Bigg Successsecurity | Bigg Success http://biggsuccess.com Life On Your Own Terms Mon, 13 Feb 2012 13:00:22 +0000 en hourly 1 http://wordpress.org/?v=3.2.1 2006-2011 bigginfo@biggsuccess.com (Bigg Success) bigginfo@biggsuccess.com (Bigg Success) posts 1440 Life On Your Own Terms Bigg Success Bigg Success bigginfo@biggsuccess.com No no http://biggsuccess.com/wp-content/uploads/2010/02/Showlogo-144_144.jpg Bigg Success http://biggsuccess.com 144 144 My Employer is Eliminating 401(k) Matches http://biggsuccess.com/2009/01/26/my-employer-is-eliminating-401k-matches/ http://biggsuccess.com/2009/01/26/my-employer-is-eliminating-401k-matches/#comments Mon, 26 Jan 2009 07:00:09 +0000 George Krueger & Mary-Lynn Foster http://biggsuccess.com/?p=1536 retirement Companies are responding aggressively to the bad economic news. Layoffs, hiring freezes, and salary freezes have been some of the most common actions so far.

___

___

Now, more and more employers are looking at eliminating the matching of 401(k) contributions. According to a survey by Watson Wyatt, the global human resources and financial services firm, things are changing quickly. In October, 2% of firms said they had already cut back on these matches and 4% said they planned to. Two months later, in December, 3% had already made the cut and 7% said they intended to.

And these are large companies. Established brands that we all know. Motorola, FedEx, Kodak, and Starbucks just to name a few.

They’re usually using the word “suspend” rather than “eliminate” when they announce these cuts. But it raises a question:

If my employer stops matching my contribution to my
401(k), should I still keep making contributions myself?

It forces us to save

This is perhaps the biggest reason to keep making contributions. Financial planners have said for years that we should pay ourselves first. Investing it before we get it, as we do with our 401(k), is the best way to make sure that happens.

Most people report that they don’t really miss the money. It’s like the taxes that are deducted from our paychecks – the government knows most of us won’t miss the money if we don’t see it.

Of course, there are ways to set up an automatic deduction from our checking or savings account for investments outside of a 401(k). That’s really close to having it deducted from our paycheck, but it’s not quite the same. That little variation can make a bigg difference for some people. You have to judge that for yourself.

Higher limits

The next best option to a 401(k) for most people would be an IRA because contributions may also be deductible. You should check with your financial advisor about the specifics of your situation.

Because you invest before paying taxes, it’s as if the government is making part of the contribution for you. For example, if you made a $1,000 contribution to one of these retirement plans and you’re in the 25% tax bracket, you would pay $250 less in taxes. So, in essence, you’re only out of pocket $750.

With either plan, you don’t pay taxes on the money you earn on your investments until you pull it out. Deductible and deferred – that’s a pretty powerful combination.

Where the 401(k) gains favor is that it has higher maximum limits – your contributions to your 401(k) can total up to $16,500 in 2009 ($22,000 if you’re over 50). You can’t contribute more than $5,000 to an IRA in most cases.

If my employer cuts or eliminates my 401(k) match, are there
reasons to fund my retirement through another vehicle?

A lot of 401(k) plans offer fairly limited investment options and you may pay lower fees in a plan that’s not a 401(k). 

__

Get the tips and tools you need to be a BIGG success.
Subscribe to the Bigg Success Weekly – it’s FREE!

___

The bigger issue

It’s not like we don’t already have a sense of it. But recent months have reinforced this paradigm. We can’t count on anyone or anything for any part of our financial future. We must take full control of our own finances. We have to build our own safety nets to make sure we are financially secure.

How much will you have at retirement?

It really boils down to three factors:

  • how much we invest

  • how much we earn on our investment (after all fees and taxes)
  • how long it is invested

From these three factors, we see that we have three options if we don’t want to retire on less money:

1st – We can try to earn more on the money we invest.
That involves taking more risk and we don’t have much appetite for that right now. So this probably isn’t going to fly with most of us.

2nd – We can postpone our retirement.
This buys us more time. People who are really close to retirement right now may not have much of a choice. They may have to do this. But if you still have some time on your side, there may be a better way.

3rd – We can increase our contributions.
Look at your budget and see if there is any way you can make up for the investment your company was making.

If your employer reinstates matching contributions, you can stop contributing at the increased rate and enjoy the extra money in your budget … or …

… you can keep making your higher contributions to give your retirement a kick!

To all our readers in Australia, happy Australia Day! And we hope our friends in India enjoy Republic Day!

And thank you so much for spending time with us today. Join us next time when we discuss extreme multi-tasking. Until then, here’s to your bigg success!

Subscribe to The Bigg Success Show in iTunes. 

Subscribe to the Bigg Success feed.

Direct link to The Bigg Success Show audio file:
http://media.libsyn.com/media/biggsuccess/00316-012609.mp3

Related posts

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I Need Money! Should I Borrow from my Retirement Plan?

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I Need Money! Should I Cash Out My Retirement Plan?

(Image in today's post by woodsy)

]]> http://biggsuccess.com/2009/01/26/my-employer-is-eliminating-401k-matches/feed/ 2 00:01:01 Companies are responding aggressively to the bad economic news. Layoffs, hiring freezes, and salary freezes have been some of the most common actions so ... Companies are responding aggressively to the bad economic news. Layoffs, hiring freezes, and salary freezes have been some of the most common actions so far. ___ ___ Now, more and more employers are looking at eliminating the matching of 401(k) contributions. According to a survey by Watson Wyatt, the global human resources and financial services firm, things are changing quickly. In October, 2% of firms said they had already cut back on these matches and 4% said they planned to. Two months later, in December, 3% had already made the cut and 7% said they intended to. And these are large companies. Established brands that we all know. Motorola, FedEx, Kodak, and Starbucks just to name a few. They#8217;re usually using the word #8220;suspend#8221; rather than #8220;eliminate#8221; when they announce these cuts. But it raises a question: If my employer stops matching my contribution to my 401(k), should I still keep making contributions myself? It forces us to save This is perhaps the biggest reason to keep making contributions. Financial planners have said for years that we should pay ourselves first. Investing it before we get it, as we do with our 401(k), is the best way to make sure that happens. Most people report that they don#8217;t really miss the money. It#8217;s like the taxes that are deducted from our paychecks #8211; the government knows most of us won#8217;t miss the money if we don#8217;t see it. Of course, there are ways to set up an automatic deduction from our checking or savings account for investments outside of a 401(k). That#8217;s really close to having it deducted from our paycheck, but it#8217;s not quite the same. That little variation can make a bigg difference for some people. You have to judge that for yourself. Higher limits The next best option to a 401(k) for most people would be an IRA because contributions may also be deductible. You should check with your financial advisor about the specifics of your situation. Because you invest before paying taxes, it#8217;s as if the government is making part of the contribution for you. For example, if you made a $1,000 contribution to one of these retirement plans and you#8217;re in the 25% tax bracket, you would pay $250 less in taxes. So, in essence, you#8217;re only out of pocket $750. With either plan, you don#8217;t pay taxes on the money you earn on your investments until you pull it out. Deductible and deferred #8211; that#8217;s a pretty powerful combination. Where the 401(k) gains favor is that it has higher maximum limits #8211; your contributions to your 401(k) can total up to $16,500 in 2009 ($22,000 if you#8217;re over 50). You can#8217;t contribute more than $5,000 to an IRA in most cases. If my employer cuts or eliminates my 401(k) match, are there reasons to fund my retirement through another vehicle? A lot of 401(k) plans offer fairly limited investment options and you may pay lower fees in a plan that#8217;s not a 401(k).#160; __ Get the tips and tools you need to be a BIGG success. Subscribe to the Bigg Success Weekly #8211; it#8217;s FREE! ___ The bigger issue It#8217;s not like we don#8217;t already have a sense of it. But recent months have reinforced this paradigm. We can#8217;t count on anyone or anything for any part of our financial future. We must take full control of our own finances. We have to build our own safety nets to make sure we are financially secure. How much will you have at retirement? It really boils down to three factors: how much we invest how much we earn on our investment (after all fees and taxes) how long it is invested From these three factors, we see that we have three options if we don#8217;t want to retire on less money: 1st #8211; We can try to earn more on the money we invest. That involves taking more risk and we don#8217;t have much appetite for that right now. So this probably isn#8217;t going to fly with most of us. 2nd #8211 Financial,Freedom,,Money bigginfo@biggsuccess.com no No Where Should I Stuff My Money? http://biggsuccess.com/2009/01/12/where-should-i-stuff-my-money/ http://biggsuccess.com/2009/01/12/where-should-i-stuff-my-money/#comments Mon, 12 Jan 2009 06:15:37 +0000 George Krueger & Mary-Lynn Foster http://biggsuccess.com/?p=1502 mattress In days gone by, mattress stuffers hid all their money somewhere in or around their home – in the backyard, in cans, between the pages of books, in the walls, in a cookie jar, and even under a removable section of floorboards.

___

___

A recent article in the Wall Street Journal talked about the new generation of mattress stuffers. People increasingly don’t trust anyone or anything, a response to falling home prices, crashing stock prices, bank troubles, and government ineptitude.

It’s something we don’t talk about much, but an increasing number of people are taking matters into their own hands to prepare for the next crash. Needless to say, these people aren’t optimists!

They’re pulling their money out of the stock market and stuffing their mattresses the 21st century way.

Stuffing money in treasuries

Instead of actually stuffing cash into their mattresses, they’re buying treasury bills, the safest of all investments. Most financial experts refer to these and other treasury securities as risk-free investments.

Stuffing money in gold

New generation mattress stuffers are also buying gold coins in record amounts. You may have noticed an increase in the number of ads on TV about gold. This flight to safety has been evident after just about every financial crisis, as people return to the gold standard.

Who is primarily driving this trend?

Many baby boomers have taken a huge hit to their portfolios just as they near retirement. They are the driving force behind this trend because they don’t have time to recover from the recent stock market losses before they retire.

___

Get the tips and tools you need to be a BIGG success.
Subscribe to the Bigg Success Weekly – it’s FREE!

___

What if you’re not ready to retire?

If you’re not close to retiring, it’s crucial to think clearly about this new mattress stuffing strategy. There are definitely some pros and cons.

Pro: We should own a well-diversified portfolio.
Experts tell us to diversify, diversify, diversify. Typically, the more diversified we are, the better. A diversified portfolio might include stocks, bonds including treasuries, real estate, and perhaps some commodities like gold. Diversification generally delivers the best return given the overall risk.

Pro: Treasuries should be part of most diversified portfolios.
Until recently, a lot of people found treasuries kind of boring because they didn’t deliver enough return. That’s because they aren’t considered risky at all, which is also why they are an essential component of a fully diversified portfolio.

Pro: Gold may also be a wise investment as a small part of a diversified portfolio.
Gold and other tangible assets usually perform best in times of high inflation. So gold can serve as “insurance” against such times. The reason that people often flock to gold in times like these is that, historically, it has been an acceptable way to pay for things.

Con: If you put all of your assets in treasuries, your returns will be much lower.
This lower return is not unjustified. After all, you’re investing in an asset that’s considered to be risk-free. The problem with this strategy is that you may not end up with as much money as you need for your retirement.

Con: It’s dangerous to put a significant percentage of your assets into gold coins.
If experts recommend gold at all (and many more are these days) as part of your portfolio, most suggest keeping it to around five percent of your total assets. Unlike treasuries, gold carries risk – its price goes up and down. One other tidbit – gold has underperformed most other assets historically.

Con: There’s no cash flow with gold.
Treasuries pay interest at regular intervals. You don’t earn any money on a gold bar or a gold coin. The only way to make money by holding gold is to sell it at a price higher than what you paid for it.

Next time, we’ll take this discussion a step further. We’ll apply some real world numbers to help you with your diversification decisions.

We are so thankful that you took the time to read our post today. Until next time, here’s to your bigg success!

Subscribe to The Bigg Success Show in iTunes. 

Subscribe to the Bigg Success feed.

Direct link to The Bigg Success Show audio file:
http://media.libsyn.com/media/biggsuccess/00306-011209.mp3

Related posts

Mania in the Market and Rising Above the Crowd

When It Comes to Investing, Time is on Your Side

Squirrels, Nuts and Business Cycles

(Image in today's post by jillmbatt)

]]> http://biggsuccess.com/2009/01/12/where-should-i-stuff-my-money/feed/ 1 00:01:01 In days gone by, mattress stuffers hid all their money somewhere in or around their home #8211; in the backyard, in cans, between the ... In days gone by, mattress stuffers hid all their money somewhere in or around their home #8211; in the backyard, in cans, between the pages of books, in the walls, in a cookie jar, and even under a removable section of floorboards. ___ ___ A recent article in the Wall Street Journal talked about the new generation of mattress stuffers. People increasingly don#8217;t trust anyone or anything, a response to falling home prices, crashing stock prices, bank troubles, and government ineptitude. It#8217;s something we don#8217;t talk about much, but an increasing number of people are taking matters into their own hands to prepare for the next crash. Needless to say, these people aren#8217;t optimists! They#8217;re pulling their money out of the stock market and stuffing their mattresses the 21st century way. Stuffing money in treasuries Instead of actually stuffing cash into their mattresses, they#8217;re buying treasury bills, the safest of all investments. Most financial experts refer to these and other treasury securities as risk-free investments. Stuffing money in gold New generation mattress stuffers are also buying gold coins in record amounts. You may have noticed an increase in the number of ads on TV about gold. This flight to safety has been evident after just about every financial crisis, as people return to the gold standard. Who is primarily driving this trend? Many baby boomers have taken a huge hit to their portfolios just as they near retirement. They are the driving force behind this trend because they don#8217;t have time to recover from the recent stock market losses before they retire. ___ Get the tips and tools you need to be a BIGG success. Subscribe to the Bigg Success Weekly #8211; it#8217;s FREE! ___ What if you#8217;re not ready to retire? If you#8217;re not close to retiring, it#8217;s crucial to think clearly about this new mattress stuffing strategy. There are definitely some pros and cons. Pro: We should own a well-diversified portfolio. Experts tell us to diversify, diversify, diversify. Typically, the more diversified we are, the better. A diversified portfolio might include stocks, bonds including treasuries, real estate, and perhaps some commodities like gold. Diversification generally delivers the best return given the overall risk. Pro: Treasuries should be part of most diversified portfolios. Until recently, a lot of people found treasuries kind of boring because they didn#8217;t deliver enough return. That#8217;s because they aren#8217;t considered risky at all, which is also why they are an essential component of a fully diversified portfolio. Pro: Gold may also be a wise investment as a small part of a diversified portfolio. Gold and other tangible assets usually perform best in times of high inflation. So gold can serve as #8220;insurance#8221; against such times. The reason that people often flock to gold in times like these is that, historically, it has been an acceptable way to pay for things. Con: If you put all of your assets in treasuries, your returns will be much lower. This lower return is not unjustified. After all, you#8217;re investing in an asset that#8217;s considered to be risk-free. The problem with this strategy is that you may not end up with as much money as you need for your retirement. Con: It#8217;s dangerous to put a significant percentage of your assets into gold coins. If experts recommend gold at all (and many more are these days) as part of your portfolio, most suggest keeping it to around five percent of your total assets. Unlike treasuries, gold carries risk #8211; its price goes up and down. One other tidbit #8211; gold has underperformed most other assets historically. Con: There#8217;s no cash flow with gold. Treasuries pay interest at regular intervals. You don#8217;t earn any money on a gold bar or a gold coin. The only way to make money by holding gold is to sell it at a price higher than what you paid for it. Ne Money bigginfo@biggsuccess.com no No I Am a New College Graduate. How Do I Establish Credit? http://biggsuccess.com/2008/05/30/how-do-i-establish-credit/ http://biggsuccess.com/2008/05/30/how-do-i-establish-credit/#comments Fri, 30 May 2008 06:30:41 +0000 George Krueger & Mary-Lynn Foster http://biggsuccess.com/?p=826 Bigg Challenge
Leah just graduated from college. She has applied for several credit cards and been turned down because she doesn’t have any credit history. She says she’s never borrowed before or even had a credit card. Her bigg challenge: How can she establish credit?

Bigg Advice
Great question, Leah! Here are 3 tips to get started:


#1 – Get a bank loan.
This will cost you a little but it will be worth it so you’ll have access to money when you need it. Here’s a way to definitely get a loan:

Deposit $1,000 into an account (e.g. a Certificate of Deposit, commonly known as a CD) for a fixed period of time (e,g. 3 months). Ask that same bank for a $1,000 loan to be paid back at the end of the three months. They may require you to pay the interest monthly, or they may not.

Your loan is 100% secured by the CD, so the only risk the bank has is that you won’t pay the interest. You’ll earn interest on the CD, but not as much as you’ll pay on the loan, so you’ll be out-of-pocket a little bit of money.

But you’re establishing credit. At the end of the three months, pay back the $1,000. Now, up the ante. Do the same thing all over again with say $2,000. Then again … each time increasing the amount. Over the course of the year, you may do this four times.

Keep the amount relatively small because you don’t want to needlessly pay interest. You’re establishing that you can pay back a loan of $1,000, $2,000 or whatever the highest amount is that you borrow. Just make sure you make every payment on time.

#2 – Have a savings account, not just a checking account.
You’ll look more favorable to certain companies if you also have a savings account. Don’t think you have to stuff it full of money. It just seems to make a difference that you actually have one.

#3 – Keep a landline phone number.
Some companies seem to feel that this demonstrates stability. They reward you for it by extending credit. So at least while you’re trying to establish credit, maintain a landline phone number.

Thanks, Leah for sending us your bigg challenge.

  2. (required)
  3. (required)
 

cforms contact form by delicious:days

Our bigg quote today comes from Benjamin Franklin:

“Remember that credit is money.”

So establish your credit and score!

Next time, we’ll discuss why work life balance doesn’t work. Until then, here’s to your bigg success!

Subscribe to The Bigg Success Show in iTunes. 

Subscribe to the Bigg Success feed.

Related posts 

Don’t Fear the Banker! 

(Image by woodsy)

]]> http://biggsuccess.com/2008/05/30/how-do-i-establish-credit/feed/ 7 00:01:01 Bigg Challenge Leah just graduated from college. She has applied for several credit cards and been turned down because she doesn#8217;t have any credit history. ... Bigg Challenge Leah just graduated from college. She has applied for several credit cards and been turned down because she doesn#8217;t have any credit history. She says she#8217;s never borrowed before or even had a credit card. Her bigg challenge: How can she establish credit?Bigg AdviceGreat question, Leah! Here are 3 tips to get started:#1 #8211; Get a bank loan. This will cost you a little but it will be worth it so you#8217;ll have access to money when you need it. Here#8217;s a way to definitely get a loan:Deposit $1,000 into an account (e.g. a Certificate of Deposit, commonly known as a CD) for a fixed period of time (e,g. 3 months). Ask that same bank for a $1,000 loan to be paid back at the end of the three months. They may require you to pay the interest monthly, or they may not.Your loan is 100% secured by the CD, so the only risk the bank has is that you won#8217;t pay the interest. You#8217;ll earn interest on the CD, but not as much as you#8217;ll pay on the loan, so you#8217;ll be out-of-pocket a little bit of money.But you#8217;re establishing credit. At the end of the three months, pay back the $1,000. Now, up the ante. Do the same thing all over again with say $2,000. Then again ... each time increasing the amount. Over the course of the year, you may do this four times. Keep the amount relatively small because you don#8217;t want to needlessly pay interest. You#8217;re establishing that you can pay back a loan of $1,000, $2,000 or whatever the highest amount is that you borrow. Just make sure you make every payment on time. #2 #8211; Have a savings account, not just a checking account. You#8217;ll look more favorable to certain companies if you also have a savings account. Don#8217;t think you have to stuff it full of money. It just seems to make a difference that you actually have one.#3 #8211; Keep a landline phone number. Some companies seem to feel that this demonstrates stability. They reward you for it by extending credit. So at least while you#8217;re trying to establish credit, maintain a landline phone number.Thanks, Leah for sending us your bigg challenge. Our bigg quote today comes from Benjamin Franklin:#8220;Remember that credit is money.#8221;So establish your credit and score!Next time, we#8217;ll discuss why work life balance doesn#8217;t work. Until then, here#8217;s to your bigg success!Subscribe to The Bigg Success Show in iTunes.#160;Subscribe to the Bigg Success feed.Related posts#160;Don#8217;t Fear the Banker!#160;(Image by woodsy) Bigg,Solutions,,Challenge,,Money bigginfo@biggsuccess.com no No Don’t Fear the Banker! http://biggsuccess.com/2008/05/06/dont-fear-the-banker/ http://biggsuccess.com/2008/05/06/dont-fear-the-banker/#comments Tue, 06 May 2008 06:30:25 +0000 George Krueger & Mary-Lynn Foster http://biggsuccess.com/2008/05/06/dont-fear-the-banker/ A lot of us are very uncomfortable talking about money, whether that means negotiating your salary, asking for a sale, or asking for a loan. So the thought of going to the bank to get a loan can be very intimidating.

The loan process seems somewhat mysterious. Wouldn’t it by nice to know where bankers are coming from? Then you would be better positioned to get the money you need.

3 things to understand about your banker

#1 – Banks can’t afford to lose money.
A lot of people don’t realize that banks operate on relatively thin profit margins. So, contrary to popular belief, they don’t make that much money on every loan.

The biggest question every banker has when looking at every loan proposal is …

Will we get paid back?

They’re more concerned about the return OF their investment than the return ON their investment. That comes later.

#2 – Banks don’t fund start-ups.
This is perhaps one of the biggest misperceptions in the business world. People think the bank is the best place to go for money they need to start a business.

To which we say, reread our first point! Bankers are relatively risk averse for the reasons stated above and more. So banks don’t tend to lend money to new, unproven firms.

You might be saying, “But I know people who got money to start their business from a bank.” Here’s the distinction – the bank wasn’t loaning money to their BUSINESS; they loaned them money as individuals FOR their business. If you look deeper, you’ll find that, in almost every case, they secured the loan with equity in their house or some other asset.

#3 – Banks need to lend money.
That’s their business. So if you need money, and you can prove that you can pay it back, and you have some assets to secure the loan, go to the bank with confidence!

Your bank is just like your favorite video store.
Video stores rent DVDs for a fee. Banks rent money for a fee. So going to the bank is just like renting a movie. You have to return the movie and pay a fee. And hey, unlike video stores, bankers don’t charge their fees upfront!

Click on our Comment link below to share your thoughts on today's post
Click on the Share This button below to Digg, Stumble, Mixx more

Our bigg quote today is by the great Stephen Covey:

“Seek first to understand, then to be understood.”

Understand your banker’s needs so you stand to get your money needs. 

Next time, we’ll discuss how to offer criticism without being critical. Until then, here’s to your bigg success!

Subscribe to The Bigg Success Show in iTunes. 

Subscribe to the Bigg Success feed.

Related posts 

How To Become A Millionaire

Good Debt vs. Bad Debt

How To Get Your Customers To Finance Your Business

5 Places to Find Cash for Your Business Today

I Have An Idea For A Business! Now What?

Lessons Learned From A Bankrupt Business Owner

(Image by svilen001)

]]> http://biggsuccess.com/2008/05/06/dont-fear-the-banker/feed/ 3 00:01:01 A lot of us are very uncomfortable talking about money, whether that means negotiating your salary, asking for a sale, or asking for a loan. ... A lot of us are very uncomfortable talking about money, whether that means negotiating your salary, asking for a sale, or asking for a loan. So the thought of going to the bank to get a loan can be very intimidating.The loan process seems somewhat mysterious. Wouldn#8217;t it by nice to know where bankers are coming from? Then you would be better positioned to get the money you need.3 things to understand about your banker#1 #8211; Banks can#8217;t afford to lose money.A lot of people don#8217;t realize that banks operate on relatively thin profit margins. So, contrary to popular belief, they don#8217;t make that much money on every loan.The biggest question every banker has when looking at every loan proposal is ...Will we get paid back?They#8217;re more concerned about the return OF their investment than the return ON their investment. That comes later. #2 #8211; Banks don#8217;t fund start-ups. This is perhaps one of the biggest misperceptions in the business world. People think the bank is the best place to go for money they need to start a business. To which we say, reread our first point! Bankers are relatively risk averse for the reasons stated above and more. So banks don#8217;t tend to lend money to new, unproven firms.You might be saying, #8220;But I know people who got money to start their business from a bank.#8221; Here#8217;s the distinction #8211; the bank wasn#8217;t loaning money to their BUSINESS; they loaned them money as individuals FOR their business. If you look deeper, you#8217;ll find that, in almost every case, they secured the loan with equity in their house or some other asset.#3 #8211; Banks need to lend money.That#8217;s their business. So if you need money, and you can prove that you can pay it back, and you have some assets to secure the loan, go to the bank with confidence!Your bank is just like your favorite video store.Video stores rent DVDs for a fee. Banks rent money for a fee. So going to the bank is just like renting a movie. You have to return the movie and pay a fee. And hey, unlike video stores, bankers don#8217;t charge their fees upfront! Click on our Comment link below to share your thoughts on today#39;s post Click on the Share This button below to Digg, Stumble, Mixx more Our bigg quote today is by the great Stephen Covey:#8220;Seek first to understand, then to be understood.#8221;Understand your banker#8217;s needs so you stand to get your money needs.#160; Next time, we#8217;ll discuss how to offer criticism without being critical. Until then, here#8217;s to your bigg success!Subscribe to The Bigg Success Show in iTunes.#160;Subscribe to the Bigg Success feed.Related posts#160;How To Become A MillionaireGood Debt vs. Bad DebtHow To Get Your Customers To Finance Your Business5 Places to Find Cash for Your Business TodayI Have An Idea For A Business! Now What?Lessons Learned From A Bankrupt Business Owner(Image by svilen001) Business,,Business,Ownership,,Entrepreneurship,,Money bigginfo@biggsuccess.com no No Don't Fear the Banker! http://biggsuccess.com/2008/05/06/dont-fear-the-banker-2/ http://biggsuccess.com/2008/05/06/dont-fear-the-banker-2/#comments Tue, 06 May 2008 06:30:25 +0000 admin http://biggsuccess.com/2008/05/06/dont-fear-the-banker/ A lot of us are very uncomfortable talking about money, whether that means negotiating your salary, asking for a sale, or asking for a loan. So the thought of going to the bank to get a loan can be very intimidating.

The loan process seems somewhat mysterious. Wouldn’t it by nice to know where bankers are coming from? Then you would be better positioned to get the money you need.

3 things to understand about your banker

#1 – Banks can’t afford to lose money.
A lot of people don’t realize that banks operate on relatively thin profit margins. So, contrary to popular belief, they don’t make that much money on every loan.

The biggest question every banker has when looking at every loan proposal is …

Will we get paid back?

They’re more concerned about the return OF their investment than the return ON their investment. That comes later.

#2 – Banks don’t fund start-ups.
This is perhaps one of the biggest misperceptions in the business world. People think the bank is the best place to go for money they need to start a business.

To which we say, reread our first point! Bankers are relatively risk averse for the reasons stated above and more. So banks don’t tend to lend money to new, unproven firms.

You might be saying, “But I know people who got money to start their business from a bank.” Here’s the distinction – the bank wasn’t loaning money to their BUSINESS; they loaned them money as individuals FOR their business. If you look deeper, you’ll find that, in almost every case, they secured the loan with equity in their house or some other asset.

#3 – Banks need to lend money.
That’s their business. So if you need money, and you can prove that you can pay it back, and you have some assets to secure the loan, go to the bank with confidence!

Your bank is just like your favorite video store.
Video stores rent DVDs for a fee. Banks rent money for a fee. So going to the bank is just like renting a movie. You have to return the movie and pay a fee. And hey, unlike video stores, bankers don’t charge their fees upfront!

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Our bigg quote today is by the great Stephen Covey:

“Seek first to understand, then to be understood.”

Understand your banker’s needs so you stand to get your money needs. 

Next time, we’ll discuss how to offer criticism without being critical. Until then, here’s to your bigg success!

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Lessons Learned From A Bankrupt Business Owner

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]]> http://biggsuccess.com/2008/05/06/dont-fear-the-banker-2/feed/ 3 00:01:01 A lot of us are very uncomfortable talking about money, whether that means negotiating your salary, asking for a sale, or asking for a loan. ... A lot of us are very uncomfortable talking about money, whether that means negotiating your salary, asking for a sale, or asking for a loan. So the thought of going to the bank to get a loan can be very intimidating.The loan process seems somewhat mysterious. Wouldn#8217;t it by nice to know where bankers are coming from? Then you would be better positioned to get the money you need.3 things to understand about your banker#1 #8211; Banks can#8217;t afford to lose money.A lot of people don#8217;t realize that banks operate on relatively thin profit margins. So, contrary to popular belief, they don#8217;t make that much money on every loan.The biggest question every banker has when looking at every loan proposal is ...Will we get paid back?They#8217;re more concerned about the return OF their investment than the return ON their investment. That comes later. #2 #8211; Banks don#8217;t fund start-ups. This is perhaps one of the biggest misperceptions in the business world. People think the bank is the best place to go for money they need to start a business. To which we say, reread our first point! Bankers are relatively risk averse for the reasons stated above and more. So banks don#8217;t tend to lend money to new, unproven firms.You might be saying, #8220;But I know people who got money to start their business from a bank.#8221; Here#8217;s the distinction #8211; the bank wasn#8217;t loaning money to their BUSINESS; they loaned them money as individuals FOR their business. If you look deeper, you#8217;ll find that, in almost every case, they secured the loan with equity in their house or some other asset.#3 #8211; Banks need to lend money.That#8217;s their business. So if you need money, and you can prove that you can pay it back, and you have some assets to secure the loan, go to the bank with confidence!Your bank is just like your favorite video store.Video stores rent DVDs for a fee. Banks rent money for a fee. So going to the bank is just like renting a movie. You have to return the movie and pay a fee. And hey, unlike video stores, bankers don#8217;t charge their fees upfront! Click on our Comment link below to share your thoughts on today#39;s post Click on the Share This button below to Digg, Stumble, Mixx more Our bigg quote today is by the great Stephen Covey:#8220;Seek first to understand, then to be understood.#8221;Understand your banker#8217;s needs so you stand to get your money needs.#160; Next time, we#8217;ll discuss how to offer criticism without being critical. Until then, here#8217;s to your bigg success!Subscribe to The Bigg Success Show in iTunes.#160;Subscribe to the Bigg Success feed.Related posts#160;How To Become A MillionaireGood Debt vs. Bad DebtHow To Get Your Customers To Finance Your Business5 Places to Find Cash for Your Business TodayI Have An Idea For A Business! Now What?Lessons Learned From A Bankrupt Business Owner(Image by svilen001) Business,,Business,Ownership,,Entrepreneurship,,Money bigginfo@biggsuccess.com no No