Now with their income levels down because of a layoff, or due to a psychological shift in spending patterns promoted by the media … people are spending less. They are feeling “deprived” since they can not “buy their happiness” anymore. This is wrong!

How many times in your life have you visited a foreign country, or even here in the United States, where people live in abject poverty, but have a happy attitude toward life?

So, we find most Americans overspending to “buy happiness.” At the same time, those unable to “buy happiness” – are happy.

I need your help … here is a list of activities anyone, or any family can do that will be frugal, yet provide a fulfilling time. When done reading this list, please send me what you or your family have been doing to “enjoy” life so I can add it to this list …

• Walk a dog … even if you have to borrow one.
• Write someone an “old fashioned” letter.
• Watch a thunderstorm.
• Donate blood.
• Hug someone.
• Call a senior citizen neighbor to say hello.
• Start a gratitude journal–every morning or evening, write down five things for which you are grateful.
• Read all those books you’ve been collecting while drinking all that tea that has accumulated in your cupboard.
• Get Skype and call friends all over the world.
• Write a poem, or at least read one.
• Continue to make charitable contributions.
• Watch It’s A Wonderful Life or Love Actually or some other super feel-good movie.
• Make a game out of cooking dinner for a week using only ingredients found in your pantry or freezer (adding fresh vegetables).
• Have a book swap party.
• Write a letter to a soldier.
• Exercise.
• Join Netflix and watch hundreds of movies.
• Teach a teenager how to balance a checkbook.
• Listen to music.
• Make a hobby out of finding free weekend activities and planning outings with family friends.
• Feed someone’s parking meter.
• Pay a true compliment to someone who annoys you.
• Visit monuments and museums in your area.
• Discover a new park. Go for a hike.
• Teach a young child how to hit a baseball.
• Your ideas??

Individuals often pick a specific dollar amount of income or funds accumulated that determines one being “successful.”

Something that hit home with me as a child on the concept of success was when a reporter interviewed a prominent restaurateur. The reporter asked …”When did you become successful?” The response by the restaurateur was…”I was successful when I was sleeping on park benches because I knew what I wanted to do.” So, my definition of success was setting goals, having a definite purpose in life and doing the most for others.

More recently, I have adopted the following statement of success and blended it into what my childhood definition was.

…When morning arrives and you want to jump out of bed to start each day. When you go down to your office, or wherever you spend your day, and, by going there it gives you a great sense of joy and gratitude. In fact, you get so much enjoyment out of what you do that you feel like you are walking on air. What you do not only energizes you, but in some way contributes to a greater good. Actually, what you do brings a greater good to a greater community.

There are even times when you feel like going down on your knees in voluntary gratitude for the tremendous good fortune that has been bestowed on you.

And, if this is true for you, then you are a success…

In summary, it does not have to be a paying job that defines success. It can be anything you love doing. So from this day forward…”climb every mountain” until you find your dream.

Wishing you “success” in the new year and for your lifetime.

If you could skim each book, you would find the same basic principles in each one. It would take you hours to assemble all your notes. While reading the May 2009 issue of Success Magazine, I was introduced to 3 sites that will help you as they have numerous personal wealth building tidbits for you. I encourage you to visit:

Thesimpledollar.com
Moneyinstructor.com
Billeater.com

You may find one idea that will catapult you into financial independence.

The mass affluent are people who:
• Save more than they spend.
• Seek to invest for the future.
• Worry about funding their children’s college education, but in most cases won’t impoverish themselves because they can cover costs through savings strategies, loans or personal income. In addition, many are not opposed to their children paying some part of their education costs.
• Worry about how they will replace their paychecks when retirement approaches, but in most cases will need to be encouraged to spend more money in retirement.
• Desire to leave a legacy to their children, not to charity.
• In retirement, seek to spend between $4,000 and $10,000 per month.
• Will have between $500,000 and $1.5 million in investable assets upon retirement.
• Would never consider calling themselves high-net-worth investors or millionaires.

Consider the following research: Russ Allen Prince and Associates just published a book entitled The Middle Class Millionaire, based on surveying middle-class Americans with investable assets between $1 and $10 million.

The mass-affluent community seeks advice on a wide array of planning issues. While they generally have investable dollars, they also want to explore how their money will affect their lives. However, many of the financial relationships they maintain are built on investment strategies, performance comparisons, technical analyses and tactical repositioning. These people feel the planning element of the relationship is missing, yet they struggle to articulate it, since their current advisor calls the existing narrow relationship financial planning.

Too many of these people visit our office with stories of how they felt like small fish in a big pond. They felt an initial sense of security aligning with a big-name firm, but when it came to having their financial planning needs addressed, the relationship would fall short.

The mass affluent seem to be stuck in a world where they want financial planning advice, yet what they buy is primarily investment advice.

Reprinted with permission from Oversold and Underserved: A Financial Planner’s Guidebok for Effectively Serving the Mass Affluent, by Marc Freedman. 2008. Denver: FPA Press

There are more than $16 billion worth of matured bonds that have not been redeemed. This is the final year Series E bonds earn interest. Thus, a $100 bond from 1960 is now with 700.

You can visit a website to see if you have an unclaimed bond. You could have substantial cash that will stop earning interest. I found a few that I had previously bought. Check out the website: www.treasurydirect.gov/indiv/tools/tools_treasuryhunt.htm.

Good luck and good hunting.

Do I speak for corporations? Yep! Do I speak for non-profits? You bet! Do I speak for colleges and universities? Absolutely! Do I speak for network marketing companies? I sure do! Do I speak for churches? Yes I do! Do I speak for lots of other groups I haven’t mentioned? Yes, yes and yes! So, if you would like to have your meeting supercharged, let us know and we will do our best to get there! I would love to include your city on my end of the year list! Email my assistant at angelique@fgmci.com and she’ll get you taken care of!

When damage is done to their home, the claim filed, and then, finding out that many items are not covered the homeowner is angry. The typical response is: “After all the years I paid those premiums those things should have been paid”. Whoa, “should have, would have, could have”, are major thinking errors and excuses for not spending time analyzing the coverage. Tell me, when you spent $20,000 to $50,000 on a new car did you ask or check out if a sun roof was included? If not, did you get angry at the dealer and say … “Well for all the money we spent that sun roof should have been included”.

When I do financial planning for my clients we look at 10 basic things in their homeowners policy. Then, I inquire if they want me to completely analyze the policy. If yes, we proceed ahead … if no, then they are at risk. For a no cost approach to analyze your policy simply set up a meeting with your casualty agent and have them explain in detail each item covered.

Above all, remember, you must prove your loses. Yes, you must prove that you had 2 TVs, or a Plasma TV etc. Also, if you do not have replacement cost coverage the insurance company will depreciate the asset before making payment. Let’s say you bought a sofa 10 years ago for $2,000. You have a fire and the sofa is destroyed. Without replacement cost coverage you will get paid the depreciated value or “0” in this case.

I learned the “prove you owned it” lesson many years ago. When I was 19 years old, I bought my first restaurant. Yes, I kept every receipt and took detailed pictures. I kept all the records in a “fire proof” safe. The restaurant burned to the ground and everything in the safe, due to the intense heat, was destroyed. No records remained. I worked countless months trying to get duplicate records from vendors. Many vendors would not cooperate. I cannot tell you the hundreds of thousands of dollars that was lost. One simple lesson learned … Keep duplicate copies offsite.

I encourage you to have your policy analyzed. I am sure the people in San Diego are now wishing they had their policies reviewed prior to their loses.

Discipline or Regret!

Here is a website that will give you a basic checklist. It is a listing from the state of Florida. Your state may have a few different sections, but, overall it is a good template.

http:// www.floir.com/pcfr/HOChecklistRule.htm

A good relationship with money goes beyond being a money manager. Our kids need to grow up to be compassionate and caring. They should learn that there are more things they can do with their time, effort and money than just spending on themselves.

If our kids learn to help make other people’s lives better it will make their own lives better. A Money Magazine study discovered that people who help other people are happier with most aspects of their lives versus those that don’t. You can give money to charity, but, the study showed donating things or volunteering works just as well. Kids may not be able to give money but they can give old toys to shelters or give time at a food bank. Our kids get something psychologically when involved in helping others. Where does it start…? With you. Being a charitable parent in front of kids helps form charitable kids. In fact, being a financially intelligent parent in front of our kids helps foster financial intelligence in them.

What are you subconsciously teaching your kids about money?? That money is something to be loathed and you must spend it all immediately!! That you should be a “miser” with money and hoard it or, there is a balance to money…an emergency fund, a set amount to save for future responsibility, a set amount to save for future purchases and, lastly, to live within your means.

Are you teaching your kids to demand instant or deferred gratification? You can get your kids started in volunteer activity after age four. Explain to your kids that there are children whose parents do not have the money to buy toys. Suggest the kids gather up their toys that they are “to big for” and put them in a bag. Then, together bring them to the shelter.

Even your teenagers can learn charity. Have them volunteer at say a Habitat for Humanity building program or other programs sponsored by your church.

Knowing that you are doing something worthwhile and significant brings a sense of contentment that is a real “high”.

A personal note from Paul Ferraresi: At an early age my parents had our whole family volunteer and help out people less “fortunate” than we were. It made us all realize as kids how great we had it (even though we did not have all the best things in life. Oh yes, we ate well…naturally, being Italian, but, we never had the best clothes or trinkets).

The lessons we learned as kids was “I cried that I had no shoes…till I saw the boy with no feet!!!”

Interesting Facts:

• 73…The number of years before 2006 when the nation’s personal savings rate last sank to negative 1 percent or lower.
• 60…Percentage of gross income saved monthly by an “Extreme Savers” couple. (Profiled by CNN Money).
• 40…Percentage of workers who say they are not saving for retirement.

Remember when you gave a beat up dining room table to a thrift shop? If you gave it after 8/18/2006 then you can not claim it as a deduction unless it is worth $500 and you get a professional appraised prior to filing your 2006 return. Lower value stuff donated after 8/17/06 must be in good condition (take pictures to prove it). You can claim a deduction that isn’t in good condition if it is worth more than $500 and you get an appraisal. Given that appraisers charge $50-250 per hour you may be better off to sell the used stuff and donate the cash to a good cause.

Congress also gave the IRS authority to deny deductions for “minimal monetary value” such as socks and underwear, donated after 8/17/06 even if in good condition.

Cash contributions: You’ll need either a bank record, cancelled check, credit card statement or receipt from the charity to deduct any cash gift after 12/31/06. For amounts over $250 you must have a receipt from the charity (a cancelled check will not do).

Appreciated Personal Property: When you donate tangible personal property such as art or furniture you can deduct only the lesser of what you paid or it’s current worth, unless, the charity keeps and uses the item for related activities.

Beginning with 2006 returns penalties climb for charitable deduction puffery. If your claimed value is 50% or move above what IRS decides, then, you can be hit with a 20% penalty of your underpaid tax.

Hmmm! Who said it was more blessed to give than receive??

1. GDP (Gross Domestic Product) has dropped to 1.6% in the second quarter from 5.6% in the first quarter. We have not seen GDP growth below 2% for four or five years.
2. The two other housing downturns in the past 30 years were in the 70’s and the 80’s. The downturns last longer than most people dream and the average cycle is three to four years. This downturn began in 2005 and may last into 2008.
   This has happened before but only preceding a recession or very dramatic slowdown.
3. Flat or inverted yield curves only occur before a recession not a slowdown. All rates from three months to 2 years are above long term rates.

A great economic indicator is the activity at Wal-Mart. It reflects the low to middle income sector of the economy. There has been a dramatic reduction in spending by this end of consumers (Note: 2/3rds of GDP is at the consumer level). Another item that could really impact things is a reversal in tax policy by the new Democratic Congress. A major reason for this 3 year run in the stock market was the passage of lower capital gains and dividend tax rates. This new rate was implemented in May 2003 and the market took off starting in June 2003. Any change in this rate would have a serious negative effect.

A recent proposal by the new Congress is to raise the minimum wage. That will raise unit labor costs throughout the economy for everyone. It will have a major impact on profits (which drives your stock market returns). It will impact unemployment and hurt job creation. If you raise the price of labor, business will find a way to use less of it. As a business owner, to maintain profit margins, when a new cost comes in…you either raise prices (inflation catalyst) or cut costs (lay people off). [You do the same thing in your household when an expense goes up]

The new Congress is talking about a windfall tax on oil companies. A windfall tax on anything would be a major negative. The last time this happened was in the Carter administration, it resulted in less exploration and eventually to the dependence we now have on foreign oil. [oil companies only make 7% profit margin; Coca-Cola makes 19%; cigarette companies make 33% and alcohol companies make 65%; Why isn’t there windfall profits tax on these other companies? Hmm!]

What can you look forward to and how do you position yourself if a recession is coming?

• Inflation has pretty much peaked.
• Commodities will continue to be strong.
• The dollar will continue to weaken thus gold and silver will do well.
• The Federal Reserve will begin to drop interest rates in 2007 into 2008 by 200 basis points, thus fixed income investments will do well.
• REITS will do okay.
• Foreign emerging markets will be strong.