Monthly Archives: June 2006

True Story on Prosperity

How do we switch from poverty to prosperity? By changing your thoughts! Just last week, a member of my church got a call from a debt collection agency. The call was about a debt from a previous marriage that he had been delinquent for 4 years. Each time he thought about the debt (or got calls from debt collection agencies about it), he would get angry about how his ex-wife should be paying for her own debt, not him.

When he got the last week call, his first reaction was to react in anger and was ready to yell at the caller. Yet, he reminded himself that he had a choice of anger or love. He decided to use love instead of anger. He responded to the caller (whose name was Nicole) by saying that his daughter was also named Nicole and was wondering what he could do to solve this problem.

After some discussion, they agreed for him to send the debt agency a money order (via overnight mail) for $300 of the $2,300 in debt, which he gladly did. After taking responsibility for the debt and his reaction to it, his fortune changed. The next day he played the lottery and won. Yet, it did not end there. He won the following day as well. In total, he won two 4-figure jackpots. This was enough money to pay off not only the remainder of his $2,300 loan, but also the 3 other smaller loans he had. So by paying off his debt, he allowed prosperity to come into his life.

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Young & Broke

Over the last month, we have all seen the news articles about college graduates with large student loans. All fingers have pointed to college costs which have significantly increased over the years as the main culprit of their debt. Yet, before we blame it all on college costs, there are other factors that should be considered as well. Some obvious factors include minimum wage not going as far as it use to and the costs of keeping up with the latest fads (e.g., I-Pods).

Yet, a main factor that we dance around is not having a good financial education class in our high schools. Thus, we learn financial lessons later in life. Some of these financial strategies that can be applied by college graduates, college students and high school students are:

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We get what we have, not what we want

We have all heard the phrase, “The rich get richer and the poor get poorer.” This is true, but not because of the reasons that most people think. People have blamed the education system, minimum wage and expensive health care. In my opinion, even though these factors have some influence, the main factor is based on an universal principle of “what we focus on will expand.” Or, from another angle (the law of tithing), we reap (receive) what we sew (give).

To see this, think about a time where you have approached a situation with anger. More often then not, what did you get back? Anger? When you have approached a similar situation with kindness, what did you get back? You may think that you get your way more often when you are angry, like at a restaurant when you send food back. Yet, as we have been hearing more of in the restaurant business, the food we get back may have been altered due to passive aggressive anger of the servers or cooks. So think twice of what you want back (anger or kindness) and then focus on this energy so that you send it out.

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Can a Rich Person be Spiritual?

I got a question about my blog Imagine if You Won $200 Million that warrants its own post.

Question for you: how do you reconcile religious teachings about money with the possibility that money does not corrupt character? These biblical passages in particular don’t leave a lot of wiggle room:

Mark 10:25 It is easier for a camel to go through the eye of a needle, than for a rich man to enter into the kingdom of God.

Luke 16:13 No servant can serve two masters: for either he will hate the one, and love the other; or else he will hold to the one, and despise the other. Ye cannot serve God and mammon (wealth).

Great question, thanks for asking. First, what everyone believes on this topic will be different. This is because how we read any text will be slightly different depending on which words we focus on. What we need to do is listen to our hearts for what rings true. So, I am not intending to convince you that my interpretation is right or correct. I am just presenting an alternative way of seeing things.

My belief is that money is just energy and we put our beliefs (e.g. negative beliefs) on money. For example, we have all heard that “money is the root of all evil.” Yet, we know, the full saying is “The love of money is the root of all evil.” Even though we know that it is the love of money, many have lived their lives subconsciously believing that money is the root of all evil. How can money be the root of evil when it is a piece of paper? Does a piece of paper have so much power? The Constitution is powerful not due to the piece of paper it is written on, but because of the thoughts and ideals that our founding fathers created. Money becomes powerful and the root of all evil because of life experiences where we have seen how people have used money to hurt others. And it is from these life experiences that for our beliefs are formed that influence how we read spiritual writings, hear spiritual teachings and experience events in our life. We may think that if you have money, then you are greedy. Yet, we could have a different interpretation if we see how money has been used to create many things including our library system (a gift of Andrew Carnegie).

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Imagine if you won $200 million

If you won $200 million, what would your first thought be?

For many, their first thought would be wow! Yet, what is underneath the wow? I recently asked the question to a class and got responses like “I would have to get a lawyer” and “I would be worried that I would lose it”. People have some fear of having money because most do not believe they know what to do with it if they had it (e.g., invest it). Others believe having so much money is greedy. What do you think about the Exxon CEO that just got a $400 million retirement package? Others may think that so much money will make them less spiritual. In other words, suffering in poverty will make them more spiritual.

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Deflating Compound Interest

We know the power of compound interest, how a $1,000 investment can grow to $17,449 in 30 years assuming a 10% investment return. However, what is left out is the impact of:

• Inflation

• Investment Management Fees

• Taxes

• Diversified Portfolio

The 10% or higher return usually factors in that the portfolio is invested close to 100% in equities. If you have a well diversified portfolio, you are not usually invested 100% in equities. A diversified portfolio usually has cash and/or bonds. Thus, the long-term return on a diversified portfolio is usually closer to 8% (depending on your equity/bond weighting). In addition, if we assume that inflation is around 3% to 4% and investment management fees are usually 1% to 2%, the net return can be closer to 2% to 4%. If you add in taxes (unless invested in a tax-deferred or tax-exempt vehicle), the returns can be smaller as well. If the return is 3% instead of 10%, the investment will grow to $2,427 instead of $17,449 in 30 years. $2,427 is still nothing to sneeze at. Yet, if you are planning for your retirement, you may not want to be overly optimistic on your returns, may want to manage your investment fees and may need to save more to compensate for a lower return. Having a comfortable retirement is still possible if you plan ahead.

For more information see:

Value of Investing

Myth – 12% Returns in Equities

Retirement Planning

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For those who are checking in for a new blog, you will have to wait a few days.  I have been having problems with my computer and need to use my wife’s computer just to check e-mails.  I hope that it is only a few more days before it is fixed (waiting for a new part).  It is hard to imagine going without a computer these days.

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Overcoming the Budget Blues

When I mention the word budget, I can see people rolling their eyes. It might as well be a four letter word. Some people avoid budgeting like the plaque. People think that a budget is meant to limit their spending rather than a tool that is used to get what they really want. However, they do not take the first step in overcoming the resistance to budgeting due to having the budget blues. If you have the budget blues (get depressed when thinking about your budget), the first step to overcome these blues is to click Overcoming the Budget Blues.

Before Buying a Home, Read This

Many want to rush into buying a home these days because they hear that buying a home is such a great investment and is better than renting. Some of this information is based on sound advice while other information is misleading. Owning a home can be a good investment, yet sometimes the advantages of home ownership are over exaggerated. Thus, before buying your new home, there are a few things that you should think about. To read this article, click Before You Buy Your Home.

Cinderella Man

We can find life lessons in many places when we are looking. One of these places that I have recently found is in the movie Cinderella Man. The movie is about a boxer in the Great Depression. So what does a boxing movie have to do about money? The movie teaches lessons about financial security, goal setting, broke versus poverty and shame around welfare. To learn more, read Cinderella Man.