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Sid’s Sense- Money Matters

Make it, save it, and spend it wisely.

View previous posts in this series, Sid’s Sense.

My grandfather, Sid’s father, had Alzheimer’s. My father barely attended law school because of his ill father. He was an only child and his mother needed help. After he died, my father and grandmother needed a way to make money so my grandmother used her skills in the kitchen to run a restaurant and later own a boarding house for boys. As many people do, Sid learned about money by not having any.

As you know, schools would rather teach us about “x’s” and “y’s” than “dollars” and “cents.” In my home, we talked and learned about money. Here are a few money lessons that most impacted my life.

Possession is 15/10ths of the law 

This is definitely in Sid’s top money lessons. It began as 9/10ths and now it’s up to 15/10ths! When you keep possession of your money, you have leverage.

Do not pay cash for a product until you are satisfied. Do not pay up front for services until the service is complete. Do not pay home contractors unless you have proof they have paid their contractors or you could end up owing double. That’s right- double! If you pay John who remodeled your bathroom and John didn’t pay for the plumbing fixtures, the plumbing company can come after you for the money and it’s legal.

Even if you have to pay a little more to avoid paying up front, do it.

Cash & Credit Cards

Lesson #1:  If you can’t pay cash right now, don’t buy it.  

The only exceptions are a house and maybe a car in some circumstances. (Business investments are a topic of their own).

If you can’t pay cash for a trip, don’t go.

If you can’t afford a private school or college, don’t send your kid there. They’ll still thrive.

If you can buy the item on sale on Monday but won’t be paid until Friday, wait until Friday.

If you can’t afford the premier sports league, don’t put your child in it. They’ll survive.

If you can’t afford to go out to dinner, don’t.

If you can’t keep up with the Jones’s, ask to see their financial statement.

If you care about credit card interest rates, you need to stop spending money you don’t have.

Lesson #2:  Cancel all credit cards you do not absolutely have to have and make sure they are off your record.

Use credit cards for 2 reasons:

1)  paying deposits and for purchases you have not yet received

2)  to establish credit in your name

All you need is one credit card, two at the very most. Every card you own has a credit limit.

If you apply for a loan, that credit limit, whether you have ever used it or not, counts against you. 

Those who loan you money know that you could spend money on that account. They will not give you the benefit of the doubt. When you have credit in your name, they will assume you will use it.

Lesson #3:  Ignore the enticement of savings you get from opening up a new credit card.  


Lesson #4:  Pay off your balances and never pay a dime of interest to a credit card company.

If this does’t make sense, read lesson #1 again.

Lesson #5:  Reward cards should be left to rewarding those who have proved to manage their money over time.

Our Visa card is a mileage card that earns airline miles. We use the miles for our race travels, family vacations, and even sending our daughter to China. I keep a running tally of those purchases and deduct them from our business and personal registers so there is never a surprise when the bill comes.

Better to assume you have no self-control and prove yourself wrong.  Especially when you are young and just starting out.

Lesson #5:  Establishing good habits is what is most valuable in the long run.

Establish rules and don’t budge because you think you will miss out on a great deal. Nothing has cost Americans more money than great deals.

Forget You’ve Got It

Save 10% of every paycheck, every gift, every time. This is called systematic saving.

From our very first paydays in 1984, there has never been one paycheck where we did not save a minimum of 10%. If we received $10.00 or $1000.00, we put $1.00 or $10.00 away in a “forget we’ve got it” account. We have never faltered no matter how much we were struggling financially.

Teach your children the 10% rule from a young age. Start with having them save 10% of their allowance, birthday money, etc.

The Rule of 72

If you divide 72 by the annual interest rate, you’ll know the number of years it takes to double your money. The value of compounding interest. Like any master, you have to have patience as money takes time to grow but when it hits a certain critical point, the growth is exponential!

My favorite example of the power of compounding is explained as a round of golf. You may have heard it before but if not, you can read it at Every time I read it, I’m still amazed!

Separate but not not equal

Organization can have a powerful impact on money management. This advice may seem silly but I don’t care because it works! Think of it as your own personal “asset allocation.” I wish every college student and young professional would read this, including those majoring in business.

Establish separate accounts– literally. At a bank, investment firm, or in jars for that matter. With computer spreadsheets, great financial apps, etc., you may decide it isn’t necessary to set up multiple accounts. At least think this way and spend accordingly.

Account #1:  10% “forget I’ve got it” account. Making plenty of money? Great, increase the percentage!

Account #2:  Daily expenses account. Most of your pay will go in here. For your mortgage or rent, utilities, insurances, groceries, basic wardrobe etc.

Account #3:  Maintenance reserve. How much you set aside depends on your ownership responsibilities but if you own ANYthing, you need to expect things will need repairs.

Account #4:  Give. This is very personal. Nothing makes you feel richer than giving to those who have less. My advice is to choose something close to your heart and set a limit.  Don’t get sucked in to other causes. Giving is still an expense (money out) and you should not forget that.

Account #5:  Long term goals account. A down payment on a house, college education, new car, etc. This is how you know if you can afford a purchase!

Account #6:  Non-critical expenditures. Entertainment, travel, furniture, new big screen TV, clothes you want, a new bike:), gym membership. When you have the cash, you know it. You buy it guilt free, appreciate it and enjoy it. A $15 mai-tai on the beach that’s paid for tastes a whole lot sweeter!

When it comes to money, there is no shame. 

If all your friends want to eat at X restaurant and you can’t afford it, turn the invitation down or suggest an alternative you can afford. Undoubtedly, there is at least one other person in the group who really can’t afford it either.

Shame is when you let things get out of control, you can’t pay your bills, and your marriage is on the rocks because you’re always fighting about money.

Young couples need to discuss MONEY and how to manage it. Money troubles are dark clouds that rain on all aspects of a relationship.


This is not a lesson in investing, only a few warnings.

Warning #1:  Pay attention to how many hands are in the pot. Investing can mean distance between you and your money and detours in between that are not well marked! There are banks, financial advisors, firms that hold the money market funds to be invested, the mutual fund managers, stock brokers and the list goes on. Ultimately it is supposed to be about companies making smart decisions and products that make you money. But with all the co-mingling of funds today and so many hands in your pot, investing can be tricky business.

Warning #2:  Stick with no load funds. Watch fees. Don’t make assumptions.

Warning #3:  The stock market is a gambling arena. Know your own tolerance level for risk taking. If you die from worry, what’s the point of having a lot of money?!

Warning #4:  Concern yourself first with systematically saving and then investing. I have known many people who play the stock market regularly yet carry huge balances on their credit cards.

The best investment is discipline.  A financial statement is pretty simple. Assets & Debt. Reduce your debt. Save money systematically. Period.

Estate Planning

Have a will and a living will. A living will ensures your wishes are known should you be incapable of making decisions due to accident or illness. Talk to an attorney about getting this done, especially if you have children.

Know the wishes of elderly parents. Sometimes conflicts with siblings don’t arise until joint decisions must be made regarding a parent in need.

Avoid probate following death. If possible, make sure financial accounts are immediately accessible by a trusted family member (on the signature card) or set up a trust.


As a small business owner, I had to educate myself about different types of insurance. This is a huge topic so I’m just going to touch on a few tips:

Tip #1:  Go for high deductibles and save on premiums.  

Put the savings you save on premium payments into an account. If want to make a claim for an incident that costs less than your deductible, you shouldn’t claim it anyway. You run the risk of future increases in your rates or cancellation–especially car insurance. When you don’t have a claim, the money saved is in your pocket, not the insurance company’s.

Tip #2:  Go for PPO (preferred provider organization) instead of HMO (health maintenance organization) health insurance if you have the choice.

Many companies offer both. I avoid HMO’s like the plague even though it costs me more. There is no way I want to be at the mercy of some bureaucracy telling me where I can and can’t go for health care in the event of an emergency of someone in my family. You lose control when you need it the most.

Learn about HCPCS codes! All medical procedures have codes and that is how your insurance company processes claims. Know your policy coverages and don’t be afraid to ask your doctor’s office how they are going to code your visit. For example, a lab test in a hospital setting may be coded differently than if you went to an independent lab for the same test. You’d be shocked at what some doctors code as a “surgical procedure.”

Tip #3:  Make sure your “underinsured” car insurance is as comprehensive as your “insured” coverage.

Thanks to my brother, also an attorney, who shared this advice with me long ago. Chances are if you are in a car accident it won’t be your fault. If the person that hits you has the minimum coverage required by law you could be screwed. By having adequate “underinsured” coverage, your own insurance company will kick in once the other person’s coverage runs out. Our insured and underinsured coverages are the same amount.

What Money Really Buys

Control.  To me, this is the greatest value of having money. I’ve never envied the mega wealthy for the things they own- speaking personally. I fantasize about the control all that money gives them to make quick decisions. The beauty of not having to watch every dollar you spend is that you can make quick decisions and move on to the next thing you want to do.

When I think of the happiest times in my life, I never think of when I was laying on a lounge chair on vacation. I think of times I or someone I love was challenged and achieved.

Aim for achievement over money. Achievement is the result after hard work has ensued. If you can make money while achieving, you have a winning combination.

The Hidden Danger of Being Rich

If you are well off and have children, remember the quote in the movie, The Descendants.

“I’ll give my kids enough money to do something but not enough to do nothing.”  Money can smother the fire in many belliesThose with potential feel no need to tap it.  There are plenty of bored people strolling beaches. I’ve known kids born into money that I have actually felt sorry for.

How do you know you are good with money?

When you find it’s almost as hard to spend it wisely as it is to make it.

[sneak peek message=”Stay tuned for Part X of Sid’s Sense, The Top Dog.“]

"You can never get enough of what you don't really need." Eric Hoffer

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One Comment
  1. Brianna Ortbals #


    May 29, 2012

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