The Real Cost of a Bad Habit

What is the value of a good habit? Think of some daily habits, like brushing your teeth, or buckling a seat belt, or flushing. All of these habits have value important to some part of life. Failing to follow through on some habits can lead to some nasty results, and those results could cost us our lives.

Now, transfer the idea to financial habits, like saving a little money each month, or regularly adding to your 401K or IRA. You will realize that the financial value of good habits can be quite high. On the other hand, if we fail to develop good financial habits, the cost can really build up over time. Most people don't ever count the cost of their own bad investing habits. Sure, we'll get a quick bit of excitement, but not only will we make our own lives more difficult, we'll pay more for the same result in the long run.

Forget the ads. And whatever the guy down the street (you know, the one with the attitude and the bling-bling) wants you to believe, nobody ever has "enough" money. It's basic economics folks: remember supply and demand? We always want more bling; we always find a way to spend our money; we get more bling based upon our limits. Naturally, if we don't like the limits, then we need to do something to increase our limits: better-paying job, better investments, career as a bank robber (kidding!), etc.

Saving more and spending less are unpopular ideas in American culture these days. Apparently, people are more concerned with how they look than with having a say in their own future. But you'll find that most wealthy people are actually quite thrifty, which is how they became wealthy in the first place. Those who aren't thrifty generally become unwealthy quite quickly. And believe it or not, income is not the primary success factor in reaching your goals. Many high-income people spend recklessly, which is why we always hear about formerly famous musicians, actors and sports figures that don't have a dime to their names.

Wealth is a matter of discipline and good habits. This is true for us as well as for our children. In our society, children are given almost everything they want. But who is giving kids what they need, like good habits necessary for a happy, self-managed life? Junior grows up without a sense of reality, he can't manage his life, and can't live within limits. What a surprise?or is it?

Live within limits. Resources are never unlimited and this first good habit is the best. While we should always seek to expand our limits, and broaden our horizons, it makes no sense to kid ourselves by thinking the limits don't exist. Denial makes our next steps increasingly difficult, and digs the hole deeper and deeper.

Develop the right financial habits. Little decisions add up. Think: drinking 2 sodas, or smoking a pack of cigarettes a day can easily make the difference between affording to retire when we want to, and having to work till we drop. All those sodas and packs of cigarettes, over time, add up to hundreds of thousands of dollars at retirement!

Now, practicing good habits doesn't mean never spending. Decide what your limits are, make a plan and spend within your own plan. You'll find yourself to be much happier when you do ? and you can still have the bling!

Scott Pearson is an investment advisor, writer, editor, instructor, and business leader. As President and Chief Investment Officer of Value View Financial Corp., he offers investment management services to a wide variety of clients. His own newsletter, Investor's Value View, is distributed worldwide and provides general money tips and investment advice to readers both internationally, and in the U.S. http://www.valueview.net

Scott Pearson can be reached for questions and comments directly at scott@valueview.net or by visiting www.valueview.net.

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Google News Updated : Mon, 13 Oct 2008 11:51:33 GMT Dodgers stand up to Phillies in Game 3 win - FOXSports.com Washington Post Dodgers stand up to Phillies in Game 3 win FOXSports.com - 4 hours ago by Ken Rosenthal Ken Rosenthal has been the senior baseball writer for FOXSports.com since Aug. 2005. He appears weekly on the FSN Baseball Report and MLB on FOX. LA revitalized at Moyer's expense MLB.com Kuroda's pitch serves its purpose for Dodgers USA Today New York Times - Los Angeles Times - Boston Globe - Philadelphia Daily News all 2,467 news articles Publ.Date : Mon, 13 Oct 2008 07:00:36 GMT UK government takes stake in three banks - CNN International Canada.com UK government takes stake in three banks CNN International - 32 minutes ago LONDON, England (CNN) -- The British government on Monday said it would make a multi-billion investment in three of the country's major banks to help them through the "first financial crisis of the global age. In quotes: Bank bail-out reaction BBC News TEXT-Lloyds TSB terms for acquisition of HBOS Reuters guardian.co.uk - Wall Street Journal - Bloomberg - AFP all 1,923 news articles Publ.Date : Mon, 13 Oct 2008 11:18:47 GMT 1.5 million G1 Android phones pre-ordered - TG Daily Product Reviews 1.5 million G1 Android phones pre-ordered TG Daily - 6 hours ago By Wolfgang Gruener Chicago (IL) - T-Mobile’s upcoming G1 may not be the best-looking iPhone rival, it may not have the most complete feature set and T-Mobile may have undersold the device at the recent launch event. Get ready for next-gen mobile InfoWorld HTC G1 Android Phone Racks up 1.5 Million Pre-orders eFluxMedia Brighthand - InformationWeek - ReadWriteWeb - ZDNet all 153 news articles Publ.Date : Mon, 13 Oct 2008 05:21:21 GMT Fantastic finishes: 5 NFL games down to the wire - Washington Post Washington Post Fantastic finishes: 5 NFL games down to the wire Washington Post - 3 hours ago Dallas Cowboys' Mat McBriar (1) has his punt blocked by Arizona Cardinals' Sean Morey as Monty Beisel (52) looks on during overtime of an NFL football game Sunday, Oct. 12, 2008 in Glendale, Ariz. Blocked punt downs Dallas San Francisco Chronicle Backups Burst Through Line and Lift Cardinals in Overtime New York Times Sports Network - FOXSports.com - Houston Chronicle - Philadelphia Inquirer all 749 news articles Publ.Date : Mon, 13 Oct 2008 08:15:50 GMT European, Asian markets bounce back - The Associated Press Vancouver Sun European, Asian markets bounce back The Associated Press - 1 hour ago LONDON (AP) - European markets opened strongly Monday following Asia's lead in response to the widespread government efforts over the weekend to shore up the world's troubled financial system. The financial crisis A light at the end of the tunnel? Economist World stock markets welcome European bank rescue AFP MSN Money - New York Times - New Straits Times - Voice of America all 769 news articles Publ.Date : Mon, 13 Oct 2008 10:23:04 GMT Manatee dies before reaching rehab site - Boston Globe WHDH-TV Manatee dies before reaching rehab site Boston Globe - 4 hours ago By Emily Canal After a 27-hour trip to Florida, Dennis the manatee, rescued from the frigid waters of Cape Cod, died in Orlando yesterday as SeaWorld employees carted the mammal to a rehabilitation center. Video: Rescued Manatee Dies After Mass. Rescue AssociatedPress Manatee rescued off Cape Cod dies en route to Florida Sea World New York Daily News WFLA - eFluxMedia - Cape Cod Times - South Coast Today all 565 news articles Publ.Date : Mon, 13 Oct 2008 07:21:21 GMT Forecast: Summery Sunshine Sticks Around - Washington Post Chicagoist Forecast: Summery Sunshine Sticks Around Washington Post - 2 hours ago Columbus Day will feel a lot more like Labor Day as temperatures climb to around 80 degrees. This unseasonably warm weather will continue for the next several days. Enjoy a warm, sunny Columbus Day Times Herald-Record Beautiful start to the work week The Star-Ledger - NJ.com The Capital Times - Journal and Courier - Richmond Times Dispatch - The Virginian-Pilot all 241 news articles Publ.Date : Mon, 13 Oct 2008 09:03:26 GMT Create Blog Add RSS Feeds to My Website

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