My Friend Raided Her Retirement, and I’m Fine With It.

Jan 15, 2021

When is it ok to break “the rules” with money?

A new friend confided she'd raided her retirement fund. “I'm not mad at you for that,” I said. Want to know why?

My friend “Sue” (not her real name), recently confided that she'd withdrawn money from her retirement fund to pay for training. Normally taking money from retirement when you aren't retired is a huge money mistake, because you lose not just that money from your retirement fund, but also all the growth that would come on top of that money. She expected me to chide her.

So why did I, as a money coach, actually think it was ok?

You see, Sue has a background in working in banking. She knows all “the rules” of how money works (the rules I teach in my Change Your Financial Operating System course). She's seen first-hand the “Millionaire Next Door” types who live in blue collar neighborhoods below their means and become self-made millionaires. She's also see the middle class and upper middle class professionals who earned good money, yet were drowning in debt because they'd committed themselves to loan after loan for toys (RVs, boats, jet skis, second homes) or shopped til they'd dropped on clothes, shoes, and jewelry and had the credit card debt that came as a consequence.

So what's the difference between “Sue” and most people?

Sue fully understands the rules. She understands the risk she has taken in breaking them. But she is making an informed and conscious choice to take a financial risk now in the hopes of making a career change that could lead to a better quality of life and, oh yeah, the opportunity to make more money in a new field.

It may not work out. She may have set herself back. But in my mind she hasn't liquidated an investment, she's shifted a small portion of her overall portfolio from one investment to another. It's a higher risk investment, but it also has the potential for outsized rewards. And because she understands enough about money to know she's taken a risk, she's going to be very focused on making that investment pay off and on re-building her retirement fund as soon as she can.

Your money is your money and you are allowed to do anything you want with it. I just want you to make an informed choice the way Sue did.

Are you ready to learn the rules of money – and when to break them? If so, I'd love to work with you. Schedule a call for a free session in which we will uncover your #1 money block and lay out a solution.

Debt and Guilt

Jan 8, 2021

Debt isn't your fault, but paying it off is your responsibility

Imagine you are at the top of a slide. Behind you are people pushing you and telling you to slide down. To either side a people pulling you down and telling you to slide down. So you push off, slide down, and get to the bottom.

You made the choice to slide down, but that decision was not made in a vacuum. How guilty should you feel as you sit at the bottom of the slide?

My answer would be – not very.

Yes, it was your choice. But you had a lot of forces encouraging that choice, and very few voices warning you of the consequences.

I think for most of us, debt is the same way. Every marketer in America is trying to separate you from your cash. Everyone says you MUST go to college, and with the escalating costs, few parents can afford to pay out of pocket. So loans it is!

Your friends, who are lovely, often help separate you from your money. After all, your friends want to spend time with you, so they invite you to the fancy restaurant. They want you to be happy, so they encourage you to buy the thing.

But here's the deal – the marketers don't care about your personal financial situation, and your friends likely don't know the truth of your finances. They probably aren't even paying much attention to their own financial situation.

It's not just the external voices – it's literally our own minds. We've evolved to want pleasure and instant gratification. When literally everything in your life is saying yes and when buying on credit feels like it has no immediate negative consequences, how could you not end up at the bottom of the slide?

Sure maybe some part of you knew better and threw a red flag. But that's one voice in a sea of thousands.

So cut yourself some slack. It's actually totally understandable that you are in debt. You'd be weird if you weren't. Let yourself off the hook for all the guilt and shame. You probably never had a personal finance class or in depth training on money from your parents. Past you was just doing what she thought was best. She didn't mean to screw you over.

Now, just because it's not your fault, that doesn't mean it's not your responsibility. Yes, you were influenced, but you made the choice. But if you can let some of the guilt and shame go, you can take a clearer look at where you are and where you want to go and map out a plan.

So if this sounds like you, take a deep breath, forgive past you, and take a step so future you can have a better life. Sign up for my money course or schedule a free consultation today to get on your way to a better financial life.

The Vital Signs of Your Business

Jan 1, 2021

Guest post by Diana Miret

The Vital Signs for Your Business

Note from Lisa: while as a money and business mindset coach I work with a lot of entrepreneurs to help them earn more, I'm not really a numbers person. For that kind of coaching, I recommend Diana Miret. She can be reached through her website at https://dianamiret.com This article is from her.

When you go for your annual physical, the nurse takes a set of vital signs, or measurements. They take your temperature, blood pressure, pulse, and listen to your heart and breath sounds. They also measure the oxygen saturation in your blood.

The medical profession knows that by assessing this small number of vital signs, they will be alerted to potential problems. It gives them a starting point to assess your health and condition.

What about taking the Vital Signs for your business and assessing if it is “healthy”?

Business owners tend to put their nose to the grindstone and that can cover up an unhealthy business. See if any of these thoughts run through your head (like they do mine):

“I just need to work harder.”

“I just need to get organized.”

“Something big is going to happen one day and the business will be fine.”

“Something just like magic will wipe away all the debt, financial stress, and worry.”

Sound familiar?

Is your business surviving check to check? Do you manage your business by checking the bank balance, rather than how you are spending against a budget? Or the worst mistake of all: are you listening to your accountant and “minimizing” profits, so you don’t pay taxes on them? Don’t get me wrong; I adore accountants. I graduated with a double major in Accounting and Finance for pennies sake. But their view of your numbers SHOULD NOT BE YOUR VIEW OF YOUR NUMBERS!

In other words, you must take your business’ Vital Signs differently – and not from your Profit & Loss Statement.

In his 2014 book Profit First, Mike Michalowicz reveals why the traditional accounting formula: Sales – Expenses = Profit is not only contrary to human behavior, but a recipe for exhaustion because it throws you into an ever-ending cycle of selling more and profiting less.

It treats profit as a left-over. And undesirable. That is CRAP. How does it make sense to spend $10 so you don’t have to give the IRS $ 3? Wouldn’t you rather have the $ 7 in cash PROFIT than nothing?

Besides teaching you to run your business differently, Mike flips the accounting formula to:

SALES – PROFIT = EXPENSES

He has you take your HARD EARNED, WELL DESERVED Profit out FIRST, and run your business on what’s left. Remember Warren Buffet’s “Pay yourself first!” mantra? Exactly like that but for your business.

And the gold doesn’t end there. He also gives you a quick assessment tool to use to take the Vital Signs of your business.

Get ready to find out your business’ health …

This chart is from page 68 of his book and provides, at a glance, a quick assessment of your business’ financial health. Take out your last P&L and see how your business compares.

Real Revenue Range: $0-$250,000
Profit – 5%
Owner's Pay – 50%
Taxes – 15%
Operating Expenses – 30%

Real Revenue Range: $250,000 – $500,000
Profit – 10%
Owner's Pay – 35%
Taxes – 15%
Operating Expenses – 40%

Note: It is important to note that he uses the term “Real Revenue” not Sales. If you are a manufacturer, retailer or more than 25% of your sales are derived from the resale or assembly of inventory, you must deduct the amount of the materials (not labor). If subcontractors deliver the majority of your service, deduct the cost of the subcontractors from Sales to get Real Revenue. Read the book for more information.

In my business coaching practice, I begin all discussions with a client by having them do this assessment. It helps them see immediately what areas are “bleeding” in their business.

Because numbers don’t lie. Just like your blood pressure number can signal a problem or good health, these percentages can help you pin-point what the business needs to focus on.

So how is your business doing?

Interested in working with a coach to help you get on track with your money or your business? Contact me to learn more about my coaching programs so you can get support in your financial life.

Tarot-Led Coaching

Dec 20, 2020

Uh-oh. She's gone to the woo.

And now for something completely different – introducing Tarot-led coaching.

For those who know me, you know I've spent my career in IT, and I grew up in Arkansas – both places where anything “woo-woo” is looked upon with great suspicion. It is at best bullsh!t, and at worst Satanic.

If you know me from those parts of my life, fear not, I have become neither feeble-minded nor evil.

I have, however, always been curious and open minded, and I love to learn new things and share them.

One of the many things I've been studying while mostly stuck at home (yay, pandemic) has been tarot card reading. I've studied the meanings of the cards and of their positions in the layout I use. I've also studied ThetaHealing and use that to access my intuition.

I think of the cards a bit like the ink blot tests psychiatrists use. The images are subject to interpretation. I don't just tell the clients what they mean. I give them the background information on the card, the layout, and what in the image is standing out to me, and then I let them check out the card for themselves.

We then use that as a jumping off point for what becomes a coaching session.

I find many new clients may not have anything top of mind that they want to discuss, or they may be reluctant to bring topics up to a stranger. By having the cards as a starting point, the issues that the client has been working on in the background of their minds often come up for resolution.

So yeah, it's a departure from my logical IT side and my bible-belt wearing side. But we all have many sides, and I find the tarot-led coaching session is a fun way to get clients talking, to help them access their intuition, and to bring issues to the surface.

Want to try it out? Schedule a $100 Tarot-led coaching session today!

Credit is Not Your Emergency Fund

Dec 11, 2020

“I don't need to save for emergencies. If there's an emergency, I'll use credit.”

I was on Facebook recently and a guy said he'd just paid off his credit cards and wondered if he should focus next on paying off low interest rate debt, like a mortgage, or if he should focus on investing.

Ummm…. aren't we forgetting something here? What about the emergency fund?

Now I know the emergency fund is boring. It's money you can't spend (boo) and it's not making you a lot of money (boo). I get it. This is one of my personal weak areas as well.

But you need access to liquid cash savings for a few reasons.

1. In a downturn, banks will reduce risk by reducing access to credit. This is already starting. A card we rarely use contacted us saying they were going to close the account if we didn't use the card soon. A friend who does the points thing with credit cards just had a bunch of cards shut down by the issuing bank because he “wasn't using them the way they were meant to be used.” They didn't mind one bit when the economy was good, but now, they are reducing their exposure.

In a downturn, banks usually fail. At least a few of them. If your bank fails, your checking and savings balances are backed by the FDIC. However, your access to credit is not. In the Great Recession the bank we used for our IT consulting company failed and the bank that took over “chose not to reopen” our business credit cards AND they shut down the line of credit we had with them to provide us with float. And by the way, when things like this happens, the bank wants to get paid back right away. Do you want to be scurrying around trying to get more credit so you can pay off that credit? Isn't it nicer not to have the debt AND to have some extra cash?

I haven't paid much attention to this, but I'm pretty sure the issuing banks have already started reducing the credit lines we have available to us on some of our cards. Check your statements and see if they've done the same to you.

2. If you use credit as your emergency fund, you will come out of the downturn with debt. Which means your first order of business will be paying off debt. Which means you are going to be right where you are now again in 10 years. The only way to get out of this cycle is not to run up debt.

3. Debt comes with payments that are not optional. If I have to use half of my emergency fund, I should immediately start paying myself back, but if I can't, it can wait. With debt, I should immediately start paying the bank yet, and they aren't going to be flexible about that. You are committing your cash flow to someone else at a time when you need it most.

4. If you borrow from yourself in an emergency, it's going to be a 0% loan. If you borrow from the bank, it's going to be higher than that.

You will never win with money if compound interest is working AGAINST you. You need to get in a position where compound interest is working for you.

5. There will be opportunities that come out of a downturn that are only available if you have cash. In the Great Recession our second mortgage lender was willing to forgive a portion of the principal of the loan if we paid it off. We were able to do that with CASH.

In a downturn those who don't have cash look to generate it buy selling things (usually toys first). If you have your financial house in order and also have extra cash, you can buy those things while they are on sale.

As always, you are free to make your own choices, but I've been through several of these cycles now and can tell you, we weren't able to really build wealth until we stopped focusing on building debts.

Are you ready to take control of your personal finances? Would you like some help? If so, schedule a call with me to learn more.

Q & A on Investing – Crowdfunding & Stock Options

Dec 4, 2020

Crowdfunding and stock options – not my bag, baby.

Wondering about real estate crowdfunding and stock options? Refocus on the basics and know when to hire the right professional help for best results.

Q: “Thoughts on investing in real estate crowdfunding and if worth doing for diversification in your portfolio?”

I don’t do this and I don’t think it’s worth doing, although of course you are allowed to do whatever you want.

Instead of looking for jazzy new ideas (where we have a hard time measuring the risk and that may not be regulated), what if we were to REALLY commit to doing the boring things that we know work?

If you really want to play, do it AFTER your retirement is secure with EXTRA money, not before your retirement is secure with money you need to use to build your foundation.

In my opinion, if investing is exciting, you are doing it wrong. If you want excitement, go to Six Flags. 🙂

Q: “Can you describe tax risks/benefits of exercising early stock options? How early? Any downside to buying these up steadily as we vest?

No. 🙂

As a financial coach and educator, my focus is on getting folks to pay down debt, build their emergency funds, and to learn about investing (and helping them overcome the mental roadblocks to doing this). I’m neither qualified nor licensed to give investing advice.

I would suggest you check in with HR and see what resources they have available to you (including perhaps a referral to someone who can help).

For tax advice, a CPA is your best bet.

For investment advice, I would suggest working with a financial planner or advisor. Remember that a project-based financial planner is a thing if you want someone to help you with just this question (rather than an ongoing relationship). However, even a project based financial planner will need to gather information about your overall financial situation to give you the proper suggestions, so don’t be surprised if they want a lot of information before answering this question.

To learn more about whether or not I'm the right professional to help you with your money and business goals, schedule a call with me today.

Where I Part Ways With Dave Ramsey

Nov 27, 2020

ve is the man for getting you out of debt, but some of his advice may need a bit of an update.

Q: “You mentioned you don't agree with all of Dave Ramsey's steps, so I'm curious- what do you recommend doing after debts are paid off?“

I do agree with Dave Ramsey step one is the baby emergency fund, although I am concerned that he’s been recommending $1,000 for a really long time. $1,000 isn’t what it once was. I could see for some people they might need a bit more.

I agree with Dave Ramsey that step 2 is paying down the debt and that high interest credit card debt is an EMERGENCY. Dave is the man for motivating people to pay down their debt.

I also agree that after paying off debt the next step is to finish out your emergency fund (which I define as 3 months of expenses for dual income households, 6 months of expenses for single income households, with perhaps some extra padding if the economy is down, someone’s job is at risk, etc.), although I don’t think you have to have your full emergency fund to start your retirement investing at work. I think you can do both at the same time.

I would also agree that the next step should be retirement money, but I’d rather see people max it out than just do a set percent as Dave teaches (unless they have a big urgent savings goal they are also working – then you might want to wait to max out the retirement fund until after the big urgent goal. But starting as soon as possible is important because of the power of compounding).

I part ways with a lot of what Dave has said over the years about investing. He’s talked about people getting 12% returns in the market, which I don’t think is realistic. I also don’t like that he refers people out to financial advisors and planners but doesn’t (as far as I’m aware) help people find advisors and planners that put the client’s needs first. I’d love to see more education around how they get compensated, suitability vs. fiduciary standards, etc. so people can make a more educated decision when they are picking a financial planner or advisor.

I don’t have kids, so of course I personally am not putting money toward that baby step of Dave’s.

Dave recommends paying a house off early. Mathematically this does not make sense with today’s interest rates. If your mortgage is at 3.5% and you can get 7% in the market, you are better off financially investing the money.

Time in the market beats timing the market, so if someone is hyperfocused on paying off the house they will lose a lot of the growth they would get from having that money invested earlier.

The emotional relief that must come from having a paid off home is REAL, and it does really reduce your bills when you aren’t having to make mortgage payments, which would allow you to invest more once the mortgage is done. So it’s not wrong or bad if someone wants to pay off their house – I get it. But do a bit of research on what it is costing you if you aren’t putting that money into investments before you decide.

Are you ready to get your finances on track? I can help. Schedule a free call to see which of my programs would be a fit for you at https://lisaduke.net/schedule

Three Tips to Enjoy the Holidays Without the Spending Hangover

Nov 24, 2020

“The way you spend Christmas is far more important than how much.” – Henry David Thoreau.

Please welcome our first guest post from my friend, Valerie Carpenter! When she's not sharing her tips for getting the most out of your holiday spending, she's helping people get the most out of their vacation budget. You can find her business Facebook page here.

There are plenty of blog posts about Christmas budgeting and spending. How you should start a budget several months, if not a year, in advance with suggestions to even open a new banking account specifically for Christmas spending. Although budgeting is essential to have a successful and debt-free Christmas, my hopes is that this blog post will inspire you to see the holidays differently and how it’s possible to pivot from the typical traditions and expectations for the season. If you have personally suffered a financial loss from the unprecedented pandemic, or maybe you are just tired of being broke after the holiday, it is an ideal time to get creative and savvy with your holiday endeavors! I have composed some suggestions on how to do exactly that…

SHOP LOCAL! – This one is huge to me. This time of the year is heavy on all of our pockets, whether you are an entrepreneur or not. So why not support one another buy buying from one another. And I am not talking about buying from your friend who is a cashier at Macy’s – let’s stay away from these big box companies. There are plenty of small businesses in your community that offer tangible items that make fantastic gifts. Some of which have put sweat and tears into handmaking them themselves! I am personally a gift giver, and find ways to make gifts during the year unique and special. This typically means the gifts I give are customized or personalized in some way. Find local businesses that have services like these to offer. Their products cost less because they are crafting them in house and you can get away without shipping costs if they are in drivable distance. Meanwhile, the gift you give to those special people in your life will be much more appreciated because it shows you took the time to get something made specifically for THEM! In turn, you are helping a small business financially. Strick up a conversation and share what it is you do with the people you buy from – maybe they will have a need for what you have to offer! Or perhaps you can even barter! I bet I have you thinking now…

QUALITY OVER QUANITY! – There is this unspoken rule of sorts, that the more you spend the more you love someone. But if you read that out loud…doesn’t that sound ridiculous?! Some of my most favorite gifts received were handmade or reasonable priced. It was more about the person understanding me and buying something that they knew I would appreciate, love or find humorous. My advice is to set the expectation ahead of time. For families with kids, why not express that each year they will get one GREAT gift (a high-ticket item), but that will be followed by smaller / stocking-stuffer type gifts. These other gifts are really for the sole purpose of generating that morning-of-excitement in having several things to open under the tree! Face it, have you ever seen a kid open a gift on Christmas day…you know, the “gift of the year” that every kid has been talking about…to find them 30 mins later making a fort out of the cardboard box it came in? My point exactly!

MEMORIES OVER CONSUMPTION – And that brings me to my next point! You know why kids find it fun to play with the cardboard box their expensive gift came in? They want to pretend, explore and use their imaginations. So maybe this year consider doing exactly that! Give one another the gift of memory making. There is no sweeter gift, than the gift of travel! Take a trip…near or far. Either plan this in advance as a family, or surprise the kids Christmas morning. How awesome would it be to find out as a kid (well, even as an adult) on Christmas morning, that you are headed to see Mickey Mouse at Disney and leaving the very next day?! That’s a Christmas that keeps giving! That will be days of fun and adventures, where as a family you enjoy it together. Truth is, if you ask anyone (child or adult), what they got for Christmas 5 years ago, they likely can’t remember…but if you ask what trip they took 5 years ago, I would confidently bet money they will remember!

These are all just suggestions from personal experience, so make of them what you please. To recap…YES, budget, just like everyone says to. [Annnnnnd, if you don’t know what budgeting looks like…well, that’s a whole other discussion. You ought to consider reaching out to Lisa Duke Financial Coaching for a better understanding *wink wink*]. But in all seriousness, change your thinking and you will change your spending. Christmas can look extra bright without making your checking account extra tight.

P.S. Would you be interested in a free call where Lisa works with you to identify your #1 money block and the solution? Grab a spot on her calendar today!

Saving for Big Goals

Nov 20, 2020

IQ: Recommendations on how to plan to save for big event planning: EX: Wedding or preparing to have a family

A: DO IT. 🙂

First step would be research – how much is the budget for the wedding? Will other family members be kicking in? What are the out of pocket expenses that insurance won’t cover for the baby? What are the non-medical expenses (crib, diapers) – both initial set up and ongoing?

When is this happening? How many months do we have to save up?

If you know you will be having the baby in 6 months, take the amount of money you want to have when the baby comes and divide by 6. Look for expenses you can cut and possible ways to grow your income to come up with the money.

I would say it’s also ok to give yourself a bit of grace and know sometimes we make choices that don’t make sense financially, and such is life. It’s tradeoffs, right? We don’t want to be completely irresponsible, but there’s no prize for making it through life saving every penny but not enjoying your life (Ebenezer Scroge taught us that!).

Are you ready to get your financial life on track? I can help. Let's talk live to see if you are a fit for one of my programs. Pick a time on my calendar at https://lisaduke.net/schedule

Paycheck to Paycheck

Nov 13, 2020

Money makes the world go 'round.

Q: “Any tips/tricks for those of us living pay check to pay check and barely have enough money to pay off our bills/debt?“

Many of the bills people think of as mandatory are not. Question everything. Remember my husband and I shared a used Honda Civic while living in Atlanta? If one of you work from home, can you share a car? Do you even need a full time car, or could you get by using Instacard and Lyft? How often do we even leave the house now anyway?

If you can’t get out of any of your bills, earn more money. Get creative. Look at everything you own as a possible asset to be sold or rented. Can you take on a roommate? Rent your car on Truro when you aren’t using it? AirBnB your couch? Get your dog a job herding sheep (ok, that’s probably not going to work, but you get the idea). Can your kids do something you now pay other people to do? Could they earn their own money for clothes and video games?

Even if you don’t want to take these ideas on now because pandemic, you can certainly start brainstorming now and implement these ideas down the road.

Are you ready to get out of the paycheck to paycheck cycle? If so, let's talk live to see if you are a fit for one of my programs. My calendar is available at https://lisaduke.net/schedule

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