No Limits Ladies.com

I was on a crowded bus yesterday (rush hour, the usual). A man took his wallet out of his back pocket (so unattractive, that big rear bulge) and started fiddling with his cards and counting his money (he had $190, 3 $50 bills and 2 $20’s). Now this guy was a big, mean looking man. I wouldn’t mess with him for $190.

But then a lady (likely reminded of something by the man looking at his money) took her wallet out of her purse and did the same. She was flashing credit card numbers and dollar bills and then after about 20 minutes, zipped the wallet back into the top of her purse.

She might as well have handed it to a mugger.

So I was talking about this to a coworker and she admitted sheepishly to counting her money on public transit also. Insanity. Flashing cash in a public place is asking for trouble. Showing the world where you keep your wallet is asking for a pickpocket (in Paris, that wallet would have been snatched before it made it to the purse).

And for goodness sakes, don’t do as a forgetful loved one does and write your PIN numbers on the back of your cards. I asked her what the point was of having a PIN if she was going to make it so obvious (she simply plans on never losing her wallet). She didn’t have a good answer.

I enjoyed The Little Book That Makes You Rich (about growth investing) so much that I picked up The Little Book Of Value Investing by Christopher H. Browne on my favorite style of investing. You guessed it (the name was a dead giveaway, wasn't it?). Value investing.

One of the first things that Browne does is clear up a common misconception of value investing. Sure famed value investor Warren Buffett is quoted as saying "My favorite time frame for holding a stock is forever" but value investing isn't about buying and holding forever. It is about buying when a stock is undervalued and selling when the stock is overvalued.

Could the stock never be overvalued? Could happen. Unfortunately you and I both know that it is likely to become overvalued at some point in time (some of us might have, in our youth, purchased overvalued stocks). REALLY overvalued. And if the stock I'm holding reached that point, I'm going to cash in my chips and sell (If I love the company, then I'll wait to buy it when it becomes undervalued again).

Having a stock I own become overvalued is a gift from the market gods. And to ignore that gift can cause real pain (when the price corrects as it always does).

Browne puts it this way…
"If the stock price of a mundane company declines, which it often does, you have the comfort of knowing that it is still worth more than you paid for it, and someday the price is likely to recover. If a stock is grossly overvalued and its stock price crashes, history shows that it is unlikely it will regain its former inflated value." This is, Browne calls it, a permanent loss.

Success Magazine (a brand new magazine launching in February) came out with their top 10 success drivers for 2008.

They are;
1. Decide To Be Successful
2. Design Your Best Year Yet
3. Identify Your Passion
4. Program Yourself For Success
5. Surround Yourself With Success
6. Model Success
7. Master The Fundamentals
8. Get Fit
9. Remember What’s Important
10. Make a Difference

All good points (for more details on the drivers, see their website http://www.successmagazine.com/pdf/TenTips.pdf ). The one I’m struggling with right now is #10 Make a Difference.

Every once in a while, I ponder the big questions. Why am I here? What is the point to life? Etc. Etc. Over the years, my answer has remained “If I can help just one person, I’ll be happy.”

But with so many opportunities and so little time (time is truly our most valuable resource), I’m digging deeper. What one person? And how to help?

I have this blog, my new business development blog, my romance novels sharing business lessons (Breach Of Trust, my first, being released in May), my volunteer work helping low income taxpayers with their income tax returns (and teaching them about finance at the same time), my mentoring, and the list goes on and on.

I’m reaching the conclusion that my scattergun approach to giving back may not be the most efficient use of my time and energy so this summer, I’m going to do some serious thinking about what I truly want to accomplish. That is my big goal for 2008.

With the sad, sad news of Heath Ledger's death last week (so young and such a hottie) came awareness of the very real health problem of insomnia. I heard the poor guy (whom I loved in 10 Things I Hate About You, one of my fave teenie bopper movies) was sleeping only 1 or 2 hours a night WITH the help of sleeping pills. Yikes, having spent all nighters before (due to jetlag or worry or I don't know why…), I know what lack of sleep will do to a person.

With problems come opportunities. Sleep instructors are gaining in popularity, especially with the well paying wealthy (the clients you want). No this isn't hocus pocus or a scam. This is a legit profession. There are courses and degrees in sleep therapy (including systems like the Sounder Sleep System). And the courses are worth it. Normally a freelance job, corporate clients can pay up to $1,250 a day. Heck, some nights I would have happily paid that much and more.

The best part is that you will be helping people get a longer and more restful sleep, allowing them to live happier, and more productive lives. Making the world a better place one night at a time.

I’m swamped with edits and upcoming promo and taxes and contract work and… sigh… stuff. However, a little while back (in case the hubby is reading this, I won’t mention the date of my last visit… LOL), I was haunting the aisles of Marshalls, spending the time to pick through their garage sale organized racks (isn’t Marshalls like a big treasure hunt?).

Why?

Because it is time to do some serious Christmas shopping.

What? Christmas shopping in January? You better believe it! I love doing my shopping now (btw… grabbed some cards at Target at 90% off, a lady in the lineup was making a joke about me being late in sending them but I was laughing manically for a different reason – 90% off folks, that’s inexpensive).

The sweaters were selling at deep discounts (I bought all my sisters sweaters for Christmas 2008) and sweaters, lets face it, don’t change that much from year to year. The same with mittens and hats and all other winter gear.

Oh, and if you’re doing something special for Valentines Day, look at the Christmas candy. Check the expiration date. If it is still good, the reds (for example the red M&M’s) are good for that fave Feb holiday also (I’m a romance reader, of course I like Valentines Day). The green ones? Likely won’t make it to St. Patty’s Day so I guess you’ll have to eat them. Darn.

Normally the hubby and I have an emergency fund. Money set aside for those big quick expenses like replacing a leaking roof or a broke down car (we just purchased a new to us vehicle).

But does setting aside a chunk of money in a money market or interest account make sense when borrowing rates are still so low and there are better returns out there?

I’ve started to wonder. The hubby and I already have a small HELOC that we use for investing purposes. The current interest rate on that is about 6% and our average rate of return is about 12% so scooping the difference is pushing our net worth higher.

So why wouldn’t a HELOC for spending (which I believe the bank really intends it to be for) be the same?

There are only two issues. One is any prepayment penalties, the other is if the HELOC is closed to further drawdowns later on (which means that when the emergency actually happens, knock on wood it doesn’t, the HELOC won’t be available).

‘Course it is not like we’ll actually be spending the money we would have put in the interest bearing account. That money will be placed in investments. Worst case, we lose money by pulling the funds out of the investments early. Hhhmmm…

I know this isn't More Money Monday but when opps come up...

Seth Godin is looking for a software developer for Squidoo. Know someone? Then ask them to apply. There is a $3,000 reward if you find them the right person. That would turbo charge the investment portfolio.

One of the calcs that I always do, when evaluating stocks, is discounted cash flow or earnings per share. A dollar tomorrow is not equal to a dollar today due to factors like inflation or opportunity cost so I must discount tomorrow's dollar.

For example:

If I got paid $1 a year from now and my discount rate was 10%, that dollar would be worth ($1/1.10) or $0.91 in today's dollars.

If I got paid $1 two years from now and my discount rate was 10%, that dollar would be worth ($1/(1.10*1.10)) or $0.83 in today's dollars.

But what discount rate to use?

What many people use is the rate of a 100% "safe" investment like a government treasury bill plus a buffer for any additional risk. That, to me, is also an airy fairy number. Sure, the government treasury bill number is solid but the risk number is one that can be manipulated (and we try to take as much manipulation out of our numbers as possible, don't we?).

What I use for my personal is similar to the rate I use in corporate calculations (for new product launches). That is, I use my target rate of return (12% - when I first started out investing it was 8%). That's the rate I'm happy to receive. Anything lower and I get a little grumpy grump face.

Btw… in corporate, the target rate of return is almost always north of 10%.

The U.S. Markets being closed yesterday, Americans got a heads up on what the trading day will be like today. That is, a disaster. Almost every single other market was down yesterday. Significantly.

Now, you're going to hear two pieces of advice today. The play by play commentators being the drama loving media, the reports will be from the two extremes.

One will be from the Sky Is Falling folks. These experts will advise to pull all your money out of the market (making it drop even more, and locking in your losses) and sit on cash or... because of the troubles with the U.S. dollar (which traded up yesterday, btw), gold (which traded down).

The other will be from the bargain hunters. They will gleefully say that everything is on sale. Get all the cash you can and buy, buy, buy. It doesn't matter if the stock is in a sucky industry or the management team can't sell the latest offering if it was free, buy.

Of course, regular readers know my stance. I'm going to look at my stock watchlist. I'll take another look at what I think these stocks are worth, factor in a margin of safety, and then buy when the stocks reach that point. Not going to. Did. I put in my buy orders last night while the markets were closed.

One of my male buddies decided that instead of picking out clothes for his wife for Christmas, he'd take her shopping instead (during the January sales, smart man). The wife brought along a female friend to provide another opinion on her outfits.

My buddy, feeling hurt, asked why that was necessary. Couldn't he give his opinion? Well, sure, if all she wanted to hear was "that looks fine" or "nice". In other words, his opinion is pretty close to useless.

As is some advice (even from trusted advisors, everyone is human and makes mistakes).

That is why I always ask for a second or third opinion on important advice. The perfect person to ask? Someone with the exact opposite stance as the first advisor.

So say you like to be aggressive on your tax filings (waving my hand in the air, like me!). You'll likely have an aggressive tax advisor or accountant. Of course, listen to her insights, that's what you're paying her for, but don't act just yet.

First ask another accountant for a second opinion.

Who to ask?

I usually like to ask a very conservative buddy to ask his accountant for a second opinion. That costs nothing and the accountant is more likely to be completely honest when talking about a third party.

The aggressive accountant will give the best case for implementing the advice. The conservative accountant will give the worst case. I, then, if still interested in the option (knowing full well what the worst case could be), work with the aggressive accountant to decrease the possibility of the worst case.

Remember advisors give advice. You will be the one taking action and you will be the one dealing with the consequences.

Seth Godin has a great post on the shortage of digital coaches. Digital coaches, as he explains, teach business folks, including small business owners, how to make the most of their technology, saving them money and more importantly time.

Recently I sat down with a senior spreadsheet bunny. This older employee spends her entire day on Excel. I noticed that she'd cut and paste using the ctrl buttons and because she'd often forget which ctrl command was which, she'd use the menu. Took time. Time she didn't have. Then I introduced her to the right mouse button. You should have seen how excited she got! (We won't even talk about pivot tables.)

When I hired my pre-editor, one of the biggest benefits that I received was how to use the Word Track Changes option. Suddenly I discovered the world of digital editing and wow, did it completely change the writing process for me.

Now, you might be saying to yourself, I don't know enough about a program to hire myself out at $100 an hour to train others. Then do as Mark Cuban did when he first started out and read the manual. Most people don't (I confess… I don't). Reading the manual made him a millionaire, several times over. Surely it can give a few extra dollars to invest with.

Yep, I finally got off my butt and put some Adsense on this site. I'm always talking about having hobbies pay for themselves. A buddy recently called me on this, citing NoLimitsLadies as an example of a hobby NOT paying its way. I had to 'fess up to the hosting and domain name fees coming out of my own pocket.

Not cool, not cool at all.

Now, I've had some great people contact me, asking to place advertising on this site. I appreciate it. Truly I do. However, I am way too lazy for that (with the book launch, I'm in a severe time deficit) and since I only need $11 a month to break even...

But because the advertising is care of Google, please do your own research before purchasing.

Being quite busy, a few things have fallen through the cracks. Lucky for me, my readers are on the ball.

Michelle reminds me that H&R Block is offering free tax advice (via email or phone). And no, you're not going to get some overseas telephone service answered by someone who doesn't know a 401K from an IRA. Your questions will be answered by a real live tax pro (Michelle says these pros each have over 8 years of experience and 250 hours of training).

This is a great opp because I don't know about you but I find the government tax folks never give a straight answer on anything (or when they do give you an answer, they don't stand by it... grumble, grumble, grumble).

But hurry, this offer is only good til January 31st!

Last week I attended the Consumer Electronics Show in Vegas (and it was blasted cold… but that’s not what this post is about). Since this was an “away” conference for me and since I’m still on a contract gig (though I’m so wishing to be off writing that novella I plotted out during the holidays), that meant I felt obliged to bring my team members back something (to not have co-workers begrudge doing my work while I’m on vacation, I always bring them back a certain something).

Usually, I bring back food products (please no location labeled magnets or other knick knacks!) but with this conference, there was some good quality schwag. Things like fancy pens (that light up so just in case we have a power failure at work, we can still take notes) and boxes of mints and plasma tvs, no, just joking about the tvs.

But how do I get enough of one schwag item to hand out?

Easy. I ask. You see the folks manning the booths are being paid to give the items away. They don’t really care to whom. And, in fact, the thought of an entire department of a company using their schwag (as opposed to tossing them in the garbage as happens with most of it) usually tickles their fancy.

The worst case is that they say no. That doesn’t often happen.

There is a free short story download at Amazon called The Miseducation Of April Hillson (by a writing buddy Maureen McGowan). Now you know that I love fictional novels that tackle personal finance or business and this short certainly does that.

The story may sound familiar. Woman spends her entire adult life married to a wealthy man. He takes care of all the finances. Pays the bills, gives her an allowance, does the investing. Then they get a divorce. Ouch. Reality time.

I love how she handles reality. Like most of us. She ignores it. She pretends change isn’t happening. She expects everything to stay the same and when it doesn’t (for example, he wisely cancels their joint credit cards), she is unprepared (and in deep, deep trouble).

I wish I could say that this short story is based in fantasy land. It isn’t. I know women who have gone through exactly this. Maybe the man isn’t as wealthy. Maybe the husband dies instead of divorces. But the women are left alone with no financial base, no financial knowledge.

Give it a read (it is free and we do love freebies here). Let me know what you think. Oh, and if you love the story and want to read more from the author, vote for it by leaving a customer review. Show publishers that there IS a market for fiction covering personal finance issues.

Money has a great article on some generation gap myths, written from the viewpoint of a boomer.

They are;

Young People Love Change.
They don't if they have more to lose than gain.

Gen X- and Y-ers lack a strong work ethic.
They don't. They simply work differently. They focus, finish, and leave. No chatting at the coffee machine for them.

They disrespect elders.
It is not disrespect to ask why things are being done.

And

Younger workers prefer to go it alone.
Nope, the means of communicating has changed. Younger people prefer to communicate via email or text rather than via meetings.

Frankly, as a non-boomer, I find this "hot" discussion on the newest generations being "different" amusing. Every generation is different. The boomers caused chaos in their parents' work places. Their parents did the same with their own parents.

Why?

See the first point. No one likes change (regardless of the generation). So when change comes (and it will come, change is the only true constant), the new generations are blamed. Grumble, grumble.

What does this have to do with investing? Lots because how you deal with the different generations in your workplace is usually reflected in your promotions and pay increases. And if you're not a employee? The younger or older generations can be your own employees, your customers, and often your business partners (that's a good thing, different viewpoints means different ideas translating into better products).

I have friends that moan and groan about not getting handed their fair share (whatever that is). I’ve been lucky. I have no such expectations. I’ve never been handed anything. Everything I have, I’ve reached out and grabbed.

For example…

Last week, at the Consumer Electronics Show in Vegas (Sin City, baby), there was a great little forum for small business owners. This meet up was very small, very exclusive and I very much wanted to attend.

Problem.

First crack at the less than 60 chairs went to American Express Open card holders.
Due to being Canadian (though I spend most of my shopping dollars in the States), I didn’t qualify. Heck, I couldn’t even apply as I didn’t have a social security number (someone suggested that I use his but I didn’t want the seat bad enough to stoop to identity theft).

I hung out at the NBC booth, chatting with all the employees there. Sad shakes of heads as they told me that they couldn’t land me (and my hubby) a spot. I emailed the moderator and got a “ohhh that’ll be a tough one” sentiment. No luck there either.

But I did find out when and where the event was.

So at that time, dressed up in business casual attire, the hubby and I show up. I ask the Queen Organizer if there are any last minute cancellations. She looks us up and down. We seem to pass her “these are not nutjobs” smell test. She leans close, and tells me “look, I can get you into the cocktail party but there are no guarantees you’ll get a seat for the event.”

Score! The cocktail party, for me, WAS the event. Head honchos, other entrepreneurs, media folk were there. We mixed. We mingled. We collected business cards and connections.

Then… show time and guess what? There was yours truly sitting in one of those coveted seats!

Why am I telling you all this (other than still being on a nice little high from it)? Because if you truly, truly want something, there are ways of getting it. Especially in the business world.

Oh, and freebie tix go first to the shameless.

Just got back from the Consumer Electronics Show in Vegas (I'll be talking plenty about that more later as I get over my jet lag – just flew in on the red eye, yikes) and some of the most interesting people there were working the exhibits. This temporary help was hired from pools of modeling agencies, marketing companies, and yes, plain ol' run of the mill temp agencies.

I heard that the pay was okay (for the week of work), sometimes the temp workers got perks (like the clothes they had to wear – though how many shirts with company logos can a girl wear?) but the big win with these assignments were the contacts made.

One woman I was talking to was an aspiring actress, a blogger, and interested in marketing. During her time manning the NBC booth, she met Donny Deutsch (of the Big Ideas fame), Maria Bartiromo (of the Wall Street Journal Report) and Seth Godin (one of my favorite marketers). Talk about some valuable contacts!

What about the folks at the less celebrity flooded exhibits? They met product designers, marketers, and company founders. Oh, and press contacts, many, many press contacts.

'Course all these contacts are useless unless they are maintained. Keep a hold of those business cards. Email them from time to time (send them a link they'd find interesting). Make that assignment pay for years to come.

Around this time of year, there are articles and articles and articles about saving money on taxes (I think this "tax season" thing is a bit silly, taxes should be considered on each transaction throughout the year).

My tax advice?

Don't spend everything you earn.

You see, I was reading Warren Buffett Speaks, Janet Lowe's compilation of his thoughts (another holiday present – my book shelves are full again). One of his quotes is "I'm paying taxes at a lower rate than my secretary… and frankly I think that's crazy." He also notes that many of the soldiers fighting in Iraq pay a higher percent of taxes than he does. That, he thinks, is unfair.

Why?

Because when you don't have to use your money for spending, you can invest it and grow wealth at a lower tax rate (note: because you will be making more money, you'll pay more tax overall but less tax as a percentage of income).

As Berkshire Hathaway doesn't pay dividends, investors' money grows relatively tax free. As turnover within the company is low, capital gains aren't paid. Investors won't pay capital gains or any other tax on that investment until they sell the Berkshire Hathaway units. They also aren't spending that money and incurring consumption tax (sales tax).

In other words, as long as investors don't need to spend the money, they're becoming wealthier and wealthier in a tax free environment.

THAT is how the rich get richer. It isn't due to fancy tax lawyers (though they can help). It is because they don't spend everything they earn.

Okay, we've cover the first 5 numbers a savvy growth investor should look at (as per Louis Navellier's The Little Book That Makes You Rich). The final 3 are as important as those first 5.

6. Earnings Growth

We talked about Sales Growth in #3, but earnings growth is as important. As sales increase, earnings should also increase (the stock price is aligned with earnings, not necessarily sales).

Which leads to the next factor…

7. Positive Earnings Momentum

Navellier not only likes earnings growth year over year, quarter over quarter (quarters should be compared with the same quarter in the previous year) but he likes this growth to be accelerating every quarter.

8. High Return On Equity

Return On Equity is one of the fundamental benchmarks for most investors. Why? Because this is the investor's return. As Navellier states "A company that has a very strong return on the dollars that have been invested is more likely to produce strong free cash flow." The company won't have to borrow or issue stock or do other things that erode shareholder value. Navellier reminds us to compare ROE between companies in the same industry, not across the entire market.

We are also cautioned not to look at any of the 8 factors in isolation. They are all important, they should all be looked at.

There's more to The Little Book That Makes You Rich than these 8 fundamental factors for evaluating growth stocks (being interested in the psychology of investing, I enjoyed his chapter on common investing mistakes). If you're interested in growth investing, the book is well worth the read.

Yesterday, I covered the first two "numbers" that Louis Navellier outlines as important in his book The Little Book That Makes You Rich. Today, we'll cover 3 more important numbers in choosing a great growth stock.

3. Increasing Sales Growth

If sales for a company are increasing year over year, quarter over quarter (adjusting for seasonality), that is a very good sign. However, it is a REQUIREMENT for a growth stock because… well… the entire definition of a growth stock is that the company is actually growing.

4. Expanding Operating Margins

Operating margins are the company's operating margin divided by the company's sales. Navellier prefers operating margins over net incomes because net incomes often include "special" one time items. An expanding operating margin means that with every incremental sale, the company makes more money per sale.

Looking at 3. Increasing Sales Growth without 4. Expanding Operating Margins is very dangerous. Why? Because I can sell a lot more product below cost but I wouldn't be making much money, would I?

5. Strong Cash Flow

You've heard my (very strong) feelings on cash flow. Cash flow is king. Cash flow means that expenses are being paid, that a financial buffer is being built, that money for opportunities will be there when needed.

Note: Again, I'm simply skimming the chapters. If you wish more, check out The Little Book That Makes You Rich.

My big brother gave me Louis Navellier's The Little Book That Makes You Rich for the holidays. It was on my wish list because being a value investor, I am intrigued and a bit ignorant of how to pick great growth stocks.

Navellier bases his picks purely on the numbers (says it takes the emotion, so deadly to investing, out of the decisions). This week I'll cover the 8 numbers he uses.

So lets start, shall we?

1. Positive Earnings Revisions

Navellier points out that analysts (the folks responsible for guessing what future company earnings will be) lose their jobs if they call company earnings results too high (because when companies miss earnings, the stock price drops like a stone). If they call the number too low, not much happens. So it makes sense that analysts will err on the side of caution and call it low. That means that there has to be very, very, very good news for analysts to move those estimates higher.

2. Positive Earnings Surprises

Another great growth sign is when a company's actual results are higher than analyst estimates. When a company's results exceeds estimates, there is an immediate bump up in the stock price. Navellier says that positive earnings surprises tend to repeat "as analysts are slow to raise estimates to reflect the new reality." What does that mean? The stock price will go up, up, up.

Note: Of course, I'm simply skimming the chapters. If you wish more information on Navellier's thinking, definitely check out The Little Book That Makes You Rich (I'm enjoying it).

Living in the chilly north, snow, snow, snow is a regular sight… for me. For others, tourists, newcomers to the area, it is a novelty. As is wearing mittens and hats and scarves.

I work in the hotel area of downtown (by a large convention center). What one enterprising businessman has done is set up a kiosk on the sidewalk selling…. you guessed it… mittens and hats and scarves. These are dollar store buys (though he does stick the city name on them to make them a souvenir which costs him likely another fifty cents or less) and he charges $10 for them. He does a brisk business on snowy days.

During the summer, he sells umbrellas, rain hats and rain slickers. Again, when it rains, he does great business.

If you're thinking it doesn't sound worth it, that's not all. He also gives away free maps. What? That doesn't earn him anything… or does it? You see, all around the perimeter of these free maps is advertising. Advertising for restaurants, shows, souvenir shops. I expect he makes a half decent profit off these "free" maps.

We No Limits Ladies are a generous bunch. We give and give and give. Yep, we enjoy sharing our good luck with others.

Often this good luck is financial. Why financial? Because anyone visiting a personal finance site, as you and I are, has money top of mind. And the more you think about financial opps, the luckier you get (amazing how that happens).

So we tend to pay for lunches, dinners, nights out with friends and family (family fun days before a stressful wedding). We can afford it and it makes us feel good.

But once in a while, I suggest that you let others treat. Why? Because it makes your loved ones feel good also. Not to mention that if you treat all the time, others assume you will continue to pay the bill and then… well, then you begin to feel taken for granted. That’ll mess up a perfectly good relationship.

This goes for gifts of time also. Are you always doing favors for your friends? Make certain that every once in a while, you ask them for favors too (I’m horrible at this). The folks you love will feel less weird about accepting favors if they know they have something to offer too.

What does this have to do with Frugal Fridays? Lots. Others treating (either with favors or money) means more money or time for us.

A friend called me up the other day (I love that nonsense phrase, the other day, that narrows it down to any day other than today… LOL), asking for my advice. She was buying a new car (no, I didn’t tell her to buy a used car though that might have made more sense), and was wondering whether to use the cash in her investment account or take out a car loan.

Normally this would be a no brainer. Use the cash, right?

Except that the car loan was at 2% (and there were no other financial dings). My friend gets a conservative return three or four times that.

Now, my friend is pretty darn financially savvy (she, as a single gal, owns her own home with a lot of equity built up, has both a retirement portfolio and an investment portfolio, and no other debt). She didn’t truly need my advice. It simply felt, as she said, “wrong.”

I know what she means. I currently have a home equity line of credit (the only debt the hubby and I have). The interest on that is a comparably steep 6% but we have it invested earning us a 12% return. Even after taxes (I pay taxes on the return less the cost of borrowing), it doesn’t make sense to pay it off… ever.

But to make the right financial decision, both my friend and I have to move past our fear of debt (the bag lady syndrome) to harness its power.

Note: Be cautious with leasing a car. I have never found a person where that choice worked out the best for him/her (especially if you plan to buy at the end of the lease term).

Loved Bankrate’s interview with Keith Cameron Smith, author of “The Top 10 Distinctions Between Millionaires and the Middle Class”. My favorite part? His bit about risk.

“As one of the mentors I spoke with, Nido Qubein, told me, "Keith, if you take risk out of life, you take opportunity out of life."”

Too true (if we ignore the fact that you can’t possibly take all the risk out of life, simply getting out of bed in the morning is dangerous). Risk is not a bad thing. Taking on additional risk without additional possibilities of reward… well, that’s not too bright.

I was also nodding my head at his response to opportunity. He asks himself three questions. What is the best thing that could happen? What is the worst thing that could happen? What is the most likely thing that could happen?

“What is the worst thing that could happen?” is my response to just about everything (so much so that my hubby now answers that question before I even have to ask it).

I was talking to a very, very broke friend about an opportunity. He was worrying about the risks so I asked him what was the worst that could happen. His reply? He could lose everything! Yes, very dramatic. My next question? “Aren’t you at that point already?”

Now you’re probably thinking that I can say that because I’ve never lost “everything.” Sure I have. I’ve lost the grocery money on “investments” (well, scams that I thought were investments). That was the worst case and I lived through it (losing some weight in the process).

Note: I wouldn't suggest taking a risk with the grocery or rent money. Not the best decision I ever made.

I’ve had them. Financial secrets. Money being such a taboo subject, most of us do. Money Magazine in a 2005 survey found that 71% of us have at least one financial secret (and those were the people honest enough to admit it). Yep, we may talk about our sex lives but we sure don’t talk about our finances. At least not truthfully.

Sooner or later, that secret is going to see the light of day (they always do, don’t they?) and when it does, it could very well be a relationship killer. I recently witnessed a loved one’s marriage collapse under the weight of the secret. This secret was revealed by a third person.

So what do you do if you have a financial secret?

You come clean. In the same Money Magazine article, financial planner Victoria Collins advises secret keepers to talk about it with the spouse or loved one… eventually. First, she says, put together an action plan to help resolve it.

I do that with the financial mistakes I make (and will continue making, mistakes are part and parcel of doing). I’ll hash out some ideas to offset or rectify the mistake. Then I’ll discuss it with the hubby. He’s able to look at the situation calmly (after he's done jumping up and down, LOL), knowing that I’ve thought about it (and it is not the end of the world, after all, we were surviving with the mistake when he didn’t know about it, we’ll survive after he knows about it also). Sometimes he comes up with some better ideas.

What if it is a huge, huge secret?

Odds are your spouse already knows. One of my other buddies was on the verge of divorce (2007 was a rough year for relationships). She was convinced her hubby was cheating on her. When they had “the big fight”, she was relieved, yes relieved, to hear that they were merely teetering on the edge of bankruptcy. Money, she told me, is nothing, betrayal… well, betrayal was a marriage breaker for her.