Lynnette Khalfani - The Money Coach™ Newsletter
3-15-2007
Hi All:
Just a quick heads up, in case you missed me the first time, watch me on Oprah tomorrow (Friday) if you are near a TV – of course, you can also TiVo the program too! J Here is a link to the website for more info: http://www.oprah.com. (I know, I know – sorry for the late notice).
Also, over the past two weeks, I have received lots of media requests and questions from everyday people like you wanting to know if they need to be worried about the recent declines in the stock market. If you have money in stocks or mutual funds, and especially if you invest in retirement plans like 401ks, 403bs, or IRAs, some of you may look at those big drops in the Dow Jones Industrial Average and panic. I know this is true, because some of the queries I have received are from folks who basically say: “I should just stop investing and get out of the market completely.”
Why We Are All Investors
This type of attitude got me thinking, you know what, really, we are all investors – whether you play on Wall Street or not. The truth is: no matter what you do with your money, you are an investor in something. Based on one simple thing – how you choose to spend your money – each one of us invests day in and day out, month after month, and year after year. You invest every time you decide to buy a new car. It just happens that you are investing in a depreciating asset that will decline in value as soon as you drive it off the lot. You invest every time you go to school to further your education – or set aside money for your kids’ college education. In these cases, you are investing in the promise of a better future.
If all of your income is going to food, shelter and security, you are investing in your infrastructure, the same way any major corporation operates, even if they are not yet making a profit. If you spend all of your disposable income on feel good things like spa treatments and trips to Starbucks, then you are investing in your lifestyle. Sorry, there will not be a monetary return on these investments...not directly, but perhaps you will find a soul mate to go with that latte … or maybe that facial and spa pampering will make you feel more confident, which may manifest itself into a better position at your job. It’s a long shot, but who knows? Or maybe you choose to drive a 10 year old car, and live in a modest home or apartment, so you can invest in world travel...No, not by buying shares of Continental, but by booking frequent trips to parts of the world that some only read about in the Sunday travel section of their newspaper. If you can afford it, I say kudos to you: you are investing in memories (or at least that is how I justify my frequent travels!) J
A Challenge From The Money Coach
You have to change your mindset about yourself, your savings, your income, and your future goals. I want to issue a challenge to each one of you. I want you to look in the mirror today and face yourself. Then go ahead and ask yourself this question: “What do I invest in and what is the return on my investment?” Some of you may say: “I invest in bonds, and I am getting a 6% return on my money.” Others of you may admit, candidly: “I invest in shoes, and it gives me attention or gets me an emotional “shoppers high.”
This exercise is about facing the truth about what you are doing with your money – which is to say, what you choose to invest in on a regular basis. Are you investing in cute clothes and handbags, so that you can look and feel good, even though you have to pay for those things on credit? Are you investing excessively in vices, like cigarettes and liquor, which can harm you financially and physically? Are you investing in CDs – and I am not talking certificates of deposit. I am referring to music CDs along with DVDs, ring-tones, and other small, monthly “I deserve it” expenditures. Whatever you are spending a good amount of money on, I want you to be honest about it.
Do not kick yourself if you come to the realization that you have been investing in the wrong things. Just resolve to do better – and follow through with that intention.
In fact, to help you jumpstart your efforts, I want you to write me by Monday and tell me what you learned about yourself by doing this exercise. So after your period of reflection, and looking in the mirror, send me a quick email letting me know what you have been investing in and what you think about your investments. If you want to change, and start investing in something else, let me know that too. I will pool your answers and announce the results so you can see what others are investing in too. (And yes, I will keep your names confidential).
Meantime, do not worry about those day-to-day blips in the stock market. They are just that: blips.
Happy Investing!
Lynnette Khalfani, The Money Coach
Author, Speaker, Personal Finance Expert
Lynnette Khalfani, a former Wall Street Journal
reporter for CNBC, is the author of
The Money Coach’s Guide to Your First Million and the New York Times
bestseller
Zero Debt: The Ultimate Guide to Financial Freedom. She has appeared
on Oprah, The Tyra Banks Show, Dr. Phil and Rachel Ray. She has also
been featured in The New York Times, USA Today, Redbook, Essence and Black
Enterprise Magazine.
Lynnette's next book,
Zero Debt for College Grads: From Student Loans to Financial Freedom
will be available in May 2007.
Feel free to email this
newsletter to anyone you think needs to improve their personal finances. For
more information about Lynnette, visit her website at
http://www.themoneycoach.net.