The Successful Snowball at the top of a Debt Hill

About three years ago we had a new upstart radio station come into town that was only on the air for about a year and a half. The afternoon show time slot was filled by the Dave Ramsey show. When I first heard Dave talk about getting out of debt by paying off all of my bills, I could have just about laughed in his face. That is easy to say for someone that makes a lot more money than me or has a lot fewer bills. I don't know about you, but I always seem to have more bills than money at the end of each month. After spending several afternoon commuting hours listening to Dave and reading his book, I realized that he had some ideas that I could really use to improve my financial situation and my life in general. On the other hand, Dave is adamant about some things that I don't agree with. I guess that falls into the category of "What works for me, may not work for you".

After listening to Dave for a while, I realized that financial independence is not so much about how much money you make, but more importantly what you do with your earnings. Dave Ramsey does have a good plan that is based on sound concepts. I feel that some of his steps are too large for a lot of people to handle, so I have refined some his steps down into more manageable steps that are more comfortable for me. Dave created what he calls the Debt Snowball. This Snowball combines the concepts of Kaisen and PDCA models (see my previous posts). You start with a plan and take baby steps to create larger and larger successes toward the twin goals of eliminating personal debt and creating financial wealth.

The first step in Dave's Snowball plan is to create an Emergency Fund of $1000. One thousand dollars can cover many of life's little emergencies without having to use a Credit Card which would only create more debt. That is sound advice, but to me a thousand dollars is a lot of money to scrounge up. Let's go back to Kaisen for a moment. How about we start with a goal of having $100 cash in our wallet. Saving five, ten, or twenty dollars a week for a few weeks will get us there. If we set our goal of $1000 dollars we might get discouraged before we gain any real traction. Having $100 in our wallet is a micro-success that is achievable for most of us. Along the way why don't we also have the goal of paying with cash for some of our smaller purchases, instead of reaching for that debt creating Credit Card? Spending cash from our wallet makes us think twice if a purchase is really something we need or something we have been buying out of habit. After all, to reach our goal of $100 or to maintain that $100 we have to be careful with our money. Just paying attention to what we spend instead of mindlessly swiping a plastic card can make a huge difference in staying within our budget. Getting by with a little less now will mean that we can have a lot later.

Once we have $100 in cash in our wallet, we can look at how we were able to save that up (Plan, Do, Check, Analyze) and use those successes to lead us towards our next goal of building up a $250 Emergency Fund, then a $500 Emergency Fund, then…I just handed you a Snowball, now run with it.

There is a better way to manage your money and get out of debt. You don't have to be just another face in the crowd. You don't have to live the way the Credit Card companies, the Government, or someone else wants you to live. You just have to decide to take back control and take that first step towards personal and financial freedom. So take those first steps with me. I'll share what has been working for me while you find out what works for you. By working together we can build happier, more secure, and more self sufficient lives for our families.

Your feedback is important to me. Let me know what you think of my blog. You can email me at larrygriffin@carolina.rr.com or drop in for a visit on Facebook. I am always happy to share ideas with others and hopefully answer some of your questions.

The Shewhart Cycle -- A roadmap for success that we create for ourselves.

It is often said that a journey of a thousand miles begins with a single step. True, but what good would a thousand steps do us if we have no idea of where we are going? I would like to introduce you to another concept that will help you greatly as you strive for financial independence and as you attempt to prepare yourselves for whatever the future holds. The Shewhart Cycle. This concept will work for anything that you are working on such as a budget, business planning, or even some of the ideas that I have given to you lately such as food storage. The Shewhart cycle goes by many names. The PDCA model (Plan, Do, Check, Analyze), the SARA model (Scanning, Analysis, Response, Assessment), are all similar models for the same basic concept. It consists of four basic steps in a closed loop that builds upon itself.

Step 1 -- PLAN: Focus on the results that you would like to achieve. Define your objectives and determine what processes you will need to deliver the results you are seeking. By focusing on the expected outcome you are also relying on completeness and accuracy of the steps that you decide to take to become a part of the improvement process. For our stated goal of creating a happier, more secure, more self sufficient life we need a plan to guide us. For our financial goal of eliminating debt and building wealth we need a plan or in this case a Budget. For creating an insurance plan so that our family can eat during a short term emergency we need to determine what foods we eat and which of those foods store well.

Step 2 -- DO: Put your plan into action. Start out with the concept of Kaizen (see my last post) and take a few cautious steps. Try sticking to your new budget. Store away a couple of extra meals in your pantry. Start putting some extra cash into your Emergency Fund (We will talk about this later). Buy an ounce or two of silver or a tenth of an ounce of gold. Start a small garden or plant a couple of containers on your back deck.

Step 3 -- CHECK: Are you able to stick with your budget? You stored some food. Have you used any of it? (Remember – Store what you eat, eat what you store). Did you have to dip into your Emergency Fund instead of using a Credit Card to get through a minor financial emergency? How does owning something of real value and real wealth (silver/gold) make you feel? How well is your garden (or container plants) growing? Every step that you take to prepare for the future should make your life better today. Where did your steps take you?

Step 4 -- ANALYZE: Analyze your results and determine what you did right and keep doing it. Look at your successes to see if you can find better or more efficient ways to reach your goals. Determine what went wrong and why it did not work. Determine where to apply changes that will include improvements. If you met one or more of your goals, create new ones or adjust your goals to a higher level. Look at where this process took you and go back to Step 1 and refine your plan.

I have a co-worker that enjoys panning for gold as a hobby. He takes a shovel full of dirt from a stream and swirls it around in a pan with some water to wash away the silt. It takes a while to work that shovel full of dirt down to a few particles of gold. Life is like that. We are given a shovel full of life at birth. That shovel full of life contains a lot of dirt and silt, but it also contains nuggets of happiness and success. It is up to us to invest the time and effort to work it out. If we don't, we just end up with a shovel full of plain old dirt.

Your feedback is important to me. Let me know what you think of my blog. You can email me at larrygriffin@carolina.rr.com or drop in for a visit on Facebook. I am always happy to share ideas with others and hopefully answer some of your questions. By working together we can build happier, more secure, and more self sufficient lives for our families.

Kaizen -- Our first building block for success.

I try to learn something new every day. During my daily adventures I often find new things that are important to me even when I am trying to find something else. Several years ago I was involved in a project with the University of North Carolina called the LEAD1 project. Leadership Effectiveness And Development, Class Number 1. About thirty supervisors from all over Mecklenburg County got together once a month for a good portion of a year to discuss leadership and supervisory skills and techniques. While a lot of those ideas presented were useful to me as a supervisor, none were more important than the Japanese concept of Kaizen which was presented on the last day that we met. That concept was so simple and yet so profound that it has stuck with me and has been the foundation of many projects in my professional and personal life.

Kaizen -- Small improvements, micro-successes, a continual search for ways to be better than we are and to make our work processes better than they are.

While such a simple statement, the concept of Kaizen has made tremendous profits for many small startup companies such as Toyota and Honda. You have heard of those, haven't you? Kaizen is one of the secrets behind the success of Japan moving from a feudal warlord system into the industrial giant it is today.

Most of you have probably seen the wrist bands and bumper stickers with W.W.J.D? Let me start another one, W. W. G. D? What Would Grandpa Do? I can walk into a hardware store today with $100 and walk out with and handful of tools and supplies. The sad reality is that my Grandpa could have walked into the same hardware store and bought those same tools and supplies for just four dollars. What happened? What went wrong? More importantly, what can we do to fix it? Yes, WE! Don't look to our government to fix this mess. They may have created this financial mess, but WE allowed them the free reins to do it. It is the responsibility of each and every one of US to fix it. We need a starting point and a plan. The starting point is here. Right here, right now. I am encouraging everyone I know to take back control of their lives and their destiny. Make positive changes in your life to make your life happier. Make positive changes in your life that will make you more successful. Make positive changes in your life that will make your family more self sufficient and less reliant flimsy government promises.

In my next post I want to put into place the next building block of financial and personal independence. We need a plan to guide us towards success. Planning is the first step, that first small improvement, the production of that first micro-success, as we begin our continual search for ways to be better than we are and to make the processes of our reach for success better than they are. Kaizen.

Your feedback is important to me. Let me know what you think of my blog. You can email me at larrygriffin@carolina.rr.com or drop in for a visit on Facebook. I am always happy to share ideas with others and hopefully answer some of your questions. By working together we can build happier, more secure, and more self sufficient lives for our families.

Taking your first steps toward financial independence.

I have talked with several investment advisers for the past three or so years. Most of them have given me the same advice that I got when I started working twenty six years ago. A couple of them have a different view on the economy and investments in general. I like to get as much information as possible on any subject that affects me and my family especially as I begin to look towards retirement. I think that most of them are giving advice to the best of their ability, but also within the constraints of making a living out of it. I’m not knocking the advice that they have given me but I now believe that they only provide partial advice at best. Over the next few blog posts I want to share some of the unusual and diverse investment strategies that I have discovered over that past three years. A couple of these investments have consistently yielded between twelve and eighteen per cent growth for me, even during the downfall of the stock market. I wish I had known twenty years ago about some of the techniques that I have learned about over the past three years.

I want to share with you some of the resources that are working for me and thousands of other informed folks. These techniques are not get-rich-quick schemes, and they do not work magically overnight, but they do work. For a lot of you who are students, or even those that have been working for a while and are struggling financially, I have some information that I will share with you in my next few blogs that will get you started towards financial independence. I know that there are a lot of advertisements out there for companies that purport to help you get out of debt, but really just want to rip you off further. I'm not going to be selling you anything and I'll even do my best to steer you away from those get-rich-quick multi-level-marketing (MLM) schemes that usually crash after you invest a lot of your hard earned money into someone else's bank account.

I will begin this series with one of the highest yielding financial investment that I have seen anywhere that almost no investment counselor will share with you. Get out of Debt. The best way to look at debt is to think of it as financial and emotional cancer. One of the most common causes of marital problems is dealing with overwhelming bills. Most investment counselors try to get you to focus on how much you can earn when you buy their products. But look at this from another point of view. Which would you rather do? Invest $1000 in stocks that MIGHT earn you 4% interest, or pay off a credit card with a $1000 balance that you are PAYING 24% interest on. Remember that for most investments the higher the yield, the higher the risk. There is ZERO risk in paying off debt. The best investment is one that will leave you with the most money in YOUR wallet, not the credit card company's wallets. The less interest you pay now, the more money you will have to spend later.

Next week I am going to share with you a couple of tools to help you eliminate debt that I have been using over the past couple of years. You don't have to buy anything or sell anything to make them work. No gimmicks, just proven strategies and techniques that I have personally tested and have proven to work for me. As a matter of fact, you will probably think "That’s so simple, why didn't I think of that?".

Your feedback is important to me. Let me know what you think of my blog. You can email me at larrygriffin@carolina.rr.com or drop in for a visit on Facebook. I am always happy to share ideas with others and hopefully answer some of your questions. By working together we can build happier, more secure, and more self sufficient lives for our families.

May Challenge – Kick Murphy out.

A lot of folks are living on tighter budgets these days. I have written a couple of times about putting away a little extra food in case times get a little tougher or if you encounter an unexpected bill that has to be paid and might cut into your normal monthly budget. You know how it is with Murphy’s Law, if things can go wrong they will. I don’t know about you, but when Murphy comes to visit, I like to get rid of him as quickly as possible. Most folks visit their local grocery store about once a week to stock up on their weekly groceries. Some live close enough that they go several times a week just to keep everything as fresh as possible. I have a real simple challenge for all of you for the month of May. Every week during May I would like for you purchase just a little extra food, enough for each member of your family to eat three meals for one day. Still not sure what to store? Here is a list of a few items that store well and my family will eat:

Breakfast: Box of just add water pancake mix and a Bottle of pancake syrup
Lunch: A couple of cans of tuna or chicken, a Jar of relish, a Jar of Mayonnaise or Miracle Whip, and a Box of crackers
Supper: Jar of Spaghetti sauce and a Box of Spaghetti or Macaroni

Remember, what works for me may not work for you. Look at my list and if you see something you don’t like, just substitute your favorite items. That is half of the "Store what you eat and Eat what you store" philosophy. If sometime in the next week or so you have a cookout and reach in the fridge to get a jar of relish or Mayo and find that there is only a spoonful left in the jar, just smile to yourself and remember that storing food does have it’s benefits when you grab your stored jar out of the pantry. If a few friends drop by at supper time and you only fixed enough or your family, how about stretching supper out with a quick Macaroni salad. A couple of cups of cooked Macaroni with a can of chicken, a little Mayonnaise, and a diced bell pepper could make what you had already planned for supper stretch twice as far. Not all of life’s emergencies are real disasters. By being ready for some of the small ones, you are also prepared for some of the larger ones. Don’t forget to add the items you took from storage to your grocery list and buy two the next time you are at the store. (Go back and re-read my copy canning post).

Start with small baby steps. Just a little extra each week. Now at the end of May you should have four or five days worth of food stored up. If you happen to have used any of the items you stored, and you use the copy canning technique of replacing each of your stored items with two others, you will probably have a full week’s supply of food storage saved up without spending a lot of extra money at any one time. Doesn’t the idea of providing a week’s extra security for your family sound easy and make you feel better?

Your feedback is important to me. Let me know what you think of my blog. You can email me at larrygriffin@carolina.rr.com or drop in for a visit on Facebook. I am always happy to share your ideas with others and hopefully answer some of your questions. By working together we can build happier, more secure, and more self sufficient lives for our families.

Shadow Catcher

For those fans that voted in my poll "What is a Shadow Catcher?", about half of you got it right!  That's right, a Shadow Catcher is a sundial.  I have enjoyed tinkering with the design and the math behind the design of of sundials for a couple of years.  There are many types of vertical, and horizontal sundials.  Some are based on tilted disks, flat plates, bowls, and some that use multiple complicated parts.   While they are all fun to work with and many of them are interesting to figure out, the traditional horizontal plate with a gnomon (the vertical pointer) is the easiest to read and understand.  I have enjoyed making prototypes of many styles of universal and ring dials, but my favorite one so far is the large sundial that I built in my back yard.  It is always accurate.  If the sun is shining is tells the exact local time.  If it is cloudy and there is no shadow, it is still accurate, it is nap time.  If it is dark outside then it is night time.  That's good enough for me.  Thanks for voting.