Rule Six

Cultivate a skill. Whether you went to school for it or not, most people have a unique skill worth paying for. A friend of mine was a part-time secretary who would walk her neighbor's dogs in the morning to generate a little extra income. After just a few months of doing this, her clients noticed that she was really good with the dogs, and so she kept on getting referrals from them. She was so busy at one point that she had to enlist the help of a second person to do some of the dog walking. I finally told her that she should just start her own dog walking company. Most people are usually too busy or lazy to walk the dogs themselves so why not pay to have someone else do it. She quit her job as a secretary, and now owns a successful dog walking business with 14 employees working underneath her. One thing I've noticed is that in this country, people will pay for the most ridiculous things. There are a lot of wealthy and lazy Americans who will sometimes pay for the most ordinary of services. Some people just have so much money to spare, that you can get a high paying salary for doing a wide variety of things. My friend would get paid almost 3 grand a day just for doing a celebrity's make-up. She made more money than me! So if you have any special talents or even something that you're especially good at and enjoy doing, then you should start getting paid for it. Create your own business, and maximize your earning potential asap.

Rule Five

Sorry I haven't posted in a few days everyone, but I've been really busy lately :(

Rule five is Don't Rent, Buy. Now I know all of us need a place to live, and not all of us have the money to actually buy a home outright, so the majority of people are usually renters. In this case, if you have good credit (see rule one) you should be able to borrow a lump sum of money from the bank to pay for a house. The mortgage itself can be viewed as an investment instead of borrowing. Because in the long term, you can reasonably expect that the interest you pay on your mortgage will be less than the increase in the value of your property. What you are banking on is that the value of your home will, in the longer term, go up, and therefore, you have invested whatever deposit you put down and your mortgage money.

Renting, however, is not an investment. You will definitely never see that money again. But before you go buy a house or condo, remeber to think carefully about how much your mortgage payments (which will be ultimately determined by your credit score) will be and if you can afford to to repay them.

Rule Four

INVEST! Don't let your money sit in the bank and collect a low 5 % interest rate. Research the stock market and start investing in some low risk mutual funds. For those who may not know what a mutual fund is- it is a company that pools money from many investors and invests the money in stocks, bonds, short-term money-market instruments, other securities or assets, or some combination of these investments. The combined holdings the mutual fund owns are known as its portfolio. Each share represents an investor's proportionate ownership of the fund's holdings and the income those holdings generate. The advantages to investing in mutual funds are:

Professional Management — Professional money managers research, select, and monitor the performance of the securities the fund purchases.

Diversification — Diversification is an investing strategy that can be neatly summed up as "Don't put all your eggs in one basket." Spreading your investments across a wide range of companies and industry sectors can help lower your risk if a company or sector fails. Some investors find it easier to achieve diversification through ownership of mutual funds rather than through ownership of individual stocks or bonds.

Affordability — Some mutual funds accommodate investors who don't have a lot of money to invest by setting relatively low dollar amounts for initial purchases, subsequent monthly purchases, or both.

Liquidity — Mutual fund investors can readily redeem their shares at the current NAV — plus any fees and charges assessed on redemption — at any time.

My personal favorite are the Vanguard Mutual Funds. They recently appeared on Forbes "Best Buys" list, and have been delivering a decent return to investors over the long haul while keeping costs under control. Check out the top 25 picks below.

European Stock Index Fund
Global Equity Fund
GNMA Fund
High-Yield Tax-Exempt Fund
Inflation-Protected Securities Fund
Insured Long-Term Tax-Exempt Fund
Intermediate-Term Bond Index Fund
Intermediate-Term Investment-Grade Fund
Intermediate-Term Treasury Fund
International Value Fund
Limited-Term Tax-Exempt Fund
Long-Term Bond Index Fund
Long-Term Investment-Grade Fund
Long-Term Tax-Exempt Fund
Long-Term Treasury Fund
New Jersey Long-Term Tax-Exempt Fund
Pennsylvania Long-Term Tax-Exempt Fund
Selected Value Fund
Short-Term Bond Index Fund
Short-Term Investment-Grade Fund
Short-Term Tax-Exempt Fund
STAR® Fund
Strategic Equity Fund
Wellesley® Income Fund
Wellington™ Fund

Rule Three

Don't be afraid to pay for financial advice. Sure you can get free advice from your family and friends, but what exactly makes them qualified to give it to you? There are only two groups that are qualified to give you accurate financial advice. First there are the skilled professionals who carry indemnity insurance- advisors you can sue in the event that the information they give you is wrong. Second there are very rich people. These people have proven their financial acumen by making large sums of money themselves. So feel free to take advice from only these two groups.

Also, any financial advisor you use should be independent. He should not be restricted to providing advice from a limited range of products offered by the company he works for. You should insist on paying for the advice on an agreed fee, not by commission on the policies you take out. You need impartial advice that is suited to you and your circumstances, and paying for the advice is the only way to be sure that you get it.

Rule Two

Take advantage of the internet to generate some income. If you have some things laying around the house sell it on ebay instead putting them in a box collecting dust, or instead of having a garage sale- they are totally outdated and rarely have a decent payoff. Ebay is used by people around the world, therefore it isn't limited to people around your neighborhood or passerbys; in my opinion it's probaby one of the most effective ways to earn money online. I've seen people use ebay to sell various items ranging from antiques to sunglasses. One of my friends buys antique pottery in flea markets and sells them for twice the price on the internet, and she makes an extra 2 grand a month just from selling this stuff. Who knew? I guess one man's trash is another man's treasure.

Advertising for people like Google and Agloco (check out links below) can also make you some money. By simply creating a site blog and placing Google ads in them, you can make money through referrals. However, with Agloco you may be able to earn a little bit more. Not only do they have a referral program but they also have created a new way for people to earn a little income from normal web browsing. You can make a kickback from surfing the internet. Their "Viewbar" plugin is a small toolbar that rests on the bottom of your screen or browser window while you surf the Internet. The Viewbar software is what enables AGLOCO to collect the money you are earning while browsing the Internet. So next time you are just laying around the house and browsing the internet, get an Agloco account and at least try to get paid for it.

Link: Agloco: http://www.agloco.com/r/BBDQ9842

Rule One

So let's begin. The first and most important rule to becoming financially successful is having good credit. The interest rate you'll pay for the money you borrow will be determined, in large part, by this three-digit number that's generated from the information in your credit report.
Most lenders have carved-in-stone rules about handing out the best terms, and those rules almost always place a major emphasis on your credit score. If their best rates are offered to borrowers with a score of 700 or higher and yours is a 698, those two points could cost you thousands of dollars.

According to http://www.myfico.com/, the consumer Web site of the Fair Isaac Corp. that created the FICO score (the most commonly used credit score), the interest rate difference between those two scores is one-half percentage point. A low credit score can definitely cost you thousands of extra dollars when it comes to paying off a home mortgage or loan. I personally have excellent credit so I can get a low interest loan to start up my own business, I can get a credit card without paying any interest on my purchases for up to a year, and my mortgage payments are so extremely low that I could probably buy another house in LA without any problems.

If you do already have a low credit score, there are 3 easy steps you can follow to rectify the problem:

1. Start paying your bills on time.

2. If you are already in severe debt, call your creditors and try to work out a payment plan to reduce your credit card balances, or seek a legitimate credit counselor. You can contact the various dept relief companies below to hep you get rid of your debt and improve your credit score. However, beware that paying off a collection account will not remove it from your credit score. It will stay on your report for seven years.
http://www.american-debtrelief.org/
http://www.edebt.com/
http://www.consumercredit.com/
http://www.repairyourbadcredit.com/

3. If you have the means, pay off the debt completely.

4. Make sure you aren't a victim of identity theft. Review your reports from all three credit bureaus for accuracy once a year.

Hope this helps! Please feel free to leave comments or make suggestions on how to improve my blog. Thank you!