Looking back on last winter, we were faced with a near panic caused by sky-high prices at the gas pump and seemingly outlandish natural gas prices. Going into this winter, energy prices appear to have moderated. However, you should still manage your winter heating costs to keep them as low as possible. There is one step that you can take right now that could take a bite out of this year’s heating expenses.

Choosing your gas supplier

In Ohio, through the natural gas choice program, consumers can comparison shop for their natural gas supplier. The Public Utilities Commission of Ohio (www.puco.ohio.gov) and the Office of the Ohio Consumers’ Counsel (www.pickocc.org) both provide instructions on choosing a natural gas supplier. If you live in another state, go to the website for the National Association of State Utility Consumer Advocates (www.nasuca.org) and click on the member directory for instructions for your state.

Calculating your savings

Calculating your projected gas cost and savings is somewhat complicated. However, both the websites mentioned above have online calculators that make the comparisons easier.

Below are the calculations for the projected gas cost for my home. My local gas company is Dominion East Ohio. For the comparison, I chose WPS Energy Services, which offers a variable rate contract with a cap through March 2007. Using my gas bill and the interactive calculator on either website I entered the following information:

• WPS Energy variable rate of $7.96 per Mcf, from the website.
• My annual usage of 82 Mcf per year, from my gas bill.
• My county’s sales tax rate of 7.5 percent, from the website.

Projected Annual Natural Gas Cost

Dominion East Ohio $ 1,041.36
WPS Energy Services $ 899.50
Savings $ 141.88

Based on the calculations, if I change to WPS Energy Services, I should have a projected annual savings of 15.7 percent.

Decisions, decisions, decisions

There are several decisions that have to be made when considering a switch in natural gas suppliers:

1. Fixed versus variable rate: A fixed rate contract will guarantee the price for the length of the contract. Typically, the contract length will vary from six months to three years. The gas price in a variable rate contract will vary as conditions change. The offers I have seen adjust monthly or quarterly.

2. Choice of supplier: Make your selection from a list of suppliers that are certified by your state’s public utilities commission. Compare contract prices and conditions.

3. Contacting suppliers: Questions to consider asking a potential supplier are:

• Are there sign-up and/or termination fees?
• What is the rate?
• Is the rate fixed or variable?
• If variable, how does it change?
• What is the length of the contract?
• What happens when my contract expires?
• When will the new rate start?

Signing up

You can sign up with a new supplier either online, by telephone, fax or mail. The new supplier will notify your local gas company, who will send you a confirmation of the change and the date that the switch will be made. It is important that you keep a copy of your agreement for future reference. This process may seem more complicated than it really is. Give it a try and start managing your winter heating costs today.

(Michael Shinn is a registered representative of the Financial Network Investment Corporation. Visit www.shinnfinancial.com for more information. Questions and comments may be sent to shinnm@financialnetwork.com.)

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“Although African Americans tend to associate the concept of philanthropy with the very rich, our community has historically been a generous and giving one, whether it be time or money,” stated Marc Morial, president and CEO of the National Urban League in his “Opinion” column in the New York Beacon, July 27.

The concept of giving runs deep in our community, whether it is to religious, civic or social causes. Passing the plate, basket or hat is a long-held tradition. However, with the exception of responding to an immediate crisis, is such spontaneous giving the most effective way to further causes that are near and dear to our heart?

I am reminded of a distinguished member of my church, with which I shared the same pew. During Sunday service when the collection plate was presented, he always just passed it along and only on special occasions placed an envelope in the plate. At the same time, everyone else, including myself, was dutifully writing out checks or stuffing cash into an envelope and ceremoniously placing it in the plate. By way of the church grapevine, I knew that this gentleman was one of the church’s major givers.

Finally, after several years, I had the courage to ask him how he makes his contribution to the church. He said, “Years ago, I set up a donor advised fund with some appreciated stock. Every quarter, the fund sends a check to the church. All I have to do is tell them how much to contribute each year.” As a postscript to the story, at the gentleman’s death, he made a significant bequest to the church through his will.

Effective giving

Effective charitable giving mutually satisfies the goals of the donor and the charity; it is consistent with the donor’s overall financial plan and provides legitimate income tax and estate planning opportunities. The simplest gift is cash.

However, from the donor’s perspective, this is the most expensive way to make a charitable gift, because the fair market value is the same as the donor’s cost. For example, if a donor gives $1,000 to charity, the fair market value of the gift is $1,000 and the donor’s cost is $1,000. The donor is allowed to deduct the $1,000 from his federal income taxes.

However, if a donor gives appreciated securities with a fair market value of $1,000, but the donor’s cost basis was $500, the donor gets the same tax deduction of $1,000; however his cost was only $500. There are numerous methods of making tax-advantaged gifts. Please consult with your tax advisor for recommendations that fit your situation. A few common gifting examples are Stocks and other capital assets; Personal property such as clothing, appliances, automobiles; Real Estate; Insurance Policies; Charitable Trusts; Charitable Gift Annuities; Bequests by Will and Donor Advised Funds.

To make your giving more effective, consider performing the following exercise with your family:

-What are the major causes that your family would like to fund over the next 12 months? Consider religious, educational, medical research, civic, social, etc.

-What percent of your total contributions would you like to give to each?

-In addition to financial contributions, will you provide volunteer services to these organizations? Consider organization boards, volunteer time, event participation, etc.

-Look at your 2005 Tax Return. What was your total charitable contribution amount and what were the top five charities? How focused was your giving? How were the gifts made: cash, appreciated securities, non-cash donations? Did you consider a deduction for mileage while undertaking charitable work?

-How much as a percentage of your family gross income do you want to contribute to charity over the next 12 months?

-Do you have appreciated capital assets that you could substitute for a cash donation?

-Have you considered planned giving activities such as charitable trusts, bequests by will or trust, gift annuities, donor advised funds, etc.?

-Are your charitable gifts matched by your employer?

Charitable giving is a part of our community’s DNA. Instead of “giving until it hurts,” make your charitable giving as effective as possible, by not only giving of your treasury, but also your time and talent.

(Michael Shinn is a registered representative of Financial Network Investment Corporation. Visit www.shinnfinancial.com for more information. Questions and comments may be sent via email to shinnm@financialnetwork.com. Neither Michael Shinn nor Financial Network provides tax advice. Please consult a tax professional before implementing any strategy.)

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How many times have you heard relatives, friends or co-workers lament, “I wanna [insert: lose weight, save more money, stop smoking or cut my debt, etc.]…” They will get involved with a “quick fix” program of some sort and a month later they are back where they started, or in some cases worse than before. Our basements, closets and medicine cabinets are loaded with $79.95 “money-back guaranteed” solutions that are testaments to our aborted attempts to change our lives. Whether it’s eating, spending, smoking or drinking, changing habits is very difficult.

Unfortunately, many lifestyle changes are thrust upon us by a catastrophic life event, such as a heart attack, bankruptcy, divorce or being laid off. When these occur, we have little choice but to change our ways–or face death, financial ruin or some other dreadful calamity. We have limited options and only a little time to make a change. Changing at these points of weakness and vulnerability is the absolute worse time to have to change. Wouldn’t it be better to change while we are strong and have the energy and resources to do so?

General Electric and some other large corporations have studied the implementation of management changes and why some are successful and others, even after great expense and fanfare, are failures. The studies concluded that there is a process for the successful implementation of change in organizations. Some of these same steps may be helpful to individuals in making significant lifestyle changes. So what are the steps to successfully implement a lifestyle change?

A change of heart

Most lifestyle changes fail because the individual is not committed in their heart to the change. To “wanna change” is not strong enough to drive change over the long haul. The need to change, whether driven by a threat or an opportunity, has to be instilled within the individual and shared by their immediate family and associates. The need to change has to exceed the resistance to change.

Create a vision

Successful people create a clear and compelling vision of themselves in their desired and changed state. As an example, if their goal is to lose weight, they will place a picture of themselves, taken when they were at their prime size, by their nightstand or dressing area, so that they can see their goal when they wake up and before they go to sleep. This creates and sustains a mental picture that will help guide them as they make decisions throughout the day. Additionally, they share their vision with their family and close associates, so that they receive support along the way.

A plan for change

Implementing a plan for change begins by writing the plan down. What are the key steps that will be taken today, a week from today, a month from now, six months and so on? How will you measure your progress? Continuing the weight loss example, what will be your average daily calorie intake, when will you exercise and how often will you weigh in? How much weight will you lose in the first month, second month and so on?

Making change last

All too often, individuals have successfully made a lifestyle change only to revert back to their old habits after a year or two. I know people with two wardrobes, one for before the diet and the other for after losing weight. Luther Vandross and Richard Pryor were two individuals that had highly publicized lifestyle changes and reversals. After you have achieved your desired goal, you have to institutionalize the change into your ongoing life patterns.

What is your financial vision for you and your family? What do you have to change in your lifestyle to achieve your financial vision? Have you created a compelling need for change and a commitment that will sustain the change? If your financial position is not where you want it to be, you have to take control to make it happen.

(Michael Shinn is a registered representative of the Financial Network Investment Corporation. Visit www.shinnfinancial.com for more information. Questions and comments may be sent to shinnm@financialnetwork.com.)

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I recently met with a client who owned a family home. Eight years ago, his wife died and he moved to Cleveland for a better job. One of his adult children lived in the home for a few years and since that time he has sporadically rented the property. Even when rented, the house was a financial drain. The client had no future plans to return to the home and his children were raising families of their own in other cities.

We sat down and crunched all of the numbers, which showed that the house was costing him between $6-10,000 per year–money that he desperately needed for his future retirement. However, because of emotional ties to the home, he was having an extremely difficult time “cutting his losses.” Ultimately, he decided to sell the home and move on with his life.

I recently discussed how people make tough decisions with Paula Brazil, president of Brazil Training and Consulting of Cleveland, Ohio. “People have to be clear about what their mission, purpose and goals are. There is nothing wrong with having emotional ties to something or someone. The challenge is remembering our priorities and keeping our choices balanced with our overall business or life plan,” she says.

In her consulting business, Ms. Brazil provides organizational and individual development training in the areas of self-esteem, customer service, time management and mission building. “One of the things I do is to help clients develop a clear vision of where they are going and what they really want out of life and their business. Accepting and adjusting to change is not easy, but in order to be successful one must simply be willing to do what the unsuccessful person will not.”

During a lifetime or career, there are a number of times that we will have to make tough decisions, for example: disposing of a family holding; selling a losing investment; discharging an unproductive employee; closing a losing business; making an important medical decision; choosing a new job; or moving to a new location. Inevitably, we will make mistakes, but the problem in many cases is not the fact that we made a mistake. The real failure comes from not dealing with the mistake, adjusting and moving on. What is the best way to make a major decision and move forward?

Put it on paper
In working with clients on major decisions, I use the following process and we put it in writing. Define and describe the problem or issue in simple terms. Estimate the cost and timing of the problem. How does this issue fit in with your long-term goals? What are the alternatives to resolving the problem? List all of the alternatives even though some may seem unworkable and select the most effective one. How will it resolve the problem and what are the positive and negative side effects. Develop a plan for implementing the solution and include dates, responsibilities and costs. Set up future review dates and modify the plan as needed.

All of the clients that have come to grips with major issues and set a plan in motion have all expressed a sense of relief and a feeling that a burden has been lifted from their shoulders.

Opportunity costs
No matter what we do, there are always tradeoffs. By just maintaining the status quo, we give up the opportunity to invest in alternatives that may have higher value and returns than we are currently receiving. Making the tough decisions and “cutting our losses” provides the opportunity to redeploy assets and energy in a direction that is more consistent with our long-term vision and goals. If there are financial situations in your life that you know should be addressed, sit down with a trusted advisor and discuss the issues and let them help you map out a plan.

(Michael Shinn is a registered representative of the Financial Network Investment Corporation. Visit www.shinnfinancial.com for more information. Questions and comments may be sent via email to shinnm@financialnetwork.com.)

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“Wealth is not about what you can acquire, but about what you can accomplish, and accomplishments take discipline, self-denial and, yes, time. To build wealth, to experience true abundance in our lives, we must go beyond meeting short-term needs and wants–a roof over our heads, clothes on our backs, the ‘bling’ of things quickly acquired and just as easily discarded–to focus on long-term goals,” wrote Earl G. Graves, Sr., publisher of Black Enterprise magazine in recognition of the magazine’s 35th anniversary. “True wealth building is about an investment of time as well as money.”

If you took a poll of American adults, I am quite confident that more than 95 percent would raise their hands and say that they want to be wealthy. However, the facts would indicate that only 20 percent of the U.S. population controls over 80 percent of the wealth. Creating wealth is more than just wanting to be wealthy or acquiring the outwardly visible trappings of wealth. Creating family wealth begins with a state of mind.

The first step to achieving any serious goal is to write it down and then visualize having achieved that goal. The subconscious mind then begins to direct your thoughts and actions towards your goal. Most people do not achieve their goal, because they never fully mentally commit themselves. They will make half-hearted attempts and then give up at the first sign of adversity.

Taking financial responsibility is more than earning a paycheck and dutifully paying your bills. Being financially responsible involves knowing how much money you have, where it is coming from, where it is going and what it’s doing in the meantime. This includes keeping a monthly income and expense report and an annual net worth statement. Most people will say that keeping track of their money is too much work, but when you consider how many hours a week you work to earn it, wouldn’t spending a few hours a week managing your money be worth the effort?

“Pay yourself first” and “it’s not what you earn, but what you keep that makes you rich” are both well-worn phrases. You have probably heard both phrases hundreds of times, but how many people actually live by these rules? Wealth accumulators save 20 percent or more of their gross incomes. Achieving a saving rate at that level is not easy. Taking control of your finances and efficiently allocating your money will allow you to keep a fair portion for yourself.

Most wealthy people own businesses. It is difficult to accumulate wealth by strictly relying on a paycheck. A job creates an income, which in most cases just satisfies the wage earner’s basic living expenses. Additionally, employment wages are not given favorable tax treatment. In most cases, you earn a certain income, subtract a few deductions and then calculate a percentage of tax to be paid to the federal, state and local governments. On the other hand, business ownership affords the owner the opportunities to legitimately expense items used in the business, such as equipment, supplies and home-office space and write them off against the businesses income. The business owner has more flexibility to legitimately manage their tax burden. Additionally, if the business is successful and increases in value, the increased value is not taxed until the business is sold and then at favorable capital gains rates.

I am not advocating that everyone quit their job and go out and start a business. However, I am recommending that you consider ways that you can create a part-time business or other streams of income, so that you can supplement your income and take advantage of the favorable tax treatment afforded business owners.

If you continue to manage your financial affairs in the same manner that you are right now, will you achieve family wealth? Some will answer yes, but for most people, the answer will be no. Unfortunately, most people will spend a lifetime working and then retire from their J.O.B–Just Over Broke! It doesn’t have to be that way and it doesn’t have to happen to you. Start today on a program that will create wealth for you and your family.

(Michael Shinn is a registered representative of the Financial Network Investment Corporation. Visit www.shinnfinancial.com for more information. Questions and comments may be sent via email to shinnm@financialnetwork.com.)

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Much has been written about the mis-education of our youth concerning money and personal finance. However, JA Worldwide (Junior Achievement) is one group that seems to be making positive headway in teaching teens about money. JA Worldwide is the world’s largest organization dedicated to educating young people about business, economics and entrepreneurship. Today, JA Worldwide serves four million students in the U.S. and 2.6 million in 97 countries internationally.

JA conducts an annual survey that provides some interesting information about the financial behavior of JA Students. Three-quarters of the teenagers have savings accounts; two-thirds feel that they have a significant influence on household buying decisions; and about half have a job during the school year.

JA Worldwide, through a grant from the Allstate Foundation, conducted the survey entitled, “Teens and Personal Finance,” wherein 1,065 students from 80 JA locations nationwide participated. The survey participants ranged in age from 13 and 18 years. The ethnic/racial mix of the respondents approximated the national distribution of the U.S population: Hispanic, 13 percent; Black 11 percent; Asian, nine percent, and evenly divided between males and females. For the survey participants:

– 74 percent have savings accounts, 31 percent checking accounts and 16 percent own stock;

– 67 percent indicated that they influenced household buying decisions;

– 49 percent reported having a job during the school year;

– 35 percent indicated that they received an allowance; and

– 11 percent own credit cards, with the percentage increasing with age.

The Junior Achievement Program teaches some important lessons about money and personal finance. I encourage you to get your children involved in the JA Program, if possible. Look at the website: www.ja.org for more information. However, there are some basic things we should be teaching our children about money.

First, we have to help our children understand that money is one of many powers. It is a power that can help them achieve their personal and family goals. Money is green and does not have a race, religion or sex. We have to teach them about the value of money, through an understanding of the exchange of time for money. For example, if you make $10 per hour and buy an Usher DVD costing $20, you’ve exchanged two hours of your life to see and hear Usher sing. Our children have to understand the old saying that “time is money.” Are we teaching our children the value of both time and money, and the necessity to use both wisely?

Our children have to understand that it is not how much money you make, but how much you keep that’s important! They have to understand that the secret is to pay yourself first and that their financial future is just as important as their landlord’s, grocer’s or clothing store owner’s. We have to insist that our children save a portion of their allowance, summer job money or monetary gifts. Saving has to become a habit. Are we teaching our children that a dollar saved is a dollar earned?

We have to teach our children to make money work for them. They have to learn about markets, investing and the benefits of compound interest. They have to understand basic accounting and the negative impact of taxes. We have to encourage them to read books and listen to tapes about making money, because they have to understand that their financial education is a lifelong process.

As we wind down 2005, this is a good time to reflect on what we are teaching our children about money. Are we teaching our children to use their time and money wisely? Are we insisting that they pay themselves first? Do we explain the difference between working for money and having money work for them? Are we guiding them towards financial independence? Finally, are we practicing what we teach?

(Michael Shinn is a registered representative of the Financial Network Investment Corporation. Visit www.shinnfinancial.com for more information. Questions and comments may be sent via email to shinnm@financialnetwork.com.)

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Can you believe we are nearing the mid-point of 2005? From a broad financial standpoint, the stock market is down slightly since the beginning of the year, short-term interest rates appear to be headed upwards, the war in Iraq continues to drag on and gasoline prices are steadily increasing. How do these changes affect your financial plan?

On a personal level, what has changed in your family’s life? Have any marriages, divorces, births, health changes, pay raises, layoffs, retirements or graduations taken place? How have family changes affected your financial plan? Right now is a great time to measure your progress toward the achievement of your financial goals and to make mid-year corrections.

Financial goals
Is your family on track to achieve its key financial goals? Short-term goals can be achieved in less than one year. They might include the establishment of an emergency fund, a vacation or minor home improvements. Intermediate goals of one to five years might include paying off credit card debt, saving for a down payment on a home or making major home improvements. Long-term objectives of more than five years might include college funding, retirement or a vacation home purchase. In general, how are you doing? If you have not written out your key financial goals, take the time to do so now.

Cash management
If you want to achieve your financial goals, it is imperative to manage the major source of your potential wealth–your cash. Are there ways that you can take advantage of today’s low interest rates by possibly refinancing your mortgage or switching to a lower rate credit card? Have you maximized your income potential? Would overtime or a second job for a few months allow you to remove the albatross of bad debt from your life?

Consider alternative ways to reduce expenses, such as buying clothes during seasonal sale periods, cooking meals at home or using public transportation. If you have not set up a monthly cash-flow statement, use your last three months’ income and expenses to establish a baseline and then track it monthly.

Tax planning
The new tax law reduced individual tax rates, increased the child tax credit, provided dividend and long-term capital gains relief and made several other changes. If you used a tax advisor in the past, consider meeting with your advisor to access your tax situation. Start by reviewing your 2004 tax returns, your most recent pay stubs and your investment account statements. Make a copy of your last Form 1040 and pencil in estimates of your 2005 income, estimated itemized deductions, withholding, credits and final tax due or overpayment. Are there ways to legitimately increase your deductions or defer income into next year, and ultimately reduce you taxes for 2005?

Insurance and estate planning
Review your life, disability, health, long term care, and property and casualty coverage with your insurance agent. Is your coverage adequate and cost effective? Additionally, every adult should have a basic estate plan that begins with a will, durable power-of-attorney and a health care directive. Are these documents current and stored in a secure place? Also, make sure that the named beneficiaries on your pension plan, insurance policies, IRAs and similar contracts are current.

Now is a good time to ensure that 2005 will be a good year in your journey toward potentially achieving financial goals. Take time during July to conduct a mid-year financial review.

(Michael Shinn is a Registered Representative of the Financial Network Investment Corporation. Visit www.shinnfinancial.com for more information. Questions and comments may be sent to shinnm@financialnetwork.com. Neither Michael Shinn nor Financial Network provides tax advice. Please consult a tax professional before implementing any strategy.)

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(FinalCall.com) – Chris Carter, CEO of the TUBA Group, was named Young Entrepreneur of the Year by the National Foundation for Teaching Entrepreneurship. This was the second year in a row that a Cleveland City Entrepreneur has received the award. The NFTE award included a trip to New York City to receive the award and a cash grant to apply to college expenses or his business.

Mr. Carter is a junior at Trinity High School and is a 2004 graduate of E City’s Summer BizCamp. He is also a graduate of the Microsystems Academy, which was created to introduce young people to the cutting-edge science and business of MEMS (micro-electrical-mechanical systems). Mr. Carter, along with two of his colleagues, was able to take these two experiences and develop a business plan for the TUBA Group. Their plan involves a web-based service that matches MEMS producers with packagers of micro-sized products.

Mr. Carter was one of the featured Young Entrepreneurs at E City’s Annual Awareness breakfast, which was held at Landerhaven on May 9. Six hundred supporters, young entrepreneurs and their families, attended the breakfast. Mr. Carter challenged the audience, “Creating TUBA’s business plan required a lot of hard work and persistence. What will you do to help E City help more kids like me?”

What is E City?

E City (Entrepreneurship: Connecting, Inspiring and Teaching Youth) was started in January 2002 by John Zitzner. According to Mr. Zitzner, “the purpose of E City is to train and grow healthy, self-sufficient individuals, by bringing entrepreneurship education to at-risk inner-city teens in Cleveland. It’s about breaking the cycle of poverty, one entrepreneur at a time.” Mr. Zitzner knows about entrepreneurship firsthand, since he started, and later sold, a very lucrative software business.

E City is a program that is run by motivated public school teachers who have completed Certified Entrepreneurship training. Today’s afterschool program involves a 70-hour curriculum on entrepreneurship and business-building. It includes training in leadership, finance, marketing and the basic elements of running a business. Students are given a grant of $50 to open a bank account and encouraged to purchase products and resell them, thus reinforcing the concept of “buy low and sell high.” Each student works with a mentor to develop a business plan, which, at the end of the program, is presented to a panel of judges.

According to Mr. Zitzner, “E City teaches young people to think like entrepreneurs–to take risks, to always be open to learning and to be empowered to take control of their lives.”

The program results are impressive. E City participants’ test scores on business knowledge have improved by 53 percent, based on pre-and post-program testing. Attendances for the afterschool program has averaged 88 percent and, finally, 82 percent of the students prepare a business plan and graduate from the program.

Mr. Zitner presented E City’s vision for the future, which is to create the first of many Entrepreneurship Academies in Cleveland. E City plans to open its first Academy in the Fall of 2006 with 100 sixth graders and add a class of 100 students each year.

“We have visited a dozen schools like this on the East Coast and it is working,” he says. “Every child in Cleveland deserves a quality education. Cleveland has low self-esteem and we have to turn this around. Education is the long-term solution. We have the power, energy, resources and knowledge to make this happen. What will you do?”

The keys to economic freedom for people of color in America are business ownership and economic development within the community. E City’s program to teach business ownership skills to inner-city youth is right on target. The teachers, mentors, leaders and supporters of E City are making a difference.

If you would like more information about the E City program, visit their website at www.ecitycleveland.com.

(Michael Shinn is a registered representative of the Financial Network Investment Corporation. Visit www.shinnfinancial.com for more information. Questions and comments may be sent via email to shinnm@financialnetwork.com.)

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(FinalCall.com) – Last year, over seven million people were victims of the silent crime of identity theft. The information explosion, easy credit and the inability of consumers to control who has access to their sensitive financial information has created an open season for identity thieves. Today, identity theft is the fastest growing crime in America.

“In the African American community, we don’t complain, we don’t get a handle on it when it occurs and it ends up ruining people’s credit,” laments Soloman Harge, executive director of Consumer Protection Association in Cleveland, Ohio. “There are some basic steps that people can take to protect their personal information and reduce the risk of some thief stealing their identity.”

Identity theft is the use of a person’s identity to perform fraudulent financial transactions without the victim’s permission or knowledge. Identity thieves have been known to fraudulently obtain credit cards, steal money from existing accounts, open new accounts, apply for loans, rent apartments, obtain jobs and even file for bankruptcy without the victim knowing about it for months or even years.

The typical identity theft begins with the imposter obtaining the victim’s identifying financial information, such as social security number, birth date, credit card or account numbers. The thief obtains this information through a variety of methods, some low tech–such as rummaging through trash, stealing mail, eavesdropping on phone conversations and stealing information from the home or workplace. Some of the more sophisticated methods involve stealing records through the Internet, buying inside information from store or credit card company employees; or stealing credit reports by posing as a landlord, employer or someone else who may have a legitimate need for credit records.

The imposter, then, opens new accounts, ravages existing accounts, makes cash withdrawals or purchases merchandise in the victim’s name. They often provide a different address, claiming to have moved. Once the imposter completes their first transaction, they are well on their way to stealing thousands of dollars and ruining the credit and good name of the unwitting victim.

The Federal Trade Commission estimates that the average number of months between the time the identity theft occurred and was noticed by the victim is 14 months. Additionally, for the typical victim, it takes 600 hours to repair their damaged credit, with an average out-of-pocket cost of $1,000.

While there is no surefire method to guarantee that your identity will never be stolen, there are ways to minimize the risk. The most important concept is to manage your personal information wisely and cautiously. Below are some ways to help protect your identity:

– Review a copy of your credit report from each of the three major credit-reporting agencies at least once a year. You can get a free copy of your credit report annually from each of the three major credit bureaus by contacting www.annualcreditreport.com or (877) 322-8228.

– Do not give out personal identification information to people or companies that you do not know. Even then, understand why it is required and how it will be used. Give out your Social Security number only when absolutely necessary. Your SSN, along with your birth date are keys to obtaining your credit report. Use a shredder to dispose of paperwork that contains personally identifiable information and account numbers, such as credit card receipts, billing statements, cancelled checks, pre-approved credit offers and etc.

– Protect your mail from theft. Deposit outgoing mail in postal mailboxes, promptly remove mail from your mailbox and have your mail held if you are planning to be away from home for a period of time. Minimize the personal identification information and the number of credit cards that you carry with you. Create unique passwords and PINS for your accounts. Do not use your birth date, social security number or other personal matching information.

– At home and work, keep all items with your personal information in a safe place. Use a secure browser when shopping online. When submitting your purchase information, look for the “lock” icon on the browser’s status bar to be sure the information is secure during transmission.

Identity theft is a serious problem and will become even more so in our high-tech world. However, there are some measures that you can take to reduce your risk and the potential impact on your family’s financial plans. Two helpful websites are: www.consumer.gov/idtheft and www.idtheftcenter.org.

(Michael Shinn is a registered representative of the Financial Network Investment Corporation. Visit www.shinnfinancial.com for more information. Questions and comments may be sent to shinnm@financialnetwork.com.)

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“The Five Lessons a Millionaire Taught Me About Life and Wealth,” by Richard Paul Evans, is an inspiring and well-written book about wealth-building and how money fits into the overall scheme of a successful life. It is not a “how to” book, but one that explores the mindset necessary to acquire and successfully build wealth. Quite simply, the author states, “The wealthy understand the principles of accumulating wealth and live them.” What are the five lessons that wealthy people practice and how can they help you?

1. Decide to be wealthy

The author quotes Napoleon Hill from his classic book “Think and Grow Rich,” first published in 1937, “riches begin with a state of mind, with definiteness of purpose, with little or no hard work.” The first step to achieving any serious goal is to write it down and then visualize yourself having achieved your goal. The author recommends writing “today I decide to be wealthy” on a card and putting it on your nightstand or by your toothbrush and referring to it morning and night, every day. The subconscious mind begins to then direct your thoughts and actions toward your goals. Most people do not achieve their goals because they never fully mentally commit themselves. They will make half-hearted attempts and then give up at the first sign of adversity.

2. Take responsibility for your money

Financial responsibility is more than earning a paycheck and dutifully paying your bills. According to the author, “taking control of your money begins with taking responsibility for it. That means knowing how much you have, where it is coming from, where it is going, and what it’s doing in the meantime.” The book provides sample net worth statements and cash flow forms.

Most people will say that keeping track of their money is too much work, but when you consider how many hours a week you work, wouldn’t spending a few hours a week managing your money be worth the effort? If you don’t take responsibility and control of your money, someone else will gladly and profitably do it for you.

3. Keep a portion of everything you earn

“Pay yourself first” and “it’s not what you earn, but what you keep that makes you rich” are both catchy phrases, but how many people actually live by these rules? According to the author, “research shows that most American millionaires save between 15 to 20 percent of their incomes.” His recommendation is saving “a minimum of 10 percent of your ongoing income and 90-100 percent of your side earnings.” Achieving a saving rate of 10-20 percent of your gross income is not easy. Taking control of your finances and efficiently allocating your money will allow you to keep a fair portion for yourself.

4. Win in the margins

According to the author, winning in the margins means, “the wealthy find additional ways to increase contributions to their growing nest egg.” There are essentially two ways to win in the margins. The first is by earning extra income. The second is by keeping more of what you earn. The author lists a number of business and extra job ideas to increase income. He also lists a number of ways to reduce expenses. Finally, winning in the margins requires a millionaire mentality, which “carefully considers each expenditure … believes that freedom and power are better than momentary pleasure … does not equate spending with happiness … and protects the nest egg.”

5. Give back

The final lesson of the book is an understanding that service to others is the highest and best use of wealth. According to the author, “I believe the truest measure of achievement is the degree to which we’ve learned to love. And service, through sharing our wealth and our time, is love made visible.” Money and wealth have to be our servant and ally in achieving our life goals. Ultimately, life is about family and relationships, spiritual growth and service to others.

(Michael Shinn is a registered representative of the Financial Network Investment Corporation. Visit www.shinnfinancial.com for more information. Questions and comments may be sent to shinnm@financialnetwork.com.)

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