired or an appliance will need to be replaced.  The idea is to try to find ways to live below your means so that you can save for retirement and other long-term goals but at the same time make it a priority to set money aside in the event an urgent need arises.” – via Everything Finance
8. Financial freedom only solves small problems. – “You know what really determines our happiness levels? Not money, but how optimistic we are and how often we have monogamous sex. Money cannot solve big problems, like cancer or world hunger or happiness. Money solves small problems, like, can you have a big wedding, can you go on a good trip. Small problems are what people talk about when they talk about financial freedom.” – via Brazen Careerist
9. Financial calculators are your friend.  Use them! – “In various posts I have referenced financial calculators that I like.  I’m going to put them all in one post so they are easy to find for reference.  As I find more, I’ll add them to this list.” – via My Dollar Plan
10. There is no specific template for business success. – “Living a life that’s not based on a template and being true to yourself may not mean paving a road in the sky like the Wright Brothers. However, if you tell everyone you want to start your own business, you will be doubted. They’ll tell you everything that’s wrong with your idea and why it won’t work: You have no experience. You’ve never run a business before, what do you know about sales? It takes money to make money. Almost no one starting their first business knows exactly what they are doing.” – via Illuminated Mind  (more…)

Your health is your life, and your wealth represents the fruits of your labor.  I assume you don’t want to be wasteful with either of them.  Here’s how to save both at the same time:

So many people spend their health gaining wealth,
and then have to spend their wealth to regain their health.
– A.J. Reb Materi

1. Reduce Your Consumption of Drugs – That includes alcohol, cigarettes, over the counter, prescription and otherwise.  Drugs are a huge financial drain, and in most cases, unhealthy for the human body.  A significant portion of the global population abuses the crap out of them on a daily basis, legally and illegally.

2. Learn to Cook and Prepare Healthy Food – People who eat every meal out tend to have lighter wallets and heavier rear ends.  With the exception of pricey, upscale dining establishments, you’ll find that most restaurants use lower-grade ingredients and employ sketchy sanitary practices that fall well below the standards you embrace in your own kitchen.  So when you eat out, you’re either spending more cash or eating low-grade product.  Regardless, you lose.  The ability to cook and prepare healthy meals is a vital skill everyone should know how to do.

3. Brown Bag the Leftovers for Lunch – Always cook enough at dinnertime so you can enjoy lunchtime leftovers the following day.  Leftovers are faster, easier, cheaper and healthier than anything you’ll find at the local fast food eatery.

4. Avoid Overpriced, Unproven Supplements – Most people assume that FDA approved nutritional supplements are proven products.  Wrong!  Do you really think the FDA has enough resources to precisely verify every new dietary supplement proposed to hit the market?  I assure you, they don’t and there is no feasible way they ever will.  Remember, the FDA concentrates its efforts on drugs, not supplements.  Under the active Dietary Supplement and Health Education Act, producers of dietary supplements do not have to verify that their product is effective, safe or at all healthy prior to placing it on store shelves.  Sometimes someone has to become dreadfully ill from a dietary supplement before it even becomes a “blip” on the FDA’s radar. 

5. Drink Filtered Tap Water – I’ve said it before, people go to work and trade priceless hours of their lives for dollars and then waste the dollars buying something that’s already free.  A Brita water filter is an inexpensive investment that makes free tap water as healthy and pure as the bottled water for sale at the local supermarket.  Since a penny saved is a penny earned, you’ll be making money every time you take a sip.  Also, substituting beverages like soda for filtered tap water is another healthy way to save.

6. Stop Driving Like a Maniac – The faster you accelerate your vehicle, the more gas you will burn.  People who are heavy on the pedal use up to 37% more gas during every mile of city driving.  At $4 a gallon, that’s a lot of wasted money.  Also, the faster you drive, the less time you have to react to hazardous road conditions.  Bottom line: Drive responsibly at or below the speed limit.

7. Brew Your Own Coffee – Is coffee perfectly healthy for you?  It’s hard to say for sure.  There is a good deal of medical research to validate both sides of the argument (see here and here).  However, one point remains certain: millions of people across the globe drink coffee every single morning.  Many of them wasting significant amounts of money on fatty, sugar and cream packed coffee beverages from Starbucks-style coffeehouses.  So the real question is: How do you make the coffee drinking habit healthier and less expensive?  The answer is simple.  Brew your own coffee.  If you like, add a dash of low fat milk and a single packet of sugar.  It’s quick, fairly healthy and way cheaper than Starbucks.  We have a Cuisinart Two-to-Go Coffeemaker and absolutely love it.

8. Wear Helmets and Protective Body Gear – How many motorcyclists, bicyclists, skateboarders, etc. do see foolishly blazing around without wearing any form of protective body gear?  It’s your life.  A quality bicycle helmet will cost you $40 and 2 seconds of your time to put it on before you ride.  If you don’t wear one and end up crashing and cracking your head open, it could cost you thousands of dollars in medical bills and take months, if not years, for your body to fully recover.

9. Stay In and Hang Out – Your home is your haven.  It’s the safest, most comfortable environment to relax and socialize in.  It also happens to be a far cheaper alternative to the local bars, pubs and clubs.  You can save money on gas and entertainment costs while avoiding a lungful of secondhand smoke.  So login to eBay, sell some stuff you don’t use, buy yourself a Wii and invite over a few of your favorite people.  Don’t forget to crank-up the tunes.  😉

10. Buy Healthy, Generic Brand Food – When it comes to the bare essentials on your grocery list, generic brands can provide the same food quality at a significantly reduced cost.  U.S. food manufacturers are forced to follow a set of standards which basically guarantees the quality of the food they produce.  Many large-scale grocery chains purchase name brand products directly from the manufacturer and simply slap their own generic brand label on the packaging.  You should always compare the generic brand’s list of ingredients to a name brand product just to make sure everything matches up.  (more…)

The millionaire next door does NOT:

1. Pay for Lawn Service – You could save $150 a month, get some healthy exercise and maybe even a bit of a tan just by mowing your own yard.
2. Go to a Hair Stylist – Even the cheapest barber shops charge men $15 – $20 for a haircut these days. If you’re a woman, it may cost well over $50 a visit. Dying your hair? You’re broke!
3. Use Time as a Measurement for Success – The millionaire next door measures success based on output quality, the results. The amount of time spent on something means nothing if the results do not meet the expectations.
4. Buy Brand New Cars – Why would anyone pay the full retail price worth half a year’s salary for the fastest depreciating assent on Earth? We are brainwashed!
5. Carry a Monthly Credit Card Balance – Carrying a monthly credit card balance only makes sense if you enjoy poverty. Monthly interest payments can add up to hundreds of dollars over the course of a year. Do not buy “stuff” right now that you cannot afford to pay for in cash right now!
6. Eat Out on a Regular Basis – With the recent price increases in corn, wheat and dairy products, preparing your own food is already expensive enough. If you eat out you will pay triple the price. If done on a regular basis you will waste a few thousand dollars a year.
7. Think He Knows It All – People who think they know it all stop learning and thus become unaware of new opportunities. Once you lose awareness, you lose.
8. Socialize with People Who Waste Money – The people you socialize with influence your habits. It is impossible to save money if you constantly hang around people who blow it all.
9. Desire Instant Gratification – You have to think long-term to attain long-term success. The millionaire next door desires long-term deferred compensation over instant gratification.
10. Pay Retail for Name Brand Clothing – You can easily save hundreds of dollars a year on clothing purchases by waiting for sales or shopping at discount retailers like Marshalls. Better yet, avoid name brand clothing all together.
11. Keep His Money in a Checking Account – If you want to increase your wealth you have to set your money up to make more money. Most checking accounts yield little to nothing in interest. Think long-term (5 years +). Invest in quality stocks, bonds and mutual funds, especially those with high yield dividends and interest. Or buy some land in an area with growth potential.
12. Replace What is Not Broken – The millionaire next door fixes things. Fixing something is usually significantly cheaper than buying a brand new replacement, especially if you fix it yourself.
13. Visit the Tanning Bed – $25 a month for skin cancer? Where do I sign up? If you want a tan, move to Florida. For those that live in Florida and still go to the tanning bed… WOW!
14. Impulse Buy – Impulse buying wastes money and leads to a cluttered house full of “stuff” you don’t need or use. If you see something you like at the mall, walk away. Think on it for a day or two. If it still holds value in your mind, maybe it’s worth buying. Never buy something the first time you see it.
15. Waste Time on Senseless Activities – They say time is money. In actuality, time is far more important than money. Time is your life. If you waste it, you will fail.
16. Focus His Attention on Negative Obstacles – If you focus all your attention on negative obstacles, you will lose sight of the finish line. You can’t get there if you can’t see it.
17. Bet The Farm – The millionaire next door takes evenly weighted, calculated risks on long term investments. If you go “all in”, you’re gambling, not investing.
18. Fly First-class – Would you pay $400 to sit in a leather chair for a couple of hours? That’s exactly what you do when you fly first class. Huge waste of money!
19. Rent – The millionaire next door has a long-term mindset. In the long-term, owning something is always more cost effective than renting it. The key is to purchase quality products for long-standing use.
20. Earn Every Dollar He Makes at His Day Job – Two words: Passive Income. You can be sure the millionaire next door invests his money wisely. These investments create a solid passive income stream that grows over time. If your money isn’t making you more money, you’ll never be wealthy.

Check out these great books for more ‘Millionaire Next Door’ tips:

• The Millionaire Next Door
• The Richest Man in Babylon
• Rich Dad Poor Dad: What the Rich Teach Their Kids About Money-That the Poor and the Middle Class Do Not!
• Secrets of the Millionaire Mind

1. Travel to See the Significant People in Your Life – There may be no better way to spend your money than to use it to nurture and rekindle personal relationships with the most significant people in your life.  As time quickly passes, we sometimes forget how essential strong personal relationships are to our mental wellbeing.  The older we get the more we need true friends and family to be regular parts of our lives.
2. Hire a Personal Trainer – Your health is your life. Without it, all the success and affluence in the world is meaningless.  Committing yourself to a regular exercise routine is one of the best ways to maintain the health of your body and mind.  Sometimes it’s hard to tackle this endeavor on your own.  Spending money on a knowledgeable personal trainer who can set you on the right course creates priceless results.  Make sure you stick with the trainer until you are committed to exercising on your own.
3. Fix What Is Broken – Have you been ignoring your screeching brakes?  What about the excessively loud hum from your AC compressor?  Or the scratching noise coming from your computer system?  Sooner or later these small annoyances will wear down the reliability of the product and you will be left with a completely broken product instead of just a halfway broken one.  Use your money wisely to fix and maintain your belongings.
4. Educate Yourself – Use your money to purchase educational courses or books pertaining to your career, or to a miscellaneous topic that interests and intrigues you.  Remember, knowledge is power and your brain is the container of that knowledge.  There are few options for spending money on something more practical than the development and facility of your brain.
5. Add Value to Your Home – Your home should be your sanctuary, the place on this planet where you feel the most comfortable.  Adding value to your home, be it personal value or increased monetary value, is always a practical choice for spending your money.  If the additions you make increase your level of comfort for years to come, you win.  If they increase the value of the home to a third party someday when you sell, you win.  If both occur, you win big.
6. Take a Healthy, Relaxing Vacation – A vacation revitalizes your mind by pulling you away from the daily stress factors in your life.  It can spark creative thought by stimulating your brain with new material.  And finally, a vacation allows you to be yourself without the external influences present in your typical surroundings.  Does that sound like something worth spending money on?  It should.
7. Upgrade Something You Use Regularly – There is nothing wrong with splurging on a practical item that you actually use on a regular basis.  If you are a hardcore movie buff that loves to watch movies on Saturday nights with your family and friends, having a 65 inch HDTV and a Blue-ray player makes sense.  If you love computer games, purchasing a powerhouse laptop gaming rig makes sense.  The idea is to never waste money on stuff you don’t use.  Spending money on upgrading your hobbies is one of the reasons you work so hard in the first place.
8. Buy Meaningful Gifts for Key People in Your Life – One of the most rewarding acts in life is the act of giving; especially to those key people you truly care about the most.  Spend a little money every now and then on a sensible gift for some of the key people in your life.  Surprise them.  It doesn’t have to be their birthday or a holiday.  Remember, there is no better gift than an unexpected gift.  You will make them feel special.  For instance, my buddy Donny brought me back a cool souvenir from Amsterdam a few months back and it just made me feel good.
9. Update Your Wardrobe – You don’t have to waste money on the latest overpriced fashion line to look good.  However, if you are still wearing the same ratty shirts, slacks and shoes from 5 years ago, it might be time to go shopping.  While appearance isn’t everything, it can make you look older, smarter and more emotionally mature.  First impressions for job interviews, dates, and the like are heavily weighted on the way you look.  Sometimes it is practical to dress to impress.
10. Buy Healthier Food – “You are what you eat.”  There is a great deal of truth in that statement.  It is impossible to maintain a healthy body and mind if you pump your body full of junk food.  Fresh, healthy food is usually more expensive, but this is an expense with priceless benefits to the longevity and wellbeing of your future.  Eating healthy goes right along with bullet number 2 about hiring a personal trainer.  Your health is your life.
11. Pay Down Debt – This one is a no brainer, so I just couldn’t bring myself to leave it off the list.  If you have a great deal of high interest debt it would be foolish not to pay it down before you go off and splurge on additional purchases.  There is nothing less practical than being a slave to your debts.

If I am what I have and if I lose what I have, who then am I?
– Erich Fromm

1. If you don’t understand the product or service, don’t buy it until you do.
2. If you do not take ownership of your actions, your actions will eventually own you.
3. If you are not saving at least 10% of your salary, you are not saving enough.
4. If you talk too much, people will stop listening.  If you don’t talk enough, people will never hear your point of view.
5. If you are lazy, you will fail.  Laziness will always overshadow your true potential.
6. If you hate your job, you also hate half of the time you spend on this planet.
7. If you are not investing (120 minus your age) percent of your savings in the stock market, you are giving up thousands of dollars over the course of your lifetime.
8. If you don’t finish what you start, your success rate will always be zero.
9. If you don’t consume enough liquids, you will never be healthy.
10. If your monthly debt payments exceed 40% of your total income, you will go broke if you don’t fix your spending habits promptly.
11. If you avoid your problems, your problems will steer the course of your life.
12. If something sounds too good to be true, it is too good to be true.
13. If you are buying a brand new car every 3-5 years, stop!  You are wasting your money.
14. If you don’t keep up with important current events, you will look like an idiot in front of others.
15. If you back-up on a freeway off-ramp, you increase your chances of having an accident by about 1000%.  Go to the next exit and turn around.
16. If you are not learning something new every day, you are wasting away days of your life.
17. If you threaten to quit your job, even if it’s a subtle suggestion, you better be ready to leave now.
18. If somebody asks you for your social security number, don’t give it to them!
19. If you are paying high monthly insurance premiums for a lower claim deductible, you are pissing in the wind.
20. If you don’t ever intend to help others, expect them to return the favor.
21. If you don’t learn from your mistakes, you probably aren’t learning much at all.
22. If you don’t dream, you will live solely as an entity of someone else’s dreams.
23. If you are ever confused, don’t be afraid to ask questions.
24. If you don’t listen to good music while exercising, you are missing out on the best part of your workout.
25. If you are not happy, it’s time to change something.
26. If you never stare off into the distance, you’ll never get there.
27. If you dress a certain way, people will treat you a certain way.
28. If you never try something new, your life’s story will be boring.
29. If you aren’t in love, don’t settle.
30. If you are overly emotional right now, make the decision later.

Critics say his advice is subjective nonsense.  Advocates say he’s the only big stock market guru who speaks the truth to the average American stockholder.  I personally like the guy because, win or loose, he’s passionate about what he does and he tells you exactly what’s on his mind.  This is a little off-topic with my recent posts, but I really thought it was worth sharing.

The original CNBC news feed:


A Comedy Central Colbert Report recap with Jim Cramer:

Before thinking about it, most people would probably advise buying a house before buying a car.  After all, a house is an appreciating asset and a car is a depreciating liability, right?  That statement might be true in the long term, but in reality, most working professionals will eventually buy both a house and a car.  In the end you will have the money for both.  So it’s not really an issue of which is the better long term investment, it’s a question of which one should be purchased first.

I’m going to assume the following:

• You have about $40K saved in cash.
• Your current car is old and only worth about $1,500.
• You want to avoid financing a car.
• You live in a rental property.
• You are looking to purchase a new car under $25K
• You will be a first time home buyer
• You are looking to purchase a house for about $275K with at least a 10% down payment and 5K in closing costs.

Answering the following questions will assist you in making the right decision based on your own individual situation.

How long will your current car last?
Have a decent mechanic estimate your car’s life expectancy.  Are there any cheap repairs that could increase the life expectancy?  Are the repairs worth the money based on the car’s overall worth?

Will your overall living expenses be cheaper before or after you purchase a house?
Is the total cost of your current rent and utilities significantly cheaper than the cost of a mortgage, utilities, homeowner’s taxes, and insurance?  In other words, which living arrangement allows you to save cash the quickest?

If you buy a house first, how long will it take you to save enough cash in order to purchase a car outright?  How much money can you comfortably afford to save each month?

Likewise, if you buy a car first, how long will it take you to replace the cash necessary for a down payment on a house?  How much money can you comfortably afford to save each month?

Do you expect decent short-term real estate appreciation in the housing market you intend to buy into?  Ask a real estate agent for numbers on local market trends.  Have home prices been rising or sinking?  What do the overall unsold inventory numbers look like?  In other words, is there any foreseen disadvantage to holding off on a house purchase for a year?

Consider the following scenario:

You really want a new house, so you decide to deal with your old car’s problems and instead purchase a new house first.  Now you have zero cash, but you do have a slowly appreciating asset, a beautiful new home.  6 months later your old car completely breaks down and the repair costs are close to the total value of the car.  If the car isn’t worth the money, you will have no choice but to finance a new car.  You will now be paying interest on an auto loan in addition to paying your monthly mortgage payments.  The annual appreciation of your house is counterbalanced by the finance charges you are paying on your car loan… at least for the first couple of years.  In the end was it really smarter to purchase the house first?

The bottom line:  As I stated earlier, most people assume that buying a house first is the smarter choice.  While it very well could be, it isn’t necessarily the best order of operations for everyone.  It completely depends on individual circumstance. 

Consider the following 2 points:

• Rewards / Miles Credit Cards – Typical rewards cards generally earn the consumer somewhere in the ballpark of 2% cash back.  If you buy a new car for $25,000 with your rewards credit card, you just saved yourself $500.  If you have an airline miles rewards card, as I do (Southwest Visa), you can earn yourself a free round trip flight for about $20,000 in purchases.  With airline fares continuously skyrocketing, this round trip airfare ticket is easily worth about $500.
• 0% Interest Rate – Many credit card issuers entice potential consumers with various introductory 0% interest rate deals for a certain period of time.  This introductory rate period usually spans somewhere between 6 months and 1 year.  Let’s say you buy a $25,000 car on your 0% interest for 1 year credit card.  You then invest the $25,000 in a 1 year CD (a non-liquid investment that prevents you from spending the cash) earning a modest 5%.  At the end of 1 year you have $26,250.  You immediately pay off the $25,000 car, leaving $1,250 to be returned to hip national bank. 

Do you think those savings are meager, or not worth the effort?  Well then head over to your bank right now and donate that amount of money into a complete stranger’s bank account.  No?  I didn’t think so.  The bottom line is this:  If you have the cash and discipline necessary to back up your car purchase, there is no reason why you shouldn’t reap the benefits of buying your next car with a credit card.  You do the math.  It just makes cents.

PS: Contrary to popular belief, most new car dealers will let you put a hefty dollar sum of your car purchase on a credit card, so long as your are paying cash on the remaining balance.