Hi! In my "Treasure Map" thread, we touched on a small discussion about money, managing it and paying off debt. According to the US Census Bureau, 95% of us will be dependant on government or family at age 65. And really, isn't that why most people are trying to make money online? To improve their financial status? Of course. I've worked with business owners for decades, 11 of those years online. One thing I notice is that even when a site owner starts making profit, they often find themselves still persistantly broke or breaking even. I think that an important part of growing an online business is knowing how to manage the money we make. After all, it doesn't feel very profitable when it's flying right out the window. Many of you know Cheri as a familiar face here. What you may not know is that she is also an excellent financial consultant and an authorized rep. for Ascend Financial Services. (I'm building her site as I write this) So, I've created this thread for anyone that has questions about debt, money and money management. I think an important part of achieving success online is knowing what to do with the money you're making.. or going to make. : ) Cheri has volunteered to answer questions in this thread, so ask away! : ) Linda

Hi Cheri; I'll ask the first question if you don't mind. I read a snippet of a conversation with Jim Rohn. It went like this; Shortly after I met my mentor he asked me, "Mr. Rohn, how much money have you saved and invested over the last six years?" And I said, "None." He then asked, "Who sold you on that plan?" I remember saying to my mentor, "If I had more money, I would have a better plan." He quickly responded, "I would suggest that if you had a better plan, you would have more money." You see, it's not the amount that counts; it's the plan that counts. When I work with website owners that are new to making profit online, I always recommend "paying yourself first." By that, I mean taking 10% off the top of any earnings to use towards the future, whether it's retirement savings, paying off debt, etc. But, therein is the question. If a site owner "pays themself first," the truth is that it's not going to be a lot at first. A site owner might be really excited to make their first $100 or $200... but 10% "off the top" is only $10 or $20. What's the best thing to do with that money when it's still in small increments? Put it against credit card debt? Put it in savings? Thoughts? : ) Linda

-------------------------------------------- What's the best thing to do with that money when it's still in small increments? Put it against credit card debt? Put it in savings? Thoughts? -------------------------------------------- That's a good question Linda. As small an amount as it is, it is a starting point. If you don't know learn or know what to do with the small amounts you have, how will you ever learn what to do with the large amounts you make?

"Paying yourself first" is not my strength but there are theories. When interest rates where significant enough to see your account grow due to compounding, it was fun to watch the balance. Now days, paying off bills and mortgages makes the most sense but do we do it? Probably not. If your amount isn't enough to do any of these, it might make more sense to set up an automatic savings a/c that takes the same small amount from your chequing account, or the one that you use the most - for the budget, etc. When it's large enough, pay off some credit cards. On the other hand, maybe just go an a sunny vacation.

Hi, Linda Thanks for providing this thread and asking me to help field questions. First thing I'd better do is post a disclaimer. In the US, a financial consultant is licensed by the federal government to give advice about investing as well as about how to handle money. I don't have such a license. Any expertise I've gained has been in the school of hard knocks and more recently through Ascend, which provides financial education and tools for personal financial management--not investing. So if anyone asks a question outside the realm of managing family and small business finances (which are often intertwined), I'll have to refer them to a licensed consultant. Fair enough? So. You asked: ============================================ But, therein is the question. If a site owner "pays themself first," the truth is that it's not going to be a lot at first. A site owner might be really excited to make their first $100 or $200... but 10% "off the top" is only $10 or $20. ============================================ My opinion is that the 10% that you pay yourself first should be just that. I'd put it in a savings account, or if you start with too little to open a savings account, then into a cookie jar or something to separate it from spending money. Have you ever read George Clason's The Richest Man in Babylon? The recurring theme there was that you should have a couple of coins to jingle in your pocket to show for a day's work. I think it was the next 10% that was to go toward payoff of debt. (Sorry, my copy has disappeared, loaned to a young friend who never gave it back.) I believe there was an allocation for charitable giving. The rest was to live on. Maybe Babylon didn't have taxes, lol. Honestly, there's a difference of opinion among the experts whose works I have read. Some say pay off the debt and you'll have more to save soon. Others say absolutely get an emergency fund first, then worry about the debt. A lot depends on the size of the debt, what resources you have to handle unforeseen expenses, your tolerance for risk, even your age. I do know that even a small amount of extra payment on debt now has a much bigger impact than you would think in the long run. The same is true for saving. That's called the time value of money. If it isn't working for you, it's working against you. It's also true that to learn to save you must develop the habit of saving. So if you can't decide and can't allocate a second 10% toward debt, it might be best to divide it and allocate half toward each goal. When you're talking about small amounts, the details of how you use it are less important than implementing the philosophy, even if the amount is only 10 cents. Cheri