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Five Financial Success Topics Schools are not Teaching Our Children…and Should

TOM@CEREFICE.COM (TOM CORLEY RICH HABITS) — Mon, 21 May 2012 14:49:19 GMT

There is no course that I know of, taught in our nation's schools on how to be financially successful in life. Our children, the country's future generation, are not being educated on matters of finance and money. Instead our schools are sending our children into the real world ill- equipped in the financial success sense. Consequently, they struggle in life, many simply eking out a living, incurring substantial debt and saving very little. No one is teaching our children how to be successful and properly manage the money they will earn. We are bringing up a nation of future debtors and poor people and something needs to be done. But what?

There are five core courses that must be taught in schools to our children:

#1 – Teaching Good Daily Success Habits

Our children need to be educated about good and bad habits. Of course, this should start in the home, but in the absence of, or in addition to such home schooling, educators must teach our children how to eliminate certain bad habits and replace them with certain good success habits, such as:

Limiting the use of social media, T.V. and cell phone use at home to one hour per day.

Requiring our children to read 30 minutes per day at home of non-school material.

Requiring working-age children to work 5-10 hours per week.

Exercising every day aerobically at least 20 minutes.

Moderating how much and what they eat and keeping junk food to no more than 300 calories per day.

The importance of controlling negative emotions.

There are many more habits but I think you get the idea

#2 – Teaching Basic Money Skills (Basic Financial Literacy)

Many schools address the financial literacy vacuum but asking local bankers to periodically talk to their students about bank accounts, check registers etc. This is wholly inadequate. Each and every high school student, each year, must be required to take a course in money management that includes:

managing a check book.

preparing bank reconciliations.

The financial activities and decisions required in running a household.

The different types of debt. How to get loans, mortgages, credit, etc.

The importance of saving 10% of their income.

How to properly manage the money you save (investment basics).

Retirement planning basics.

The types of insurance they will need in life.

The differences between renting and buying a home and how to do both.

The differences between leasing and buying a car and how to do both.

The costs of college and how to pay for it.

Ideally, each year, a different case study should be introduced to high school students incorporating various elements of money management and financial literacy. Currently, our children are left to their own resources and they find out the hard way that financial illiteracy can get them behind the financial eight ball very quickly.

#3 – Teaching Relationship Management

When it comes to financial success in life, one of the most important assets successful people have is their ability to grow strong, long-lasting relationships in life. Unsuccessful people do not know how to manage their relationships. Our schools need to teach our children that how they manage their relationships in life will significantly affect how much money they make in life. Some basic relationship management strategies that need to be taught include:

The Hello Call, Happy Birthday Call and the Life Event Call. Every student should be taught that it is important to reach out to all of their relationships regularly to say hello, happy birthday and to recognize something good or bad that affected the life of any one of their relationships. Reaching out by a personal visit, phone call or a personalized card are the most effective ways to do this. Facebook, cell phone texting and email are good but only if they are used to supplement a personal visit, phone call or personalized card.

The importance of regularly getting together with your relationships in a personal setting through breakfasts, lunches, dinners, parties or life events is critical in developing strong, long-lasting relationships and this should be drilled into our children.

Children need to be taught how to use the currently available technology to manage their relationships. Technology exists that allow us to set reminders to call or meet with those relationships we desire to grow.

#4 – Teaching Time Management

Children need to understand the importance of “to do” lists and accomplishing daily tasks. This is critical to success in life. The byproduct of not doing so is the bad habit of procrastination. We need to equip our children with the knowledge and the tools to help them avoid the bad habit of procrastination. According to Psychology Today 20% of adults are chronic procrastinators[i]. In the real world, procrastination leads to angry customers, lost customers or, worse, lawsuits. When we procrastinate we are forced to rush tasks which lead to shoddy products or services and, thus, lost revenue or higher costs.

#5 – Teaching Proper Goal-Setting Techniques

Our children are not being taught correct goal-setting techniques. At the heart of the matter is the fact that neither parents nor educators understand what is and isn’t a goal. Many are taught that a goal is a wish. Wishes are not goals. What sets a wish and a goal apart is action. Wishes are wishes because there is no action-based plan underpinning the wish. Goals are goals only when action steps are required to achieve the goal. Educators need to teach our children the anatomy of a goal and the five types of goals:

Five-Year Goals - These are broad-based initiatives to be accomplished within a five-year period and are sometimes referred to as long-term goals. Think of your long-term goals as your "wish list." Create a plan for accomplishing each goal and include the tasks needed to be accomplished.
Next-Year Goals - These are goals you set for next year. This set of goals gets you closer to achieving your long-term goals. They represent lesser, broad-based goals or objectives that you need to accomplish in order to reach your five-year goals.
Current-Year Goals - These are goals you set at the beginning of the current year. They help move you closer to reaching your goals for next year and, thus, your five-year goals.
Monthly Goals -These are specific initiatives backed by action steps required in order to help you reach your annual goals. At the beginning of each month list monthly goals. These are goals with a realistic probability of being reached by the end of the month. Break down each goal into tasks or steps. The monthly goals could be the number of insurance policies to write that month, or the number of new clients you hope to gain, or a revenue target for the month. These goals might include a project to be completed or an article to be written.
Daily Goals - These are sometimes referred to as daily "to-do" lists or daily tasks. Daily goals represent the daily achievements wealthy people seek to attain every day in order to accomplish their broader monthly goals. They are daily activity goals. Successful people seek to reach 70% or more of their daily goals. Before you begin each and every day, compile a "to do" list. List only those things you believe you have a realistic probability (70% chance) of completing that day. Prioritize this list and set a specific time in which you will tackle each item. The lower priority items are those that have a low probability (bottom 30%) of being accomplished that day and can be accomplished the subsequent day. You do this in order to build flexibility into your "to do" list to avoid frustration in failing to accomplish the important tasks set for that day. During the day mark off each completed task and congratulate yourself in its accomplishment. At the end of the day evaluate your "to do" list. This forces accountability.

Thankfully, financial literacy has become a topic of great discussion among educators. But financial literacy will only get our children so far in life. Our education system needs to incorporate financial success education into their high school and college curriculums. Until they do we will be raising our children to fail in life financially and that affects the entire country. Teaching our children how to be financially successful in life will pay dividends down the road that will benefit the future stewards of society, today’s children.

[i] http://www.psychologytoday.com/articles/200308/procrastination-ten-things-know

Tax Consequences of Selling a House Owned by your Company

TOM@CEREFICE.COM (TOM CORLEY RICH HABITS) — Mon, 21 May 2012 14:39:50 GMT

If you have a house that is under your company name and you want to sell it back to yourself (owner of company), do you have to pay capital gains taxes?

The answer to this question really depends on the type of legal entity your business is operated through. Businesses may be operated as any of the following legal entities:

Traditional “C” Corporation

S Corporation

Single-Member Limited Liability Company which is taxed as a sole proprietorship

Limited Liability Company with multiple owners, which is taxed as a corporation or partnership

General Partnership

Sole Proprietorship

Each legal entity has unique tax advantages and disadvantages, depending upon the nature of the business and the transaction. Let’s answer this question, legal entity by legal entity.

C Corporation

There would be no long-term capital gains tax on the sale but there would be regular corporate income tax on the sale, if there were a gain realized on the sale. The reason for this is that C corporations do not have any preferential capital gains tax rates available to them. Generally, all of the income recognized by a business operating through a traditional C corporation is taxed at the corporate income tax rates that range from 15% up to 35%, depending upon the level of taxable income. Any asset sale by a corporation to a shareholder would be taxed if there were a gain on the sale, this includes a house. Furthermore, the sales price must represent what is called an arm’s length price. Arm’s length means it represents what an independent third party would pay for the home. If the sales price of the home was determined to be not at arm’s length by the IRS, then there are a host of distribution-related issues that could apply and which are beyond the scope of this article.

S Corporation

The sale of a house by an S corporation to one of its shareholders would be treated as a long-term capital gain (if the corporation owned the house for more than one year) and this gain would be passed through to the respective shareholders and taxed on their individual income tax returns. An S corporation generally does not pay any income tax. All items of income and loss are passed through to the individual shareholders who must report these income or loss items on their individual income tax returns. There are other issues, such as depreciation recapture, if the house were used for a business purpose, but that is beyond the scope of this article.

Single-Member Limited Liability Company (“LLC”) and Sole Proprietorship

Single-Member LLCs and Sole Proprietorships are taxed the same way at the Federal level. If the house were used for business purposes and was owned by an LLC (title was in the name of the LLC) then the gain on the sale would have to be reported by the owner of the LLC on their individual income tax return. If the house were owned more than one year by the LLC then the owner would treat the gain as a long-term capital gain. With respect to a Sole Proprietorship, the house can only be titled in the name of the individual who operated the Sole Proprietorship. Since title does not change there is no sale and no capital gains issue until the individual sells the house to an independent third party. Depreciation recapture rules would apply if the house were used by the business, whether an LLC or Sole Proprietorship, but that is beyond the scope of this article.

Limited Liability Company with multiple owners, which is taxed as a Corporation

The rules that apply to a Corporation would be identical in this scenario, meaning any long-term capital gain would be taxed only within the LLC.

Limited Liability Company with multiple owners, which is taxed as a Partnership and General Partnership

Partnerships are similar to S Corporation in that the individual items of income and loss are not taxed within the Partnership but are passed through to the individual partners and taxed on their individual income tax returns. Thus, any sale of a house by the Partnership would be taxable to the individual partners not the Partnership. If the Partnership owned the house for more than one year then the gain would be eligible for the long-term capital gains tax rate, which is currently 15%.

The real troublesome issue with respect to a house owned by a business is the loss of the home sale exclusion. The home sale exclusion allows individuals who own a home as their primary residence to exclude up to $500,000 of the gain from taxation ($250,000 for individuals whose filing status is single). When the house is owned by a business this home sale exclusion is lost, which is a significant tax consideration. As in any tax transaction, it goes without saying that individuals need to seek the advice of a CPA or Attorney.

The Real Cause of Poverty in America

TOM@CEREFICE.COM (TOM CORLEY RICH HABITS) — Mon, 21 May 2012 14:35:21 GMT

Before I begin on my quest to transform your life from one of poverty to one of unlimited financial wealth, let me set out some important facts about poverty and wealth in America:

46.2 million Americans live below the poverty line[i].
50% of American Households make less than $34,000 a year[ii].
Average student loan debt now exceeds $25,000[iii].
309 million people currently reside in America[iv].
138 million make enough money to warrant filing an income tax return[v]
6.9 million, or 5%, make $155,000 or more a year[vi].

This 5% puts money away for retirement, education for their children, savings, go on fun vacations, live in nice homes and retire without any financial worries.

What is this 5% doing right? What is it that financially successful individuals do that sets them apart from everyone else? In a five-year research study on the daily habits of wealthy and poor individuals the answer is: it’s your daily habits[vii]. Wealthy individuals have many good daily habits and few bad daily habits. Conversely, poor individuals have many bad daily habits and few good daily habits. The simple reason for this has to do with how you were raised. In wealthy households parents go to great lengths to instill good daily success habits in their children. This creates what I refer to as, “the generational cycle of wealth” and is a materially contributory factor to the wealth gap. It is also the underlying reason why the rich get richer. In poor households children learn bad daily habits from their parents and this creates what I refer to as, “the generational cycle of poverty”. In poor households the poor get poorer and this pattern repeats itself from one generation to the next.

So how do you break the generational cycle of poverty? You need to eliminate your bad daily habits and replace them with good daily habits.

Bad Habits That Are Making You Poor

You watch too much T.V. and waste too much time on social media.
You eat too much and drink too much of the wrong things.
You don't exercise enough aerobically.
Your relationships are on an “as needed” basis. You only reach out to your friends to socialize or when you have problems and need their help. You don’t call them just to say hello, happy birthday or to congratulate them or console them when something happens in their lives. In other words, you ignore them unless you need them for something.
Procrastination is the rule rather than the exception. You don’t maintain or stick to a daily “to do” list.
You devote very little time to your career beyond working. You do not attempt to become expert in your field. To you work is a necessary evil that one must endure in life in order to survive. Therefore, you do the bare minimum. You have “it’s not in my job description” syndrome.
You talk too much and don’t listen enough. Oftentimes, you are putting your foot in your mouth and saying inappropriate things.
You are not generous with your time or money with respect to your relationships.
You are a spender and not a saver. You don’t save 10% of your income every month. You spend more than you earn and your debt is overwhelming you.
You don't control your thoughts and emotions on a daily basis. You lose your temper too often and belittle others too much.
You don't network enough or at all with respect to your career or field.
You don’t set goals or don’t understand what goals really are.

Daily Habits That Will End Your Poverty

The Ten Good Daily Success Habits of Wealthy Individuals[viii]

Wealthy individuals have eliminated their bad daily habits and replaced them with good daily habits.
Wealthy individuals set daily, monthly, annual and long-term goals. They understand the difference between a wish and a goal.
Wealthy individuals engage in daily self-improvement. They engage in four core career-related, self-improvement activities.
Wealthy individuals take good care of their health. They exercise aerobically 20-30 minutes each time, four days a week. They monitor what they eat and how much they eat.
Wealthy individuals manage their relationships every day. Strong relationships are the currency of the wealthy. They employ certain strategies to grow their relationships such as: “The Hello Call”, “The Happy Birthday Call” and “The Life Event Call”.
Wealthy individuals live each day in moderation.
Wealthy individuals complete at least 70% of the tasks on their daily “to do” list.
Wealthy individuals engage in “Rich Thinking”. They are upbeat, positive and focused on achievement.
Wealthy individuals save a minimum of 10% of their income every year.

10. Wealthy individuals control their thoughts and emotions, every day.

How to Re-Program Yourself With your New Good Daily Success Habits

Take out a piece of paper and form two columns. In the first column list every one of your bad daily habits. Call this column your “Bad Habits” column. After listing all of your bad daily habits invert them and include them under column two, your “Good Habits” column. For example: "I watch too much TV" becomes “I watch 1 hour of TV per day". "I eat too much" becomes "I eat 2,000 calories per day". Fill your Good Habits column with these inverted Bad Habits. Keep you Good Habits list with you and refer to it every day. Live your new good daily habits for 30 days. By the end of this 30 day period you will be unshackled from those bad daily habits that have been dragging you down and creating failure in your life.

We live in an incredible country and have something no other country in the world has, the American Dream. This dream is one of unlimited opportunity that everyone is entitled to. While our parents taught us the importance of dreaming big in America, it isn’t enough. Dreaming will only get you so far. The rubber meets the road to financial success only when you begin doing. You need to do certain things every day that will make you successful in life. You need to eliminate your bad habits and re-program yourself by living new good daily success habits. Success is a process. It’s not about random luck, education or superior genealogy. It’s about what you do every day. It’s about your daily habits.

[i] http://en.wikipedia.org/wiki/Poverty_in_the_United_States

[ii] Tax Foundation: http://www.taxfoundation.org/

[iii] http://money.cnn.com/2011/11/03/pf/student_loan_debt/index.htm

[iv] http://quickfacts.census.gov/qfd/states/00000.html

[v] Tax Foundation: http://www.taxfoundation.org/

[vi] Tax Foundation: http://www.taxfoundation.org/

[vii] Rich Habits – The Daily Success Habits of Wealthy Individuals by Thomas C. Corley www.richhabits.net

[viii] Rich Habits – The Daily Success Habits of Wealthy Individuals by Thomas C. Corley www.richhabits.net

Why You Really Got Fired From Your Job

TOM@CEREFICE.COM (TOM CORLEY RICH HABITS) — Mon, 21 May 2012 14:33:22 GMT

“She was looking for a reason to fire me.”

“The economy is bad.”

“Everyone is cutting back.”

“I’ve been around for a while and make too much money.”

“They’re downsizing.”

“Profits are down.”

“They had to reduce overhead.”

“They outsourced my job to India.”

Excuses. That’s what they are. Excuses. Now there are some reasons people get fired that have nothing at all to do with their job performance. Bankruptcies happen. Companies go under. I grant you that. But at the end of the day you just were not valuable enough to keep around. If you were, you would be among the last to get fired or among the first to get hired by a competitor.

Value, indispensability, top-notch skills and strong relationships are what keep people from getting fired. Very few in the workforce pocess all four of these “unfireability” attributes. That’s right. You learned a new word. Don’t try to look it up in the dictionary. You won’t find it. It’s a word I created to describe why the top 5% in America never get fired or if they do, wind up working at a competitor very quickly. The best always have a job, I guess is my point. But how do you get to be in that vaunted “unfireability” category?

Most employees lack all four of these “unfireability” attributes. Many, in fact, have no discerning attributes which would render then “unfireable”. Another word I created. What they do have are bad career habits and these bad career habits are why employees get fired. What are these bad career habits?

The Bad Habits That Are Responsible For Your Unemployment

You do the bare minimum. You do just enough to keep your job. You have “it’s not my job syndrome”.
You do not care about your company’s customers or clients. To you they are a nuisance.
You don’t devote yourself to learning everything you can about your industry or your field
You do very little to build strong, long-lasting relationships among your fellow employees or supervisors.
You do not engage in extra-curricular work activities or extra-curricular industry-related activities.
You don’t even know what trade organizations your company belongs to.
You don’t regularly reach out to help fellow employees who may be overwhelmed with work.
You don’t read industry periodicals, newsletters, blogs or books.

Fear not. All is not lost. There are ways you can re-invent yourself and become “unfireable”.

Two Strategies That Will Make You Indispensable to Your Employer

Career-Related Self-Improvement – Top performers in every company have their fingers on the pulse of not only their company but also their industry. They do this by keeping up with changes in their industry through daily reading. Every industry has their respective industry periodicals and the top performers read these periodicals regularly. There are also company/industry newsletters, company/industry blogs and industry books that will help you grow your industry knowledgebase significantly. Two interesting things happen when you engage in all of this self-help industry reading. The first is an increase in confidence. Your confidence will grow as your knowledge grows. The second thing you will notice is a growing passion for what you do. Knowledge feeds your confidence and confidence feeds your passion. The job you previously “tolerated” now becomes a passion. As your confidence and passion for your job grows, people notice. It’s impossible to hide and it alters how those around you perceive you. And by those I am referring to your supervisors and their supervisors. They take notice. In time you become the “go to” person in your company and you move yourself away from the pack.
Career-Related Relationship Building – The very best employees treat those they work with within their company and within their industry like gold. They value relationships. They do things to grow strong, long-lasting relationships both within their company and within their industry. They participate in company functions and committees. The also join industry-related organizations, such as trade groups, and actively participate in these groups by joining various sub-groups or participating in various industry event committees. They reach out to these relationships regularly just to say hello, or happy birthday or to acknowledge some life event. They go to wakes, funerals, Shiva’s, weddings, baptisms etc. They look for opportunities to help their relationships any way they can. They know the names of the spouses and children or grandchildren of their relationships. They know their hobbies, the books the like to read, their favorite sport or music. They are in constant pursuit to learn more about their relationships.

Top employees engage in these two strategies because it not only makes them more valuable to their company but it also exposes them to opportunities that they previously were blind to. This might include leadership roles that open up within the company or industry, an opening in another company department, personnel changes they would have never known about or new product or service offerings within the company or industry. The more you know about your company and industry and the stronger your relationships both within your company and within your industry, the more valuable you become to your employer. These strategies will make you more money, garner more promotions and in time render you “unfireable”.

How Your Bad Habits are Holding You Back and Causing You to Fail in Life Financially

TOM@CEREFICE.COM (TOM CORLEY RICH HABITS) — Mon, 21 May 2012 14:31:24 GMT

Are you struggling financially? Do you have difficulty paying your monthly bills? Are your savings inadequate? Do you have little, if any, college savings for your kids? Are your credit card debt payments strangling you financially?

If you answered yes, as most of you did, you are in good company. 95% of the U.S. population is in the same boat. Everyone in this group is hanging on by a thread. Only 5% of the U.S. population is living the good life[i]. They have plenty of savings, go on nice vacations, have little to no credit card debt, buy cars when they need to, pay bills within 30 days and have content family lives. Why? Why is it that 95% of the population is floundering in this great country of ours?

Getting by financially is no accident. Every day you process failure into your life. The underlying cause for financial failure resides in your daily habits. Everyone in this 95% group has bad daily habits. Let me shed some light on some of the bad daily habits that most individuals share in common. Sit tight as this will be a bumpy ride for most of you:

You watch too much T.V. and spend too much time on the Internet.
You eat too much and drink too much.
You don't exercise enough aerobically.
You don't call people and wish them a happy birthday, or call your relationships regularly just to say hello.
You don't maintain a daily "to do” list or, if you do, you complete less than 70% of your daily tasks.
You don’t devote yourself to daily career-related, self-improvement.
You talk too much and don’t listen enough.
You constantly put your foot in your mouth and say inappropriate things.
You are not generous with your time or money.
You procrastinate.
You don’t save 10% or more of your income.
You don't control your thoughts and emotions on a daily basis.
You belittle others too much and find fault in everything.
You have wild emotional swings. You are either too happy or too sad and you get depressed too much.
You don't network enough.
You have no goals or fail to achieve your goals.

I can go on and on. Bad daily habits have everything to do with your lot in life. And those struggling financially have many bad habits.

Despite the enormous amount of money that goes into our education system, not one school system in the country teaches its students "How To Be Financially Successful In Life". 95% of us are on our own. We learn what we learn in life regarding financial success from our parents, teachers, family, friends and anyone we come into contact with. Since most don't know how to be financially successful, we are learning bad habits from everyone. Everyone, that is except to the wealthy 5% that get it. Their parents and family get it too. Their friends and anyone they associate with get it.

What does this wealthy 5% do differently, every day, that the 95% don’t do? They have incorporated into their lives good daily habits. What are some of the good daily habits of this 5% group?

The Ten Good Daily Success Habits of Wealthy Individuals

Wealthy individuals have eliminated their bad daily habits and replaced them with good daily habits.
Wealthy individuals set daily, monthly, annual and long-term goals. They understand the difference between a wish and a goal.
Wealthy individuals engage in daily self-improvement. They engage in four core career-related, self-improvement activities.
Wealthy individuals take good care of their health. They exercise aerobically 20-30 minutes each time, four days a week. The monitor what they eat and how much they eat.
Wealthy individuals manage their relationships every day. Strong relationships are the currency of the wealthy. They employ certain strategies to grow their relationships such as: “The Hello Call”, “The Happy Birthday Call” and “The Life Event Call”.
Wealthy individuals live each day in moderation.
Wealthy individuals complete at least 70% of the tasks on their daily “to do” list

Wealthy individuals engage in “Rich Thinking”. They are upbeat, positive and focused on achievement.
Wealthy individuals save a minimum of 10% of their income every year.

10. Wealthy individuals control their thoughts and emotions, every day.

A Simple Technique to turn Your Bad Habits into Good Habits in 30 Days

Success is a process and in order to process success in your life you must do what wealthy individuals do every day. You must have good daily habits in order to become financially successful. When you follow these ten good daily success habits you will be walking in the footsteps of the wealthy.

[i] According to the Tax Foundation 6,899,110 households made $154,643 in adjusted gross income in 2009. This represents the top 5% of all tax filers in the United States. http://www.taxfoundation.org/

Why Most Individuals Never Achieve Their Goals – What Wealthy Individuals Know About Goal Setting That Others Don’t

TOM@CEREFICE.COM (TOM CORLEY RICH HABITS) — Wed, 16 May 2012 18:04:29 GMT

Far too many individuals fail to achieve their goals. Many who fail to achieve their goals simply give up on goal setting altogether out of frustration or a loss of confidence in the goal-setting process. Why do people fail to achieve their goals? The heart of the problem lies in the fact that many who set what they think are goals are not setting goals at all. They are, instead, making a wish. In my five-year research study on the daily habits of wealthy individuals I received an education on how wealthy individuals set goals as well as their entire goal-setting process[i]. So let’s begin.

The Anatomy of a Goal – How to Turn a Wish into a Goal

Wishes are not goals. What sets a wish and a goal apart is action. Wishes are wishes because there is no action-based plan underpinning the wish. Goals are goals only when action steps are required to achieve the goal. For example, a typical goal setter may establish a goal of making $100,000 in income for the year. They may even list this "goal" on a goal sheet that they review periodically. As the year moves along they soon begin to realize that they will not get close to making $100,000. This usually occurs mid-year. Downcast, they often stop reviewing their goals for the year. Feelings of inadequacy, poor work ethic, lack of focus begin to filter into their minds as a result of missing the goal. That's too bad. It's too bad because the failure in achieving the "goal" has little to do with work ethic or focus or competence. Instead, it has everything to do with misinterpreting a wish for a goal.

So how do we turn our wish of making $100,000 in income for the year into a goal? The first thing we need to do is to create an action plan. An action plan represents the specific steps that are required in order to help you reach your $100,000 earnings target. Let's use the example of a life insurance agent who desires to make $100,000 in commissions for the year. What specific action steps are required in order for a life insurance agent to make $100,000 in commissions for the year? In order to answer that question we need to work backwards and define the steps necessary to reach this financial benchmark.

Step #1: How many average life policies need to be written for the year in order to spin off $100,000 in commissions?
If the average life insurance case generates $2,000 in commissions this means that you will need to close 50 cases for the year. Is this possible? If the answer is yes then you move on to Step # 2.

Step #2: How many individual meetings will you need in order to have a shot at closing 50 cases for the year?
If it takes five meetings to create one closed case then you will need to meet with 250 people during the year. Is this possible? If the answer is yes then you move on to Step #3.

Step # 3: How many phone calls will it take to create 250 meetings for the year?
If it takes ten phone calls just to get one meeting, then the answer is 2,500 phone calls for the year. Is this possible? If the answer is yes then you move on to Step #4.

Step #4: How many phone calls will you have to make every week in order to reach your goal of 2,500 phone calls for the year?
Assuming you take four weeks off for the year for various reasons (vacation, time off etc.) then that leaves you with 48 weeks to work with. This will require you to make approximately 50 phone calls a week. Is this possible? If the answer is yes then you move on to Step #5.

Step #5: How many phone calls will it take each day to reach 50 calls per week?
Ok, that was an easy one. Ten per day. Is that possible? You bet it is. 10 phone calls per day. Now you have your goal, which is: MakeTen Prospecting Calls Each Day.

You may notice that each goal you set requires a step-by-step analysis in order to determine if the goal is possible to achieve. The real goal is not to make $100,000 per year, but, instead, to make ten phone calls per day. That action step is your goal. The byproduct of achieving your goal is that you will make $100,000 for the year in commissions. See how goal setting works? What you have done is taken a "wish" of making $100,000 per year in commissions and broken it down into steps in order to determine what your real goal needs to be. By going through this exercise, what you are really doing is creating a business plan for each wish, which involves defining the variables for each particular goal. Variables such as the number of policies that need to be written, the number of meetings that needs to take place, the number of prospecting phone calls that are needed to create a meeting. Then you break these variable assumptions down into the daily activities required.

In summary, a wish becomes a goal only when you define the action-based steps that must be accomplished in order for your wish to come true.

Goal-Setting Process of Wealthy Individuals

Wealthy people set five types of goals.

Five-Year Goals - These are broad-based initiatives to be accomplished within a five-year period and are sometimes referred to as long-term goals. Think of your long-term goals as your "wish list." Create a plan for accomplishing each goal and include the tasks needed to be accomplished.
Next-Year Goals - These are goals you set for next year. This set of goals gets you closer to achieving your long-term goals. They represent lesser, broad-based goals or objectives that you need to accomplish in order to reach your five-year goals.
Current-Year Goals - These are goals you set at the beginning of the current year. They help move you closer to reaching your goals for next year and, thus, your five-year goals.
Monthly Goals -These are specific initiatives backed by action steps required in order to help you reach your annual goals. At the beginning of each month list monthly goals. These are goals with a realistic probability of being reached by the end of the month. Break down each goal into tasks or steps. The monthly goals could be the number of insurance policies to write that month, or the number of new clients you hope to gain, or a revenue target for the month. These goals might include a project to be completed or an article to be written.
Daily Goals - These are sometimes referred to as daily "to-do" lists or daily tasks. Daily goals represent the daily achievements wealthy people seek to attain every day in order to accomplish their broader monthly goals. They are daily activity goals. Wealthy people seek to reach 70% or more of their daily goals. Before you begin each and every day, compile a "to do" list. List only those things you believe you have a realistic probability (70% chance) of completing that day. Prioritize this list and set a specific time in which you will tackle each item. The lower priority items are those that have a low probability (bottom 30%) of being accomplished that day and can be accomplished the subsequent day. You do this in order to build flexibility into your "to do" list to avoid frustration in failing to accomplish the important tasks set for that day. During the day mark off each completed task and congratulate yourself in its accomplishment. At the end of the day evaluate your "to do" list. This forces accountability.

Wealthy individuals write down their goals and set a deadline for achieving their goals. These goals are reviewed frequently and are modified as the facts change in their lives. A little known secret I discovered in studying wealthy individuals is that the wealthy constantly revise their goals and their deadlines. Wealthy individuals understand life is not a fixed, static thing. Things within our lives change and our goals must change as well. Unless a goal is written down along with a specific accomplishment date, it will be forgotten or neglected. You must see your goals every single day.

Daily Affirmations –Wealthy Individuals Create Daily Affirmations around Their Goals

I uncovered a very powerful technique the wealthy use in achieving their goals. Wealthy individuals utilize daily affirmations as a tool to help them reach their goals. The daily affirmations are constructed in such a way as to be directly related to a specific goal. For example, one wealthy individual used a daily affirmation to achieve his goal of adding solar installations to his company’s product and service offering. In order for this to happen the wealthy business owner needed he and his electrical engineer employees to secure a particular license to do Photovoltaic installations. To help, he created the following daily affirmation using the name of the license he and his group were working toward securing:

“I am a limited renewable energy contractor”.

His goal for his company was to get into the solar cell installation business by the end of the year and he made each license applicant successfully use the above affirmation to motivate each one of them to obtain the license. They all did and his firm became even more profitable.

In order for the daily affirmations to work they need to be in the present tense: “I am”. They also need to represent the future state or future you: “a renewable energy contractor”. You can use daily affirmations to help you with your goals. If your goal for the year is to increase your sales productivity you can use the following daily affirmation: “I make ten prospect phone calls today”.

“I make” is the present tense and the future state is ten phone calls being made by the end of the day.

Daily affirmations only work if they are in the present tense, represent the future you (or future state) and are tied to an action-based goal.

Once you learn the secrets behind how wealthy individuals set goals you cannot fail to achieve your goals. With you newfound knowledge you can now set goals and feel confident that you will achieve each one of your goals and improve your financial life.

[i] Rich Habits – The Daily Success Habits of Wealthy Individuals, by Thomas C. Corley (www.richhabits.net)

Hilary Rosen and the Left’s War Against Stay-at-Home Moms and Traditional Families

TOM@CEREFICE.COM (TOM CORLEY RICH HABITS) — Tue, 15 May 2012 18:59:47 GMT

Hilary Rosen’s diatribe about Ann Romney is not only an assault on stay-at-home moms; it’s an assault on the family unit, family values and the American Dream. The fact is, families with a stay-at-home mom do a much better job raising their children than dual income families. The importance of quality time with the family is a myth. The only quality time is quantity time. Teaching children good daily success habits requires a lot of time. Families with stay at home moms have more time to teach their children the good daily success habits they will need to succeed in life. Children who are raised in a dual income household are simply not getting the quantity time that is necessary in order for them to be adequately taught good daily success habits.

Family units with a stay-at-home mom may struggle financially for their choice but the upside is that this investment in the family pays dividends down the road when kids become adults. Simply stated: families with stay at home moms do a better job parenting that dual income families. Their children have an incredible advantage over their counterparts as they enter the real world.

Rhetoric such as Hilary Rosen’s only highlights the glaring differences between pro-family conservative American principles and anti-family, anti-American liberal ideology.

If you would like more information on me here is the link: http://www.richhabits.net/uploads/PRESS_KIT_RICH_HABITS.pdf

Occupy Wall Street Needs a Name Change

TOM@CEREFICE.COM (TOM CORLEY RICH HABITS) — Tue, 15 May 2012 18:58:20 GMT

I am a CPA. Most of my clients are very successful. They represent the cream of the crop in America and can afford a CPA to help them with their taxes. In my 25 years as a CPA I’ve noticed a few things about my successful clients:

Most of their kids excel in school

Most of their kids go to college

Most of their kids inherit very little money from their parents yet grow up to be financially successful nonetheless

Most of my clients’ money is tied up in their retirement/business and used to pay for college for their kids

My clients invest a lot of time in their families

My clients all have very good success habits

My clients teach their kids these success habits

I mention all this because my clients represent that evil 1% that has been dominating the news around the country for the past year. I guess it makes for good press to assault this 1% group, but what I believe is really being assaulted is the American Dream and core American values. This group is in the 1% because they had good parents who taught them work ethic and good daily success habits. In my opinion, the 99% are mad at the wrong people. Instead, they should be mad at their parents for not teaching them how to be successful in life. They should also be mad at their teachers and the education system for not teaching them the good daily success habits they should have been getting at home. Not only do I believe this 99% group should shift their blame from the wealthy and Wall Street but I think they should also change their name from “Occupy Wall Street” to “Blame Parents”.

If you would like more information on me here is the link: http://www.richhabits.net/uploads/PRESS_KIT_RICH_HABITS.pdf

The Pros and Cons of Volunteerism in America

TOM@CEREFICE.COM (TOM CORLEY RICH HABITS) — Tue, 15 May 2012 18:55:23 GMT

The roots of volunteerism in America go back very far. Benjamin Franklin was perhaps one of the most prodigious volunteers in our nation’s history having organized the Philadelphia volunteer fire company, a militia, circulating libraries, public hospitals, mutual insurance companies, agricultural colleges, as well as intellectual societies. Franklin saw volunteerism as each citizen’s civic duty. Evidently, many agree. Nearly 63 million Americans volunteered more than 8 billion hours in 2010 according to the Corporation of National and Community Service, a federal agency that leads President Obama’s “United We Serve” initiative. The value of this volunteerism was approximately $173 billion[i]. Today’s volunteerism manifests itself in many forms. Parent-teacher organizations, boy scouts and girl scouts, blood donation, political campaigns, the preservation of historical landmarks, fire companies, emergency services, religious organizations, business organizations and many civic groups all rely on volunteerism for their very survival.

There are many benefits to volunteering one’s time. There are also some negatives. The purpose of this article is to address the pros and cons of volunteerism in America so let’s get started.

Pro #1 – Recognition in Your Community

When you volunteer your time in your community you gain name recognition. It exposes you to more people and expands your relationship base. You become a recognized figure in your community and that makes you feel important.

Pro #2 - You Make a Difference

There is no better feeling than the feeling that you made a difference. I like to call it the George Bailey Effect. We all want to feel our lives have meaning. Volunteerism satisfies that empty feeling we sometimes have about our very existence. When our volunteerism makes a difference it simply makes us feel like we matter in life.

Pro #3 – You Get to Meet New People

Volunteerism allows you to meet new people and gain new relationships. These relationships can turn into life-long friendships or business associations. If you have had difficulty making new relationships volunteerism may be the perfect remedy.

Pro #4 – Financial Reward

Volunteerism is a perfect way to highlight your skillset. When you do a good job people notice and that notice very often translates into business opportunities. People want to do business with people then know, like and trust. What better way to make that happen than volunteering.

Con #1 – Time Commitment

I knew an individual who did so much volunteering that his business began to suffer. His wife gave him some religion and before you knew it he had resigned his position from several organizations. There is a serious time commitment required when you volunteer. Oftentimes your reward for doing an outstanding job is another committee assignment or request for your skills by some other organization. If you are not the type to say “no” you could find yourself in over your head in terms of time and this could negatively affect your job, business or worse, your family life.

Con #2 – Personality Conflicts

I have seen firsthand volunteers nearly come to blows. When you volunteer you have to deal with people. Some people are pleasant to deal with and some are not. When you find yourself working with individuals you do not like or cannot get along with it can be a very unpleasant experience.

Con #3 – The Power Play

Some individuals get carried away with their leadership status within some non-profit organizations. They use their status as a means of fulfilling some need for power within their life, often to the detriment of other volunteers. In most cases these individuals do not last long but while they are around they make life a living hell for other volunteers.

Con #4 – Theft

Many non-profit organizations are small and dependent upon a few individuals to manage the affairs of the organization. Sadly, some volunteers breach their fiduciary responsibilities. Unless the organization has some checks and balances, this theft could go on for years. I’ve seen it first hand, so I know what I am saying is true. For most organizations there is very little vetting of prospective volunteers that goes on. If an unscrupulous volunteer makes their way to some leadership role, such as Treasurer, the organization could find itself the victim of theft.

[i] http://iipdigital.usembassy.gov/st/english/publication/2011/11/20111114165732pillihp0.3918421.html#axzz1tGorQzsR

How Parents and our Education System are Teaching our Children to Fail Financially

TOM@CEREFICE.COM (TOM CORLEY RICH HABITS) — Tue, 15 May 2012 18:53:02 GMT

When I travel the country speaking to high school and college students about exactly what they need to do to become financially successful in life I always begin my presentation by asking three questions:

“How many want to be financially successful in life?”

“How many think they will be financially successful in life?”

Almost every time I ask these two questions every hand rises in the air. Then I ask the magic third question:

“How many have taken a course in school on how to be financially successful in life?”

Not one hand rises in the air, ever. This happens every time I have asked this third question. Clearly every student wants to be successful and thinks they will be successful but none have been taught by their parents or their school system how to be financially successful in life. Not only is there no course on basic financial success principles but there are no structured courses on basic financial literacy. We are raising our children to be financially illiterate and we are raising our children to be poor and to fail in life. Is it any wonder that most Americans live paycheck to paycheck? That most Americans accumulate more debt than assets? That many Americans are losing their homes? Is it any wonder that most Americans cannot afford college for their children and that student loan debt is now the largest type of consumer debt[i]? According to The Institute for College Access & Success' Project on Student Debt, the average student loan debt is $25,250. This debt forces college graduates to postpone buying a home and starting a family.

The second worst part about this problem is what our children are being taught by their parents and the school system. They are being taught that rich people are bad. You think I'm wrong? Just ask your child if they have ever read Robin Hood in school. Most likely the answer will be yes. Then ask them if Robin Hood is a good guy or a bad guy. Most likely your children will say “good guy”. In fact, they very likely consider him a hero. The fact that Robin Hood was a thief who stole someone's hard-earned money is irrelevant. He took from the rich and gave to the poor. That, our children are taught, is o.k. because poor people are good and rich people are bad and poor people are thus "entitled" to that rich person's money and wealth. Our schools are teaching our children that striving to become wealthy in America is bad. In other words, the American Dream is a bad thing. The Occupy Wall Street movement is a manifestation of this “financial success is bad “ mindset. The 1% are bad and the 99% are good. You cannot pick up a paper these days without there being some article on the wealth gap. Clearly this wealth gap needs to be addressed. But measures to address the disparity between the rich and the poor, such as the Buffet Rule[ii], are poorly thought out and simply will not solve the problem of poverty in our country. The real solution is to equip our children through education at home and in school with tools that enable them to become financially successful in life.

So how do we do this? Parents and our schools need to work together to re-educate our children in the following areas:

Limit T.V., social media and cell phone use to no more than one hour a day.

Require that children to read one to two educational books a month.

Require children to aerobically exercise 20 – 30 minutes a day.

Limit junk food to no more than 300 calories a day.

Require that children set monthly, annual and 5-year goals.

Require working age children to work or volunteer at least ten hours a week.

Require that children save at least 25% of their earnings or gifts they receive.

Teach children the importance of relationship building by requiring them to call friends, family, teachers, coaches etc. on their birthdays and to send thank you cards for gifts or help they received from anyone.

Reassure children that mistakes are good not bad. Children need to understand that the very foundation of success in life is built on learning from our mistakes.

Punish children when they lose their tempers so they understand the importance of controlling this very costly emotion.

Teach children that seeking financial success in life is good and is a worthwhile goal. Children need to learn what the American Dream is (unlimited opportunity for financial success) and taught that the American Dream is a great thing and what made this country great.

Children need to learn how to manage money. Open up a checking account or savings account for children and force them to use their savings to buy the things they want. They need to learn that they are not entitled to things like cell phones, computers, fashionable clothes, flat screen T.V.s etc.

Require children to participate in at least two non-sport-related extracurricular activities at school or outside of school.

Parents and children need to set aside at least an hour a day to talk to one another. Not on Facebook, or on the cell phone, but face to face. The only quality time is quantity time

Teach children how to manage their time. They should be required to create daily “to do” lists and these lists need to be monitored by parents. The goal should be to accomplish at least 70% of their tasks on their daily “to do” list.

Financial success is not a secret. Wealthy people do certain things every single day that sets them apart from everyone else in life. Wealthy people have good daily success habits that they learned from their parents. These daily habits are the real reason for the wealth gap in our country and the real reason why the rich get richer. Unless we teach our children good daily success habits, and level the playing field, the rich will continue to get richer and the poor will continue to get poorer.

[i] http://www.finaid.org/loans/studentloandebtclock.phtml

[ii] http://www.whitehouse.gov/economy/buffett-rule

How to Guarantee That You Will Never Get Fired Ever Again

TOM@CEREFICE.COM (TOM CORLEY RICH HABITS) — Tue, 15 May 2012 18:51:04 GMT

In my five-year study of the daily success habits of successful individuals, one important discovery I made was that successful individuals are fanatics when it comes to daily career-related, self-improvement. The reason? They are in constant pursuit of knowledge in order to help them identify opportunities. This makes them more valuable to their employer, customer or clients and helps them to rise up the career ladder of success. I uncovered four ways that successful individuals engage in opportunity-seeking, self-improvement: Reading, Writing, Speaking and Doing[i]. Each one gets you higher up the ladder of financial success.

[i] Rich Habits – The Daily Success Habits of Wealthy Individuals, by Thomas C. Corley (www.richhabits.net)

Strategy #1 Career-Related Reading

Many of us get monthly industry periodicals. Typically, we set them aside and tell ourselves that we will get to that reading very soon. We may even pull out the periodicals, after a week or two, and browse through them, tearing out articles we are intent on reading. We set these articles aside and, again, tell ourselves we will get to that reading very soon. After a few months we throw these periodicals/articles out, rationalizing that they are outdated and of no use. Their time value has rendered them outdated.

Successful individuals have a different tact. They set aside time every day for reading. They read every one of their periodicals. Why? Successful individuals understand the value of timely information. They are in pursuit of opportunities to make more money and advance their careers. Often these opportunities are found inside these industry periodicals. Successful individuals, on average[ii], set aside thirty to forty-five minutes of every day for career-related reading. They do this day in and day out. Successful individuals understand that reading helps them remain current with industry technical information and industry trends, which often leads to the discovery of hidden opportunities. To successful individuals, reading gets them one wrung higher on the career ladder of financial success.

Strategy #2 Career-Related Writing

Writing is a form of communication. Because you are writing on a topic, you must gain a more comprehensive understanding of that topic than reading alone can provide. Successful individuals engage in writing in a number of ways including: company newsletters, industry newsletters, newspaper articles, industry publication articles, Internet articles and customer/client letters. Writing helps lift successful individuals up another wrung on the career ladder of success.

Strategy #3 Speaking

Speaking, like writing, is a form of communication. Speaking requires a greater understanding of a subject matter than writing or reading will provide. There is a simple reason for this. In a speaking engagement you may be asked a question and this makes it a two-way communication process. When you are "the expert" on a topic for which you have been asked to speak you must fully know that topic, inside and out. This requires a more detailed study that reading and writing together cannot provide. Speaking forces you to dig deeper and expand your knowledge base. Speaking elevates you up another wrung on the career ladder of success.

Strategy #4 Doing

There is no better way to perfect your knowledge in an area than through repetition by doing. Repetition in a particular area gets you closer to perfection than reading, writing or speaking ever could. Each time you repeat a task in a particular area you become more efficient and more expert. Doing, over and over again, allows you to make and fix mistakes. It allows you to improve and perfect your skill-set. Through repetition by doing you will, in time, become a master in a particular task or subject matter. Doing raises you to the highest wrung on the career ladder of success.

Successful individuals employ the above strategies in an effort to become more expert in their field and make themselves indispensable to their employer, and their employer’s customers or clients. These strategies also open up your eyes to opportunities that were previously hidden.

Finding Opportunities

The most successful of individuals employ all four career-related self-improvement strategies in climbing the career ladder of success. But you can achieve a good measure of career success by simply dedicating yourself, every day, to just one of these four career-related, self-improvement strategies. Make no mistake about it; it's not an easy discipline. Daily career-related, self-improvement is boring. It's tedious. But the by-product is the discovery of otherwise hidden opportunities. Opportunities that were there all along, but could not be seen until you took that important step of expanding your knowledge base.

I like to use the following metaphor to best explain how these strategies work:

Imagine for a moment that you find yourself surrounded by trees. These trees are a metaphor for opportunities. You see all of the trees that are in front of you. Now imagine off to the side of these trees is a hill. This hill is a metaphor for career-related, self-improvement. What happens when you climb that hill (what happens when you engage in daily career-related, self-improvement)? You begin to notice that there are more trees. As you climb higher and higher up the hill (as you engage in more and more career-related, self-improvement) you realize you were in a forest and what you now see are not just individual trees but a forest; a forest of opportunities. Climbing that hill, engaging in career-related, self-improvement, exposes you to more opportunities in life and in your career.

Opportunity and Luck

Many individuals who struggle in life believe they have bad luck. And these same unsuccessful people believe those who are successful are simply, well, lucky in life. What they don’t understand is that successful people create their own luck. They create, what I call, opportunity luck. Let’s talk a bit about luck.

There are four types of luck.

Random Good Luck - This is a type of good luck that you have no control over. This could include winning the lottery, for example.
Random Bad Luck – Again, this type of luck you have absolutely no control over, such as getting struck by lightning.
Opportunity Luck - This is the type of luck that successful people create through their good daily habits such as engaging in career-related, self-improvement.
Detrimental Luck - This is the luck that unsuccessful people create through their bad daily habits, such as not devoting enough time to becoming more valuable to their employer. People who devote very little time to career-related, self-improvement add very little value to their employer and are among the first to get fired.

Utilizing one or more of the career-related, self-improvement strategies will make you indispensable to your employer. Increasing your knowledgebase opens up the world of hidden opportunities. Opportunities which will help your employer increase revenues or reduce expenses and guarantee that you will be among the highest paid of employees and among the last to get fired.

[i] Rich Habits – The Daily Success Habits of Wealthy Individuals, by Thomas C. Corley (www.richhabits.net)

[ii] Rich Habits – The Daily Success Habits of Wealthy Individuals, by Thomas C. Corley (www.richhabits.net)

The War Being Waged Against Wealth and the American Dream

TOM@CEREFICE.COM (TOM CORLEY RICH HABITS) — Thu, 19 Apr 2012 14:27:34 GMT

What do Hilary Rosen, Occupy Wall Street and President Obama’s “Buffet Rule” all have in common?

All are evidence of a war currently being waged against the wealthy. The fuel feeding this war is the current state of the economy. With so many out of work and struggling financially, agenda-driven politicians and media are hyping the unfairness of the wealth gap and demanding fairness in the distribution of wealth in America. But there is one major impediment to this march toward fairness.

In America we have something no other country on the face of the planet has ever had. This something is the reason why the U.S. economy is $15.1 trillion, while our nearest competitor is just half that. This something is the reason why there are 403 billionaires in the U.S., while our nearest competitor has 62. This something is the reason why immigrants from the four corners of the globe risk life and limb to get to our shores. This something is why millions of Americans start new companies; why entrepreneurship is so strong in the U.S. What is this something? The American Dream.

The American Dream is the idea that an individual or their family can rise from poverty to wealth in one or two generations. It is the idea that the wealth we create is ours to keep (property rights). It is the idea for a better life for our children and our children's children. The American Dream is responsible for the largest economy the world has ever known. The American Dream is what sets America apart from all other countries. The American Dream is that oasis in the desert of hopelessness that is most of the world. The American Dream stands in the way of any “fair” redistribution of wealth.

The very moment we accept the notion that the wealth gap must be narrowed by government initiatives is the very moment the American Dream dies. When an entrepreneur invests his or her life savings, retirement savings or mortgages their home to start a business the reason he or she does so is because of the American Dream. The hope is that the business will succeed and the entrepreneur will receive a financial windfall down the road that will benefit his family, his children and their decedents. When an immigrant risks life and limb to get to our shores, in their minds they are arriving at the port of call for the American Dream. To immigrants the American Dream represents the hope that they can end their personal poverty and that of their family.

This war on the American Dream is well thought out. Those who advocate wealth fairness through government action are attempting to re-define the American Dream from that of unlimited opportunity to unlimited government entitlements with the wealthy minority carrying the financial bucket of the country for the poor majority. The American Dream motivates individuals to do great things. Without that motivation, great things simply will not get done and America will be America no more.

Taxation of Commodity Traders

TOM@CEREFICE.COM (TOM CORLEY RICH HABITS) — Mon, 12 Dec 2011 21:32:28 GMT

Commodity Traders are may be taxed under two different methodologies. One I refer to as the "Default Rule" and the other I refer to as the "Mark-To-Market Election Rule".

The Default Rule
Under Internal Revenue Code ("IRC") section 1256, Commodity Traders are granted two major tax breaks:
Tax Break #1
60% of commodity gains are taxed at the long-term gains tax rate and 40% of gains are taxed are treated as short-term gains. This is known as the "60/40 Rule".
Tax Break #2
Commodity trading losses may be carried back three years, to offset prior years commodity trading gains.

In order to meet the definition of a Commodity Trader, for purposes of the above favorable tax breaks, an individual must be a member of a domestic board of trade designated as a contract market by the Commodity Futures Trading Commission (a.k.a. "regulated exchange"). The definition of a commodity under IRC section 1256 includes any regulated futures contract, any foreign currency contract, any non-equity option, any dealer equity option and any dealer securities futures contract. If you trade on a regulated exchange you are a "Commodities Trader" under IRC section 1256 and can avail yourself of the preferential 60/40 Rule.

When such Commodity Traders file their tax returns for the year they report their commodities gains and losses on Form 6781, which is attached to Form 1040 (Federal Income Tax Return for individuals). The gains and losses reported on Form 6781 are split into two groups: 60% long-term gains and 40% short-term gains. The next step is to move these two groups of gains/(losses) over to Schedule D and they are taxed accordingly (long-term gains/losses are netted against short-term gains/losses). If their is a net long-term gain this is taxed at the current favoralbe capital gains tax rate of 15%.

What I just described is the general rule of taxation of Commodity Traders and most Commodity Traders are taxed under this rule. Any expenses you may have incurred (such as margin interest expense) may only be deducted as an itemized deduction and, thus limited.

Mark-To-Market Election Rule
There is another tax option available to Commodity Traders, however. If a Commodity Trader meets the definite of a "Professional Trader" they are eligible to make the IRC section 475 Mark-To-Market election. This new optional rule came into effect in 1997 under The Taxpayer Relief Act of 1997, which gave Commodity Traders the ability to make the Internal Revenue Code ("IRC") section 475 Mark-To-Market election. When you make this election it allows Commodity Traders to do two things:

#1 Treat commodity gains and losses as ordinary income (loss). When you make the IRC section 475 Mark-To-Market election you are eligible to file a Schedule C and list your commodity business expenses. Under this election, commodity business expenses have more value as they are no longer considered itemized deductions but, instead, ordinary business expenses. These expenses can then be used to offset other income you reported, such as wagesWhen you make the Mark-To-Market election, a Commodity Trader is electing out of the 60/40 Rule and, instead, treats all gains and losses as ordinary. The 60/40 Rule is the default rule that is available to Commodity Traders who have not made the IRC section 475 Mark-To-Market election. Most Commodity Traders do not make the IRC section 475 Mark-To-Market election in order to preserve the favorable taxation of commodities (60% long-term gain treatment and 40% short-term gain treatment).

#2 Allow Commodity Traders to take deductions on Schedule C for business expenses associated with your commodity trading business. You can only take deductions on a Schedule C where you have a valid IRC section 475 Mark-To-Market election in place.

In order to be eligible for the IRC section 475 Mark-To-Market election a Commodity Trader must meet the stringent tax definition of a Trader. The "Trader" definition, for purposes of the Mark-To-Market election, requires an individual to seek to profit from short-term changes in the market. This trading activity must be substantial, frequent and continuous. You must be a full-time trader who is trying to capitalize on the momentary swings in the market each day. If you meet the definition of a "Trader" then you are eligible to make the Mark-To Market election, which must be made by April 15th of the current year if you want the election to be effective for the current year. Example: You make the election by April 15, 2012 for tax year 2012. Once in place the election allows you to treat all gains and losses as ordinary (reported on Form 4797, which is attached to your individual income tax return Form 1040).

Commodity Traders cannot take advantage of the 60/40 Rule and take deductions on Schedule C at the same time. It's one or the other. The 60/40 Rule is only available to Commodity Traders who DID NOT make the IRC section 475 Mark-To-Market election. The ability to take Schedule C deductions is only available to Commodity Traders DID make the IRC section 475 Mark-To-Market election.

The Financial Success Equation

TOM@CEREFICE.COM (TOM CORLEY RICH HABITS) — Thu, 22 Sep 2011 23:14:30 GMT

Financial success ain't easy. Very few in America experience financial success. It's a needle in a haystack. The ones who do find financial success in life, however, do so by following a formula. I call it the Financial Success Equation and here it is:

        FINANCIAL SUCCESS = PASSION +HARD WORK + OPPORTUNITY LUCK

This equation is like a linked chain. You need each variable in order to form the linked chain of financial success. If you are missing even on of these variables you will never achieve financial success.

PASSION
The first variable, the first link in the chain of financial success, is Passion. Forget about education, intelligence, genius or creativity. None of that matters when you find passion for something that allows you to make a good living. Obsessive passion overrides all of your deficiencies and renders mistakes irrelevant, except for purposes of better educating yourself in what not to do. Passion forces you to a higher level of intense learning and self-improvement. So when you peel the onion of success down to its core, what you find at the heart is passion. Uncovering that passion in your life will catapult you above every one of your peers and set you flying like a rocket ship, so long as the industry or undertaking you are passionate about is in a lucrative field or industry.

Unfortunately, passion finds very few individuals. Most eke out a living in quiet desperation. When you find your passion, and that passion can be monetized, count your blessings because you are walking along a path very few are privileged to traverse. You have found your heaven on earth.

HARD WORK
The second variable, and link in the financial success chain, is Hard Work. You must work hard at the thing you are passionate about in life. You cannot force a hard work ethic. The work must feel effortless to some degree. Hard work must be something that just happens because your passion drives you to work hard. It is virtually impossible to sustain a hard work ethic in a job, profession or industry for which you are not passionate about. When you are forcing a hard work ethic, that is when you know you do not have the passion for what you do to make money.
Furthermore, working hard in a profession or in an industry that is not very profitable or has low profit margins will never provide the return on investment known as financial success.

OPPORTUNITY LUCK
The most important variable and link in the chain of financial success is luck. Specifically, opportunity luck. This is a type of luck that happens because you have created the opportunity for luck to occur by being passionate about what you do and working hard at it. Opportunity luck is, to a great extent, outside of your control. Opportunity luck is elusive. It is luck after all. It does not manifest itself to everyone who is working hard at something they are passionate about. We all hear the success stories about Bill Gates, Steve Jobs and Warren Buffet. You would not know any one of those individuals if they did not experience opportunity luck in their lives. They could have toiled in their passionate pursuit, until their deaths, and not realized financial success, if it were not for opportunity luck. Just the same, they would not have created the opportunity for luck had they not had a passion and worked hard at their professions. I am paraphrasing Warren Buffet who stated that he was one of the privileged few who won the luck of the draw.

Statistically, financial success will very likely not find you. I can guarantee it will never find you if you are not passionate about what you do for a living because you will never work as hard as you need to work in order to create the opportunity for luck to occur in your life. The point of this entire article is this:

    If you love what you do and work hard at what you love, keep swinging.

Opportunity luck only manifests itself in those who are passionate about what they do and effortlessly work hard at it.

Learn more at http://www.richhabits.net/

Wisconsin - America's Waterloo

TOM@CEREFICE.COM (TOM CORLEY RICH HABITS) — Sat, 26 Feb 2011 17:55:00 GMT

The very fate of our great nation is being decided right now, in Wisconsin. If Governor Scott Walker prevails against the powerful unions, his victory will light a firestorm of state by state revolution across the nation and halt the cancerous spread of Socialism.

Since FDR, America's citizens have been systematically brainwashed by our government into believing it could provide for the retirement and health care needs of its citizens. It also promised generous safety nets, such as the 99 weeks of unemployment benefits our government currently provides. One social program after another, over time, slowly began to transform a growing segment of Americans from a self-reliant citizenry to a government-dependent citizenry. And for nearly 60 years it worked. It worked in large part due to the fortuity of a demographic shift that began when the first Baby Boomer was born and continued until the first Baby Boomer retired, thus ushering in a new detrimental demographic shift. It has become all too apparent in the past three years that America can no longer afford its entitlement programs. There simply is no more money that can be squeezed from the private sector taxpayers.

The battle between government dependence and individual self-reliance is seeing its first major skirmish in the state of Wisconsin. Governor Scott Walker is the villain to those who wish to remain dependent on government and its quasi appendages - the unions. But to the majority of Americans, Scott Walker is an American Hero. He has raced to the front of the line of leaders, not unlike a heroic soldier in battle, and drawn his pistol against America's sworn enemy, Socialism in the form of big government and powerful union representation. Despite the media's relentless efforts to paint Governor Walker as an evil dictator who despises the working class, Americans are not buying it. We agree with Governor Walker. We support Governor Walker. We join Governor Walker in this battle that goes to the very heart of what it means to be an American.

Wisconsin is shining a light on the money laundering machine unions have become. On one end of this machine taxpayers provide the funding for the wages of government employees through taxation. At this end of the machine taxes are laundered into wages. These wages are then transformed into mandatory dues contributed by the enslaved union members. These dues are channeled into the union coffers and spit out the other end of the machine in the form of political contributions to the Democratic party. Taxes, in this money laundering machine, go in one end and come out the other in the form of political contributions to the Democratic party. Democratic politicians then turn around and increase the wages and pension/health benefits of their loyal socialist brethren in these unions.

This cycle has continued for many, many years with wages and benefits growing to the point where we are today; a point in which there are far too many government employees making nearly twice what their private sector peers make. What a scheme. And this scheme has worked well until the private sector ran out of money and could no longer afford its own government. That is where we are today and Wisconsin is the battleground for America's fate. The line in the sand has been drawn by Governor Walker, a modern day George Washington. The fate of this great nation now rests on the shoulders of anti-government revolutionaries in the battleground state of Wisconsin. The battle is waged.

Understanding The Section 179 Depreciation Deduction

TOM@CEREFICE.COM (TOM CORLEY RICH HABITS) — Thu, 24 Feb 2011 15:16:00 GMT

When a business acquires a depreciable asset (capital assets that have a life expectancy of more than one year) the business is required to depreciate that asset over its useful life. Depreciation rules used to be very simple. The business would receive an annual depreciation deduction equal to the cost of the depreciable property acquired divided by its useful life. Then the idea of accelerated depreciation entered the heads of some Congressmen (or rather the lobbyists) and over time, the rules on depreciating property have become one of the most complicated areas in taxation. One accelerated depreciation method added way back in 1958 created what is now called Section 179 Depreciation. This article will address the current rules that are in effect for depreciating property under Section 179.

General Rules:
Rather than having to depreciate property over several years, Section 179 allows businesses to deduct the entire cost of the property in the year of acquisition. In order to qualify, the property must be used more than 50% in a trade or business and must have been acquired from an unrelated third party. The election to depreciate property under Section 179 is made on a property by property basis by completing Part I of Form 4562. There is currently a $500,000 dollar limit on the cumulative amount of the Section 179 deduction a business may take in one year. This maximum deduction is reduced dollar for dollar when the total cost of depreciable property acquired in a given year exceeds $2,000,000.. For example, if your business acquired depreciable property in a single year totalling $2,500,000 you would not be eligible for any Section 179 deduction.

Property Eligible For Section 179 Depreciation:
New or used property is eligible, however, if the property was previously personal use property, it is not eligible. Following is a list of property that is eligible for Section 179 expensing:

Airplanes
Automobiles/Trucks/Vans (Generic - not altered for specific business/industry needs) - limited to $11,060 for cars and $11,160 for trucks and vans
Billboards (if movable)
Computers
Fences used in farming business
Gasoline storage tanks and pumps at retail service stations
Helicopters
House trailers
Livestock
Machinery and equipment
Office equipment (copiers, typewriters, fax machines)
Office furniture and fixtures including file cabinets and book shelves
Off-the shelf computer software
Oil and gas well and drilling equipment
Qualified real property
Signs (if movable)
Certain storage facilities
Store counters
Testing equipment
Tractors
Water wells that provide water for livestock

Property Ineligible For Section 179 Depreciation:
Any property used 50% or less for business purposes will not qualify. Also any property used in rental house or apartment is not allowed. Property used outside the United States is not eligible. Property used by tax-exempt organizations and governmental units is not eligible. Property held in an estate or trust is never eligible.

Air conditioning units
Barns
Billboards/Signs (if not movable)
Bridges
Buildings (Exception if Qualified Real Property)
Car washes
docks
Elevators (Exception if Qualified Real Property)
Sidewalks
Stables
Swimming pools
Tailers (if non movable)
Warehouses
Wharves

I wish to thank the 22 year old Congressional staff members who write the tax code and regulations, the IRS for their incomprehensible explanations thereof and the tax court rulings for making the U.S. income tax system as complex as it is, thus affording me and many other CPAs the opportunity to make a living in a completely unnecessary field.

Passion - The Air That Success Breathes

TOM@CEREFICE.COM (TOM CORLEY RICH HABITS) — Wed, 02 Feb 2011 20:05:00 GMT

What do Benjamin Franklin, Andrew Carnegie, Thomas Edison, Steve Jobs and Mark Zuckergerg all have in common? An intense passion, bordering on a fanatical obsession, for something that they were able to monetize (make money on). These individuals were able to find their passion in life. When you find your passion in life, particularly in an industry or field that has strong profit margins, you will catapult yourself to greatness and untold wealth.This article will share with you some of the insights into how wealthy individuals search for and discover their life's passion.

Forget about education, smarts, creativity, work ethic, motivation, luck, working capital, upbringing or family environment. None of that matters when you find passion for something that affords you the ability to make a living to support your family. Obsessive passion overrides all of your deficiencies and renders mistakes irrelevant, except for purposes of better educating yourself in your passionate activity. Passion forces you to a higher level of intense learning and self-improvement. So when you peel the onion of success down to its core, what you find at the heart is passion. So how do you find that particular activity which consumes you with fanatical passion? Aaaa. That is the right question. How do you find your passion? Answering that question in your life will catapult you above every one of your peers and set you flying like a rocket ship.

Unfortunately, passion finds very few individuals. Most eke out a living in quiet desperation. Or as I like to call it, in living hell. When you find your passion you are in heaven. For the rest of humanity it is off to the fire pits of Hades to live out your insignificant existence until the compassionate embrace of death rescues you from your mortal torment.

But do not surrender just yet for you are very lucky. An individual named Thomas Corley spent five years searching for the very things that help uncover this passion. Not only that, he wrote about his discoveries of the secrets to financial success in his famous book, Rich Habits (https://secure.mybookorders.com/order/multiproduct.aspx?siteid=176 .

What Tom discovered was that passion does not just happen. It does not just show up and announce itself. Passion, Tom discovered, is actually the byproduct of the occurrence of opportunity luck. What Tom uncovered was that in order to find your passion you first need to create the opportunity for luck to occur in your life. Passion is not a fruit you can pick off a tree. It only manifests itself after you have created opportunities for luck. In order to realize financial success in life you need to create opportunities for luck, which will then reveal the activity which will become your obsessive passion for the rest of your life.

So how do you create these opportunities for luck which will lead to your passionate activity?
Now that is the right question. In order to create opportunities for luck in your life you need to do certain things every day. You need to adopt good daily habits, or what Tom calls, Rich Habits. In his five year research study on the daily habits of wealthy and poor individuals, Tom uncovered ten daily habits that set wealthy people apart from everyone else. Anyone who follows these ten Rich Habits, will create the opportunity luck that then gives birth to your passion. Success is a process. There is a reason why many call it the "secret to success". Tom found that the reason why success was a secret was due to the fact that wealthy individuals did not even know why they were successful. It took five years of research to uncover the secrets to financial success embodied in the Rich Habits - The Daily Success Habits of Wealthy Individuals. If you would like to learn more about the Rich Habits buy the book. It's a small investment for the secret to financial success. https://secure.mybookorders.com/order/multiproduct.aspx?siteid=176

How Rich People Use The "Avalanche of Success" Technique to Create Weallth

TOM@CEREFICE.COM (TOM CORLEY RICH HABITS) — Mon, 31 Jan 2011 16:51:00 GMT

Success is not easy. No matter what any self-help "expert" says, no matter what any promoter says, success takes time, persistence, passion and an obsessiveness that borders on fanaticism. Successful people are fanatics and obsessed with whatever it is they do to make money.

Wealthy individuals understand that success is a process. Wealthy individuals do certain things every single day that sets them apart from everyone else and positions them to be financially successful. Oftentimes success takes time and can be a psychological minefield. The ups and downs one experiences in the pursuit of success are impossible to explain. Suffice it to say that this success process requires a dogged determination and a steel mind.

The path toward success requires that you do little things every day. Wealthy people have good daily habits taught to them by their parents, primarily. They incorporate these good daily habits into their daily lives. These good daily habits are part of their toolkit for success. Most individuals (95%) have inadvertently been taught bad daily habits by their parents. This is why most individuals struggle financially, eking out a living and living paycheck to paycheck.

In my five-year research study on the good daily habits wealthy parents pass along to their children, I uncovered ten main daily habits, which i share in my ground breaking book, Rich Habits https://secure.mybookorders.com/order/multiproduct.aspx?siteid=176 . These ten Rich Habits are at the heart of the success process. When you follow these ten Rich Habits you are actually walking in the footsteps of the wealthy. You are processing success into your life. But it takes time and wealthy individuals understand this all too well. Wealthy individuals understand that by following the Rich Habits every day, they are getting closer and closer to the "success event" or what I refer to as the "Avalanche of Success" event.

The Avalanche of Success is a wealth building technique rich individuals use to amass an abundance of wealth. By doing certain things every day, by processing success into their lives through the application of the Rich Habits, wealthy individuals understand that they are actually positioning themselves for an Avalanche of Success event. The Avalanche of Success event is a byproduct of following the Rich Habits every day. Each day you follow the Rich Habits you get closer and closer to the Avalanche of Success event.

Here's how it works. You follow the Rich Habits every day. In time, opportunity luck will manifest itself. In most cases, this opportunity luck will seem insignificant. But over time this opportunity luck builds and builds, like snowflakes on a mountainside. In time, these snowflakes, this opportunity luck, will become so significant that an avalanche will occur in your life. This avalanche is the realization of all of your hard work in diligently following the Rich Habits. The financial reward will seem disproportionate to the daily efforts you put out in following the Rich Habits but that is the reality of wealth creation. It seems obscene compared to your daily efforts. The Avalanche of Success works. Wealthy people have been using this technique for thousands of years to create untold wealth. Thanks to Rich Habits, the playing field is level. You no longer require successful parents in order to learn the secrets to financial success. All that is required is that you read a book. And that book is Rich Habits. Create your Avalanche of Success event. The time is now to begin your new life.