Ask The Millionaire Mommy Next Door a question (Women of Personal Finance Spotlight)

[MillionaireMommyND]

Originally Posted by Just In Case

As an Entrepreneur and Mommy, I love the insight on your blogs!! My mom and I have started a company called Just In Case, and we are funding it ourselves. It's a bit controversial because we are marketing an intimacy compact to women.
Advertising in mainstream magazines is not an option right now because of how expensive it is... do you have any fun, "out of the box" suggestions?

BTW the abundance exercise on your blog was a blast!!!
It inspired a VERY clean garage at my house too!

Rachael

Thanks, Rachael, for your nice compliments. I'm happy to hear you are enjoying the abundance exercise! The effects have been literally life-altering for me so far, and yes, I'm having a bunch of fun with it, too!

Anyway, I've never paid for advertising for our businesses. I aim for referrals instead. This serves to save me money (no advertising expenses) and time (reduces marketing efforts). Establish and maintain good customer and referrer relationships and you'll never need to advertise.

How do I create a referral-based business? Here are a few tips:

• Introduce your service or product to complementary businesses. Offer discounted or free services to potential referrers.
• Look for mutually beneficial arrangements with existing, complementary businesses.
• Provide value for your customer AND for your referrers.

Seek publicity:

• Volunteer
• Submit Public Service Announcements (PSA) to relevant publications and news media
• Create a blog to encourage interaction with your target market and become an authority in your niche

[borgdiadora]

Great story I am a newly six figuire earner on my way to millionaire status and am trying to avoid the pitfalls of having new money but its tough. I rented a luxury townhouse that I probably shouldnt of but beyond that Ive been saving. No car purchase or anything else. If you have any tips Id appreciate it, I have all day and night free so Im trying to get in the mindset that free time is best spent doing free things.

[ellej9]

Outsource it to India. Elance or Your Man in India Virtual Assistant. Or! Have a contest of your subscribing blogosphere to write in a one page essay/resume of why they would like to train to be your assistant to help answer e-mails. Along with each essay and an entrance fee of say $15 of which all the proceeds will benefit Kiva. (This will weed out insincere attempts so you won't have to read them all. ) And you will train them to be your assistant for a probationary period to see if they work out...Just some thoughts.

My question is how do you determine your budget/investing for say long term goals and the money you will live on today? I will be receiving a retirement that is 2/3rds of my salary today with Cola's in 2.5 years. And I am looking to replace up $900 a month in passive income. Any ideas? I do own a home. Thanks. Laura

[Xin Lu]

Hey Jen,

Just dropping in to say that this thread is awesome so far. I've been reading your blog since it started!

[Sam]

I've stumbled across Millionaire Mommy in a roundabout way. I am postponing the "inevitable" return to work after my daughter's birth 7 months ago. My latest half-hearted attempt at pyjama income is through blogging and freelance writing, and my next article was going to be about gender roles in today's society and the need for a double income. This is how I stumbled across WiseBread, this forum, and the Millionaire Mommy.

Jen, after spending my daughter's naptimes reading your blog, I am inspired. Tonight, I plan to sit down with my husband and discuss our future financial independence. The problem is - I can already hear his disinterested scoff. He is not the money man in our relationship - I am the person who pays the bills, manages the savings, and worries about how to make ends meet. He is a spender, and is generally happy to hand over the money management to me. I haven't put a lot of effort in, though, and lately we have spent most of what we earn.

Up until now, this hasn't been too much of a problem. Neither of us is materialistic, so most of our income has always gone towards having fun - primarily through travel. We don't have debt in the way of personal loans or credit card. We own an old car outright, and we don't spend much money on living expenses. We spend what we earn but not more, and when we need to save, we do.

However, now we have a kid, it's time for change - we need to build wealth and maintain it. I have read through bits of your website, and it has been fascinating. But saving, budgeting, and setting goals is not a problem for me. What I don't know is - what next? So we're going to save and invest money - but how? I have a house (in my name) with a mortgage, which we could sell for profit... But what do we do with the profit?

My question is this: Where do we start with investing? Where do we go for advice and more information? We don't have a lot of money to pay for advisors or brokers, so I don't want to "invest" in the wrong advice. As an aside, I am in Australia, so a lot of the US financial terms don't make a lot of sense to me.

Thanks for all your fantastic advice and interesting blogging.

[MillionaireMommyND]

Originally Posted by Madisonp

Hi MMND,

I have been following your blog for quite a while now. I have to say that I enjoy seeing the email in my inbox alerting me to a new post from you. Also, I am an avid reader and I saw that you recommeded 'Wishcraft' by Barbara Sher. Well the library did not have that one but I am nearly finished with 'Live the Life you Love' by the same author and it is truly one of the best life guides/self help books I have read (and I have read loads!) so thanks for the recommendation.
About 14 months ago, both myself and my husband were made unemployed by the same company, financially we were wiped out. Since then we have used all our 401K and every last bit of savings (including the kids) that we had. Previous to our unemployment we racked up nearly $100,000 in legal fees on credit cards. Both my husband and I have been consumed by the job search but to no avail. We have been given financial support from our families but that is running out too. We have learnt many lessons and although we have the impending doom of being unable to pay our debts, we have been living frugally and trying to enjoy each day regardless of the situation. We now have no health insurance and for the first time, have been unable to pay our credit cards. The next test is going to be if we can pay our mortgage. Yesterday I was turned down for a position that I truly thought I was going to get so that was a disapointment. I just wondered if you have any advice for us or for others going through similar problems. Thanks and I look forward to reading more of your blog.

I commend and congratulate you for keeping your chin up despite your current financial troubles and for making efforts to "enjoy each day regardless of the situation". You sound like a strong, capable woman.

I could be completely off base here (because I don't know all the details), but I'm going to dish out some “tough love”. I sense you can take it.

I hear you saying that both you and your husband have been unemployed for over a year, you've drained every savings and retirement account, you have a whopping $100,000 in credit card debt, you have kids, no health insurance, and don't know how you'll pay your next mortgage payment. You've put a strain on your extended families' finances, too.

What this tells me is that you are in financial survival mode.

First... if you own a home, car(s), television, cable subscription, etc... then you aren't being frugal enough. It's time to sell everything. Cancel all subscriptions, sell your cars and take public transportation, sell your house and rent an apartment. Remember, you are in financial survival mode. You clearly can't afford your current lifestyle.

Second, 14 months with neither you or your spouse earning an income is too long. Now is not the time to be picky about the jobs you'll take. Take a job serving food at a restaurant to earn tips. Place a free ad on Craigslist offering your skills or talents. Enroll with a temp agency. Make some money!

Contact your credit card companies and mortgage lender and tell them what is going on. Negotiate.

First survive. Then thrive.

Barbara Sher is one of my favorites, and reading her book, Wishcraft, was one of the big turning points in my life. I recall an exercise where she has you describe, in great detail, your ideal day. That one was an eye-opener for me because I was feeling stuck with “what is”. Up until then, I had a difficult time imagining anything bigger or better in my life.

Keep your eye on the prize -- while you do what it takes to survive.

[jones13]

MMND, this is a pretty basic (curiosity mostly) question, but how much $$ did you put away into savings each of the 10 years that you say took you to become a millionaire? Not counting what you earned in interest, etc, but how much actual dollars earned through work that you saved. I am just interested from a salary standpoint how much earning potential one would need to do it in 10 years. Thanks.

[MillionaireMommyND]

Originally Posted by Linda Leighton

Hi MMND

I get all your email's and I really like how you think- especially your thoughts on your sweet daughter. I am a grammie who has had to take on raising my 2 granddaughters - age 8 and 5 - at a time in my life I was supposed to be out there free to do what I want. It is what it is and I know if it wasn't for my husband and me they would be lost in the 'system' and I hold my head high for that. I want to create some financial future for them in case we aren't around to do so and have saved $4000. to date. I want to invest that for them- its such a small amount but better than 'a poke in the eye'. Any thoughts??

Your granddaughters are blessed to have you and your husband in their lives. People like you make all the difference.

Are you talking about wanting to make sure that your granddaughters would be financially okay if you and your husband pass away before they become adults? If this is the case, I'd suggest checking into term life insurance policies. Meet with an estate attorney to discuss other options. I think it would be best to legally adopt your granddaughters, if you haven't already.

If you're intending to save for their adulthood (ie college tuition), I suggest that you make sure YOUR financial future is in order first. Your granddaughters will be able to work, apply for scholarships, loans, etc. if needed. But you and your husband have limited earning ability. It would be harder on your granddaughters if they reached adulthood and then needed to provide financial assistance for you.

If all your financial ducks are already in a row AND you have a plan in place in case you die before they are adults, then great, invest the $4,000 for them. Consult with your attorney and/or tax adviser about the best account option(s). Then invest the $4,000 in a solid, well-diversified, no-load mutual fund or index fund.

[MillionaireMommyND]

Originally Posted by borgdiadora

Great story I am a newly six figuire earner on my way to millionaire status and am trying to avoid the pitfalls of having new money but its tough. I rented a luxury townhouse that I probably shouldnt of but beyond that Ive been saving. No car purchase or anything else. If you have any tips Id appreciate it, I have all day and night free so Im trying to get in the mindset that free time is best spent doing free things.

I have an idea: If you want financial freedom as soon as possible, keep your budget at pre-six-figures and live off of your previous income level. Schedule an automatic bank transfer, every payday, to your investment accounts (max contributions to tax-advantaged retirement accounts; balance in taxable portfolio). You will be financially-free before you know it!

Otherwise, if you keep bumping your expenditures up to match your growing income level, you will end up like many others-– rich in STUFF; but poor in freedom, options and time. No matter how much you earn, you will never be financially-free.

Also, keep in mind that researchers find that happiness levels increase when one enjoys experiences. It stagnates when one buys possessions. Experiences trump STUFF.

[MillionaireMommyND]

Originally Posted by ellej9

Outsource it to India. Elance or Your Man in India Virtual Assistant. Or! Have a contest of your subscribing blogosphere to write in a one page essay/resume of why they would like to train to be your assistant to help answer e-mails. Along with each essay and an entrance fee of say $15 of which all the proceeds will benefit Kiva. (This will weed out insincere attempts so you won't have to read them all. ) And you will train them to be your assistant for a probationary period to see if they work out...Just some thoughts.

My question is how do you determine your budget/investing for say long term goals and the money you will live on today? I will be receiving a retirement that is 2/3rds of my salary today with Cola's in 2.5 years. And I am looking to replace up $900 a month in passive income. Any ideas? I do own a home. Thanks. Laura

Thank you for your suggestions on handling email! I find your apprentice suggestion especially appealing. I had some extraordinary experiences with apprentices while operating my dog training school. All of my dog training instructors started as my apprentices as they learned the craft, and one of them eventually purchased my business. I've done a little brainstorming about how to set up an apprenticeship program with my blog, so I appreciate your great input! Thank you!

You asked,
...how do you determine your budget/investing for say long term goals and the money you will live on today?

I've used Microsoft Money's Lifetime Financial Planner for years. I revisit the planner at least once each year, often tweaking my financial plan and playing with “what if” scenarios. It incorporates my entire financial life -- present and future.

You wrote,
...I am looking to replace up $900 a month in passive income. Any ideas? I do own a home.

Since you own a home, why not use it to generate the extra $900/month? A few ideas:

• rent out a couple of extra bedrooms
• run a B&B
• sell it, rent a home, and invest your equity and monthly savings. Read my post, Rent, Grow Rich, Be Free for details.