When Daniel Richard offered me a review copy of his new ebook, Breaking the Gambling Addiction, I wasn’t sure if I was going to review it. That’s just because I try to stick to topics that are (1) within my realm of competence, and (2) applicable to most of the people I’m writing for. Gambling addiction is neither of those.

But when I thought about it, I realized that I really did need to tell people about it. Because while most people aren’t addicted to gambling, it’s a devastating problem for those who are.

2-3% of U.S. adults are considered problem gamblers, and 1% are considered pathological gamblers. In addition to the obvious financial problems gamblers face, there’s a strong link between gambling addiction and problems with drugs, alcohol, and smoking, as well as depression and suicide.

People email me questions about all kinds of things – goal setting, finance, psychology, spirituality, math, blogging, copyright law, etc. And if I don’t happen to know the answer personally, I like to at least be able to point them in the right direction. So now I’m ready for anyone who may ask me how to break a gambling addiction.

I’ve always been very anti-gambling. I tell people that when I went to Atlantic City, I learned my lesson the hard way by losing 650 simoleons (by which I mean $6.50). When I later went to Las Vegas, I’m not sure if I gambled at all. It just doesn’t seem appealing to me.

Therefore, I don’t pretend to have any business telling people how they can overcome a gambling addiction. I think the best people to help with that would be either a psychologist, counselor, etc. who has helped people break their addiction, or somebody who has broken their own. Daniel Richard is the latter.

He placed his first bet at 16 (below the legal age), got hooked, and got to the point where he was stealing money to sustain his habit. Then he found out how to break his addiction, and he hasn’t looked back.

Here’s the table of contents:

• Introduction

Part 1: My Story

• Chapter 1 – Curiosity
• Chapter 2 – I Won! Winning My 1st Bet
• Chapter 3 – Getting Hooked
• Chapter 4 – Controlling The Urge For A Gamble
• Chapter 5 – The Dry Spell
• Chapter 6 – And I Stole
• Chapter 7 – Where’s My Conscience?

Part 2: Lessons Learned

• Chapter 8 – 11 Self-Approval Lies on Gambling
• Chapter 9 – Why We Gamble?
• Chapter 10 – “I Can Stop”
• Chapter 11 – 4 Factors In Gambling
• Chapter 12 – Gambling: An Exchange of Money for More Money To Spend?
• Chapter 13 – 6 Thinking Traps of Money Making Through Gambling
• Chapter 14 – Funding Gambling As A Channel To Making More Money
• Chapter 15 – The Chase For Uncertainty
• Chapter 16 – “Everything We Do Is A Gamble”
• Chapter 17 – Uncertainty: High Risk = High Returns?
• Chapter 18 – The Art of The Gamble
• Chapter 19 – Gambling: The System for Easy Money?
• Chapter 20 – The Wolves Know The Code To Your Wallets

Part 3: Breaking Free

• Chapter 21 – The Preparation
• Chapter 22 – Habits vs Addictions
• Chapter 23 – Knowing Your Motivation
• Chapter 24 – 7 Tips To Quitting The Gambling Addiction
• Chapter 25 – You Don’t Need Any Psychological Hacks to Breaking Free
• Chapter 26 – The One Thought That Changed My Life
• Chapter 27 – After Change: Are You Leaving Behind A Legacy?
• Chapter 28 – Dealing With The Gambling Addictions of Loved Ones
• Acknowledgments

He also has a sneak preview available on his site. Know someone with a problem? Give them more than encouragement. Give them Breaking the Gambling Addiction.

Hunter Recommends:
Greatness Without Genies: The Law of Attraction for Realists
How to Be Rich And Happy: Whatever You Want, Whenever You Want
How to Finally Find What You Love to Do And Get Paid For Doing It

When I was at Virginia Tech, their football team’s defense was a sight to behold, particularly their special teams. They blocked more kicks than anyone else in the country, enough that we were almost surprised when the other team managed to get a kick off. Very often, blocked kicks became immediate scoring opportunities. I even saw them intercept a two-point conversion attempt and run it back for a safety.

And on one particular day, the defense and special teams were in full force, working the magic we had come to expect of them. Except there was one problem: the offense didn’t show up.

Despite the sacks and despite the blocked kicks, they weren’t putting points on the board because they couldn’t do anything on offense. As one announcer said, “Special teams will only get you so far.” And Virginia Tech lost that game.

In personal finance, people who only play defense can expect to meet a similar fate. Steve at Brip Blap has often written about the importance of expanding your means, and I agree with him.

Most people focus purely on reducing spending. That’s financial defense. It’s critically important (and most people are losing that game), but it’s not the only game. There’s also the often ignored game of financial offense, or earning more than you spend, rather than spending less than you earn.

One of the most popular bits of financial wisdom is to keep your eye on the Latte Factor, which is the tendency for small purchases to add up unnoticed over time. And it’s good advice. By controlling your small expenses and investing the money you save, you can end up with lots more money than you would otherwise, perhaps a difference of millions of dollars over a period of decades.

I’m not knocking this at all. I think frugality is the most important key to financial independence. In Where Have All The Dollars Gone?, I talked about the method I used to plug my financial leaks early on, basically just keeping extremely close tabs on the Latte Factor. But there are some problems with only playing financial defense.

In The 4-Hour Workweek, Tim Ferriss says:

“This book is not about saving and will not recommend you abandon your daily glass of red wine for a million dollars 50 years from now. I’d rather have the wine. I won’t ask you to choose between enjoyment today or money later. I believe you can have both now. The goal is fun and profit.”

When you save money today in hopes of spending it later, you’re deferring a lot of your enjoyment to a future date that may never arrive. You might not live that long. Or the economy might collapse (I don’t mean a stock market correction, but something like the dollar no longer being accepted as currency). It doesn’t make sense to put all your chips on something that may or may not ever happen.

Another thing is that you quickly run into diminishing returns. The more you save, the harder it becomes to save more. You can cut out the frivolous expenses pretty easily. Then you can use some self-discipline to live below your means. But when you’re spending several hours a day looking for coupons, you have to ask yourself if it’s worth it.

Another thing is that by trying so hard to reduce your expenses to zero, you’re cutting yourself off from life. If your goal is to sit perfectly still to minimize the energy you use, oxygen you breathe, heat you generate, etc., then what good are you? Why invest so much effort into being a bump on a log?

To be fair, increasing your income is easier said than done, and I’m not going to propose how to do it in this post. I’m just suggesting that you develop both your financial offense and defense. Control your expenses, yes, but instead of trying to be totally passive to minimize your consumption, work on maximizing your output. Create value, make money, boost enjoyment, engage in life.

Photo by Stacey Lynn Photography

Hunter Recommends:
Greatness Without Genies: The Law of Attraction for Realists
How to Be Rich And Happy: Whatever You Want, Whenever You Want
How to Finally Find What You Love to Do And Get Paid For Doing It

Their reasoning was that if they got 5% interest on $2 million, that would be $100,000 a year of taxable income. But that’s like a normal salary, not enough for the lavish retirement they have in mind. So how can you retire on only $2 million?

Aside from the ridiculous odds of winning that much money in the lottery, their logic isn’t quite right. You can get more than a 5% rate of return, and also you’re not limited to spending only the returns (you can spend the initial $2 million too).

But the basic idea is right: what may sound like a lot of money isn’t so much when you need it to support your big spending plans for the rest of your life.

Whenever someone asks if $x is enough to retire, the answer is always no. Because if you were planning to live within your means and spend money at an indefinitely sustainable rate, you wouldn’t have to ask.

If you have to ask, what you’re really wondering is “Since my desires will expand completely out of control with my unrestrained greed and carelessness, is this so much money that I can’t possibly screw it up?” No, it never is.

I remember when Michael Vick got his 6 year, $62 million contract in 2001. Everyone wondered how he could possibly spend it all. Aside from the obvious fact that you don’t have to spend it all, I didn’t see any reason he couldn’t run out of money if he wasn’t careful. Oprah had recently spent $52 million on a single house.

Fast forward 7 years. He had lost his salary and endorsement deals because of the dogfighting scandal. And the bills continued to pile up: steep lawyer fees, 6 luxury homes, and living expenses and 10 cars for friends and family. With no other options, he filed for bankruptcy.

Your retirement could last longer than you think, and you probably won’t have close to $62 million to take you through it. So how can you prevent this from happening to you? It’s pretty simple, actually.

1. Be frugal. It might not be fun and sexy, but it’s by far the most important tip for becoming and remaining financially independent.

2. Don’t stop earning money in retirement. Earning money comes from creating value. Why do you need to stop creating value at a certain age? You might want to change the way you do it, but you don’t need to shut down completely.

Keep these tips in mind, and you can live indefinitely with no savings at all. Ignore them, and no amount of money will ever be enough.

Hunter Recommends:
Greatness Without Genies: The Law of Attraction for Realists
How to Be Rich And Happy: Whatever You Want, Whenever You Want
How to Finally Find What You Love to Do And Get Paid For Doing It

“The new law of evolution in corporate America seems to be survival of the unfittest. Well, in my book you either do it right or you get eliminated…The point is, ladies and gentleman, that greed, for lack of a better word, is good. Greed is right, greed works. Greed clarifies, cuts through, and captures the essence of the evolutionary spirit. Greed, in all of its forms; greed for life, for money, for love, knowledge has marked the upward surge of mankind.”

Greed isn’t the right word because it’s an extreme version of what he’s really talking about. The opposite extreme is apathy, and both extremes are bad.

I’m not sure what a better word would be. Desire? Ambition? Drive? Mojo? Life force? Evolutionists call it selective advantage. Academics call it a thirst for knowledge. Economists call it rational self-interest.

Whatever you call it, it’s not bad. Surely there’s plenty of room between one extreme of preying on innocent people, and the other extreme of being a spineless jellyfish.

I’m bringing this up now because I just saw Michael Moore’s new movie, “Capitalism: A Love Story.” While I liked it, I thought it was far weaker than “Sicko” and “Fahrenheit 9/11.” I totally agree with him about all the corruption at the top, but I disagree with him about what’s happening at the bottom.

We see several people in the movie being evicted from their homes. Is it sad? Yes. Being poor is awful, no question about it.

But while I saw people who weren’t happy about their situation, I didn’t see anyone taking personal responsibility for it, or coming up with a plan for how they’re going to fix it. They just think they deserve to stay in their house whether they’re making the payments or not.

Their logic seems to be “I’m poor, therefore someone should give me a free house.” If it were me, I’d be thinking “I’m poor, therefore I better make more money so I can pay for this house.”

One family looked out the window as several police cars pulled up to their house to evict them. But they refused to open the door for them. Instead, one family member called the Sheriff and said they weren’t going to resist, but the cops were going to have to break the door down.

I actually found this guy more offensive than the “condo vulture.” He thinks he’s Gandhi in a noble fight of nonviolent resistance? No, he’s just a jerk who’s wasting the cops’ time and causing someone else’s property to be damaged.

To be fair, we didn’t get any information about how all these people ended up like that. There could have been tragedies that put them in that situation through no fault of their own. (Though minor economic fluctuations such as this recession are far from being tragedies.)

But there were hints that they became homeless only through absence of greed, for lack of a better word. Thinking that money is evil isn’t going to help. If you’re not making enough to pay the bills, then you have to either reduce your bills or make more money.

Are there no jobs where you live? You might have to move. Does your occupation no longer pay well? You might have to change fields. Do you not have any skills that employers want? You might have to develop some. This might not be fair or convenient or what you wanted, but it’s sometimes necessary.

When I got laid off in the dot com bust, I had to move to where the jobs were, learn new skills, and take a big pay cut. Did I want to do that? No, but it was a lot more constructive than sitting around in an area with no jobs, waiting for Michael Moore to put me in a movie.

And if I had stayed, I certainly wouldn’t have claimed the right to live there without paying for it. I would have sooner starved to death than default on my mortgage.

One person in the movie says there are only two kinds of people: the ones who have nothing, and the ones who have everything, with no one in between. Where is he getting that from?

I’d guess that almost everyone who’s reading this post is in between. The ones who have nothing sometimes truly lack the ability to move up, but usually they just refuse to evolve.

If someone doesn’t want to have moderate greed, I think that’s their right. But they have to accept the consequences of the path they’ve chosen.

Michael Moore says capitalism is the enemy of democracy. But the problem isn’t capitalism itself, just the kind we have.

Most people are outraged that the top 1% makes as much money as the bottom 95%, but that’s not the problem per se. If they create that much value, they should make that much money. Why should the people who don’t create any value make as much money as the ones who create a lot?

However, the problem is that the broken system allows some of the top 1% to make that much money without creating that much value. In fact, some of them destroy value.

And some of them have gone to jail for it, but many more are still out there and up to their old tricks. Why wouldn’t they keep doing it, if they have no sense of ethics and no one’s going to stop them?

Moore says the top 1% fear the bottom 95%, because they have 95% of the votes. But he says they won’t take back the country with their votes, because they believe that if they keep working hard, they’ll be in that 1% someday.

I don’t know where he’s getting that from. Why would anyone think they’ll magically jump up like that? No, the problem is that there’s no one to vote for. No one stands for eliminating corruption because being a politician requires being all caught up in it.

True capitalism doesn’t guarantee that everyone is equally good at the game, just that we all get to play by the same rules. And while there should be a safety net to help people stay in the game when they’re down on their luck, we don’t want a system that fixes everyone at the same level. Eliminate greed, and you eliminate progress.

Moore unwittingly gives us an example of the good kind of greed: Jonas Salk, inventor of the polio vaccine. He did a great thing and didn’t patent it for personal gain, because he didn’t need the money.

But while he wasn’t greedy for money, his greed for a cure is what made him work hard enough to find it. He wasn’t the kind of guy to sit back and wait for someone to hand him a cure, or buy him a house.

Evil people are often obsessed with money, but that doesn’t mean that money is evil. It’s just a resource, and it works for its owner.

When good people refuse to play the game, that just means that only the evil people will have it. Isn’t it better to see it in the hands of people who will use it well? That’s why we need a healthy dose of the good kind of greed.

Hunter Recommends:
Greatness Without Genies: The Law of Attraction for Realists
How to Be Rich And Happy: Whatever You Want, Whenever You Want
How to Finally Find What You Love to Do And Get Paid For Doing It

What an awful book. I received this as a gift from someone who had some extra copies. I appreciate the gesture, and I would gladly link to them, if it didn’t reflect so poorly on their judgment. It’s that bad.

How Secrets of the Millionaire Mind by T. Harv Eker became a New York Times, Wall Street Journal, and USA Today bestseller, I have no idea. It’s like the guy started with Rich Dad, Poor Dad, threw out all the good parts, and padded the bad parts out to 200 pages.

I don’t even need to tell you what’s wrong with it. I’ll let the author do that for himself:

“This is a special ceremony, so I’m going to ask you to eliminate any distractions right now. Stop munching, stop talking on the phone, and stop whatever you’re doing. Men, if you like, you can change into a suit and tie, although a tuxedo would be best. Women, a formal evening gown and heels would be perfect. And if you don’t have anything that’s classy or new enough, this would be an occasion to go buy yourself a brand-new dress, designer label preferred.

If you’re all ready, let’s begin. Please kneel down on one knee and bow your head in respect. Ready, here goes. ‘BY THE POWER INVESTED IN ME, I HEREBY ANOINT YOU AS ‘WORTHY’ FROM NOW UNTIL FOREVER MORE!’

Okay, we’re done. You can stand up now and hold your head high because you are finally worthy.”

Feel better now?

“The play account rule is that it must be spent every month. That’s right! Each month you have to blow all the money in that account in a way that makes you feel rich. For example, imagine walking into a massage center, dumping all the money from your account on the counter, pointing to the massage therapists, and saying, ‘I want both of you on me. With the hot rocks and the frickin’ cucumbers. After that, bring me lunch!’”

After that, bring me humility!

“[At my workshop] I then pull out a wooden arrow with a steel-pointed tip and explain that as a practice for this discipline [going beyond your comfort zone], you’re going to break this arrow with your throat. I then demonstrate how the steel point goes into the soft part of your throat, while another person holds the other end of the arrow against their outstretched palm. The idea is to walk straight into the arrow and break it using only your throat before it pierces through your neck.”

And if you survive this, next you drink the Kool-Aid!

I really don’t have much to say. For an infinitely better financial motivation book, try Rich Dad, Poor Dad. It has its flaws, but anything negative you can say about it goes ten times for Secrets of the Millionaire Mind.

So why did I even bother writing a review? Because I had to say something. It greatly concerns me that a book like this can become a bestseller. We’re in an economic crisis because too many people checked their brain at the door when making financial decisions, and I don’t think books like this are going to help restore sanity to the American public.

Have any of you read it? Did you find it helpful? If so, tell me what I’m missing.

Hunter Recommends:
Greatness Without Genies: The Law of Attraction for Realists
How to Be Rich And Happy: Whatever You Want, Whenever You Want
How to Finally Find What You Love to Do And Get Paid For Doing It

I have a credit card that I haven’t used in a long time. I just got a letter from the company saying:

“We’re writing to you because we noticed that this credit card account hasn’t been used for at least 24 months. We believe this may indicate that the account no longer meets your financial needs. With this in mind, the account has been closed.”

Translation:

“We haven’t been making any money off of you, and because you haven’t used your card in 24 months, FINALLY we’re allowed by law to close your account without notice. Go away now.”

Today’s quiz: what will happen to my credit score?

A) It won’t change, because closing an account that hasn’t been used in 24 months doesn’t make any difference.

B) It will go up, because now I have less credit available, and therefore less ability to go into debt.

C) It will go down, because my balance on my other card is now a higher percentage of my total available credit.

D) It will go down, because I’ve lost the history of timely payments on that account.

I don’t know the answer. Do you?

Hunter Recommends:
Greatness Without Genies: The Law of Attraction for Realists
How to Be Rich And Happy: Whatever You Want, Whenever You Want
How to Finally Find What You Love to Do And Get Paid For Doing It

“You have ABSOLUTE CONTROL over but one thing, and that is your thoughts. This is the most significant and inspiring of all facts known to man! It reflects man’s Divine nature. This divine prerogative is the sole means by which you may control your own destiny. If you fail to control your own mind, you may be sure you will control nothing else.

If you must be careless with your possessions, let it be in connection with material things. Your mind is your spiritual estate! Protect it and use it with the care to which Divine Royalty is entitled.

You were given a WILL-POWER for this purpose.

…

Doubting Thomases scoffed scornfully when Henry Ford tried out his first crudely built automobile on the streets of Detroit. Some said the thing never would become practical. Others said no one would pay money for such a contraption.

FORD SAID, “I’LL BELT THE EARTH WITH DEPENDABLE MOTOR CARS,” AND HE DID!

His decision to trust his own judgment has already piled up a fortune far greater than the next five generations of his descendants can squander. For the benefit of those seeking vast riches, let it be remembered that practically the sole difference between Henry Ford and a majority of the more than one hundred thousand men who work for him, is this-FORD HAS A MIND AND CONTROLS IT, THE OTHERS HAVE MINDS WHICH THEY DO NOT TRY TO CONTROL.”

This gives a taste of his writing, which is a bit old fashioned and peppered with glaring typos, creative punctuation, and RANDOM ALL CAPS. It also requires a good amount of patience to read it, because he’s very wordy, sometimes going on and on about things that are completely out of date.

But Think and Grow Rich is worthy of being a classic. While the wording is dated, the ideas are timeless. It’s also incredibly optimistic without being too cheesy.

And it’s practical. It’s about controlling your thoughts, but in a down to earth way instead of being all about “thought vibrations” (although there is some of that). If you find yourself making excuses instead of money, Napoleon Hill will whip you into shape.

Actually, it’s not really specific to money. At one point he says that “riches” means “financial, spiritual, mental, and material estates.” Think of it as a guide for keeping your mind from getting in the way of your success, whatever it is you’re working towards.

He alludes to Andrew Carnegie’s secret, which he says is the key to all great financial success. He doesn’t state it directly, but he hints at it in every chapter, and says the secret will appear to you when you’re ready. I’ll revisit the Carnegie Secret at a later time. (Update: now you can learn The Hidden Secret in Think and Grow Rich!)

Meanwhile, Think and Grow Rich is freely available from this link.

Table of Contents:

Author’s Preface
Chapter 1 – Introduction
Chapter 2 – Desire: The Turning Point of All Achievement
Chapter 3 – Faith Visualization of, and Belief in Attainment of Desire
Chapter 4 – Auto-Suggestion: the Medium for Influencing the Subconscious Mind
Chapter 5 – Specialized Knowledge, Personal Experiences or Observations
Chapter 6 – Imagination: the Workshop of the Mind
Chapter 7 – Organized Planning, the Crystallization of Desire into Action
Chapter 8 – Decision: the Mastery of Procrastination
Chapter 9 – Persistence: the Sustained Effort Necessary to Induce Faith
Chapter 10 – Power of the Master Mind: the Driving Force
Chapter 11 – The Mystery of Sex Transmutation
Chapter 12 – The Subconscious Mind: The Connecting Link
Chapter 13 – The Brain: A Broadcasting and Receiving Station for Thought
Chapter 14 – The Sixth Sense: The Door to the Temple of Wisdom
Chapter 15 – How to Outwit the Six Ghosts of Fear

Hunter Recommends:
Greatness Without Genies: The Law of Attraction for Realists
How to Be Rich And Happy: Whatever You Want, Whenever You Want
How to Finally Find What You Love to Do And Get Paid For Doing It

Today I came out from under my rock to see what was happening in the financial world, and found that today was one of the worst days of the financial meltdown. I found myself thinking about Martha Stewart, and wondering whether insider trading should have been included as the seventh income stream in Online Business School.

Seven years ago, Martha sold all of her ImClone stock on insider information the day before an 18% drop, avoiding a loss of $45,673. She denied it when questioned, saying “I just want to focus on my salad.” But sure enough, she was eventually convicted of conspiracy, obstruction of an agency proceeding, and making false statements to federal investigators. She was given a free five-month vacation in Camp Cupcake, and fined $30,000.

I didn’t follow this story closely, but am I missing something here? Did she actually profit from the deal, even after the conviction? I’m not an economist, but it seems that one good way to reduce the deficit is by raising the “insider trading tax.” I’m not a big fan of taxing the rich just because they’re rich, but if they’re guilty of illegal riches, can’t they share the wealth a little?

Below are the lyrics I remember from the parody song “Martha,” to the tune of Barry Manilow’s Mandy. I heard it on the radio years ago, but I can’t find it online. I wish they did a video, because it really loses a lot without the tune.

She got an inside Wall Street tip
Now she’s gonna pay for it
Her broker says she lied
She’ll soon be indicted
She’s facing lots of time
And we’re so excited

To see her walking out in cuffs
Twenty years won’t be enough
Dress her up in stripes
Send her to Sing Sing
Keep her there for life
It would be a good thing, oh Martha

Well they’ll get you for insider trading
Then they’ll send you away, oh Martha
When we’re laughing so hard that we’re shaking
What’s your stock worth today, oh Martha

You had everything and you spoiled it
Now they’ll lock you away, oh Martha
Pretty soon you’ll be sharing a toilet
With your cellmate

Hunter Recommends:
Greatness Without Genies: The Law of Attraction for Realists
How to Be Rich And Happy: Whatever You Want, Whenever You Want
How to Finally Find What You Love to Do And Get Paid For Doing It

I think people are severely overreacting to the short term problem while severely underreacting to the long term problem.

The short term problem

The economy is obviously in trouble, but remember that for most people, nothing bad has actually happened yet.

Some people have lost their jobs, and I most likely will too. I’ve known for about 6 weeks that the company I work at is going to lose 80% of its revenue on October 3, and that date is finally here, so we’ll see what happens. But most people in this country haven’t lost their jobs.

Homes have dropped in value from their peak, but that doesn’t matter. You don’t feel it at all until you sell, and even then, you’re getting a better deal on the next place you buy. Some people have lost their homes, but that’s because they were counting on a miracle to be able to afford them. Failure of a miracle to materialize is not a crisis.

Stocks have dropped, a little. It amazes me how much people were freaking out about that tiny 4% dip in the Dow we recently had. 4% is nothing. It was back up more than 4% the next day. Now the 7% drop, yeah, that was big. They called it the biggest Dow plunge ever, but that’s only in terms of points. In terms of percentages, which is what matters, it was only the 17th biggest Dow plunge.

It dropped by a greater percentage as recently as September 17, 2001. 7% is really big, but not close to the record of 22.6% on October 19, 1987. Did anyone here survive 1987? Corrections happen once in a while, and we were about due for one.

Gas is up a little, they say. Actually, adjusted for inflation, gas prices have remained relatively flat in the U.S. since 1918.

What is this blood in the streets that everyone’s talking about? Maybe it’s not champagne, but it’s sure not blood. There will be some kind of bailout, and then everyone will forget all about this.

The long term problem

Don’t get me wrong, lots of bad things have happened lately. It’s just that we haven’t felt the effects yet. The tumors are growing, but we appear healthy on the outside.

Unfortunately, it’s possible to rack up an awful lot of financial problems before it all comes crashing down on you. But then, it’s too late. One good thing to come out of this mess is a wake up call.

This past Tuesday, the U.S. national debt passed $10 trillion. That’s 1 quadrillion pennies. How often do you get to measure things in quadrillions? When you include unfunded Social Security, Medicare, Medicaid, etc., the total debt is $59.1 trillion, or $516,348 per household.

We’ve been at a financial DEFCON 2 for a long time. For us to really see blood in the streets, all that has to happen is for the world to say, “You know what, America? We don’t want to lend you any more money.” Then we’ll see how helpless we are at paying our own bills.

Don’t think that the U.S. is invincible. The Holy Roman Empire had a nice run for 1,000 years. How are they doing today?

The day of reckoning is coming. I have no idea if it’s coming soon, or in 10, 20, or 50 years. But it doesn’t matter. The longer we wait, the harder it will be to avoid it. We need to start taking some drastic actions now.

So here are some basic ideas. You won’t like them, but you can’t get a shot without feeling a pinch. No sacrifices and the whole country goes under.

I’m going to take a risk and get slightly political here, but seeing as how I’m an independent, it’s probably relatively OK. (Interestingly, Breanne Potter posted some political statistics about the Myers-Briggs Type Indicator, which predict that I’d be an independent based on my type.)

Social Security

They say that Social Security can’t be saved. Really? Are you sure that cutting benefits by 90% and raising the retirement age to 100 wouldn’t do it?

Social Security was originally meant to provide some extra income in your golden years, not cover all your expenses. People would start collecting benefits at 65 (I assume), and maybe die at 68. They also probably had a pension. (Remember those?)

Now people are living much longer, there are fewer workers per retiree, and people expect Social Security to pay all their bills. And yet, we’ve made basically no changes to the system.

If you want to retire at 65 and live to 95, you need to save up a lot of money to pay for that. Social Security is just your ice cream money, but you’re responsible for the rest.

Let’s start raising the retirement age right now. We don’t even need to cut benefits for current retirees, but at least stop making cost of living adjustments. I know you think you’re entitled, but we’re in a crisis, and we need to do SOMETHING.

Wars

New rule: no more unnecessary wars. Even if a war would cost absolutely no lives and liberate these people and make us allies with those people, it doesn’t matter. We can’t afford it.

We used to be the country that thought Hitler was Europe’s problem. Now we’re the country that wants to send the military whenever someone looks at us wrong. Stop doing that. If there’s a problem, let the UN do something.

The bailout

The bailout might not end up being $700 billion, but there will probably be a bailout of some kind. Bail out who you absolutely must, but let some people go under. Don’t reward recklessness and encourage it to happen again. Go after the bad guys and make them pay. Let people lose their homes if they can’t afford them; it’s their own fault and we can’t afford to save them.

Personal debt

As for individual households, stop racking up so much debt. I recently got a letter saying my credit card limit had been increased to $20,000. If some disaster ever forced me to charge even a tenth of that, I’d cut my power and starve myself until I paid it off.

I know someone who makes considerably less money than me, who just bought a $27,000 car and financed most of it. Meanwhile, the car I paid about $14,000 cash for 6 years ago is holding up just fine. I know being cheap isn’t much fun, but neither is being in debt.

I have a friend of a friend who owes $25,000 on his credit cards, and he has no intention of ever paying it off. His plan is to just keep charging and making the minimum payments until he dies. A good plan, until he maxes out his credit and has to declare bankruptcy.

Stop thinking of debt as normal. The attitude that citizens and politicians can afford anything they can charge is killing this country.

An inspiring story

But I won’t end on such a grim note. Instead, I’ll share this story I heard years ago, which provides some much needed inspiration for these troubling times.

I invested that nickel in an apple. I spent the entire day polishing the apple, and at the end of the day, I sold the apple for ten cents.

The next morning, I invested those ten cents in two apples. I spent the entire day polishing them and sold them at the end of the day for 20 cents.

I continued this system for a month, by the end of which I’d accumulated a fortune of $3.50.

Then my wife’s father died and left us ten million dollars.”

My last post on how to slowly grow your subscriber count ironically brought in 20 new subscribers that day.

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Michael Martine at Remarkablogger is going to hold a blog traffic teleseminar in a couple of weeks. See that link for details. If you click, it increases my chances of winning something. Again, see that link for details.

Hunter Recommends:
Greatness Without Genies: The Law of Attraction for Realists
How to Be Rich And Happy: Whatever You Want, Whenever You Want
How to Finally Find What You Love to Do And Get Paid For Doing It

This is yet another finance book with a picture of a guy pointing at you (page 6), but it’s good. And it’s also an actual book, selling on Amazon from $80.90 used and $122.88 new. Here, let me save you a hundred bucks or so.

Here’s the table of contents:

Chapter 1: MAGIC THINKING: The Key to Success

Chapter 2: HABIT MAGIC: Turning Yourself On to Self-Discipline

Chapter 3: GOALS MAGIC: The Ultimate Tool for Financial Success

Chapter 4: MONEY MAGIC: The Keys to Mastering Your Money

Chapter 5: M.S.I. MAGIC: Multiple Sources of Income-What the Rich Have Always Known About Wealth Creation

Chapter 6: MASTERMIND MAGIC: The Secret Weapon
of Wealth

Chapter 7: TIME MAGIC: Double Your Power and
Personal Effectiveness

Chapter 8: SALES MAGIC: Learn To Sell-The Key to Your Future

Chapter 9: SUCCESSIBILITY THINKING: The 30-Day Success Declaration Plan

Chapter 10: MULTIPLY YOUR BUSINESS: The Ten Realities

This is a full-fledged book at 321 pages, so don’t expect to finish it quickly. It’s filled with lots of good stories, tips, ideas, quotes, and so forth, and he really covers a lot of stuff. In fact, he covers too much; I would have split it up into a few separate books.

As with any finance book, I don’t agree with everything he says. Among his more stupid ideas is to call up the most successful person in your industry and say this:

“Hi, my name is ______. We’ve never met, but I really admire you. The reason I’m calling is I would like to meet briefly with you. I’m trying to hit new levels in my business life and I know I could learn from someone like you. I will only need 37 minutes of your time. When we meet, I will have a list of well-thought out questions. I will take notes and I will act on the advice you give me. Also, I will report back to you all my progress.”

I dare someone to do that!

I was a little thrown off by Chapter 10: Multiply Your Business. It really looks and feels like a completely separate book that was just randomly thrown in. It even comes after the epilogue, so I guess it’s supposed to be a bonus book. It’s about marketing, it’s not as good as the rest, and some of it is really dumb. He says he can teach you how to get a book published in order to differentiate yourself from your competitors. OK, but he says you can write it in 40 hours, or use their copyright-free material, or use ghostwriters. Huh?

Anyway, if you ignore the weird chapter 10, this is a good book, though personally I found it more entertaining than practical.

Hunter Recommends:
Greatness Without Genies: The Law of Attraction for Realists
How to Be Rich And Happy: Whatever You Want, Whenever You Want
How to Finally Find What You Love to Do And Get Paid For Doing It