I discovered Scott Belksky’s video, How to Avoid the Idea Generation Trap, via Lifehacker last Sunday.  The video’s caption caught my attention more than the title:

Ever find yourself jumping from idea to idea, hooked on the high of idea generation but never completing any one project? 99% Conference speaker Scott Belsky breaks down road-tested methods for seeing ideas through to the finish.

The first two minutes had me chuckling out loud. It’s as if he worked with one of my former managers. The ability to think big, dream big, and actually move forward with your idea in hopes of making it a reality are traits that some possess more than others. From my experience, people who possess these traits can be great leaders and are able to generate excitement about their ideas in others. However, once excitement wanes, and the reality of the hurdles and obstacles become more concrete, it becomes much easier to generate a completely new idea rather than tackling the obstacles the current idea has presented.

He begins by describing the hamster wheel type process in which the entrepreneurial and creative type consistently find themselves trapped:

1. Dream Of New Life Changing Idea
2. During Initial Excitement, Put Everything You Have Into Making Idea Reality
3. Once Idea Makes it to the “Doldrums” Stage, Project Progress Plateaus
4. Dream Up New Idea
5. Rinse and Repeat

Belsky then provides tips to help move past the project plateau or doldrums stage, instead of starting the process over with a new idea:

Seek and Value Constraints
Without constraints, new ideas will constantly demand the attention and throw the project off task. I’ve personally witnessed this during new system design meetings. The project manager struggled to moved past the “If your system could do anything you wanted stage” of the process. Eventually, you have to decide what is out of bounds, so that everyone has a set a of rules and constraints to work within.

Break It Down
Increments -> Milestones -> Tasks
Belsky suggests figuring out how much time you will spend on predetermined increments (think time, not goals), determining measuring milestones to be reached along the way, and finally determining the necessary tasks to help you implement your idea. All these things need to be tangible.

Short Circuit Our Natural Reward System
Belsky says we are hard wired for short term rewards, such as a good grade on a test and a bi-weekly paycheck. But, once you embark on a new project, these short term rewards are stripped away. You may not have anyone see your work for months. You may not make any revenue for years. So what do you do?

Successful project managers create games to provide these short term rewards.

Empower the Skeptics
We typically don’t want to work with the Debbie Downers, but they need to be empowered to prevent new ideas from overtaking the current project.

Seek Competition
Competition pushes us to action and keeps us engaged. Noah, a Brooklyn photographer had been taking a picture of himself every morning for the past six years. While browsing the web, he found a photographer elsewhere who had been doing the same thing for three years and was trying to figure out what to do with her photos. This pushed Noah to create one of the most widely viewed youtube videos of all time:

The Creative Process

• 1% Creative
• 99% Acquired Discipline

Belsky argues that The Creative Process is actually more about acquired discipline than it is idea generation. From my experience, the old adage that ideas are a dime a dozen is very true. The ability to successfully implement an idea is much more valuable.

I wrote this back in October while my favorite baseball team was down 2 games to 1 in the world series. I didn’t post it at the time because, well, I wasn’t consistently blogging anymore. I recently reread this post and thought it might help someone out there keep their proverbial chin up. So I’m finally posting “It’s Rarely Too Late.”

I’m a baseball fan.  I grew up playing catch with my dad in the empty field next to our house.  I remember attending my first professional ball game, and although I wish I didn’t, I remember the many nights spent crying after going 0-4 as a pre-teen. Baseball is how I made several of my childhood friends, and because I never moved until after graduating high school, I ended up playing baseball with the same kids through my senior year.  Baseball helped define my childhood, and as a result, I am absolutely beside myself that my team, The Texas Rangers, are in the 106th world series.

We are down 2 games to 1 against the San Francisco Giants.  We escaped with our first world series win in franchise history last night.  My team is currently behind, but the series isn’t over yet, not even close.

The majority of us, at one time or another, have had times in our financial lives when we feel so far behind that we throw our hands up and say “what’s the point.” Maybe you are tens or even hundreds of thousands of dollars in debt.  Maybe you are approaching traditional retirement age but you haven’t even thought about saving for your golden years.  If you find yourself in a situation where you are behind, keep in mind that you can always take small steps that can, and will, eventually help you “come from behind” and win.

The Boston Red Sox were down 3 games to 0  in a 7 game series against the New York Yankees in the 2004 American League Championship Series.  At the time, no team in baseball (and maybe professional sports) had ever come back to win a series after falling behind three games.  I can only imagine how easy it would have been for them to have completely given up after dropping their third game in a row. After all, they were the Boston Red Sox, the team that had been cursed since trading away Babe Ruth in the early part of last century.  But they did come back.  And they went on to win the world series that year.

I’m not sure how the Red Sox were able to overcome such odds.  But I do know that consistently attacking a BHAG (big hairy audacious goal) one step at a time can, and will, eventually lead to success. This is how Dave Ramsey gets the average person, including yours truly, to pay off tens of thousands of dollars in a short period time.  He calls it “baby steps.”  Whatever plan you want to use, just keep in mind that persistence and hope, when used together, can move you closer to your end goal than you might think.  It’s rarely too late.

I read an article about the lives of Wall Street investment bankers when I was a freshman in high school.  I don’t remember the entire article, but a few key points resonated with me:

• They made A LOT of money
• They worked long hours
• The really good investment bankers could literally pee on their bosses leg and not get fired
• They all had something called an M.B.A.

About My Experience

I don’t remember wanting to be an investment banker exactly, the ridiculously long hours were a turnoff.  However, after reading that article, I decided I needed an M.B.A.  At the time, it seemed the degree would open up countless doors in the future.

I graduated from college in 2005 with a marketing degree and a music performance degree and immediately found the perfect job in the music business/education industry (albeit low paying.)  In an effort to increase my long-term opportunities and hopefully the pay that comes with them, I decided to take advantage of the local public university that offered evening classes designed for working professionals wishing to obtain their M.B.A.

For the most part, the coursework was challenging and interesting.  Unfortunately, some of the coursework seemed to be a repeat from my undergraduate studies.  The key difference between undergraduate and graduate school were my classmates.  Most of my graduate school classmates weren’t kids, they were adults with real jobs, real experiences, and real contributions to class discussion.

If you’re considering pursuing your M.B.A., don’t overestimate how much you will learn from your professors.  More importantly, don’t underestimate how much you’ll learn from your classmates.

Potential Costs

Time – I began my studies in the fall of 2006, and passed my last course during the Summer II term of 2010.  That’s about four years for the English majors laughing at my poor sentence structure and plethora of monosyllabic words.

Traditional programs require that you attend classes full time for two years.  However, as schools try to increase their bottom lines, they are figuring out ways to put more “butts in seats.”  They are doing so by catering to those who can’t afford to retract from life for two full years by offering part-time programs, online programs, and evening courses.

Either way you go, you will undoubtedly sacrifice a great deal of your time to make this goal a reality.

Money – Like homes, cars, TVs and undergraduate degrees, the price of an M.B.A. varies greatly. Prestigious Ivy League Universities may cost 6 figures while a public university may only cost $25,000. The opportunities available to you after you finish vary just as greatly as the price tag. It all depends on the prestige of the university, and like most things in life, a little luck.

Just like time, either way you go, you will undoubtedly pay a substantial amount of money.

Potential Benefits

Increased Opportunities and Compensation – Unless you are the one dimensional “geeky” type who values education for the sake of education, then maybe the opportunities of a fatter paycheck don’t interest you. But I can attest that the majority of my classmates were looking for both increased opportunities and compensation. They chose the M.B.A. as a means to achieve their desire for each.

With the economy taking a hit in the recent years, more students have gone back to school to enhance their skills and make themselves more marketable in the tight marketplace. The M.B.A. has become a very popular degree, much more so than in past decades. The increased competition makes it harder to stand out, and the perception of the school you attended, and who you know, are even more important that in the past. Still, I can personally attest that the knowledge gained from my coursework has benefited me and the organization for which I currently work.

The Intangibles – Don’t underestimate the intangibles that may not be quantitatively measurable when earning a higher education degree:

• Increased Knowledge
• Self Worth
• Confidence
• Self Esteem
• Pride
• Relationships

I’m sure you could come up with a much longer list of intangibles, but these are a few intangibles that I personally gained after receiving my degree.

As I mentioned above, I probably learned just as much from my classmates as I did from my professors. Every single class I took required students to work in groups, to complete projects, give presentations, and come up original with solutions to case studies. In other words, I spent more time with each group than I did listening to my professors lecture.

So How Do You Decide?

I just finished reading The Simple Dollar’s post about risk assessment. Trent says,

Here’s that rule. Whenever you’re thinking of taking some significant risk, ask yourself this simple question: is the worst (reasonable) case scenario tolerable for me? If it isn’t, find a more conservative option. If it is tolerable, then that risk is acceptable.

This is obviously a simple approach to help answer your question, but the exercise is worthwhile.  For example, if you currently work full time while raising two kids, the worst case scenario might mean you aren’t able to see your children during the week due to your night classes.  2 – 4 years without tucking your kids in at night might be intolerable to you.

Flexo at Consumerism Commentary also attempts to help you make your decision in his post questioning the worthwhile of graduate school.

When it comes to MBAs, I can safely say most people pursue this degree in order to increase their salary. In this case, the only measurement that matters is the same one you’ll focus on in an MBA financial class: a cost-benefit analysis based purely on the numbers.

For a look at estimated numbers, check out Liz Pulliam Weston’s Is Your Degree Worth $1 Million — Or Worthless?

Obviously the final decision is yours. After weighing your goals with the potential costs (including the opportunity costs) and benefits, you will have a better idea if it is right for you.

Who wouldn’t enjoy having a cool million to their name? J. Money over at Budgets are Sexy is one of the most entertaining personal finance bloggers that I regularly read, and has established a “Million Dollar Club” for anyone who has “dreamed about becoming a millionaire – and actually want to DO SOMETHING about it.”

I’ve been thinking about joining for some time now and thought, “what the hell, why not today.”

From what I can tell, it looks like J. is only counting cash, thus leaving out the value of his home.   (Maybe you can clarify when you get some time J.?)   My only problem with not including our home in the calculation is that my new million dollar goal is going to compete with another important goal of ours, to be completely debt free including the house in 7 years.  Because I value the peace of mind that debt freedom brings over obtaining $1,000,000 in cash and investments, it will just take a little longer before officially reaching J’s million dollar mark. I guess it’s really a moot point since I’ll eventually reach the “Million Dollar” goal (God willing), regardless of how it’s calculated.  So with that in mind, drum roll please…

My Millionaire To-Do List:

1. Continue to Contribute 15% of our Gross Income to Retirement Accounts (until #3 is completed)
2. Completely Pay Student Loan Debt by 4/1/2010 Leaving $0 in Consumer Debt!
3. Completely Pay Home Mortgage by 12/1/2016 – DEBT FREE!
4. Max Out Roth IRA For Both of Us After Contributing Enough in 401(k) To Receive Match – beginning 1/1/2017
5. Max Out My 401(k) – beginning 1/1/2017
6. Establish Multiple Streams of Income Through Rental Property or other Part Time Ventures – starting now!

To be honest, I’m not sure I can even guestimate the day I’ll officially complete the million dollar goal.  But I know it will be sooner rather than later thanks to J. providing an open forum enabling me to post my goals for all to see!  Feel free to track my progress at The Broke M.B.A. under the networth category.

It’s been an exciting month and full of random expenses such as the $225 home inspection fee and weekly expenses associated with our Saturday morning tailgates. However, we still managed to show a positive increase in our total net worth. It’s nice to still have significant influence over this number, through either reducing expenses and/or earning income. I don’t think it will be too long before the market is the primary indicator of our total gain or loss each month.

Cash – $42,126
Our cash reserves have still been growing in anticipation of our closing date this Friday.

Stocks – $1,030
Our two cars are completely paid for. So instead of sending a monthly car payment to the bank, we’ve recently started investing $350 per month in a mutual fund. There are some risks associated with this strategy, but they are risks we are both comfortable with. This strategy was solely inspired by Dave Ramsey’s Drive Free, Retire Rich.

Retirement – $18,531
We are still saving roughly 15% of our gross take home pay for retirement. I believe the market is down slightly from my last update, but our contributions and employers’ matches still made for a slight positive increase.

Cars – $11,875
The value of our cars is an estimation from Kelly Blue Book.

Student Loans – $7,405
Still looking forward to getting rid of these next spring. After sending our lender the $8,000 from our first time home buyer’s tax credit, I’ll still have a few hundred dollars left.

It’s the start of new a month and time to take a look at the ol’ networth.

Cash – $40,577

Our cash reserves have been growing steadily over the past year as we have been saving for a down payment on a new home. We had a slight decline in cash thanks to the title company depositing our $2000 check made out for earnest money.

Stocks – $706

We decided two months ago to begin depositing our “car payment” into a mutual fund. I put “car payment” in quotes since we aren’t really sending the payment to a bank. We are simply saving money in an account so that we can pay cash for a car when the time arrives. You can read my thoughts on Dave Ramsey’s Drive Free Retire Rich concept here.

Retirement – $17,897

We are currently saving 15% of our gross take home pay for retirement. I contribute 4% of my gross pay to my company’s Roth 401(k) account in order to get the 4% match. The remaining 7% is deposited into mutual funds inside a Roth IRA at ING. My wife contributions are deposited into her 403(b) at work.

Cars – $11,875

The value of our cars is an estimation per Kelly Blue Book.

Student Loans – $7,493

The dreaded student loans. I can’t wait till these are gone, and they will be. Soon. It turns out I have just under $8k left which is the exact amount of the first time home buyer credit! If everything turns out as planned, we will be proud homeowners without any consumer debt by next spring.  Check out an interesting post at Financial Highways regarding this First Time Home Buyers Tax Credit.

Would you like to drive free cars for the rest of your life?  And what if I told you that you could become a millionaire while doing so?  According to a plan entitled, "Drive Free, Retire Rich" on Dave Ramsey's website, you can do just that.  Interested?  If you are like me, then I bet you are.  Who wouldn't want to drive a different car every 5 to 6 years without ever making another payment?

The first time I viewed this video I was so excited and inspired that I made my wife watch the video with me.  I sent the link to my family, and I even posted the link on my personal finance class discussion board for my classmates to view.  The video assumes that by making a car payment to yourself every month for 6 years and investing it in a mutual fund earning 12% each year, you will be able to purchase new cars off the interest earned in the fund.  It assumes that after the first 6 years of payments, you will never again have to touch your principal investment, or have to make another payment and still purchase an $18,000 vehicle every 6 years.

I first viewed this video during the summer of 2008, almost one year ago to the date.  Things sure have changed since then.

Although it appears we have rebounded from the market's bottom, the majority of investors watched their portfolios lose 50% of their values during the past 6 months to a year.  What if you had begun paying yourself that car payment, let's say $500, every month beginning in January, 2003?  You would have invested $36,000 by January, 2009.  Now if your investment had actually grown 12% for 5 1/2 years, then your total investment would have grown to $46,423!  Awesome.  But we all know what happened during the fall of 2008.  For the sake of simplicity, let's assume like many, your portfolio was roughly sliced in half by January 2009, the time when you are supposedly able to make your last car payment and drive free cars for the rest of your life.  Your balance would have fallen somewhere in the $20,000 to $25,000 range.  Now this would enable you to purchase your next car, and you will never have paid a dime in interest to the bank.  However, you would have been sorely dissapointed once you realized that you would have to continue to make car payments to purchase your next vehicle, even if the payment is to yourself. (Assuming your purchase price is near $20,000 as illustrated in the video.)

I do think this is a great idea, and one that my wife and I are working to implement.  But you must keep in mind that if something sounds too good to be true, it probably is.  This video totally ignores the risk involved when investing in stock mutual funds.  Many financial experts recommend keeping any money you will need in 5 years out of the market, because of the risk involved.  This is something to keep in mind when considering if this plan is right for you and your family.

What are your thoughts on this idea?  I would love to hear what others think regarding this one!  You can view the video here.

I recently updated my personal Facebook and Twitter status to the following:

"I will be getting my money's worth at the gym later today." 

A few hours later, a friend left the following comment:

"That's an expensive workout!" 

Unfortunately, she is right and she of all people would know.  We are coworkers and members of the same gym.  She works out 6 -7 days per week while I have worked out 6-7 times the past 3 months.  Her comment inspired me to figure out just how much how I was paying per workout.

I'm contracted to pay $50 per month over a two year period.  That means I'll be dropping $1,200 total over this two year period.  That sounds pretty expensive, and regardless of how often I go, it's still $600 per year.  Assuming my friend has the same contract and attends 6 times per week during this two year period, or 624 times, then her cost per workout would be $1.92.  Not bad.  Especially when you consider the other cost benefits associated with good health.  Assuming I continue going to the gym twice per month over the next two years, or 48 times, then my cost per workout would be $25!  Now that is an expensive workout!

At the end of every semester, I often reflect on each class' most important topics and how I can apply them in the future.  I learned a great deal about personal finance in my personal financial planning course.  It was an excellent class full of practical information and I am much better for taking it.  But if I had to narrow it down, the biggest lesson learned was this:

The Financial Planning Process
When properly applied to your personal financial situation, this process will help you make better decisions in the future.  It will make your goals attainable, whether they be paying off your debt to funding your dream retirement.  It will ultimately change the way you think about your financial future by giving you a framework in which to work.

So what is the financial planning process?  According to "Personal Finance, Skills For Life" by Vickie Bajtelsmit, this process is composed of five steps:

STEP #1 – Analyze Your Current Finances
Without knowing where you stand, you'll never know what direction you should take.  At a minimum, you should take stock of the following:

1. All Debts
2. All Assets
3. Net Worth
4. All Saving, Checking, and any other Bank Accounts
5. Investments Accounts
6. Insurance Documents
7. A Budget (know where each dollar came from and where it is going)

Luckily, there is help for the organized and unorganized alike.  Check out my post on some of the websites that offer free "financial simplification" services.

STEP #2 – Develop Short-Term and Long-Term Financial Goals
Once you know where you stand, you will have a better basis on which to set your goals.  You should think about where you want to be 5, 10, and even 40 years from now.  Do your goals consist of monetary achievements or personal satisfaction?  Are you concerned about your net worth or something more altruistic?  It doesn't really matter what your goals are, as long as they are your goals and inspire you to achieve something more than you might have previously thought possible.

STEP #3 -  Identify and Evaluate Alternative Strategies for Achieving Your Goals
Depending on your goals, countless strategies will exist to help you achieve them.  All strategies will have costs and benefits that you will need to carefully evaluate.  The subject matter of this blog will provide you with information regarding such strategies.

STEP #4 – Implement a Plan For Achieving Your Goals
When you have successfully analyzed all of your possible strategies, you will be able to implement a plan by selecting those most conducive to your financial situation and personal preferences.  This blog will also provide you with useful tools and examples to help you make these decisions.  For example, I recently posted about how much house we can afford and how we arrived at that number.

STEP #5 – Regularly Reevaluate and Revise Your Plan as Necessary
Your situation, goals, and strategies will not be the same at age 20 and age 45.  Things will change over time and so should your financial plan.  So with that in mind, it's simple.  All you have to do is review your plan on a periodic basis and continue through the steps when necessary.

The time to make New Year's resolutions is just around the corner.  And the time to break them is just around the other corner.  Believe it or not, I have had some success with New Year's resolutions. For instance, I completely gave up soft drinks for an entire year back in 2000.  But that's about the only resolution I have ever been able to keep.  I'm definitely not an expert in the personal development arena, but I do know that writing down your goals is the first logical step to achieving them and I would suggest you give this a try.  I planned on saving this post for later this month.  But after reading Trent's blog @ The Simple Dollar this afternoon, I decided to go ahead with this topic.  So with that in mind, here are the financial goals that I hope to achieve in 2009.

Pay off the student loans
I'm not out of school yet, so technically I am not even required to begin making payments until around 2011 (I think).  But, I am carrying around a $19,040.25 balance.  I will receive a $5,000 scholarship in January which should propel me in the right direction.  Based on our current budget, this goal should be accomplished by the end of summer.  (I still have two classes left, but currently have the cash on hand to pay for them!)

Save for a home down-payment
Once the student loans have disappeared, I plan on applying the cash, previously used to pay off the student loan debt, towards our first home's down-payment fund.  I'm not exactly sure when we will purchase this home, but it could happen as early as January, 2010.  I have begun a First Time Home Buyer Series so that you can follow us along throughout this exciting process.

Graduate
I am 7 hours, or two courses, away from graduating with my M.B.A.  I have been working full time since January 1, 2006 and attending classes part time since fall, 2006.  Unfortunately, it looks as though work is going to prevent me from being able to finish up this spring.  Depending on the classes offered, I could gradate at as early as the summer, but it may have to wait until December.  Regardless, my goal is to wrap up the degree in 2009.

Establish The Broke M.B.A.'s readership
I hope to learn and implement the key things necessary for "The Broke M.B.A." to succeed.  I would like to see at least 3,000 daily subscribers/readers of this blog by December 31, 2009.

2008 may have been the best year of my life for no other reason than it being my first as a married man.  January 5th will mark our one year anniversary and I have no doubt that 2009 will be a great year!