Everything You Ever Really Needed to Know About Personal Finance on the Back of Five Business Cards

A few days ago, I had lunch with an individual who is considering hiring me to give a multi-hour seminar to a business convention on personal finance. This person knows me from the local community and is a reader of The Simple Dollar and he felt that I might be the right person to give such a presentation.

During the lunch, out of the blue, he asked me to give a five minute nutshell version of what I would present to the group. I thought for a minute, pulled a pen out of my pocket, and asked him for five business cards. In those next five minutes, I summarized everything I know about personal finance in a pocket-friendly presentation.

I saved the business cards, scanned them in, and thus, for your enjoyment, is my presentation (with some extensive helper notes so you can know what I was actually saying while drawing these cards).

1. The Most Important Thing

business card 1

In the end, this is the fundamental rule of personal finance: spend less than you earn. It’s the one point that comes up time and time again in almost every personal finance book you read or talk that you hear. Why? Because it’s true.

There are two avenues to achieving this goal: spending less and earning more. By working on either (or both) of these areas, you can increase the gap between those two numbers – and that gap is your ticket to freedom. The harder you work on either spending less or earning more, the bigger that gap will become and the quicker that train to your dreams will arrive at the station.

2. Earn More!

business card 2

So how does one earn more? Many people will argue that there is no universal way for people to earn more money, and they’re right: some people are born entrepreneurs, others function much better in an office environment. Some people are endlessly creative, others are masters at completing long lists of tasks.

Once you dig past that, though, there are some common things that anyone can do, regardless of their financial state, to earn more money.

1. Get educated.

This doesn’t mean drop out and go back to school. It merely means to keep learning new things. If something interests you, read a book about it. Take evening classes to get certification in a certain area or get a masters’ degree. No matter what you’re doing, there’s some way you can learn more and improve yourself.

2. More income streams.

Always be on the lookout for ways to have money rolling into your pocket from a lot of different places. Maybe you’re a good writer and can sell a short story or an online ebook. Maybe you’ve got a little piece of land somewhere that you can lease to a farmer or a developer. Maybe you spend your free time managing a flower bed in the park – why not put a little wooden freewill donation box out there for people to drop a coin in? Maybe you have some extra cash laying around with which you can buy a long-term treasury note that will keep issuing you a check every six months. Having more income streams merely means that losing one of them (like your job) is less devastating in your life and it also means your overall income for now will go up.

3. Start a side business.

Instead of burning a few hours in front of the telly each evening, how about investing at least part of that time into starting a side business? You can try starting a blog with a few ads on it, or maybe you’re good with woodworking and can make deck furniture. Maybe you’re good at baking bread and can take loaves to the farmer’s market, or maybe you deeply enjoy gardening and can sell vegetables. There are lots of possibilities out there for starting a business that will supplement your current income and perhaps eventually grow into your main income.

4. Move towards your passions.

Whenever the opportunity presents itself, gravitate towards the things that really excite you, because passion is what will make you successful. For me, my passion is writing, so I’ve made an effort to gravitate towards it by working on The Simple Dollar in my spare time. For others, it could be anything – maybe it’s leading a team, or perhaps it’s writing beautiful computer code. Whatever really excites you and makes you want to do more and more and more and better and better and better, that’s what you need to move towards at all times.

5. Don’t burn bridges.

You never know when a relationship you’ve forged in your past might come in handy later on, even the ones you completely don’t expect. Thus, even if you feel wronged in a situation or want “revenge” on some people – or even if you just feel an urge to spread negative gossip – resist it. As you get older, you’ll find yourself time and time again bumping into people that you forged relationships with earlier on – if you burned those bridges, you’ll find that eventually you’ll have burnt that very bridge that you need to cross to get ahead. My advice? Never spread a negative word about anyone, because it never helps.

6. Keep in touch!

When you do build a bridge with someone, don’t let it get old and worn out – spend the time to keep in touch with that person. Shoot them an email or a phone call every once in a while just to see what they’re up to. When it’s clear they need help and you can easily provide it, always provide it. I found the book Never Eat Alone to be particularly powerful in this regard. I’m rather introverted, and it’s often a challenge for me to initiate and then keep communication going with someone, and this book provided tons of tips on how (and why) to keep contact with people.

3. Live Frugal!

business card 3

For a lot of people, frugality is a nine letter word for cheap. They think of people doing stuff like buying cartloads of generic products, using forty coupons in the checkout aisle, wearing patched clothing, driving a rusted-out old vehicle, and other such things that it’s easy to look down your nose at.

Here’s a secret, something that I’ve witnessed several times in my own life and read about many more: those frugal people that you look down your nose at often have a mountain of cash in the bank (not always, of course, but more often than you think). They’re not drowning in a mortgage, they’re not making payments on a five figure credit card debt. They’re not working to death on the weekends or drowning an ulcer in Pepto-Bismol. They’re living their life according to their own rules.

The best part is that we can all apply some of those same rules in our own life. Here’s what you can do to start reducing that spending.

1. Maximize every dollar.

Every time you spend money, you make a decision. You decide that whatever you’re giving that dollar for is worth it, and thus you make the exchange. The real key to spending less is to raise that definition of what a dollar is worth. You know those times when you buy something, but you realize you don’t really need it and you’re also not convinced that it’s a very good deal? Make the choice to not buy it, or buy a cheap version and see how much you actually use it. Don’t be afraid to shop around a bit.

Food is a great example of this. Quite often, people will eat out at places like Applebee’s and drop $20 or $30 on a meal that they could have made at home for $3. “But it saves time and is convenient,” you say? Just for fun, try making an equivalent meal at home sometime. You might be surprised to find out how easy it is and how much you’ll save.

2. Habits of all kinds are dangerous!

Most people have some sort of routine in their day where they buy a morning latte or a bagel, or they drink six cans of soda, or they eat out at the same place each day for lunch. What these routines add up to is a lot of money. Spending $5 every day in a workweek adds up to $1,300 over a year – that’s a mortgage payment for a lot of people. Spend some time looking at the stuff you do every day, especially the ones that require you to spend money, and ask yourself if they’re really necessary or could be replaced.

3. The ten second rule

Every time you go to make any purchase, even when you pay a bill, stop for ten seconds and ask yourself if this is really something you want to spend your money on. Do you really need this item? Do you really need to be paying $14.95 a month for unlimited text messages when you use maybe ten? Could you reduce that electricity bill by putting in a lot of CFLs? This one simple technique will often point you in the direction of spending less money.

4. Don’t make yourself miserable!

Most of the time, when you cut a bit of spending from your life, you’ll find that you never miss it. However, there are times when you find yourself really regretting it. If that’s the case, then it’s probably a worthwhile expense for you. Saving money doesn’t have to equate to misery, it just means that you cut down on the unnecessary.

5. … but don’t forget the big picture.

That, of course, doesn’t mean that you should justify every purchase with a basic “I want it and I have money in my account.” That shouldn’t ever be enough to motivate a purchase. I find that using a visual reminder in my wallet of what I’m financially working towards does a great job of keeping my mind on the big picture and helping me filter out what’s really needed and what’s just a fleeting desire.

4. Manage money!

business card 4

Whenever you increase your income or decrease your spending, you’ll find yourself with more cash at the end of the month. That cash is your ticket to financial freedom, and the more you can get each month, the better off you are. The trick, though, is to not spend it, but to do things that will build a stable future for you. Here’s the game plan.

1. Pay off all high interest debt, such as credit cards.

Anything with an interest rate over 9% needs to go as soon as possible. Use the extra money to make double or triple payments on these debts, focusing first on the one with the highest interest rate. When that one’s gone, keep going with each successively lower interest rate debt. This is akin to Dave Ramsey’s popular “debt snowball” technique.

2. Build an emergency fund.

An emergency fund is an amount of money you keep in a savings account that’s intended to be used in the event of a major crisis, such as a job loss, a medical emergency, major car damage, and so on. I usually suggest to people that they measure their emergency fund in terms of months’ worth of living expenses – you should have a month and a half worth of living expenses for each person you claim as a dependent. So, for me in a house with two children and my wife, I have a six month emergency fund. Need help saving or not sure which account to open that will maximize your savings? Research the Best Savings Account options we featured.

3. Max out retirement.

By this, I mean you should go to one of those retirement meetings at work, ask exactly how much you should be putting away to ensure that your living expenses are well-covered in retirement, and put that much away. This varies a lot depending on how much you have in right now, how much your employer matches, and so on, so you should talk to your retirement planner at work about the specifics.

4. college savings?

College savings are next. If you have kids, set up a 529 college savings plan for them and start automatically putting a certain amount into this account each month. The plan Iuse for my own children is College Savings Iowa, which is managed by Vanguard – I currently put in $100 a month for each child.

5. Pay off all debts.

If all of these are covered and you still have cash left over (which you will, given some time), the next step is to pay off all of your debts. Get rid of your car loans, your student loans, and your mortgage. This is actually the step I’m focusing on right now, as I have already taken care of steps one through four. For help finding the right card to transition your debt and keep interest rates low, check out the Best Balance Transfers Credit Cards page.

6. Invest!

You might also want to start investing at this point. My recommendation is to buy low-cost broad-based index funds because they don’t have many fees and grow very nicely over long periods of time. I personally invest with Vanguard directly through vanguard.com.

5. Control your own destiny!

business card 5

Most people see the goal of all of this as being rich. That’s why you see so many books about millionaires on bookstore shelves – being a millionaire is something many of us aspire to, right?

Here’s the secret: it’s not about being rich. Having a big net worth is just an indicator of what this whole process is really about.

It’s all about freedom.

Freedom from debt. Freedom from supervisors telling us what to do. Freedom to spend the time to do things right. Freedom to try out new things and follow our interests. Freedom to sleep until eleven one day, then stay up until two in the morning working on what we’re passionate about.

That’s what most people really want – I know that’s certainly what I want. Having a big bank account just means that I’m not beholden to others. I can follow my passions and dreams wherever they take me. If my job is not satisfying to me, I’m no longer tied to that paycheck – I can just get up and walk away. I can do whatever makes me happy and avoid most of what makes me sad, without regrets or worries.

It’s a lot of hard work to climb that mountain, but the air up there is the sweetest thing that there is.

Want to know more?

If you liked the information on these cards, you should really dig into some of the better personal finance books to learn more. I’ve read a pile of these and made a list of the best ones. You should also take the time to dig into The Simple Dollar as well as some of the other excellent personal finance and personal development blogs out there – they do a far better job of humanizing and explaining money and personal development than many of the “big” corporate sites.

Most importantly, remember that you can do this. Two years ago, I was almost bankrupt and in deep despair because I didn’t believe this stuff, either. It took a lot of learning and a lot of honest soul-searching, but I began to realize what was really important and I turned the ship around. Trust me: you can do it, too.

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  1. Chef says:

    Did he hire you on the spot? I loved this!

  2. Jacob says:

    I think this is without a doubt your best work yet. Excellently done! As long to a must-read as an article can be…

  3. sab says:

    lol…great illustrations! The amazing thing is that it really is that simple. Now, keep in mind that simple is NOT the same thing as easy…

    I love it how you say that its not about being rich. That makes me feel better about not needing to own the latest model luxury car, and about not wanting to own a mega-huge luxury home although thats what we’re “supposed to” work for. I can sigh from relief knowing that, and it doesn’t matter what someone else wants for me. It’s amazing, I mentioned to my sister the other day that when my lease runs out I’m going to buy a used/pre-owned car…she thought I’d lost my mind!!

    I hope you get hired…you’d do a great job!

  4. T'pol says:

    Great post! I hope you got hired for the task right away. I have been following your blog for a long time now and find it very inspiring. I have never been in debt but, I was not saving as much as I could either. So, all that you discuss regarding lowering monthly bills and getting rid of subscriptions I do not need helped quite a lot and now I am obsessed with being frugal. Thanks a lot!

  5. KellyB says:

    Wow, that post was awesome! Everything one needs to know, easy to understand and well thought out! I’ve recently found your blog and so glad I did. I’ve already worked my way through the archives! I truly enjoy your posts and writing style. You are definitely doing the right thing by pursuing your passion for writing. Best of luck with this blog and the new one.

  6. Heather says:

    Let me know if you’d like some help with the presentation; my side business is preparing presentations. I can give you some pointers or assistance in exchange for some advice on setting up a my own blog…

  7. T'pol says:

    I put a link to this article at my blog. I hope it is OK. If not, please let me know and I will take it out. The blog is in my native language (Turkish) but most of my readers speak English. Below is the link if you would like to see it. I wrote the entry in both languages.
    http://begenmezsenokuma.blogspot.com/2007/11/tutumluluk-zerine-sylenebileceklerin.html

  8. Lupin White says:

    Thank you for sharing this. Truly inspirational…but without the usual rhetorical, pretentious (for want of a better word or acronym) BS.

  9. debtdieter says:

    Fantastic post Trent, I love how everything you really need to know fits on 5 business cards.

  10. Marta says:

    Awesome – love the visuals! I’d love to see more photos and snapshots like this on the blog.

    Also, looks like you killed two birds with one stone – everything you wrote could be used in your presentation, just create a couple slides in PP and you’re set! I hope you got the job!!

  11. Looby says:

    This is one of the best summaries of personal finance I’ve read. Such simple sensible advice that everyone should take a moment to consider. Great visuals, I loved this post.

  12. LC says:

    “that gap is your ticket to freedom”

    I don’t think it could be said any better. It’s amazing the different ways people view that “excess money” they have after covering basic expenses.

    This is one of my favorite posts. Even though it’s a lot of the same stuff we’ve all been reading, it shows how simple financial freedom really is and that you have internalized what you preach, since you were able to pull together a presentation on such short notice.

  13. Rick says:

    First of all, a minor critique. Point 3 should be “Live frugally”, not “Live frugal.” I’m sure you know, and I know these drawings were done on the spot, but I just hope this minor grammatical error doesn’t make it into the final presentation.

    Second, a general comment. These points are all stated time and time again in the personal finance world, and it’s amazing how simple they are. And yet they’re almost a guaranteed way to get rich. There are so many get-rich-quick scams and earn-thousands-at-home scams and such, and so many ways that people think they can get rich. Occasionally they do. Most of the time the fail miserably. But by following these five easy steps, anyone can become rich. And yet I’m surprised at the number of people that simply don’t live by these principles.

  14. Mark says:

    This is great. I am going to print this out and show it to my kids when they are old enough!!! Fantastic.

  15. Minimum Wage says:

    Wow, this is really cool. A great opportunity and a great response.

    Now, if you were to address a group of college graduates with student loan debt and menial minimum wage jobs, how would you do it differently? (The “get educated” bit would probably not resonate well with this audience.)

    I’m happy to add that I have just had the first enjoyable meal – including the first meat – in more than a month. I had been living on mac-and-cheese, rice, beans, and pasta. Important parts of a complete diet, to be sure, but kinda monotonous on their own.

  16. NiJaal says:

    That is awesome. I am going to print them out and pin them up somewhere as a reminder. Thanks!

  17. Wow Trent, great post.

    I try to follow most of your suggestions, but it is really great to see that all you need to know about personal finance fits on five business cards. I think people know this already or have a general idea, but have not figured out to apply it to their own life.

    good luck with the presentation.

  18. Scott says:

    Great post! I would go to this seminar.

  19. Tarits says:

    This is great Trent! You have a gift for hitting the literary nail on the head. =)

    I’ll link this post to my “new” website; finding your blog is one of the best things that happened to me this year. I was really inspired to manage my finances and to blog with purpose.

    Keep it up!

  20. Minimum Wage says:

    Another PF blog with a “millionaire calculator” gave me an idea on how to get your child off to a great financial start.

    With this calculator, you enter a dollar amount for monthly investment. The calculator defayults to an annual yield of 8 percent, which you can change.

    Using 8 percent yield, the calculator says that a monthly investment of $30 (i.e. $1 per day) will grow to $1 million in 814 months (about 68 years).

    This blog also suggests giving your child an allowance, requiring chores, and allowing your child to earn money by doing additional work.

    So my idea is for a parent to invest $30 per month from the time their child is born, until they child can independently earn money. (There will be a transition period where the child will be able to earn not quite $30; the parent should contribute enough to maintain the monthly $30 investment.)

    I think this would get kids off to a great financial start with good habits and reasonable attainable and sustainable goals.

  21. Janette says:

    This is a great post Trent! You couldn’t have made it any simpler!

  22. Wax says:

    best post ever. nice job – more drawings in the future, please. No more blurry jpegs now that we know you can draw.

  23. 10KPortfolio says:

    This post was perfect. You nailed everything. Every card made perfect sense.

  24. Kyle says:

    *Slow clap growing gradually*

    Great post.

  25. Greg says:

    Wow, excellent summary!

  26. It really boils down to two things. Passion and common sense. Find something you love doing (passion) and eventually you will find a way to make money doing it, stop spending more than you make and have an investment plan (common sense).

    BTW, I loved the drawings!

    Best Wishes,
    D4L

  27. david says:

    Excellent summary — and just what I needed to be reminded of!

  28. Sean says:

    I’ve always been a visual learner, love the pictures!

  29. Thanks for the great post, Trent! You summed it up very nicely. It really is that easy. All it takes is just takes a little discipline.

  30. Luke says:

    Did you ever see the movie “Dead Poets Society”?
    http://www.imdb.com/title/tt0097165/)

    There’s a scene where the teacher (Poet John Keating, played by Robin Williams) gets a nerdy non-poetic type to make up poetry off the cuff, by spinning him around and making him say words. In the midst of his confusion the student gets quite profound (well of course – it’s a movie).

    This post reminded me of that – brilliance that emerges under pressure. And, like poetry, it’s direct, ‘real’ and meaningful in very few words.

    Great job!

    As a side note, I’ve been thinking about this process lately: that constraints lead to ‘better’ creativity (as opposed to more). For instance, my journal-writing can be page after page of whining, self obsessive drivel. Yet if I constrain myself to writing ONLY in Haiku structure, what comes out can be very moving, honest, direct. Try it sometime! I’m mulling this idea for an expanded blog post some day (have to get a blog first :).

  31. Chris says:

    Fun! Thanks so much for the wonderful post.

    It’s full of absolutely valuable information, but it’s just… fun! That picture of you standing on your debt is inspiring.

  32. Shevy says:

    Loved it!

  33. lorax says:

    Great illustrations! Great advice too.

    If you write a PF book, I hope you illustrate it yourself.

  34. Minimum Wage says:

    My strategy is very simple:

    1) Pay rent
    2) Pay health insurance
    3) Pay student loans
    4) Pay prescriptions as needed
    5) Keep utilities (incl $10 dialup connection)
    turned on as necessary
    6) Stock up on cheap staples (mac/cheese, PB&J,
    rice, beans, pasta) as remaining funds permit.

    Money gone, that’s it, very simple.

  35. Pamela says:

    Excellent post! I love the “five business cards” presentation.

  36. Fuji says:

    Trent you have real talent for conveying information clearly and concisely, well done!

    Btw, you might enjoy reading “Recuse from Domestic Perfection”, by Dan Ho. It’s really light reading, but it is a good reminder for those caught up on am endless acquisition cycle.

    You don’t know to post this comment, just wanted to let you know you are doing an excellent job!

  37. Fathersez says:

    This post is truly outstanding.

    THis post is probably going to be used by many, many, pf blogs and pf advisors ( I definitely shall be), as a “reference text”.

    Thank you. You have clearly demonstrated that pf is a passion with you.

  38. Mandy says:

    That was one of the great ones you wanted to write this month! :)

  39. Bones says:

    As for T’pol, I’d really like to translate this article to italian and publish it on my blog.

    I’ll start right off, but I’ll wait for your permission to publish it.

    Thanks for sharing (very timely too, as I am going to freelance for a while).

  40. kristen says:

    I’ve been reading for a year without commenting but that post was so great I had to de-lurk. Thank you!

  41. BigRed says:

    Trent–this simple information is spot on! I am going to print it out and give it to my 14 year old (perhaps the least acquisition-hungry kid on the planet–she actually likes shopping at the Goodwill thrift shop, and we giggle idiotically on the way home over our gently-used, perfectly serviceable finds).

    I wanted to mention a very cool stocking-stuffer for environmentally-minded parents and kids. Wrap-N-Mat (www.wrap-n-mat.com) makes a wonderful product that is hand or machine washable (it’s flat, so no worries about not getting in the corners), and completely reusable. THe Prints are really cute and the wrap acts as a placemat too.

  42. H-Bomb says:

    I totally agree with Tarits finding your blog is also one of the best things that happened to me this year. This is my favorite post yet!

  43. Lynn says:

    Along with everyone else I wanted to say that was a great post! I just found your blog last month and have come back every morning to see what you have in store for us next. I just started down my own path of financial responsiblity and accountability and enjoy reading your inspiring posts! Keep it up!

  44. Peter says:

    Good article. This can be spun into a article for Money or Kiplinger’s magazines. You should do that.

  45. Heidi says:

    Excellent post! Count this is your “ten good articles” twice.

    I would hire you in a heartbeat. I can’t believe you post this stuff for free online – I hope you find a publisher for your book.

  46. Ro says:

    Very nice!

  47. Debbie M says:

    Excellent! Sounds exciting and fun! Congratulations!

    I do have a few notes for you, though:

    I would make “Get educated” even broader: Acquire new job skills. It’s not just about knowledge.

    I would also expand “Keep in touch” to include widening your social circle. Joining professional organizations and volunteering for high-profile duties could be included here.

    I would change “Live frugal” to “Be frugal” (or “Live frugally” as Rick suggested) to make it grammatically correct.

    I would change “Habits of all kinds are dangerous” to something more like “Analyze your habits” or “Inspect your habits.” I have the habit of signaling before I change lanes (even if I don’t see any cars). This is good because then any cars I don’t see know what I’m doing, not to mention pedestrians and bicyclists. Most habits are actually good.

    I would change “Max out retirement” to something like “Invest for retirement” or “Prioritize retirement.” Maxing implies maxing out all retirement programs, which only rich people can do. (Oops, I meant upper-middle class, because no one thinks they’re rich.) (Also mention that people who don’t plan to retire or don’t plan to retire young sometimes do, due to getting laid off or getting an injury or illness.)

  48. Rob in Madrid says:

    I did something this week I’ve never done before. Eaten rather thrown out the food I had in my fridge. I even managed to eat up two bags of potatoes I had leftover from a while ago. Really thought I’d end up with one of them in the garbage. I’ve been really pushing myself (and the wife) to eat up what we’ve got before buying more. It’s amazing the recipes you can come up with when pushed.

    MW google Hillbilly Housewife’s $45 Emergency Menu for 4 to 6 prices maybe a bit out of date but even on a MW you should be able to afford it.

  49. Rob in Madrid says:

    “If you receive WIC, Food Stamps or have food from a local food bank, you’ll be able to do much better than this menu plan. It is based on bare minimums.”

    think she’s talking up your alley MW.

    Day one breakfast Pancakes

    think she’s talking up my alley :)

    PS still waiting for the blog.

  50. Rob in Madrid says:

    thought

    call the first one

    MIND THE GAP

  51. Dan says:

    This is probably your best post yet!

    And by that I mean the 5 cards alone.

  52. LC says:

    mind the gap!

    that’s perfect :)

    although some people may not get the reference

  53. haha, those are awesome. I’ll have to use one of them when I order my next batch of business cards.

  54. BrandonA says:

    This is great, so simplely put with great explinations. I am going to send some of my readers here to get some knowledge. Thanks

  55. st says:

    Terrific post. I really love this 5-biz-cards concept. I want to see it grow, that’d be fun. http://www.5bizcards.com isn’t taken yet. That’d be a cool site. All kinds of different topics (advice, books, movies, events, etc.) boiled down to 5 business card-back illustrations with text. I wish the movie Titanic could’ve been done this way. Would saved me the 3 hours of watching it. :-) heh

  56. adso says:

    Very good post. This is precisely what it’s about.

    I find that I don’t need very many material things for happiness. I certainly don’t need to keep up with the Jones’s. There are a few things I spend money on, but I don’t spend all that much money. I have started to see the effect of some of the things you talk about, like spending less to widen the gap. That works of course, it’s not enough by itself to make a real big difference.

    Now I’m very much looking into the passion thing and I hope my passion will show me the way to a new future. I don’t need toys [not many at least - and the ones I like aren't that expensive] I do need freedom and I’m working towards it.

  57. Dave says:

    Re: card #5

    Wealth = Freedom

  58. Ginger Marks says:

    As a retired Financial Advisor I have but one thing to say, “AMEN!”

    Ginger

  59. Vamsi says:

    Thats a great article. Kinda gist of most of the books around. Great work.

  60. thats just brilliant.

    Have you thought of putting this together in a book format?

    If you make a book thats like a children’s book with 4×6 pages, it’ll probably sell as a stocking stuffer during christmas.

  61. Greg says:

    On the 10 second rule, I used to ask myself “How many hours do I have to work to buy this?” It worked for me.

  62. Chris Rick says:

    I have had battles with my wife over many years. We are doing much of this, but a few crucial things are missing.

    It says it so well. I’ll let you know if this manages to get the message home.

    Brilliant.

    Chris Rick

  63. Rajiv says:

    Very inspiring post .. liked it .. !!

    I was in constant state of flux whether to become rich by sloughing day n night or to live free by managing personal finance intelligently. You have lucidly explained all the essentials of personal finance in few definite points. Your info has helped people like us to articulate our financial goals n plans. Now i can sensibly manage my personal finance and live life which i want.

    Thanks.
    Rajiv Shah

  64. Art says:

    Great list, but you left off one very important thing that is implicit in your advice: track what you earn and spend.

    Whether it’s via Quicken, a spreadsheet, or just a properly balanced checkbook, it is difficult to do any of what you suggest if you don’t have a way of measuring your in- and out-flows accurately.

  65. catfood says:

    Responding to Rob in Madrid–yes, working with the food in the fridge can be quite inspirational.

    I joined a community-supported agriculture co-op this spring. Every week or two, I picked up a couple of big boxes of vegetables and sometimes some fruit and herbs, for US$20. It was my share of whatever the farm happened to have ready for harvesting at the time, in whatever quantity, but always turned out to be more than I could expect to get in a supermarket at that price.

    Time after time, there were vegetables I didn’t recognize, or things I wouldn’t ordinarily have bought on my own. So again and again, I hit Google for some ideas of what to make with the stuff I got. Time after time after time, I discovered new recipes that thrilled my vegetarian girlfriend. She keeps asking me to make that bok choy recipe and is eager to try the roasted starburst squash again when it’s in season.

    Then I found myself stuck with 2.5kg of sweet potatoes (yams) that NOBODY I know likes. It was coming up on Thanksgiving holiday in the U.S., and presto–sweet potato pie for my relatives!

    Working with what you have, foodwise, can be frugal fun.

  66. Peachy says:

    Very nice!
    My favorite card is you standing on your mountain of debt. I think the class will love your presentation. It’s so concise and easy.
    Now..we all just have to follow the steps and we’re on our way to standing on top of our own mountains. Again, this is wonderful.

  67. I have been following advice like this for about the last 5-8 years and it is working for me especially the advice to pursue you passion.

    My passion is programming and I was frustrated with the complicated software out there for managing your money so I wrote “My Ca$hflow for Windows” to help me and my children manage our finances and its available for free at:

    http://wesleysteiner.com/mycashflow/main.html

    check it out

  68. John Smith says:

    This all is actually self evident and somehow smells like part of somebody else’s plan to make more money.

  69. berg125 says:

    The simpler the better.

  70. kevin says:

    don’t forget taxes as well…. a dollar spent requires earning about 1.40 after federal and state sales and income taxes

  71. Penny says:

    Hey teaching is great, write your book and then teach on it. Suze Orman does it. Why can’t you. Then you can travel with your wife and kids in the summer and have a tax write off to boot :)

    I’m glad someone doesn’t check my grammer I would be in trouble. :) Personally I would like to read a book that touches on personal finance, but also organization, and addiction, and habits that hold you back. I like how you compare $ to Mountain Dew for instance. People don’t think this way, they want they get. I find financial books are so similar that I don’t read them anymore. Also health is the most important so why can’t we have it all. Like a living vs. struggling. It’s all in there. Unfortunately most people are driven, lots of them can’t even read directions and follow thru much less have a better idea. You are in the top 1%.

  72. Penny says:

    I meant most people aren’t driven. Some are discouraged and it’s harder for them, that’s why it’s so important to find a group of people that push you to do better. I mean push as in inspire.

  73. Jsong says:

    this is a great daily reminder on how to get rich slowly. thanks!!!

  74. Dave M says:

    Awesome post! I just linked back to this from my blog. Thanks!

  75. Yako says:

    Inspiring. For all the rest I use MasterCard!
    Thanks for this excellent post.

  76. DannyBly says:

    Great thought provoking article! And not difficult to understand or implement. Bookmarked : )

  77. Lemons says:

    Why is that one principle of spending less than you earn so hard for people to get? Thanks for stating it in such a clear and compelling way. I have heard everyone from Ross Perot to Sister Mary Josepha (my headmistress when I was a little girl) try to convey this – it really is one of the most important maxims for a happy life. Readers may like to see how Charles Dickens put it: “Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.” Charles Dickens

  78. Brian says:

    Very good article – my wife and I have been living by many of these, particularly the one on spending less than you earn, which was brought home to us recently as I just lost my job and we realized that we can actually live off her income without to much trouble for the interim. I’d join catfood in recommending the Community Supported Agriculture idea if you’re lucky enough to live in an area where they exist – we’ve started in the last couple of months, and we’re eating more healthily and for less money than before as a result. Here it’s $86 a month for their medium sized box of veggies which gives us plenty even sharing with one of our housemates.

  79. Excellent article! Great summary of everything you need to know to do well financially! This is the kind of thing to print out and stick to your refigerator door to remind you every day of the basics!

  80. Dough Roller says:

    Trent, that’s impressive to boil down just about everything one needs to know about personal finance to just five business cards.

  81. Nate says:

    Great post! I love this kind of stuff. I just wanted to point out that Dave Ramsey’s “Debt Snowball” Does not advise starting with the highest interest CC. Instead is strongly urges you to start with the Card with the lowest balance, regardless of the interest. Once that is paid off, you apply the minimum payment that was going on the smallest card, to the next highest.(that’s the snowball part) This process is continued until all cards are paid off.

  82. MoneyMingle says:

    incredible website…just found it, share the same enthusiasm as your previous comments! (linking to you with pleasure!)

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  84. Jerry says:

    Commenter #3 said that some folks think we are “supposed” to work for the newest and shiniest stuff. Says who? The corporations that sell shiny garbage and make money off of it. Our poor friends who have swallowed the ads, thinking happiness can only be found in the next wrapper. My wife and I decided not to watch television. We are not wasting money on cable service, our son does not see the “buy toys” ads, we don’t get pestered, and we are all much happier. There is no down-side, as we have more time interacting together and having fun. Some neighbors think we are strange for not knowing about media garbage like “reality” shows, but we are living our own reality instead of wasting our lives passively watching someone else’s scripted pseudo-life. Some days I just do not understand my own culture.

  85. Excellent article. One point you made that I can totally agree with is ‘More Income Streams’.

    I completely turned my life around a few years ago when I started creating websites. Each website is effectively a new income stream so the more websites you build, the more money you make.

  86. Mayur says:

    Very good article. Summarises lots of PF info very concisely and in a useful post.

    I especially like the bit about freedom – I always thought that being rich was important, but when I thought about this post, the idea that a handle on my finances would bring freedom, simply felt right!

  87. Jason says:

    This is just simple and great advice. Wow! All we have to do is spend less than we earn and we will not be the biggest nation of debtors in the world!

  88. chew says:

    bravo!! short and concise guide to “freedom”.

  89. Kate says:

    This is just inspiring! As another reader said, I want to print it out and hang it around my house. And the houses of all my friends, though that might not be received as well! You have one of the best sites available and I appreciate all your thoughts.

  90. Nadine says:

    It’s all about freedom! You sure got that right! Love your blog and this posting was right on the money!

  91. Matt says:

    I know I’m Johnny come late on this, but this post is really, really good. Personal Finance is not as difficult as we often make it out to be. It is just a matter of tuning out propaganda, which makes us do what we know makes no sense.

    People also need to more often focus on abundance (increasing income) instead of always focusing on LACK! So, I have to give kudos for the section on “Earning More”.

  92. ReddH says:

    This is a fantastic article. I love it! I think these cards should be made into a poster or something.
    Thanks Trent!

  93. Heather Paige says:

    I really enjoyed this and will be rereading it as a reminder!

  94. This post was awesome! Everything one needs to know, easy to understand and well thought out! I’ve recently found your blog and so glad I did. I’ve already worked my way through the archives! I truly enjoy your posts and writing style.

  95. Ran says:

    Precise steps are given for anyone to manage their finance effectively and especially with credit cards. I would like to also see the information on credit management services (Debt and credit consolidation), as part of this article, which many people would love to know at this time of credit crunch. Keep up the good work!

  96. Chris @ BuildMyBudget says:

    These five cards would have been great when I was a financial advisor. A very simple and effective way to get the point across. Nice!

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  98. Nikki says:

    Hi! I’ve been reading through your blog archives for a week now, and I love it!

    I finally had to comment because the drawing on the last card (with the mountain) was just absolutely hysterical to me, and I literally laughed out loud.

    Thanks for the great advice and serious motivation – savings/emergency funds/retirement/etc seem achievable to me now.

  99. Keith Patterson says:

    The articles were quite interesting and informative , there is as much literature
    in this worksheet as there was in the “logic”
    study guides.

    Thanks for helping me think a little bit wiser
    and clearer.

  100. Debt Consolidation Regina says:

    This is well thought out article! Very useful everyday tips and reminders that help in managing your money efficiently. A good way to remember these tips would be to print this guide and post it somewhere visible as a daily reminder.

  101. Great stuff Trent… Glad I found this gem!

  102. Awesome post. One of the best yet. It’s like a picture book for personal finance.

  103. Matt Jabs says:

    This is one of the most beautiful alliterations of financial freedom that I have ever read. Thanks for this…

    “It’s all about freedom. Freedom from debt. Freedom from supervisors telling us what to do. Freedom to spend the time to do things right. Freedom to try out new things and follow our interests. Freedom to sleep until eleven one day, then stay up until two in the morning working on what we’re passionate about.

    That’s what most people really want – I know that’s certainly what I want. Having a big bank account just means that I’m not beholden to others. I can follow my passions and dreams wherever they take me. If my job is not satisfying to me, I’m no longer tied to that paycheck – I can just get up and walk away. I can do whatever makes me happy and avoid most of what makes me sad, without regrets or worries.

    It’s a lot of hard work to climb that mountain, but the air up there is the sweetest thing that there is.”

  104. Roberta says:

    AMAZING post. Love it. I was just sitting here feeling a little sorry for myself, staring into a weekend of frugality: projects, chores, self-improvement, & organizational tweaks around the house and thinking: why is all of this taking so long? This helps. Love the drawings & the messages on the cards.

  105. Ashton says:

    I almost have this freedom. Just one more year, and I’ll be better off then this year! I’m fortunate to have a job where I can come in late, leave early and still receive the pay check. Very soon the work will get better. But a very nice post.

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