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

[MillionaireMommyND]

Originally Posted by 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!

Thank you, Xin Lu! I'm having fun with it (although my shoulder is starting to lock up on me - I'm not very good at typing, so I think I scrunch up). You all are posing such great questions -- I only hope I can keep up!

Love your blog, too, especially when you write about China, the culture and how it relates to finances, etc.

[lynnor]

So I have another question. Healthcare. That is the #1 thing that keeps me at my misery-inducing current job vs. leaving it altogether. (DH's company doesn't provide any benefits other than 401k)

The thought of not having or having to pay for private health insurance (esp in our country) scares the bejeezus out of me. With some of my past conditions, it would seem unlikely to be able to get private coverage (seems hard to get covered if you've ever had anything worse than a cold). Then there are the kids, of course. Being in a company plan greatly helped when we adopted them (esp since w/ country we chose, finalization process only begins after 6 mo. of post-placement visits). Several other moms found out the hard way it was next to impossible to get their private carrier to insure their child since adoption wasn't finalized yet...and some needed a lot of medical treatment (talking heart surgeries).

So, after that rant...Do you have any advice for paying for/getting health care coverage for those that aren't covered by a large group plan and are maybe harder to insure? Especially affordable coverage.

[MillionaireMommyND]

Originally Posted by 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.

I can relate to the differences in money views in a marriage. My husband doesn't “scoff” when I discuss our financial future or my personal goals, but he has never been the “money man”, either. I bring the money-awareness to our marriage; he brings other gifts and talents. We've learned to appreciate each others differences to create a successful team. My best advice here? Keep talking. Become a money role model for him. I shared one of our typical money conversations in a post titled, Memories are made of the things we DO, not the things we BUY. As you'll see there, my husband and I come from very different backgrounds and money mindsets. Yet with communication, we're able to come to mutually agreeable solutions.

You asked several questions related to investing. May I suggest reading through the investing post archives on my blog for my detailed responses. I don't know about the similarities and differences of investing in Australia, sorry. I would suggest asking friends, your attorney, tax adviser, etc. for a referral to a fee-based financial adviser (not a commissioned one). Seek to invest in no-load mutual funds, index funds, or ETFs (or the Australian equivalents).

Best wishes with your blogging, writing, and financial-freedom planning!

[MillionaireMommyND]

Originally Posted by 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.

Great question, and one I'll need to look up in my financial records and statements to accurately calculate. Once I get around to doing it, I'll post the details on my blog. Off the top of my head and very generally speaking, I saved 10-30% of our annual income each year. Additionally, I invested most of our home equity when we sold our home and started renting, and invested the proceeds from the sale of my dog-training business as well.

[jdp]

Originally Posted by lynnor

Do you have any advice for paying for/getting health care coverage for those that aren't covered by a large group plan and are maybe harder to insure? Especially affordable coverage.

Ohhh, good question - probably a big unconscious stumbling block for me!

[MillionaireMommyND]

Originally Posted by lynnor

So I have another question. Healthcare. That is the #1 thing that keeps me at my misery-inducing current job vs. leaving it altogether. (DH's company doesn't provide any benefits other than 401k)

The thought of not having or having to pay for private health insurance (esp in our country) scares the bejeezus out of me. With some of my past conditions, it would seem unlikely to be able to get private coverage (seems hard to get covered if you've ever had anything worse than a cold). Then there are the kids, of course. Being in a company plan greatly helped when we adopted them (esp since w/ country we chose, finalization process only begins after 6 mo. of post-placement visits). Several other moms found out the hard way it was next to impossible to get their private carrier to insure their child since adoption wasn't finalized yet...and some needed a lot of medical treatment (talking heart surgeries).

So, after that rant...Do you have any advice for paying for/getting health care coverage for those that aren't covered by a large group plan and are maybe harder to insure? Especially affordable coverage.

I'm not an insurance expert, so I can only share how our family handles health insurance. One of the reasons we keep our plumbing business around is that it gives us the opportunity to get group coverage. Classified as employees of our S-Corp, our family qualifies for group coverage, even though no one else works in the company but us. (We hire subcontractors instead of employees.) This eliminates the preexisting conditions issue.

Our monthly premium is pricey - $785 for the three of us (supposedly the rate would stay the same with additional children in the family though). We use a Health Savings Account (HSA) plan with a high annual deductible.

Talk to an insurance broker about your options. Perhaps you can start a small business of your own so your family can beat the preexisting conditions clause, too. It would probably be worth it, just to free yourself of your “ misery-inducing current job”, if nothing else!

[cheri703]

Hi! I've been reading your blog for a while and I am very inspired by your life. A bit of background: I have always had an entrepreneurial slant to my life, I have had various businesses when I was younger, always ready to go full tilt at whatever new opportunity presented itself.

I have been wanting to be a dog trainer for a long time, and finally the opportunity to leave my job and attend a training program opened up. Problem being: various depression, physical health issues, marital difficulties, and limited financial availability have slowed my progress in building things. I have recently been working harder at getting it going, but I don't know what is the best way to build my client base.

The other difficulty is that we are very rapidly approaching a crisis point with our finances, my husband's job doesn't pay a whole lot. I realize that probably getting a part time job (at least) would be a great idea, but with some of the health issues I'm having, I wouldn't have much energy left for my own business by the end of the day, so I need to decide where to focus.

I know this is rambling, but I guess my question is: What did you find most effective in building your client base as a dog trainer?

Also, I'd love to hear more about your time as a trainer. I realize that this list isn't necessarily the ideal spot for the discussion, but I have "email members" enabled, so (once you catch up on all of your others) I'd welcome any info about it.

Eventually I hope to achieve financial independence, I long for the day my husband won't have to work at a crappy job and can pursue his dreams, but it just feels REALLY FAR AWAY! Thanks for all of your insight on your blog and for giving your time and thoughts to people here.

[MillionaireMommyND]

Originally Posted by cheri703

Hi! I've been reading your blog for a while and I am very inspired by your life. A bit of background: I have always had an entrepreneurial slant to my life, I have had various businesses when I was younger, always ready to go full tilt at whatever new opportunity presented itself.

I have been wanting to be a dog trainer for a long time, and finally the opportunity to leave my job and attend a training program opened up. Problem being: various depression, physical health issues, marital difficulties, and limited financial availability have slowed my progress in building things. I have recently been working harder at getting it going, but I don't know what is the best way to build my client base.

The other difficulty is that we are very rapidly approaching a crisis point with our finances, my husband's job doesn't pay a whole lot. I realize that probably getting a part time job (at least) would be a great idea, but with some of the health issues I'm having, I wouldn't have much energy left for my own business by the end of the day, so I need to decide where to focus.

I know this is rambling, but I guess my question is: What did you find most effective in building your client base as a dog trainer?

Also, I'd love to hear more about your time as a trainer. I realize that this list isn't necessarily the ideal spot for the discussion, but I have "email members" enabled, so (once you catch up on all of your others) I'd welcome any info about it.

Eventually I hope to achieve financial independence, I long for the day my husband won't have to work at a crappy job and can pursue his dreams, but it just feels REALLY FAR AWAY! Thanks for all of your insight on your blog and for giving your time and thoughts to people here.

Thank you, and you are welcome. Congratulations on pursuing your aspirations!

As I wrote here before (see #21 above in this same thread), I prefer to build a client base completely through referrals (no paid advertising). Here's a sampling of how I did this specifically with my dog training business:

Concept #1: Introduce your service or product to complementary businesses. Offer discounted or free services to potential referrers.

How I implemented this concept: I put together an informational packet consisting of my bio and certifications, class description summaries, and letters of recommendation. I contacted veterinarians, pet groomers and boarding kennels in my community and asked for a brief introductory meeting. After making my personal introduction, I asked these business owners if there was anything I could do to help them handle their difficult pet behavior issues. I offered training workshops for their staff, free. I invited the business owners and their employees to attend free dog training classes with their own pets. In other words, I made it easy for complementary businesses to get to know me and my services. Because I proved my mettle to them firsthand, they were more than happy to refer their pet-owning customers to my school.

Concept #2: Look for mutually beneficial arrangements with existing, complementary businesses.

How I implemented this concept: I offered to teach classes at their facility. This was a beneficial arrangement for them and for me: I had a free place to hold classes -- and bringing my classes to them generated new exposure from pet owners to their facility.

Concept #3: Provide value for your customer AND for your referrers.

How I implemented this concept: I went above and beyond their expectations. This is easy to do when you're doing something you feel passionate and excited about!

Concept #4: Seek publicity.

How I implemented this concept: I volunteered for several community non-profit groups that had a pet-related focus like the Humane Society, Guide Dogs for the Blind, etc.

I used free PSAs (Public Service Announcements) in relevant publications and news media announcing open registration for upcoming dog training classes, and offered occasional free workshops such as “How to House-train Your New Puppy” or “How to Raise a Canine Good Citizen”.

These days, (this wasn't viable back when I owned my school), you could create a blog to encourage interaction with your target market and become an authority in your niche.

Organize a pet fair. Invite complimentary businesses (networking) and showcase your training abilities by giving public demonstrations.

I hope my ideas spur even more from you. Since you mentioned financial difficulties, may I suggest that you take a part-time job working for a veterinary hospital – or even better, another dog trainer. Immerse yourself in the dog world as you build your own business on the side. Once you've established your customer base and have earned steady sources of client referrals, quit your job.

Best wishes!

[allenang]

Jen - thank you for taking the time to do this this week and actually be present as a support. I found your webpage through the Rich Woman website. I am finishing my PhD in higher education administration (I have a B.S. in urban planning, and a MSW - I focus on community development, and am a native Detroiter - lived in MI until just a month ago - now live in Ohio), am 35 y.o., African-American, and single. I work for a research-based foundation that studies democracy and how people can empower themselves through community-building to advance democracy. I just got this job a month ago - it is a job that will only last a year or two (policy of the position).

After 18 years of school, I have $200K in student loans facing repayment, beginning March 2009. I rent. I have a retirement plan with $7K in a porfolio (should I change it to something else to make that money work better for me?). That's it in terms of assets. My salary this year is the most it has been since 1998: $47K. I pay $800/month in rent. I have three credit cards (all under $1500 and not maxed out), and I have a 2007 car ($13K left to pay on it). In 1999, I declared Ch. 7. My FICO is about 650 now. This week, I got a dog from my mom, so I am a new pet parent as well. I'm busy, functionally tired, but joyful because I am using my passions and my talents to their full potential - because I know where I am headed to serve humanity best.

I want to be financially free by 40 - exactly five years from now. I have a community development corporation idea that I want to apply to Echoing Green next month to get funding to live and start. Ideally, I want to live out west where my best friends are - but I plan on basing my company out of Detroit, with an international impact range as it grows. Ambitious - yes. Will it work - yes. That's not my issue.

My issue is: I work 40 hours a week at the research foundation doing literature analysis. Part of my job includes time to finish my dissertation, which is directly related to the work of the foundation. I will be done by December 2008. I know where I am going, I own books, "Why should white guys have all the fun", "Your Money or Your Life", Chopra's "The Seven Spritual Laws of Success", most of the Rich Dad & Rich Woman books and CASHFLOW 101, Steve Marriotti's book on young entrepreneurs, a book about how to have Zero Debt with Student Loans, Good to Great, Echoing Green's "Be Bold", Po Bronson, and The World is Flat - I've read "Women Who Launch". I am resourceful, and yet very unaware how to get to what I want from here.

I cannot, for the life of me, figure out a business to begin making a montly passive income. After the dissertation is done, I can propose to consult with the universities with which I used to work. But until then, I have very little time - and yet no excuses. I just don't know what to do to START. Any suggestions?

Thanks for your example, reading all of this, and your answer. I eagerly await hearing from you.

[MillionaireMommyND]

Originally Posted by allenang

Jen - thank you for taking the time to do this this week and actually be present as a support. I found your webpage through the Rich Woman website. I am finishing my PhD in higher education administration (I have a B.S. in urban planning, and a MSW - I focus on community development, and am a native Detroiter - lived in MI until just a month ago - now live in Ohio), am 35 y.o., African-American, and single. I work for a research-based foundation that studies democracy and how people can empower themselves through community-building to advance democracy. I just got this job a month ago - it is a job that will only last a year or two (policy of the position).

After 18 years of school, I have $200K in student loans facing repayment, beginning March 2009. I rent. I have a retirement plan with $7K in a porfolio (should I change it to something else to make that money work better for me?). That's it in terms of assets. My salary this year is the most it has been since 1998: $47K. I pay $800/month in rent. I have three credit cards (all under $1500 and not maxed out), and I have a 2007 car ($13K left to pay on it). In 1999, I declared Ch. 7. My FICO is about 650 now. This week, I got a dog from my mom, so I am a new pet parent as well. I'm busy, functionally tired, but joyful because I am using my passions and my talents to their full potential - because I know where I am headed to serve humanity best.

I want to be financially free by 40 - exactly five years from now. I have a community development corporation idea that I want to apply to Echoing Green next month to get funding to live and start. Ideally, I want to live out west where my best friends are - but I plan on basing my company out of Detroit, with an international impact range as it grows. Ambitious - yes. Will it work - yes. That's not my issue.

My issue is: I work 40 hours a week at the research foundation doing literature analysis. Part of my job includes time to finish my dissertation, which is directly related to the work of the foundation. I will be done by December 2008. I know where I am going, I own books, "Why should white guys have all the fun", "Your Money or Your Life", Chopra's "The Seven Spritual Laws of Success", most of the Rich Dad & Rich Woman books and CASHFLOW 101, Steve Marriotti's book on young entrepreneurs, a book about how to have Zero Debt with Student Loans, Good to Great, Echoing Green's "Be Bold", Po Bronson, and The World is Flat - I've read "Women Who Launch". I am resourceful, and yet very unaware how to get to what I want from here.

I cannot, for the life of me, figure out a business to begin making a montly passive income. After the dissertation is done, I can propose to consult with the universities with which I used to work. But until then, I have very little time - and yet no excuses. I just don't know what to do to START. Any suggestions?

Thanks for your example, reading all of this, and your answer. I eagerly await hearing from you.

Allenang, it sounds like you're ambitious, resourceful and passionate about your dreams. And you're also bringing up a lot of issues – more than I can drill down to focus upon here without knowing specifically what you're looking for. I think you'd be an excellent candidate for working with a business coach or mentor. A resourceful one can help you identify your options and get you started on the right path. You might try one of the many directories offered online such as these:

http://www.lifecoach.com/find/how_coach.htm
http://www.findyourcoach.com/?ref=wmt_011
http://www.lifecoachguide.com/specialty.aspx

...or (here comes a shameless plug)... I've recently decided to offer one-on-one financial coaching and small business consulting services by phone. I love to share what I've learned with others... and it's more fun for me when it's intense, uncensored and focused on results. I can help you evaluate the issue(s), think "outside of the box" to uncover new possibilities, identify your goals, uncover your passions and turn your passions into profit, create an action plan, and provide motivation and accountability.

Because this is a new service, I'm offering a very reasonable introductory price to the first 20 takers. Email me if you'd like more information or to schedule a free 5-minute initial consultation to see if we'd be a good fit for one another.

In the meantime, may I suggest adding Wishcraft and I Could Do Anything, If I Only Knew What It Was, by Barbara Sher to your reading list.