Tom's Blog

I was sitting in church the other day and the speaker was talking about budgeting and otherwise watching what you spend so you don't get into financial difficulty. He was suggesting that we can never be truly financially free unless we have control over our spending habits.

This started me thinking about the relationship between spending habits and eating habits. As many of you know, a few years ago I reduced my weight by over 20%. I had tried losing weight before, but had never been totally successful. I love to work out and had always figured that if I worked out enough (i.e., used enough calories), then I could pretty much eat what I wanted. After all, this theory worked well in high school when I was on the swim team. The problem, of course, is that unless you are working out 8-10 hours a day, you can never work out enough to overcome bad eating habits.

So, this last time, I followed the WeightWatchers program and changed my eating habits. I started eating less, including less fat, while increasing my fiber intake and making sure I was getting lots of protein. The result was pretty dramatic. In six months, I lost over 40 pounds. But what has been even more dramatic is that I have kept the weight off for over 2 years. Statistically, only 3% of the population has ever lost 20% of their body weight and kept it off for more than 2 years.

So what made this time different? Simply, I finally got the message that good exercise habits cannot compensate for poor eating habits.

What does this have to do with building wealth? There is a direct corollary between eating habits and spending habits. Just as you cannot exercise enough to overcome poor eating habits, so you can never make enough money to overcome poor spending habits? Want proof? Just ask M.C. Hammer, Scottie Pippin or dozens of other celebrities who have made millions and spent every penny of it.

So, while our goal is to create enough wealth to live our ultimate lifestyle and while we always want to focus on our wants, not just our needs, we still need to learn to manage our spending. We need to set aside funds every month to go into our wealth building. We need to set aside funds every month to donate to good causes. The rest we can spend. But spend wisely, whether you are in your wealth building years or whether you have achieved your ultimate lifestyle. For more on building wealth and achieving your ultimate lifestyle, visit our School of Wealth Strategy, coming soon to http://www.provisionwealth.com.

Warmest regards,

Tom

Do you know people who make lots of money from their job or their business but never seem to have any money? Or maybe they have money now, but they don't have any assets other than their home, their cars and their boat?

I keep running into this situation and I always come to the same conclusion. Making lots of money has nothing to do with wealth. Nor does it seem to have much to do with financial knowledge or wisdom.

Just this week, I was talking to a new client who runs a very successful business. He makes hundreds of thousands of dollars each year, but has more liabilities than he has assets. The reason seems to be that while he has made incredible efforts to make his business successful, he has never devoted the time or energy to learn how to make his investing successful. This is not a criticism of this client. It is a part of our society. We are taught to work hard at our job or our business and to turn our finances over to some financial advisor who may or may not know what he or she is doing.

In addition, this client was given some poor advice regarding his taxes, so he is in deep doodoo (yes, that's a technical term) with the IRS. Now, he has to work even harder to pay back taxes that with proper planning may not have been owed at all. Again, our society teaches us that taxes are too difficult so we need to "hand them over" to some tax advisor who probably only knows a little more than his client. In reality, you cannot "hand over" your taxes to a tax advisor. You have to learn enough of the rules to know when to go to your tax advisor for advice. He or she cannot be with you every minute of the day.

The answer for all of these high-income, low-wealth people is the same. It takes knowledge to be financially (and tax) free. That's why, at ProVision, we have created a brand new course to teach investors of all income levels how to create permanent wealth. I'm off to Minnesota today to introduce this product to a group of Internet marketers. You can get this education too, by enrolling in our School of Wealth Strategy, coming soon to our website at http://www.provisionwealth.com/products.

Remember - Financial Freedom is Closer than you Think - but only if you have the knowledge to obtain it.

Warmest regards,

Tom