Wisdom of Rich Dad

We’re familiar with the idea of work-life balance — that miraculous sweet spot where one’s out-of-office world is rich and full, and doesn’t collide with one’s career.

But how about money-life balance? According to J.P. Morgan Chase and Co. and the nonprofit advocacy group Consumer Action, a reasonable money-life balance considers the positive emotional benefits that go along with behaving responsibly with money.

In other words, you achieve money-life balance if you’re not racking up massive credit card bills during late-night online shopping binges on Zappos.com (ahem).

In a newly released survey conducted by Chase and Consumer Action, only one-third of 1,016 adults said they had money-life balance.

The Key to Good Balance

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Most people have plenty of thoughts and feelings, but the problem for many seems to be the ability to take action. The culprit, of course, is fear.

Fear can be one of the biggest things holding you back from wealth, happiness and success. Just think about it. How many times have you lost valuable opportunities because you were afraid that they won’t work out or that you might fail — even before trying?

It could be a job interview that you declined, or an investment opportunity that requires some amount of risk. Then there is the classic example of finding a soulmate. You might have someone in mind whom you are interested in, but you just didn’t have the courage to tell him or her.

So you see, fear is a HUGE obstacle in many aspects of our lives, preventing us from living happy, peaceful and abundant lives. That’s why if you want to succeed in any area of your life, you MUST cultivate the trait of courage. Courage is defined as the ability to confront fear, danger or uncertainty. To put it simply, it is the ability to take action in spite of fear.

So what is fear? What does it come from? What is its purpose in your life?

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Divorced three years, Albert Ramos shares custody of his son and daughter, ages 5 and 8, with his ex, but the kids live primarily with him.

Their mother contributes $800 a month in child support, but he bears the bulk of the costs for the kids’ day-to-day care.

As primary provider, “I never want to live paycheck to paycheck,” says Ramos. So he’s become a super-saver, stashing away 18% of his $100,000 income each year.

“He’s saving more than most people in his situation,” says Plantation, Fla., financial planner Benjamin Tobias.

On the other hand, he’s barely treading water on his home as a result of his tapping equity for an investment that hasn’t gone as planned; he’s way underinsured; and despite his power-saving, he’s shortchanging his kids’ college funds.

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Technology’s evolved to the point where you can go right around the cable company to get your favorite programs. Depending on where you live, you might have to stick with them for Internet access — but there’s definitely no need to pay for big packages that include channels you don’t watch. Here’s how you can keep the good stuff…

Step 1: Take Note of What You Watch and See What’s Available.

Before you buy or cut anything, figure out what channels and programs are important to you. Then see where else you can get them. There are a lot of options:

Broadcast. You can still snatch many stations out of the air with an antenna. But before you go buy one, use AntennaWeb to get an idea of the channels available at your address and the best place to put an antenna. Thanks to the switch to all-digital in 2009, there won’t be any fuzzy pictures or static — you either get a channel or you don’t. And if you do, it might even be in HD. If that’s the case, your TV needs an “HDTV tuner” to take advantage of the HD signal. Many but not all newer TVs have them built-in. Check your manual.

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How much better will you do if you invest well instead of poorly (or earn the average)? — James McGrath, San Marcos, Calif.

Considering all the attention investment pros (and financial magazines) lavish on picking the right stocks and funds, I can understand why you might think superior investing ranks above all else when it comes to a `secure future and a comfortable retirement.

Savvy investing is certainly important — you don’t want to blow your savings on lousy funds or ineffectual strategies. And you’ll end up richer if you happen upon a winning investment. If you’d owned the Sequoia Fund for the past decade, for example, a $10,000 balance would have grown to more than $16,000 now, vs. $12,800 if you’d simply earned the market return.

But as a practical matter you can’t know in advance which fund or stock will beat the market — in fact, over the past 15 years, only 55% of U.S. equity funds did so, according to Morningstar. Rather than pinning your hopes on higher returns, I’d say boosting your savings rate is a surer way to improve your retirement prospects.

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As debit cards become less appealing, banks are rolling out some of their best credit card offers.

For customers angry about rising debit card fees, banks are promoting an alternative that, they say, is just as convenient, but with lower fees and better rewards. They call it a “credit card.”

Until recently, debit cards have been popular among consumers, offering convenience without the risk of going into debt and, often, generous rewards programs. But as banks have cut back on debit card rewards and, recently, started imposing fees, credit cards have begun to look attractive by comparison. Several banks have actually sweetened their credit card rewards programs; Discover will eliminate charges for cardholders traveling abroad as of Nov. 6. And interest rates are low: The average fell to 12.28% in August, the lowest it’s been since February, 2009, according to the most recent data from the Federal Reserve.

At least one bank seems to be encouraging its customers to make the switch from debit to credit. Last month, Bank of America announced that it was discontinuing the rewards program on its Merrill Lynch debit card, which is used by its brokerage clients. Those cardholders have until May to redeem their rewards — or they can transfer their rewards to the Merrill Visa Signature credit card. A Bank of America spokeswoman says the bank isn’t steering clients to credit cards but only offering them the alternative.

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