Here are my Financial Rules
Everyone in this world needs to manage money in some capacity. Something I’ve learned is that the majority of people have no clue about how to manage their money.
Everyone (including myself) needs coaches to learn how to manage money and needs to continuously be growing and training.
My kids have Financial Rules on their walls.
Yes, you read that right, my kids are under 5 years old and they will be taught about how to use money the correct way from a very young age.
Parents are scared to teach their kids about money because they don’t know how to use it themselves or they are embarrassed of their financial situations.
Someone or some place taught you how to use money and you will teach others how to use it.
Places I don’t want teaching you or my girls about money include:
The Bank, The Insurance Company, The Government, Broke Friends, Etc.
The reason I feel so strongly about teaching you and my girls about money is because I see over 50% of the people I meet cry at some point when it comes to money. I see families torn apart, marriages ended, and dreams crushed.
It doesn’t have to be that way!! You can have true financial freedom!
Love People and Use Money
Too many people have this backwards. You’re not supposed to love money and use people. Remember, money is just a tool to be used, just like a brick. They both can be used for good or bad. You can take the brick and build a house or throw it through a window.
I’ve experienced being used first hand. I’ve also seen it happen to others where they have been wronged financially by people and companies. I will teach you how to protect yourself. If you have been wronged then forgive and move on. Don’t continue to be a victim. You can become victorious despite them.
Q: Is money the root of all Evil?
This is commonly misquoted and the real verse is ” For the love of money is the root of all evil” 1 Tim 6:10
Debt is never an option
If you have no debt currently, DON’T start.
If you’ve already racked up some debt, STOP adding more. You cannot borrow your way out of debt.
” You can’t drown in your sweat, but you can in your debt.” James Phillips
My wife and I call debt the “Dream Killer”.
I see so many tears in my office and the number one reason is debt. It kills me to see grown adults break down. There is a way out and in this blog I will write articles to help you get out of debt and get your dreams back.
Q: Can I have any debt?
The only debt I’m okay with is a Mortgage but there are rules. You want your home to be a blessing and not a burden.
Investigate ! (Trust but Verify)
Okay, this is a big one for me because too many people are too trusting because they don’t know any better. They don’t teach this stuff in school. Well, I teach anyone that will listen. We research everything on the internet these days but we don’t research anything about finances or who we do business with. What? That’s crazy!
Run and Fail Forward (Take calculated risks)
Run forward. You can’t change yesterday. There is no reverse in this life. It happened, get over it and go forward. That also means you need to be cash flow positive with your money every month. If your cash flow is ever negative then you’re going the wrong way. Too many months of going financially backwards leads to destruction and death of your dreams. This means you have to know how much money you have coming in and going out every month. It sounds like I’m talking about a budget doesn’t it? Well, I am, and no it’s not a bad word. It’s crazy that less than 5% of the people I meet have some type of budget. It won’t kill you to do a budget and it doesn’t take that much time. I’ll even give you a budget template that adds it up for you to see if you’re positive or negative.
Here are some tips to run forward:
Always Eliminate Emotions – When dealing with finances, this is a lesson you want to learn sooner than later. Math is constant and the answers don’t change so there is no need for your emotions. Eliminate fear and greed from all your financial decisions and make the logical decisions.
Always live below your means – This means don’t spend money you don’t have. Make sure you have a surplus every month to put into savings or investments.
Always negotiate – If you don’t know how to negotiate then you need to learn or bring someone with you on all your large purchases.
Always set rules – For every purchase that you make you need to categorize it BEFORE you purchase it as a Need or a Want. Anytime you make a big purchase, you need to have a cooling off period so you don’t make spontaneous purchases that you will regret.
(No joke. It took me 3 months to buy a car once.)
Always continue to learn – If you’re not growing then you’re dying. You need to stay up on what is changing in the world of money. You can do this with the help of a good advisor.
It says on my daughter’s walls to “never give up and dare to do what others are scared to do”. As my girls get older I will ask them what they failed at today. Why would I ever want my daughter to experience failure? Because if you don’t fail from time to time then that means you are not trying anything hard and you will one day die with those regrets. Life is going to blow up like a bomb some days and you need to learn to Fail Forward. When I say take risks I mean take calculated risks with good probabilities. Not some off the wall idea.
“I never thought I would be an entrepreneur but life blew up one day and I took a calculated risk after making lots of sacrifices.” James Phillips
Stay Motivated and Celebrate Success
One of the hardest things to do with managing money is to stay motivated. I’m just like you. I get up some days and just want to throw in the towel. (And I’m a National Champion and All-American). That is why you have to find ways to motivate yourself especially during the hard times.
One way I stay motivated in my day to day job is having my “welfare glasses” on the wall behind my desk. The days where I want to give up, I turn around and tell myself I’m not going backwards and I have people to reach to help change the direction of their lives. You have to find ways to motivate yourself and know the why behind what you’re doing.
Let’s Celebrate! If you want to stay motivated during the hard times you need to celebrate the success no matter how small. I remember during the hard times my wife would put my dinner on a red plate. What? It’s something we do in my house. When someone has something to celebrate they get to eat off the red plate. It didn’t cost anything and it saved me from giving up when the times got tough. It was a reminder that I was going forward even though I may have felt like I was dying on the inside.
Never make a financial decision you don’t understand
This rule just drives me nuts. I can’t tell you how many people I meet that have no clue about the financial decisions they have made. How can you know where you’re going if you don’t know how you’re getting there? You have to take ownership and responsibility for all your financial decisions. Make sure any person you ever talk to is teaching you and not just selling you.
You need variety
When you make a financial decision make sure you consult a variety of companies and financial professionals.
Protect your loved ones
Pay attention to this one if you have a family or people that rely on your income. I can’t stress enough how important this rule is to have completed. You need to have a TERM LIFE insurance policy in place to protect the ones you love. I will post many blog posts on this subject because I have a ton of stories dealing with life insurance.
Here is what my wife and I are protecting.
Q: Is term life insurance expensive?
Term insurance is really cheap and you should ask your financial advisor to run you the costs for all the top rated insurance companies.
Don’t blame others, Don’t put your burdens on others
If your reading this and live in the U.S.A then you live in the greatest country ever in history. How do I know this? I’m a huge history buff. I can’t get enough of it. The miracle experiment that is the U.S.A has created a personal freedom like no other country ever in history.
That being said you have the freedom to be successful beyond your wildest dreams. The only person holding you back with your finances is you. You have to decide to fight for you and your family. You have to stop blaming others and being a slave to your paralyzing thoughts. I get it, life is not always fair. You do not have to be a victim! You can choose to be victorious!
Don’t put your burdens on others. This does not mean that you should not ask for help when you fall because we all need to be picked up at some point in life. What I mean is that because you partied it up for 30 years and failed to manage your money properly you have burdened others to take care of you. I see this with older and younger people alike. An example is when older people who never saved a dime and need their kids or family to take care of them and clean up their mess constantly. Another example is when you have a younger person living off their parents or family when they are perfectly capable of taking care of themselves. If you can’t tell by now, I do not enable people. I teach and train people to reach their potential. My wife and I made so many sacrifices and for someone to take what we worked so hard for is truly unfair. Don’t you think? My wife and I do.
Never let anyone borrow your money
To avoid destroying relationships, you must implement this rule. I know this sounds harsh but the key word is borrow. If you think about it, by letting them borrow money you just put that person in the position of the slave to the lender. Get it now? I didn’t say you couldn’t help them by giving them money. I just said to never let them borrow it.
This rule applies especially for family!
Co-signing is a horrible idea! Not only do you break rule #1 but you go into debt for someone who cannot get financed on their own. That means the professional lending institution doesn’t trust them enough to get paid back. They need you to cosign so they can go after you when the other person defaults. I will never cosign on a debt for anyone-not even my own kids. You are at risk of having your relationship ruined with that person or family member. Think of the pressure you put on yourself for the person you co-signed for. How would you like to live with the pressure of knowing that the actions of the person you cosigned for may ruin your credit and your own financial goals?
Get a Push Partner for accountability
You need a coach to help push you to your potential. They are not there to tell you what you want to hear. A push partner is there to challenge you and tell you what you need to hear; someone to hold you accountable for your actions and inactions. This helps with the motivation that is so hard to keep. How I came up with the term push partner was from my wrestling career in high school and college where I was the starter the whole time. That means I never came out of the line up and the other teammates in my weight class never got a chance to wrestle. As a result, I got all the recognition and awards. The crowd never saw all the people pushing me to my potential. The partners that pushed me everyday to succeed are the only reason I achieved what I did.
I am a push partner to all my clients. I challenge them and tell them what they need to hear and not just what they want to hear. I tell my clients all the time that I will carry them over the finish line if I have to.
Be a good Teammate (Married Peeps)
Q: Do I have a Push Partner?
My wife is my push partner. Ok, stop laughing and pay attention.
If you are married then you are on a team. My wife and I say all the time before we do something, “Go Team Phillips”. If any part of your team is off, especially when it comes to finances, then your team is going to fail. Ever wonder why finances are the number one reason for divorce? The team is going to fall apart and lose if you’re not on the same page. This means financial dates are a must and you have to be a good teammate. You have to have the 3F’s on your date.
C’mon. Get your mind out of the gutter.
Sharing is Caring (Knowledge and Money)
This is my favorite rule. One of my love languages is giving and serving. Once you become a financial champ you get the chance to bless others. My wife and I have a separate account outside of our regular tithing and giving that is only for blessing others. This account is designed to help those people in our lives who fell on hard times and life punched them in the face. No, I am not lending them the money. This is a one time gift and the only string attached is that they need to sit through my financial course where I show them how to manage their money and become financial champs. I do not enable them by just giving them money without the knowledge of how to use it. I want them to Run and Fail Forward as well as push them to their potential after their blessing.
I don’t care how your sharing looks but it can’t just be giving money without direction. You never know how educating someone about finances can change their whole life. Don’t be scared to talk about money with people. It is not a taboo subject.
For those with children:
You need to talk to your kids about finances and pass on your knowledge and good habits. I meet people all the time and they tell me that their families never talked about money. That means they learned money habits from the vultures trying to make money off them. You need to change that starting with your family to effect the future generations. You will save them a ton of heart ache.