Sustained Abundance

Everyone Needs a Budget, Including You

2011-03-13T05:18:00Z

Less than 1% of Americans have a Written Budget and Stick to It

No wonder so many people run out of money before they run out of month! According to Jesse Mecham, the founder of a very affordable personal budgeting software called "You Need a Budget", only about one half of one percent of Americans have a formal written budget and stick to it.

My initial reaction was, how can that be? We have millions of Americans who work with money and finances on a daily basis, run their businesses on a tight budget or even help others with their finances. The truth is that most people have great difficulty sitting down to face their own personal financial realities and see a budget as something that can only restrain them from living life as they wish. Another truth is that most of us do not live life as we wish, so what is the risk of creating a budget?

While it is true that there is discipline and time involved in establishing a budget and building a financial pad, buffer or emergency fund, the time involved is minimal and could easily be found by eliminating one stupid TV show from weekly viewing. This is no big deal since "average" Americans now watch 151 hours of TV per month. It is hard for me to imagine how much financial pain and suffering could be avoided if people would only give up 10% of their TV viewing time (15.1 hours per month) to organize their personal finances and plan for retirement. Given the financial difficulties many face due to the loss of home equity or even the loss of a home, planning for the future has become more important than ever.

If you are healthy and employed, not knowing where things stand financially probably creates most of the stress in your life. There is a simple way to reduce stress, eliminate arguments over money, educate your children to act responsibly with money etc. and that is to create and live within a budget and show those you love how to do the same. It is a fundamental step on the path to sustained abundance.

Listen to the interview I recorded with Jesse Mecham, the creator of YNAB, (a personal budgeting software) as we talk about his concept and the benefits of his product. Click on the forward arrow to start the recording.

Creating Sustained Abundance in 2011 and Beyond

2011-03-08T21:07:00Z

New Challenges, New Realities

Amazingly, it has been 306 days since my last entry. I could not believe it when I saw that number in my control panel but there it is. Did I stop thinking about Sustained Abundance? Have I given up on the idea or possibility creating and sustaining abundance for myself and my family? The answer to this question is unequivocally no.

I was distracted from what is truly important (namely planning for abundance on a regular basis) by the reality of the workplace. My old company closed its doors, let 1500 people go and is still trying to survive. My challenge was to pick up the pieces and keep moving forward. Like so many people out there, that challenge proved difficult, stressful and time consuming. Whatever your current level of mental and financial preparation for a job loss, the reality can prove challenging. But that does not mean you should forget to plan for abundance. I am more convinced than ever this means more self direction and self reliance. We have simply become way too used to the concept of entitlements and that there will be unemployment insurance, welfare, workfare, this fare that fare to back us up if we stumble and fall.

During my job woes, I was challenged more so than ever before in my working life. I am working now, but making far less than I did. This has happened to so many people I know so I don't bring that fact up to get sympathy, but rather to point out what I realize more strongly now.

Many of us will be challenged in the coming years and one major challenge will be making the time to think about our individual plan for creating abundance. The steps I've previously described as a path to abundance are: 1.Survival, 2.Sufficiency, 3.Surplus. That may sound easy enough, but how to get from one to another? How can you do this with fewer resources or if you are in the position of being able to quickly generate a surplus, what then?

Things are changing in America and Americans will need to change too...

Most of us have given away or refuse to take responsibility for our own financial futures, especially in the selection of our own investments and responsibility for the results of those investments after we make them. Dealing with Debt is the general condition right now, but we should be planning for future Abundance too, or it is far less likely any of us will achieve Sustainable Abundance.

Given the level of uncertainty in the American Economy (and so many other places too), I believe it is truly time to re-think what Abundance really means. Does it mean the home of our dreams on the ocean, or does it mean freedom from the fear that we will not have enough to eat tomorrow? Is it time to live with less in order to have more? Can we really live for the moment and escape the consequences of failing to plan for the future? Will there be a meaningful retirement for middle class Americans?

I read a book recently that has really helped me to get clear on how so many of us are where we are financially instead of where we should be. The book is called "The Two Income Trap" by Elizabeth Warren. I encourage you to read it whether you are married or single, broke or still able to put something away for the future. Read the book and tell me what you thought.

In order to guide my writing, I want to know what you are thinking. Share your stories about your changing plans for Abundance, let me know if your priorities are changing and share with me what is working for you now. Let me know how are you answering these questions:

1.How do you tell those you love that they need to get by with less or contribute more to make your family work as a family?

2.What do you tell a spouse or significant other who says that living well now is the only important thing?

3.What do you say when it is you that wants to live now and those you love are concerned about the future?

4. How are you helping your children to understand that they will need to be far more self sufficient, live with fewer toys, consume less and save far more to create a stable future?

If you have a question and want an answer share it with me here.

Visualizing Sustained Abundance

2009-07-13T04:13:00Z

Thinking About Sustained Abundance

I have been thinking about how to represent the basic stages of building abundance. As a mental exercise, a friend suggested I try to create a graphic image to make my ideas "real and visible". The result of the exercise is the new Sustained Abundance Logo. The stages of abundance I see as the sides of a perfect triangle in the logo. They are reflected in the development of true, lasting abundance as:

Survival
Self Sufficiency
Surplus

There are other points along the paths, some intermediate stops and some end goals. Reaching abundance is defined by a personal definition of what abundance is in the first place. In the real world a path to abundance is not linear and is reversible, you can have it and then lose it, fight for survival, reach a point of self-sufficiency or even surplus and lose that too.

The idea behind creating abundant thinking is to look at what people do to stay on the path longer, leave it only when they must and return to it full of hope and understanding that there can be a sustainable future, with abundance in many forms.

As a labor of love and a work in progress, I welcome your thoughts, comments and direction in this effort. Please contact me at lance@sustainedabundance.com .

Let's Get Real...

2009-04-10T16:15:00Z

Recognizing our General Character and Overcoming it in the Future
From it's inception, America has been built on debt. There never was a nostalgic time when more than just a very few Americans lived below their means and saved for the future because it was the right thing to do. This is a popular myth.

In character, this soon to be "Great Depression" is no exception as leveraged debt in mortgages reached more than 50% of gross income(s) in places like CA and the cost of revolving debt service per household peaked at over 14% of gross income in 2005. Both of those percentages are records. Based on many years of actual results, bankers know that mortgage debt is not sustainable at levels of more than 28% debt to income (DTI) on a 30 year fixed mortgage. What happened was allowed to happen in spite of history and because of greed on all sides.

Thanks to a commercially nurtured consumer mentality aided and abetted by a profit hungry financial sector, the "savings rate" in 2005, (manifested in Mortgage Equity Withdrawal and revolving credit use) was officially reported at -2.5% but was really more like -13%. Once again (we did it in '29 too) we became a nation of "Monthly Payment Consumers" (MPC's), never questioning the total cost of any purchase over time, asking only "can I make the monthly payment". Without inflation in housing values to sustain MEW the bubble has collapsed. The only time consumer spending was a higher percentage of GDP was in the late 1920's, when it reached 83% in America.

Thanks to "exotic" mortgages and stretched DTI's, people that should only have qualified for and purchased a $500,000 home on a 30 year fixed rate fully amortized loan, qualified to purchase a home priced at $1,000,000 using two interest only loans, with 3% down. Prices inflated because people could qualify using unsustainable loans. Consumers used Home Equity lines of Credit (HELOCS) and refinances to keep spending beyond their means. With each refinance, new commissions and fees went to the lenders and servicers and each borrower started over making payments that were mostly interest. In other words, building equity the old fashioned way (paying down principal) became almost non-existent.

Keep in mind there has also been a not so subtle shift in the costs of health care and pension savings to wage earners by corporations during this time, in addition to lots of new, expensive "indispensable" services like cellular phones and cable TV. The media, supported by commercials was only to happy to propagate the "Life Styles of the Rich and Famous". In 2006, I saw a womens magazine with a cover article that read something like "763 things I want now".

As desirable a place California may be to live, we reached a point where the ratio of housing price to median income was more than 20x in coastal areas and more than 10x in places like San Bernardino. Historically it was more like 3x in most of the country. The bubble popped on the periphery and is slowly working toward the coasts. Who knows where prices will settle, but our coasts are treasured the world over and especially in places where people built productive businesses and saved like there was no tomorrow. They can still pay cash.

The "solutions" to the crisis being offered are more leverage and bailouts to the billionaires whose greed promulgated the environment that sustained the bubble and whose lobbies and campaign contributions have shaped our laws and political systems. If the free market is not allowed to determine property values in residential real estate once again this mess will drag on for years and our grandchildren will be little more than tax serfs. (See "Going Down with the Joneses" at http://www.box.net/shared/cfje9z2vpv) .

Goals for Sustained Abundance in 2009

2009-01-26T03:44:00Z

Helping More People to Help Themselves

In the simplest way I can say it, my key 2009 goal for Sustained Abundance is to help more people to help themselves.

Sustained Abundance is looking for good people from all walks of life who want to learn more ways to help themselves create a better future. A future that includes more financial security with a better understanding of what it takes to become Self Sufficient. Self Sufficient means doing the most you can for yourself and those you care about, with a minimum of dependence on government or big corporations.

Creating true abundance means thinking of yourself as a special kind of orporation, "You Inc." that must be nurtured and responsibly grown and managed to the point of reaching your personal vision of Abundance. Ideally of course that Abundance should be Sustained over time and the methods for building Sustained Abundance should be shared with our children and all who ask.

This is not to say that we should become totally business like or abandon the emotional side of our lives, but we must become more responsible for our financial results. Having financial abundance will not insulate us from troubles or problems, but it is fairly safe to say that having financial abundance helps us to meet worldly challenges on a stronger footing.

A major goal of Sustained Abundance is in sharing what we know with others who will in turn share what they have learned for the benefit of all generations.

During 2009 Sustained Abundance will be sharing information on:

- Financial Survival in Difficult Times
- Getting a Second Start in America
- Replacing High Interest Debts with Wealth Building Assets
- Keeping the Home you Have or preparing to buy a Home you can afford
- Building, Maintaining or Rebuilding your credit
- Becoming Self Sufficient by building Sustained Abundance in your life
- Creating Abundance by Self Directing Your Retirement Plan
- Living a Simpler Life

The Seminars and Webinars on topics related to Sustained Abundance can be accessed at the "Best of the Best Seminars" site at www.botbseminars.com which shows a monthly calendar of Topics, Dates and Times and links to register for presentations on important topics. You can suggest topics by sending an email to info@botbseminars.com .

Big News

The big news for 2009 is the development of a true Website for Sustained Abundance. This Blog will not go away, but will be rolled into a full Sustained Abundance Website with pages dedicated to the many paths we take to abundance.

At any given point in time each of us is on a financial path. Those who do not understand the path they are on are the least likely to reach Sustained Abundance, but some will despite themselves. Others who invest time to learn what it takes to create abundance and more importantly, how to sustain it will live a more fulfilled life.

Marriage and The Two Income Trap

2008-12-19T00:24:00Z

Baby Boomers Need to Rethink Use of Dual Incomes

As a Baby Boomer born in mid-boom, I now realize what a trap the two income mentality has become in America.
Harvard lawyer Elizabeth Warren has written a great book called, "The Two Income Trap", which is on my must reading list for anyone looking for a better understanding of the current financial environment. Baby Boomers and couples of all generations really need to rethink how they use the two incomes that most earn.
Gradually we have moved to a point where both spouses in most marriages are working. I've heard that more than 70% of married women who can work, are working (at substantial wage parity) to their spouses. The other 30% are at home mostly for childcare or elder care reasons and there are a lucky few where the income of one spouse covers all needs. If the couples are not living on less than they earn (and who is?) they have created a recipe for natural disaster.
Wage parity for women is a tribute to equality and I would not go back to the way things were in the '50's, but I do want people to think about what has been lost along with what has been gained during the transition to a two income society. The sad truth is that for the last 25 years very few have taken a close, hard look at their financial lives and lived on a real (written down) budget. If we had, we would not be in the financial mess we are in now.

In 2005 people were spending 113% of their income (including dual incomes) and by 2007 had debts equal to 140% of their gross annual income and servicing that debt was 14% or more of their gross income (an all time record high). At the same time, personal savings was at an all time low, between -2% and -13% depending on who you listen to.

When you rely on two incomes, all hell breaks loose when you lose one, either through job loss, illness or divorce. No one plans for any of these to happen, but they do. The bottom line is, the finances of most marriages deserve careful study and budgeting and careful discussion between spouses before problems develop. For many in the current environment it is already too late, but some marriages could be saved by examination and careful discussion with a focus on financial reality and not emotion. This is easy for me to say, but divorced people know all about what is lost and what is gained only after they are divorced for a time.

Many "Stay at Home" (SAH) spouses now face the necessity of going back to work in a crappy job environment. If you are SAH, it would pay you to learn something valuable during the day or at night when your spouse is there to lend a hand with kids, just in case you have to re-enter the job market, or as a way to earn part time money at home.

Every couple (married or not) should discuss who would/should/will/can be working, earnings, how expenses split etc., particularly before they get married. The probable result of an effort like would be a lot fewer marriages and fewer divorces. Couples should also calculate what it costs to raise children and figure out what salary increases it would take over time to fund their kids educations and plan for retirement too. Going forward I believe we may well see a falling birthrate in America, simply because children are expensive!

Many of todays Boomers have never planned for retirement and with their kids through school now realize they can never retire (see my blog at http://selfdirectioncentral.com/ . Very few of our kids are preparing to help their parents in old age or have any interest in doing so plus they will have the added tax burden of Social Security and Medicare Shortfalls, and all the new bailouts to pay for.
It is up to us as parents (of any generation) to plan and provide for our own needs and create our own Sustained Abundance. No one else will do it and we cannot rely on our employers or the government.

My wife and I know of only one couple who really has planned their finances to the penny all of their married lives and one other couple who actually put money away to accrue for the costs of a new car purchase every 5 years and to replace a roof or water heater in their home in 5 or 10 years, but this is the way we should all be thinking. Cheap credit allowed us to stop doing this. If a water heater went out or the car needed a repair, we just charged it, right? Cheap credit and many credit cards are going away, Heloc's are unaffordable or gone. In fact, Citi just announced a huge increase in credit card rates for most borrowers to nearly 30% APR.
By the way, both of these couples have not suffered the least bit during this downturn and their finances remain secure.

With real wages stagnant since the 70's and more and more expenses for health insurance and retirement benefits being shifted to each worker, any couple considering marriage needs to realize that it is folly for the higher earner to SAH and they should plan for living on one income while earning two until their assets are substantial enough for one or both to SAH or go part time. (At least one years total expenses in the bank). They also need to look at the possibility that one or both may be forced to go part time and with no benefits. Continuation Health insurance for a couple with kids can easily be $1000.00 per month after a job loss.

People with recession proof jobs and good benefits should plan to keep them if they have a family and think about that "part time dream career" when all of their long term commitments have been met, or do not make long term commitments and live the way they want as a single person.
The biggest mistake we have all made, once we were in the two income mode, was and is to think that both incomes would be available forever and could and should all be used to fund current purchases. The few couples who have lived on one income and saved or invested the other are doing just fine. Many of those who justified the purchase of a larger home using a second income are in a living hell today because one or both incomes are gone. The single largest obstacle we face is our desire for instant gratification, (to have everything we want now) and an environment of easy credit along with two incomes has played right into our fulfilling desires.

All of this sounds harsh I will admit, but look at all the current misery created by no planning or poor planning by young and old, single and married alike. It truly is time to change the way we live and remember there is a future to plan for.
Note: If you would like to participate in Webinars on topics related to Personal Finance, check out my 2009 Webinar schedule at Best of the Best Seminars on the web at: http://botbseminars.com .

When Will Consumers Start Asking Themselves the Hard Questions?

2008-11-22T12:32:00Z

What it Really Takes to Create Sustained Abundance

An friend emailed me to ask if I am still committed to writing this Blog. I had to think about it for a while before responding because while I am very committed to the principle, I have not been active in the doing. I think this is true of most consumers. In our heart we know that our recent style of living is not sustainable and must be changed.
As an average American consumer affected by many aspects of this downturn, I am actively interested in understanding how it has occurred , what forces were/are beyond my control and what things I've done under my own control that have made it worse for my family.

The real bottom line in all of this is that most average Americans do not have any idea about their personal finances, have no budget or plans for the future (no savings) and have basically gone with the flow of easy credit and consumption because it was fun and the path of least resistance. At least 25% of the Baby Boomer Generation will retire on Social Security with no other source of income. At the present time, the base income of Social Security is below the Poverty level in this country. Is there any reason to believe this situation will improve?

Now that this period of easy credit and consumption has slowed and may stop for a long while, I am wondering what it will take for people to sit back and really consider what it takes to maintain a sustainable life style in America, what I call "Sustained Abundance".

If you take the position that you cannot rely on anyone else, not parents, not siblings or other family or co-workers, not local or federal government and maybe not even a spouse or significant other, what do you really have to do to pay your own way and create enough abundance to be sure that you will have abundance at a reasonable level into the future? Many will take the position that living for the moment is the easiest way not to deal with any of the above issues. Ignorance, as they say, is Bliss.

As a responsible spouse and a parent, I choose not to ignore what is happening, and in fact I am asking more questions than ever about credit, about planning for the future and about every new purchase I consider. This new attitude comes from the realization of the many blunders I've made with credit, my failure to plan and purchases that have come back to bite me in the rear.

As an example, I went to have my car tuned up last week and was told that I needed new spark plugs in my six cylinder engine. The cost for replacing six spark plugs is $440.00 with labor and my car is not a luxury vehicle by any stretch. At 100k miles the Catalytic Converter died and could only be replaced at the dealer at a cost of $2,200.00. Needless to say I had not saved money for either of these events.

The question foremost in my mind now is, why didn't I ask the simple questions about the cost of maintaining the vehicle I selected before I bought it? I did not plan for sustained ownership of the vehicle and simply assumed that I could get a new one if anything too irritating happened to this one. How many of us have/had the same attitude?

We have all made decisions about our financial lives. Some of us have done better research than others, but all of us need to start asking the hard questions about our past and future purchases and plan for the costs that relate to our decisions. What kind of parent would I be if I did not make an effort to explain the simplest realities of personal finances to my offspring?

There is light at the end of the tunnel for anyone who shakes of the sleepy ease of going with the flow as it has existed for years. Positive change, more control and less fear is almost entirely attainable in spite of outside conditions, once you make the commitment to creating your own Sustained Abundance.

Finding Your Way to Sustained Abundance

2008-07-29T17:13:50Z

If you don't know where you are going, any path you take will get you there...

Abundance means different things to different people. If you are starving, abundance simply means having enough to eat. As your awareness of abundance increases your life may expand in a material sense or you may choose to focus on more spiritual things. Two different people, with very substantial differences in material posessions can feel that they are surrounded by total abundance. Some people can never feel abundance, even when surrounded by material things and especially when they have no awareness of a spiritual life.

My goal in creating "Sustained Abundance" is to help people find their own best path to a level of Abundance that is sustainable for their life and transferable to future generations.

Why do we confuse having material things with having abundance?

After the turn of the century in our country (and many others), the focus in most peoples lives became the accumulation of visible material goods and far less attention has been paid to the invisible (spiritual growth and saving or investing for the future).

Every decision or non-decision comes at a price. If you choose to do something, there is a material, spiritual or temporal (time) cost to each decision. If you choose not to do something, the same costs apply

My Vision

My vision now is to use the incredible power of the Internet to disseminate the tenets of an American life-style that creates "Sustained Abundance" for anyone willing to reconsider their foundations and make the changes that will be necessary to create that life. Ask any immigrant who has built a life here and they will still tell you that there is more opportunity to succeed here than anywhere else in the world, despite the quirks of our political and economic system. Why do so many native born Americans have fears and doubts about the future of America?

My emphasis will be on what are rational and truly sustainable approaches to building a life in our "Post-Industrial", now "Financialized" economy.

If you are the only living relative of a wealthy person and know you are the sole beneficiary of the estate, you need not read on. If you consistently pick winning lottery tickets, go to the liquor store and buy more. If you are fortunate enough to earn far more than you can spend and have wisely invested the difference in the right real estate, stocks or hedge funds, you may not be interested in what I have to say.

If you have children growing up now or young adults in college now and you are struggling to make ends meet and still hope for a future with financial dignity, read on.

If you are making ends meet or have a surplus to your needs and want to build on your current abundance for a better future, read on.

An Old Dog Learns New Tricks

I recently learned how to create an online Weblog or Blog as they are called and it was really very easy to do.

My hope is that this "Blog" forum will lead a full Website and to Webinars and Seminars on the topics that are pressing on "Middle Class" Americans today, namely:

1. How to survive the coming changes in an economy that has been based on unsustainable consumption rather than production.

Recognize your true financial situtation and make a plan to improve it
Understand what you need to retire with dignity and plan to achieve it
Living more Simply and feeling good about it
Attracting more abundance through a positive outlook

2. A mass mindset that has moved my generation completely away from the values that made our grandparents self sufficient and kept them solvent.

3. Americans, enabled by a financial system dominated by "Irrational Exuberance*", spent themselves into a financial coma, from which many will never recover. (Irrational Exuberance is a book by Robert J. Shiller*). For all generations, it is time to re-evaluate how we are living and to consider what actions will be necessary to create Sustained Abundance.

4. Exporting many of the worst mass market products of our culture to "emerging" economies around the world with the result author George Ritzer calls "The Globalization of Nothing" in his book by that name. We have done this to their overall detriment and ours as well, without a second thought. The tradeoff is and has been maximizing near term profits at the expense of a sustainable future while importing cheaply mass produced products for unsustainable mass consumption in America.

5. A Real Estate Bubble enabled by "Securitized" lending that has critically wounded the residential market on a scale unprecedented since 1929, with "Median Home values down in every part of the country" (ABC Evening News, 2-14-08, Charles Gibson) For an overview on the progression of the credit and lending crisis and the recent socialization of Home Loan lending, read my blog at http://unsustainabubble.com/ .

6. The systemic failure of our Petroleum based economy to fund and promote technologies that could and should supplement Oil as much as possible in the future to create sustainable life-styles for our children.

7. Politicians who seem to have never read a history book, consistently repeating the mistakes that destroyed the previous great empires of history.

8. The positive and negative effects of "Consumerism" on all generations of Americans.

Moving Forward toward Sustained Abundance

I have now created a forum on social, economic and moral issues affecting different generations of Americans I describe as "Boomers on the Bubble" (Baby Boomers) and "Echo Boomers on the Edge" (Echo Boomers) and the "GenX Legacy" (Generation X). I am concerned about rapid and (potentially catastrophic) changes in the American economy and society in general and how the most likely changes (Economic and Political) will affect each generation in turn.

For now, I want the emphasis to be on topics that support the awareness and development of financial "Survival Strategies", "Self Reliance" and "Self Sufficiency", "Sustained Abundance", "Surplus and the search for sources of Sanity and ultimately, sources for Serenity in America, including Simpler Living.

I look forward to lively discussions and feedback from the growing group of friends I am meeting at my "Best of the Best" Seminars and through my work in the area of Self Directed Retirement Plans (Blog at http://selfdirectioncentral.com/). The new website for sustained abundance should be fully tested and operational by mid-September, 2008.