Patricia Stallworth, MBA, CFP® Host Financial Boss Radio

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HANDBOOK 5 Guiding Principles to Take Charge of Your Money

If you’re in charge everywhere EXCEPT when it comes to your money, become a

Financial Boss. Just imagine the possibilities when you are in charge of your destiny!

About Patricia Stallworth, MBA, CFP®

Patricia Stallworth is the founder and CEO

of eWorth Advisors, a fee-only financial

planning firm dedicated to empowering

people to take charge of their money to

create the life they want to live. She

specializes in working with women and

couples who are ready to break free from

things holding them back to achieve their

goals.

Prior to starting her own firm, she worked

in a management or advisory with several firms, including Deloitte

& Touche, American Express Financial Advisors, AXA Advisors

and the Small Business Development Center.

Patricia is the host of the Financial Boss Radio Podcast, a sought

after speaker and the author of several books, including Minding

Your Money and How to Get Divorced Without Losing Your

Blouse.

My Invitation to You!

Let’s talk. I invite you to schedule a call to see if we

might be the right fit. Contact me (Patricia) directly at

ps@eworthadvisors.com or visit the website at

eWorthAdvisors.com and click on the Contact tab.

⚫ Find out where you

stand. Sign up for a free financial

evaluation!

FINANCIAL

Copyright © 2019 by Patricia Stallworth

All rights reserved. No part of this book may be reproduced, stored in

a retrieval system, or transmitted in any form or by any means, includ-

ing electronic, mechanical, photocopying, recording or any other

method – except in the case of brief quotations used in critical articles

or reviews – without the prior written permission of the publisher and

the author.

DISCLAIMER: This publication is designed to provide accurate and

authoritative information in regard to the subject matter covered. It is

sold with the understanding that neither the author nor the publisher is

engaged in rendering legal or other professional advice or services. If

such legal or other expert assistance is required, the services of a

competent professional should be sought.

This book belongs to:

_____________________________________

Owner’s Pledge

I am totally committed to achieving financial

independence/security/freedom. I realize that there will

be challenges associated with this decision and I accept

them as part of the process.

Signed:

Listen to Financial Boss Radio: www.FinancialBossRadio.com

introduction

what’s holding you back?

“Everyone is necessarily the (s)hero of his/her own life story.”

— John Barth

M oney is complicated. We love it. We hate it. We

obsess over it. We ignore it. We resent it. We

hoard it. We crave it. We bad-mouth it.. If fact,

we have so many mixed feelings about money

it’s a wonder we ever accomplish anything.

But at the end of the day, your money is one of the most valua-

ble assets you have to help you get to where you want to go –

to break free from the chaos – to live life on your terms. The

good news is even if you, like so many people, have a troubled

or conflicted relationship with money, you can still succeed –

you can still put your money to work to create the life you want.

And, it can all start with the simple decision to take charge!

Sometimes taking charge is easy -- it just requires a few simple

changes in your routine. Other times it requires putting guard

rails in place until you form new habits that work for you instead

of against you. I wrote the Financial Boss Handbook to help

you get and stay on track with your money. The five principles

included here have helped me as I have gone through the

twists and turns with money in my life and I hope they will help

you as well.

Starting today, make a pledge to take charge, to take responsi-

bility and to take action to create the life you so richly deserve!

Patricia Stallworth

principle #1

Cultivate A Wealthy Mindset

“You can only change your life if you change your thinking."

— Jannie Putter

C ultivating a wealthy mindset is key to achieving and

sustaining wealth. Having a wealthy mindset means

overcoming pesky money biases, attitudes, and be-

haviors that can block your path to success. These

biases are everywhere and we’re all vulnerable to them be-

cause they usually plant their roots deep in our subconscious.

So, for example, if you believe that having a lot of money or

being “comfortable” is a bad thing, there’s no way you will ever

achieve sustainable wealth because you will always find a way

to sabotage yourself. Want proof? Listen to some of the stories

of the big lottery winners who ended up losing their money al-

most as quickly as they won it. It wasn’t a lack of money that

caused them to fail, it was instead the lack of a wealthy mind-

set.

So what are some common money biases that might be hold-

ing you back? Here are seven particularly destructive ones:

1. “Money is the root of all evil.” The correct quote from the

Bible is “the love of money is the root of all evil,” but that

may not stop your subconscious from interpreting it differ-

ently. In other words, deep down you may actually believe

that money is evil and that you must make every effort to

get rid of it as quickly as possible when it comes into your

life so that it doesn’t corrupt you.

2. “Rich people are greedy.” Just as no one wants to be

thought of as evil, most people don’t want to be thought of

as greedy either. But the simple truth is instead of changing

your behavior, money has a way of amplifying who you are.

So, if you were a greedy person before you had money,

nothing will probably change. On the other hand, if you

were a generous person beforehand, you will most likely be

even more generous. Remember, you can’t help yourself,

your family, the poor or anyone else if you don’t have the

money to do so.

3. “Financial planning is for rich people.” This is actually true,

but it is also true for people of modest means and everyone

in between. In fact, the less money you have, the more im-

portant financial planning becomes because it allows you to

maximize your money to achieve your goals.

4. “Money can’t buy happiness.” Here’s a news flash: neither

can poverty. Rich or poor, it’s your attitude that determines

whether you are happy or not.

5. “It’s better to give than to receive.” Giving is a good thing,

but so is receiving. If you’re uncomfortable being a receiver,

you will always find a way to push away gifts or to downplay

their value − from compliments to income − so always be a

cheerful receiver and giver.

6. “Women can’t learn to manage money.” Or “I’m not good

with numbers so I can’t manage money.” Even though con-

sciously you know this statement can’t be true, deep down

inside you may still believe it, especially if you struggled

with math in school or you never had any formal financial

education. But, that’s just not true. You can look around and

see lots of successful women managing money and if math

is an issue, we have tools (computers and calculators) that

can greatly simplify the process.

7. “The spouse or partner that is the most comfortable or skilled

in financial affairs should manage the family finances.” Its

okay for couples to split up the financial tasks, or even for

one partner to be responsible for all of the tasks. However,

both partners should be actively involved in, or at least

knowledgeable of, all aspects of their family’s finances.

Couples who can talk about and work together on their fi-

nances often find that it makes their marriage stronger.

Can you see how beliefs like these could sabotage your chanc-

es of building wealth and financial freedom? After all, who

would want to be wealthy if it meant that you were doomed to

be evil, greedy or unhappy? And most of all, that you couldn’t

be good at managing your money even if you wanted to be-

cause you didn’t have the ability to learn how.

Be on the lookout for these and other destructive attitudes and

thoughts. If you do encounter them, challenge them and do just

the opposite so you can prove them wrong. Never forget how

powerful your mind can be and that by simply changing your

mindset, you can instantly change the course of your future!

Money is a tool you can use for GOOD!

principle #2

Discover what drives you: Uncover

your Primary money motivator

“Money isn’t everything, but it ranks right up there with oxygen.”

— Rita Davenport

U nderstanding your money motivators or what acti-

vates or energizes your behavior and gives it direc-

tion is key to taking charge. In fact, they are often

the reason behind much of your earning, spending,

saving and giving decisions.

Money motivators are highly personalized to each individual

and to complicate things, they can change under different cir-

cumstances. However, uncovering your primary money motiva-

tor will provide you with the knowledge to play to your strengths

and become aware of behaviors that might trip you up and keep

you from creating financial freedom.

To be clear, none of the money motivators are inherently better

or worse than the others. They all have strengths that can be

beneficial to you and they all have their flaws. So, it’s important

to make a conscious effort not to get caught up in the extremes

because that can make it more difficult to achieve the freedom

to live life on your terms.

Once you understand your primary money motivator, you can

begin to see patterns and predict your behavior in different cir-

cumstances. This allows you the opportunity to take charge and

even override your natural tendencies when necessary.

The four primary money motivators are:

• Security - If you are motivated by security, you will most

likely want to stay in your comfort zone – a steady job, in-

vesting in real assets like properties and guaranteed in-

vestments with the goal of securing your future. And, you

may be resistant to change because of the uncertainty that

often accompanies it.

• Freedom - If you are motivated by freedom, you will

most likely resist anything that ties you down. You will

look for jobs that offer you a great deal of autonomy. In

fact, you will do anything to maintain your freedom, at times

even sacrificing security, love, and power to keep it.

• Power - If you are motivated by power, you tend to have a

high energy level. You are dedicated and driven, even ob-

sessive about your work, and you are always ready to take

on a new challenge. You crave success and the status

symbols that go with it, often to the extent of sacrificing

your family life.

• Love - If you are motivated by love, the most important

thing to you is to feel love and feel supported by the people

in your life. To achieve this you will sacrifice your dreams,

your career, and your financial future for your spouse, your

children, or anyone you love.

Once you understand your primary money motivator, one of the

best ways to stay in control is to set financial goals for your fu-

ture, develop plans to accomplish them, and then work on your

plan everyday.

Not sure what you primary money motivator is? Take the

‘MYM Motivator Quiz’ on the next page to discover what’s driv-

ing you.

MYM Motivator Quiz:

For each question, circle the response that best describes you. 1. I feel that money...

a. can solve my problems. b. frees up my time. c. is a means to an end. d. helps make relationships better.

2. Money allows me to... a. feel secure. b. do what I want to do. c. get ahead in life. d. buy things for others.

3. If I suddenly came into a lot of money, I... a. wouldn’t have to worry about the future. b. wouldn’t have to work. c. could really build up my business. d. would spend a lot on family and friends and enjoy

more time with them. 4. Regarding saving money, I...

a. have a plan and stick to it. b. don’t have a plan and rarely save. c. don’t have a plan but manage to save anyway. d. don’t make enough money to save.

5. When I pay bills, I... a. pay them when due, but no sooner. b. put it off and sometimes forget. c. pay them when I get around to it. d. worry that my credit will suffer if I miss a payment.

6. When I make a major purchase, I...

a. research a great deal before buying. b. go with my gut. c. feel I’m in charge, after all it’s my/our money. d. ask friends/family first.

7. If I have money left at the end of the month, I... a. put the money in my savings account. b. go out and have a good time.

MYM Motivator Quiz (cont):

c. look for a good investment. d. buy a gift for someone.

8. When I eat out with friends, I prefer to... a. ask for separate checks. b. divide the bill proportionately. c. charge the bill to my bankcard and have others pay

me. d. pay the entire bill because I like to treat my friends.

9. When I can’t decide on a purchase, I often tell myself... a. it’s a bargain. b. it’s only money. c. it’s a good investment. d. he/she will love it.

10. In my family... a. my partner does/will take care of the finances. b. I do/will handle all the money and pay all the bills. c. I do/will pay my bills and my partner will do the

same. d. we do/will sit down together to pay bills.

Score: Add up the number of responses for each letter. Then look at the Answer Key below to see what each letter indicates. The letter with the most responses represents your primary money mo-tivator.

a. _______ c. _______

b. _______ d. _______

ANSWER KEY:

“a” answers relate to Security. “b” answers relate to Freedom. “c” answers relate to Power. “d” answers relate to Love.

principle #3

Keep track of where your are

“Even if you’re on the right track,

you’ll get run over if you just sit there.”

— Will Rogers

O ne of the best ways to always know where you are

is to track your net worth. Your net worth is essen-

tially a snapshot of your general financial condition

at a given point in time and it represents your finan-

cial power. That is, the amount of freedom, independence and

choices you have in your life. The higher your net worth, the

more financial power you have.

Calculating your net worth regularly allows you to track your

progress and to compare it to your goals.

NET WORTH equals what you own (assets) minus what you

owe (liabilities).

Net Worth = Assets — Liabilities

Assets include things you own like cash on hand (checking ac-

counts, savings, certificates of deposit (CDs)), stocks, bonds,

mutual funds, property you own, such as your house, cars,

household furnishings, jewelry, and collectibles, the cash value

of life insurance policies, retirement plans, annuities, real estate

and business interests.

In other words, anything of value you own that could be sold.

While it’s easy to determine the value of some items – your

checking and savings account balances, for example – others

can be more difficult to place a value on. For instance, if you

own a car that you originally paid $20,000 for several years

ago, what value should you use in calculating your net worth? If

today, according to Kelly Blue Book, you could get about

$15,000 for it, the answer is $15,000.

And, that’s the way to think about everything you own that has

a monetary value – what you could reasonably sell it for today.

Once you have a value for each item, add them all up to deter-

mine the current value of everything you own if it was convert-

ed to cash at reasonable market prices today. The key to keep-

ing the estimates of your assets consistent is to use the same

method to calculate them each time.

Next, consider your liabilities. Liabilities are items you owe and

include things like outstanding loans (student, auto, installment

and personal), mortgages, credit cards, unpaid bills (medical,

utilities, etc.), penalties related to situations like breaking a

lease if you’re renting and taxes you owe (income tax, real es-

tate taxes, etc.). In many cases, you will have a current balance

to use while in other cases, you may need to estimate exactly

what you owe. Again, once you have a figure for each item, add

them all up to determine the current amount you owe.

All of this may seem like a big, complicated exercise just to

come up with one number – your net worth. But it will get easier

each time you do it and it’s definitely worth it. Knowing your net

worth number gives you a basis to improve it and increase your

financial power. Plan to calculate your net worth at least once a

year. Also, perform a ‘before and after’ calculation if you’re

planning any major transitions, such as moving or making a

major purchase such as a house or a car so you can see the

impact such a purchase would have on your net worth.

The first time you calculate your net worth can be a bit of a

shock – seeing everything you own and owe boiled down to

one number. In some cases, you may even be looking at a neg-

ative number because you have more liabilities than assets and

that can be even more shocking. While that’s not the best place

to be, it’s important to know so that you can determine areas

you need to work on to grow your net worth, your wealth and

your financial power.

Your goal should be to increase your net worth each year.

Common ways to increase your net worth include increasing

the value of assets such as your savings account balance and

the return on your investments, and decreasing your liabilities

such as paying off debts. Calculating your net worth not only

helps you track where you are but it gives you a starting point

to increase your financial power.

You INCREASE what You Measure!

Calculate Your Net Worth

ASSETS (Things you own)

Use Fair Market Value CASH AND SAVINGS

Cash and checking accounts ___________

Savings accounts ___________

CDs, Money Markets ___________

Other __________________ ___________

Cash and Savings Total $__________

INVESTMENT ASSETS

Stocks, Bonds, Mutual Funds ___________

Employee stock options ___________

Cash value life insurance ___________

Income producing real estate ___________

Other __________________ ___________

Investment Assets Total $__________

RETIREMENT ASSETS

Pension or Profit sharing plans ___________

IRAs, Keogh accounts ___________

Employee savings plan, 401(k) ___________

Other __________________ ___________

Retirement Assets Total $__________

NON-INCOME EARNING ASSETS

Home ___________

Furniture and equipment ___________

Autos ___________

Recreational vehicle, Boat, etc. ___________

Collectibles ___________

Jewelry ___________

Other __________________ ___________

Non-Income Earning Assets Total $__________

TOTAL ASSETS $___________

Calculate Your Net Worth (cont.)

LIABILITIES (Things you owe)

Use Current Outstanding Balances

Home mortgage ___________

Other mortgages or notes ___________

Installment debts ___________

Credit cards ___________

Other loans ___________

Taxes ___________

Other ___________

TOTAL LIABILITIES $___________

Net Worth = Total Assets – Total Liabilities

Total Assets $____________

minus Total Liabilities $____________

Your Net Worth $____________

principle #4

Pay yourself first and Grow

your wealth

"To be successful you don’t have to do extraordinary things. Just do ordinary things extraordinarily well."

— John Rohn

P aying yourself first allows you to grow your wealth

faster because it puts you and your goals at the top of

your priority list. In essence, it’s a top-down version of

a budget because it gives you the opportunity to put

your money to work where it matters most.

So often we miss out on the opportunity to save for goals such

as a retirement or a vacation because when the paycheck

comes in, it gets used up to pay bills and other expenses, and

any excess money just seems to disappear. So, if your like

most people, you tell yourself you’ll save when you get your

next check, but the cycle just keeps repeating itself over and

over and your savings never grow.

So, what’s the best way to pay yourself first? The very best

method is to calculate the amount you want to save each month

and then automate the process.

For example, Kim takes home $6,000 each month after taxes

and deductions for benefits. She has a list of goals she wants to

accomplish, including saving for retirement in an IRA, creating

an emergency fund, saving for a down payment on a house, a

vacation and setting something aside for her kids college. She

has calculated the totals for each goal and decided that ideally

she would like to save the following amounts each month:

• $450 a month in an IRA for retirement

• $250 a month in an emergency fund

• $500 a month for a house down payment

• $100 a month for a vacation fund

• $200 a month for the kids college fund

That’s a total of $1,500 a month. Next, she subtracts $1,500

from her monthly income of $6,000 and she’s left with $4,500

each month to spend on bills, eating dinner out or whatever she

wants without worrying whether she will have anything left to

save. (See her example of what this looks like on the next

page.)

If your income is relatively consistent, you may be able to auto-

mate all or part of the process like Kim did by having your bank,

brokerage or mutual fund company deduct the funds from your

checking account each month. However, if your income is irreg-

ular or you don’t have that option, create a bill for each item on

your list and place it on top of all of your other bills as a remind-

er so you never forget to pay yourself first.

Q: I’m worried that if I pay myself first, I won’t have

enough left to pay my bills.

I understand your concern, but it is all a matter of setting

priorities. Using the example above if Kim needed $5,000

instead of $4,500 to pay my bills each month, she would

need to make some decisions based on how important

the goals on her list were versus the expenses she had.

In some cases, she might decide that the goals were non

-negotiable and look for ways to cut her expenses. In oth-

er cases, she might decide that her expenses were non-

negotiable and look for ways to accomplish her goals

with less money, revamping them or even putting one or

more of them on hold. In either case, deciding how to

allocate your money is very personal and you should con-

sider all of your options before making a decision.

Kim’s Pay Yourself First Example

Don’t be afraid to fail. Be afraid not to try.

Salary

Separate ccounts • 5

• ergency fund 5

• ouse down pay ent 5

• College fund

• acation fund

Total 5

General Checking

5

• egular ills ortgage rent

ca le insurance phone etc.

• Fun oney entertain ent

clothes charity etc.

principle #5

Invest Early and Often

"Lack of will power has caused more failure

than lack of intelligence or ability."

— Flower A. Newhouse

I nvesting early and often allows you to take advantage of

compounding and time to build wealth faster. Com-

pounding has been called the 8th wonder of the world

because of its tremendous power. The secret to com-

pounding is that you not only earn interest on the money you

invest, but you also earn interest on the interest your invest-

ments earn. While this may not sound like much, compounding

can have a powerful effect on your investments over time.

Here’s an example of how compounding works:

If you place $2,000 in an investment that pays 10% each year,

at the end of the first year, you will have $2,200 (the $2,000

you started with plus $200 in interest). Assuming you make no

deposits or withdrawals, at the end of the second year you will

have $2,420 ($2,200 plus $220 in interest). The extra $20

comes from the interest on the $200 in interest you earned in

the previous year. As long as you keep your money invested,

this process will repeat itself each year, and after 30 years,

your account will have grown to almost $35,000 from your origi-

nal $2,000 investment. That’s the power of compounding.

But it gets better. Using the same example, if you add $2,000

to the original investment each year for 30 years, at the end of

that time, you would have approximately $400,000 from an in-

vestment of only $62,000! The more you invest and the longer

the time frame, the bigger it grows!

Finally, automating your investing will make it easy and almost

effortless to grow you money. Dollar cost averaging is one of

the most popular ways to automate your investing. With dollar

cost averaging you consistently invest the same amount each

month and instead of doing it manually, you can automate the

process by having your employer, banker, broker, or mutual

fund company deduct money from your checking or other ac-

count and invest it in a mutual fund, or other investment. This

occurs month after month regardless of whether the market is

up or down. Not only does this technique make investing easy,

but you may actually get more for your money over time be-

cause when the market is down, you will be able to buy more of

the investment for the same amount of money.

Here is an example of how dollar cost averaging works:

Sharon authorized her mutual fund company to deduct

$100 from her checking account on the 15th of every month

to purchase $100 worth of shares of XYZ mutual fund.

When the price goes down, more shares are purchased,

and when the price goes up, fewer shares are purchased.

Here is how Sharon’s mutual fund performed over the past

six months:

0

5

10

15

Jan Feb

Mar Apr

May Jun

Date

Amount

Invested

Price per

Share

# of Shares

Purchased

Jan 15 $100 $10 10.000

Feb 15 $100 $9 11.111

Mar 15 $100 $5 20.000

Apr 15 $100 $6 16.667

May 15 $100 $8 12.500

Jun 15 $100 $10 10.000

Total $600 48 80.278

Here is what Sharon’s mutual fund account looked like:

Average price per share = $8.00 (48 ÷ 6 months)

Sharon’s Average cost per share = $7.47 ($600 ÷ 80.278)

Sharon was not only able to grow her investments on a regular

basis with very little effort, but she also saved money in the

process because dollar cost averaging allowed her to pay less

than the overall price per share.

The CASH is in the CLARITY!

Epilogue

Do Something Today!

“If you want to know your past life, look into your present condition; if you want to know your future,

look into your present action.” — Padmisabha

D o something today!

I know there’s a lot of information even in this small

book, but I want to encourage you to pick at least

one principle and start working on it today.

And don’t forget, I’m here to help.

If you have a question about anything you have read or if you

are ready to take charge of your money life and you want to cre-

ate a plan specifically designed for you, let’s talk.

The biggest mistake I see people make is doing nothing.

Minding your money is a skill like any other skill, and it can be

overwhelming when you aren’t sure where to start. However,

don’t let not knowing what to do eat away at your joy. You can

have a life that excites you, but you have to be an active partici-

pant.

Don’t wait another day. Do something now.

DO SOMETHING TODAY!

Let’s Talk…

Schedule a supportive session to see if we might

be the right fit. Contact me (Patricia) directly at

ps@eworthadvisors.com or visit the website at

eWorthAdvisors.com and click on the Contact tab.