In the present-day economy, there are clearly some areas of the country that are doing much better than others. Some places have economies that are strong; in others, things are quite bleak. For some of these places, these trends have been in place for a while – long before the recession.

Clearly, job and career prospects are brighter in some geographic areas vs. others.

In terms of quality of life – as measured by attributes such as low housing prices, short commutes, mild weather, cultural and entertainment options – there are clearly some areas of the country that offer more than others. For many, living in a cold, gray, decaying city is not as attractive as living in a place with warm weather, scenic landscapes, and fun outdoor activities.

Obviously, while subjective, it’s safe to say that there are some places that are generally more appealing than others.

So, given these two variables – economy and quality of life – wouldn’t it make sense for each of us to try to move to a place that would seem to have more to offer than where we are currently living?

Logically – looking at it that way – yes. Why live someplace with less to offer.

Practically, however, it doesn’t quite work that way.

Why?

Here are four major reasons why people don’t relocate so readily:

1) Selling a Home. Homes aren’t quite as liquid in many places here right now – at least not at a price many people might want to accept. Depending where one lives, a home could be rented out. Of course, there still might be rental income tax to attend to in that case.

2) Finding a new job. It might take some time in this economy to find a new job in a new city, much less the one you might be in right now.

3) Family considerations. For many people, there are family ties that make it emotionally difficult to move. There could be relatives close by, or kids who are established in their schools. Perhaps some family members need care. Whatever the reason, the people factor makes it tough to pick up and move anywhere.

4) Resistance to change. Sometimes people just don’t want to change. People get comfortable in their surroundings and daily interactions. Even though something might seem to be exciting, fun, and profitable, it can be scary for people who don’t want their regular routines and comfort zones to change.

There are likely many additional reasons why people don’t want to move. Perhaps you are thinking of one related to yourself.

Having said all of this, I propose that you consider this hypothetical situation:

A company or organization within your profession or line of work approaches you with a job offer. They tell you that the job will be in a city over 1,000 miles away. The job will be a comparable position as your current role, in an organization with comparable prospects and reputation. Additionally, the company will insure that your working spouse, if you have one, will receive a position in that same new community that is comparable to his or her old job. One other factor: the company will provide relocation expenses.

Taking this into consideration, here is the question:

How much would your compensation have to increase, on a percentage basis, for you to accept the new position?

My hypothesis is that as one gets older, this percentage gets higher. In fact, I am guessing that it gets disproportionately higher as one gets older.

I have a friend who once told me that he wouldn’t move from his home in Wisconsin unless he was offered a salary increase which was not in any way unrealistic. I asked him if he would move if his pay was doubled, and wasn’t even sure then! He would have moved at a much younger age, he said, but now his kids were established in school, his family lived in the area, and he was comfortable.

At the time, I thought that might have been a bit narrow-focused. Now, older and with a family, I understand. Frankly, I don’t plan to move. Now, as much as truly enjoy the Chicago area, I wouldn’t mind living on the West Coast.  It would be great to have a second home, though the economics behind that are completely laughable right now – and for the foreseeable future.

The bottom line: I’m not considering moving out of the area until my kids are out of school. I now see how my friend wouldn’t want to move across the country even if his salary was doubled. Sure, it would be a good financial opportunity. But there’s more to life and happiness than money alone. For me, relationships and health play a big role in decisions I make as well.

What about you? What percentage increase in income would it take for you to relocate to a community over 1,000 miles away?

This article was included in the Carnival of Financial Planning at My Trader’s Journal

Do you ever skip breakfast?

If so, congratulations! You’re eating the ultimate frugal breakfast: a breakfast of nothing!

Of course, while that might be a nice frugal victory, we all know that we shouldn’t skip breakfast. It’s very often described as the most important meal of the day. When you eat breakfast, you’re literally breaking the “fast” that took place while you were sleeping. You consumed no nutrients since the prior day, so your body needs to be nourished to get a new day started on the right foot.

It has been shown that people who skip breakfast, and make up for it later in the day, tend to consume more food later when they eat. Additionally, when hungry, they tend to be more likely to eat higher-calorie, less-nutritious food as well.  Furthermore, without breakfast, we just don’t have the right energy in the morning to optimize our health and attitude as we get the day going.

Ok, so we know that we must eat breakfast. But how can we do it cheaply, and nutritiously?

For me, the choice is oatmeal. Now, I have to say that I never grew up eating oatmeal. I ate more of the processed, sugary cereals that line supermarket shelves than I probably should have. Let’s chalk that up to the ways of the 1970′s and 1980′s (I just can’t blame my Mom and Dad!). 

These days, however, it’s almost like a habit to start the day with oatmeal. While I occasionally have a homemade, nutritious smoothie, it’s oatmeal that’s usually for breakfast.

Why oatmeal? Well, besides tasting good (at least to many of us), oatmeal has the following 3 big benefits:

1) Helps you lose weight by controlling cravings

2) Helps reduce LDL cholesterol

3) Is good for diabetics, as it slows the digestion of starch

4) Provides a good source of protein, fiber, and nutrients

And here’s the part that’s exciting to the frugally-oriented:  it’s very inexpensive.

I recently bought a canister of quick oats, in a non-name brand version, and paid $0.99 for 16 ounces. This comes out to about 11 servings of 1/2 dry cup of oats, which represents exactly how much I have in the morning.

Basic math tells me that I paid $0.09 for my morning serving of oatmeal. That’s it. Nine cents!

Now, I do like to doctor up the oatmeal a bit, and supercharge it with additional nutrients. I usually, depending on the day, add one, two, or all three of the following:

• 1/2 tbsp flaxseed – cost $0.04
• 3 strawberries – cost $0.40
• 1 banana – cost $0.20
• Sprinkle of cinnamon – cost $0.01

The total cost of this breakfast ranges from $0.09 for the basic version to $0.74 for the fully-loaded version.

It’s been a great way to start the day for me, as I’m getting nutrition and doing it at a reasonable cost – without too much prep time.

What about you? Do you have any breakfast favorites that are both quick and relatively nutritious, that would appeal to the frugally-oriented among us?

This article was included in Festival of Frugality #233 at Learn Save Invest

There are plenty of people who have achieved greatness in different walks of life. Many of these people are in the public eye, and have achieved notoriety through their achievements in certain high profile vocations. Politics, sports, entertainment – these have created some of the most popular examples of success in our modern society.

What makes some of these people so successful? Sure, some have inherent, incredible talent – but many of these people needed a chance to develop their skills, and often times it’s a matter of opportunity and practice that got them to where they are. 

Two books – Malcom Gladwell’s “Outliers”, and  “Talent is Overrated” by Geoff Colvin, take fascinating looks at what gets someone to be successful to the point of being exceptionally successful in their specific areas of focus. In “Outliers”, it becomes clear that it’s not just the natural inherent talent that certain people have which gets them successful, but it’s a matter of opportunity as well. Once they get the opportunity, they may get even more opportunities, exposure, etc – which leads them to success. For example, Canadian hockey players who are born soon after the January 1 age cut off tend to be disproportionately part of top teams even later in their teen years. These kids were more physically advanced at early ages than their counterparts born later in the year, and were selected for the top teams, received the best training, most ice time, etc – until they became the best. The results fit the selection. 

In “Talent is Overrated”, the author looks beyond natural gifts, and focuses on practice as a means to greatness. It is the hard work and deliberate, repetitive practice that someone takes on which can ultimately drive the person to high levels of success. 

Taking these two interesting books together, it can be surmised that greatness might not be just a matter of natural talent, but rather of opportunity plus hard work. Old fashioned, but in this day and age of instant celebrity status, perhaps it is these standby approaches to success that still hold true. 

Taking this further, can this be applied to personal finance? In other words, is it possible for any of us to achieve “financial greatness?” 

I say yes! 

Sure, it will be harder for some of us to achieve certain levels of strictly financially-measured levels of success than others. Some already have more than others, are born into wealthy families, have lives free from encumbrances, are healthier than others, etc. That said, I think success is a relative term, and it is different for each of us. What financial greatness means across the board, however, is reaching levels of success that are truly beyond what we originally thought possible. 

How do we get there? Well, I’m not there yet, so I can’t give you a foolproof path to riches. Even those that are there can’t give us a guaranteed path, because otherwise we would all be on the way there. But I’m willing to say that learning from the examples in the books I mentioned, it’s possible for each of us to reach extraordinary levels of success. For some of us, it could be a matter of opportunity – or putting ourselves in position to succeed. For most of us, I suspect that hard work and a regimented, disciplined approach to money management can get us there. If this has worked with athletes, musicians, actors, public speakers – as well as people studying math, history, etc – then I believe it could work with personal finance. 

Here is my suggested approach, utilizing 6 steps: 

Have a philosophy: Visualize what you want your life to be like, and where money fits into it. For me, money is part of what I call the HWR framework – interrelated with health and relationships as a component of overall quality of life. Since I would like a high quality of life, with strong relationships, strong physical health, low stress with lots of enjoyment, and plenty of generosity, I think having money to fulfill those dreams can be helpful. It’s not just about accumulating the highest dollar total for me; it’s about total quality of life. Of course, if it’s about the bottom line for you, so be it. This part is highly individual. 

Set goals: Ok, so I just got done saying its not just about accumulating the highest dollar total for me. True. But, in order to facilitate the bigger overarching goals I have, specific money amounts do come into play. This is where goal setting comes into play. I believe that as in many other activities, it helps to set a goal that is aspirational yet conceivably achievable. Figure out how much you need to make your dreams come true, and go for it. Write it down, record it – make yourself aware of it on a regular basis, while not obsessing. The goals may be different for each of us – sky high for some, while many of us will have more modest goals, relatively speaking. Again, the specific goals are highly individual. Putting this into practice, one can determine goals at the 1, 3, 5, 10, 20 year markers. 

Learn: Get educated, and make it a continual practice. There is always something new to learn every day. Keeping a mindset that is attuned to constant learning can only help. Reading books, blogs, talking to people – these are all great ways to learn. For me, blogging on personal finance is a way to increase my knowledge of this space. Learning about financial concepts, different asset classes, how debt impacts your finances, different products in the marketplace (such as an Empire Building Kit), and ways to save money on purchases are all good uses of time. Often times, it’s what you don’t know that you need to know that can help the most. That’s a continual journey for all of us. Let’s put ourselves in a position to succeed. 

Record Expenses: Keep track of your expenses, and analyze where you money is being spent. It’s a topic that is blogged about frequently, and I am a proponent of doing this, at least on a period basis. If never done before, it can be an eye opening experience. Done right, it can tell you where your money is going, and help you control where future cash outlay is going, in order to meet your goals. 

Spend in a Disciplined Way: This, I believe, is a critical aspect of influencing a successful outcome vs. the alternative. There are plenty of stories about regular people of average means who were able to grow a comfortable next egg just by being disciplined in their money spending decisions. This helps maintain or even grow the important income minus expense gap. 

Manage your Career: This can take different forms, but it essentially means protect and ideally grow your potential to bring in positive cash flow. How can such cash flow come in? Well, if it is passive cash flow that requires very little effort, that’s great. For most of us, however, we need to get to the point of having such investments that can do that for us. This is where your career comes into play. It is the other side of the equation – it provides the money that you can manage through steps I mention above. While many of us tend to spend a lot of time thinking of ways to save money, it’s often the income stream that makes the biggest difference. Actively managing your career so that you can put yourself in a position to maximize your earnings potential can only help. Over deliver on the job, seek promotions, build your resume, learn in everything you do, and keep a strong network going. Combine those actions with long term goals and keeping your head in the game, and you’ll be on the way to financial success. 

I plan to follow these 6 steps, with overall discipline and practice, day in day out. I don’t plan to be obsessed with this. Rather, I am working toward making this a part of my routine, like brushing teeth  

This is my game plan, and we’ll see what happens. My strictly financial goals are probably more modest than others, but as I said, it’s all individual. 

What do you think? Is it possible for the average Joe or Jane to achieve “financial greatness” using such disciplined strategies?

When it comes to our finances, each of us has our own individual approach. Some of us are savers, some are spenders, and others are somewhere in between.   This continuum is a paradigm that our popular culture uses to frame differences in the way people approach money.

I believe that the way we approach our finances goes beyond that particular behavioral characterstic. In reality, I think our approach to finances can be viewed in more of a multi-dimensional setting, where money has a different role in each our lives. For some, money means survival, plain and simple. For others, money is something that is a part of their lives but rarely on their mind, regarless of the role it actually plays. For yet others, money is an obsession, as accumulation signifies achievment. Some people view money as analogous to insurance, or a defensive resource to protect against future setbacks. Some people want money to provide a good home….or to contribute to the ability to have certain hobbies….or to provide something to bequeath to future generations….and so on.  Sometimes the same person may view money differently in different situations. The bottom line is that we each have our own relationship with money, and our own conscious and subconscious needs for money, rooted in our value systems and cumulative life experiences.

This is an area of personal finance that has interested me for a while. Why do people behave the way they do with respect to their money? What’s driving this behavior?

Of course, a starting point for anybody is to consider how you personally view things. Taking an introspective approach, I have spent time figuring out my own take on money, and the role it plays in my life. What I have determined is that it fits into the framework of HWR – Health, Wealth, and Relationships. These are 3 key parts of life, linked together as a part of a system.

Think about it: HWR – Health, Wealth, Relationships. They’re all connected, and to the extent one is strengthened, the others will be strengthened as well. If one is weakened, the others will be weakened as well.

For example, lets take 2 people: A and B.  They are twins. A has good health, average wealth, and good relationships. B has good health, average wealth, and poor relationships. Over time, all other things being equal, I think that A will end up having a better overall quality of life.  My reasoning is that A’s good relationships will be good for his happiness and will lower his stress levels compared to B, which will give A a chance to be healhier. As A is healthier, he will have a better chance to be wealthier, as he will be able to in better position to earn money while having lower healthcare expenses. And while he is healthier, he in turn will be in a better position to cultivate, keep, and grow relationships, leading to better chances to be wealthy, etc. Circular, perhaps…yet very symbiotic.

So to me, money is a part of the Wealth aspect of HWR. Beyond basic survival, money gives you the opportunity to live a healthier life, with the time and means to have more positive relationships. One thing I want to make clear is that I am not saying that money buys friends. Well, it could, but those aren’t true friends. What I am saying is that the more money you have, on balance, the less stressed you are about it, and the more time you have to do other things, such as cultivate true, genuine relationships that aren’t based on money. Money is but a component in the system.

There is no right or wrong framework, each of us has our own specific one, whether we have consciously thought about it or not. It would be interesting to get the perspectives of a range of folks to see the different views of money in all of our lives.

This post was included in the Carnival of Personal Finance #249 at Amateur Asset Allocator