Giuseppe Hess

Chapter #1
Principle #1: Financial independence
What if I told you, You are in bondage as we speak? The reality is, you are. Proverbs 22:7 says
The rich rule over the poor, and the borrower is servant to the lender Your family needs to be
self-sufficient and to not depend on anyone for your financial support. With the principles I will
outline, you will be able to provide for your family comfortably and live your life free of the
bondage of debt.
Principle #2: Personal financial planning
A man who can plan on how he uses his money will be able to show great self-control. So many
heart-aches are caused by reckless spending and poor budgeting. Whether or not you need that
new OLED 52 TV is irrelevant when looking down the barrel of foreclosure. Personal financial
planning comes with the six Ps of planning: proper prior planning prevents poor performance.
With a proper plan, and good discipline you can determine where you want to be in the next few
years.
Principle #3: A lifelong financial plan
Many people talk about creating a lifelong financial plan but never seem to get around to doing
one. Be sure to create a 5 year plan to start off where you want to be financially. This plan will
help you save, budget, account for your spending, and even direct you when to use credit,
purchase major items, house purchasing. Once you get a hand of making financial plans you can
even set goals and events in motion that will help you retire as a millionaire.
Chapter #2 Show me the Money
Principle #4: Financial Records

Lets start off with the basics. Always keep financial records. As we discussed in the previous
chapters always keep an up to date budget and set of personal goals. Look at these regularly as
they will serve you no good unless they are viewed weekly. These along with other documents
such as personal records, titles, deeds, transaction records and investment records must be stored
in a safe place as they contain sensitive information.
Principle #5: Liabilities
This is a principle that needs your immediate attention. You have a lot of debt. And your Current
Liabilities out-weigh your cash flow. You must determine what debts you will need to pay. These
debts vary from; charge accounts, credit card balances, short-term loans, auto loans, and medical
bills. The other types of loans are Long-term Liabilities, these include things such as auto loans,
mortgages, and student loans. Our advice to you is to write down an know what liabilities you
have. As soon as you know the problem, the faster you can determine how to solve it.
Principle #6: Budgeting Methods
There are three main ways of budgeting, mental, envelope and written. The main reason you
have gotten you family into the situation it is in, is because you used the mental method too
much. You established spending habits and budgets based on how you felt. Even the strongest of
willed people need to write down their budget before taking on the month. You are no exception.
The other two are the Envelope method, and written method. The envelope method is the concept
of labeling your food, clothing, entertainment, gifts, and even savings in individual cash
envelopes. This method is likely to help you not go over your given budget for the month. The
written method is the most important. The key is to write down each transaction. This will allow
you to see where all you money went. All these methods work hand in hand and will serve you
well in the coming years.

Chapter #5 Save Now Buy Latter

Principle #7: Consumer Credit
Consumer credit is not your friend. This is the concept of buy now pay latter. Consumer
borrowing is now the way of life in the world we live in today. You are in the position you are
now because you lived the way of consumer credit, but no more. With the skills you learn in this
chapter you will learn how to save for what you want, and how to pay yourself interest. You will
make goals and promises to yourself, never to spend more than you make and how to make the
money work for you.
Principle #8: Credit Capacity
Because your barrowing debt has gotten you where you are today, let us discuss Credit capacity.
There is a rule of thumb to never barrow more than 15-20% of your income (after tax take home
pay). The amount of your net worth should determine how much debt you can afford. You are
already at risk of becoming bankrupt, so it is absolutely necessary to stay at the lower limit of
your credit card debt. And ask yourself are you willing to make the necessary sacrifices in order
to stay out of debt?
Principle #9: The Cost of Making Minimum Monthly Payments.
Credit card companies are not your friends, if they could they would make you their slaves.I
mean barrowers for life. Doctrine and covenants explains it the best by saying Pay the debt thou
hast contracted. Release thyself from bondage D&C 19:35 the cost of Minimum Monthly
payments is keeping you in bondage. Take a look at this excerpt from the debt elimination budget
we made for you.

It takes you 3 months to pay off the amount of 1 minimum payment! Luckily we can release
ourselves from bondage by paying more than the minimum payment, this will complete the loan
fairly fast depending on how much extra money you put into it.
Chapter #3: Putting your money to work
Principle #10: Stocks or Equity investments
Now that you know how to eliminate your debt, it is time to make that money work for you.
Investing is the best way to make sure that you get payed and not the creditors. There are many
different ways you can invest, the first is a Stock. A stock represents ownership in a corporation.
Some shares give dividends to its stockholders, which are a portion of a companys earnings.
When a stocks equity increases, the stockholder can sell it for a greater profit than what they
bought it for.
Principle #11: Stock investment Strategies.
Some say that investing is risky, one way to reduce this risk, is through dollar cost averaging.
This is the concept of putting in a fixed amount of money each month into certain types of
stocks. You do this over a certain amount of time, the market will fluxgate, and the stock will
drop and rise. But more likely than not the percentage gain on the stock will be positive and give
you a good return. This strategy will always minimize your cost and provide the best results if
you follow the next four steps, Diversify, buy and hold, beat inflation, and Ignore world events.
Principle #12: IDEAL investor
This acronym means Invest, Diversify, expect the market to go up and down, always select
investments that outpace inflation. Looks at investing with a long-term perspective. Always take
the risk of investing. Diversify, not only in the stocks you choose, but in companies who
diversify in products and services in the company. Do not be afraid of a fluctuating market. The

worst decision you can make is sell at a lower amount than you bought for. Give your
investments some time. The stock will go back up. And always try to beat inflation and invest
with a long-term perspective.
Chapter #4 The Time value of Money
Principle #13: Value Changes over time
This sections all about having your cake and eating it too. If you have ever heard of the
marshmallow experiment with little kids it sums up this section pretty well. You can have one
marshmallow now, or you can wait 10 minutes and have two. Which one will you choose? Delay
that instant gratification so that you can pay yourself the interest and buy cash what you need.
Principle #14: Run the Numbers
I am going to tell you about various formulas that will help you run the numbers for yourself.
This is so that you can go into any situation with a plan. Future value- This formula calculates
the future value of an investment or any number that grows at a certain interest rate for a certain
number of periods. Payment - This formula calculates the payment for a certain loan or
investment based on a certain interest rate for a certain number of periods. Present Value - This
formula calculates the present value of an investment or loan based on a future amount of the
money received or paid given a certain interest rate and a certain period of time. Rate - This
formula calculates the interest rate per period for a certain loan. Number of periods - his formula
calculates the number of periods for a certain investment or loan at a certain interest rate.
If you plan these ahead of time, it will give you time to save, and you will never be taken
advantage of because you set the terms of the loan.
Principle #15: The Miracle of Compound Interest

Banks earn you interest over time in a savings account. Depending on the interest plan it could
be annually, quarterly, bi-annually, or compounded which is monthly. Compound interest is the
ideal form of investment return when it comes to interest. Be sure to invest in stocks, bonds, and
anything else that is compounded monthly. You can see how hard your savings will work for you
given an interest rate and enough time. However, interest works against you when you borrow
money. The benefits may seem great at the moment but the financial bondage is terrible.
Chapter #6 You Are Not Your Car
Princile #16: Critical Finacial Decisions
You and your family have large car payments. While also having debt in many other areas. It is
very easy to spend higher than you upper limit of debt cap. It is important to make good
decisions when it comes to transportation costs. Many people feel they must have an expensive
car to have a good selfimage. However, as the title to this chapter indicates, your worth is not a
matter of the expense of your car. A new car is not a good investment, the goal is to increase your
net worth, do not go the other way around.
Principle #17: Transportation Alternatives
You can choose to spend 50000 dollars on a nice new car, and then pay interest on that, or you
can consider alternate modes of transportation. My team did notice that you spend hundreds of
dollars each month on Gas and transportation. There is a great lesion in forcing yourself to spend
money on small things. Like bus pass, bike, or train. The tradeoff is time, image, and
convenience for cost.
Principle #18: Purchasing New Versus Used Vehicles
A new vehicle is a waste of money. In the first year the value of a new car will depreciate
drastically. Most new vehicles depreciate by as much as 50 percent the first two years of

ownership. Buying a two-year-old used vehicle minimizes the loss in value caused by
depreciation. The trade-off is that you get a full warranty with a new car and little or no warranty
with a used car. The book says buy a one to two year old car, but in my opinion buy a older car
and spend a couple thousand on it. It will serve you well for many years.
Chapter #7: location, location, location
Principle #19:What can you afford?
You are already in a house and you have two mortgages on the house you own now. You made
the right decision to buy rather than rent but you need to know what type of home you can
afford. Everyones dream is to own ones home so living in an apartment is generally viewed as a
temporary step while you save enough money for a down payment on a home and/or become
more established in a specific location. But here are the general guidelines when buying a home.
Should not spend more than 25 to 30 percent of your take-home pay on housing and can afford a
home valued at about 2 times your annual income.
Principle #20: Qualifying for a Mortgage
This is what had you in the most trouble financially, all of your mortgages. Before making
another consider these rules of thumb. The ideal down payment is 20% or more of the price of
the home. However, few first time homebuyers have that much in savings. Your income needs to
be higher than 3 times your down payment as well. The lower the interest points by the lender
the better, try to lower the percentage of the interest as much as possible.
Principle #20: Selecting a Home
When you find a new home, please keep in mind the following guidelines, location, condition,
and real estate agent. The location determines the value of selling, and convenience with work,
school, ect. Condition will be a important factor. Be sure to have it appraised. Find a real estate

agent who will not charge you with a lot of fees, but one is necessary when negotiating prices
with potential buyers.
Chapter #10: Independent wealth
Principle #22 Ultimate financial Independence
You are financially independent when you live on less than you earn from your employment.
However, you are independently wealthy when you have accumulated enough funds to live
comfortably and no longer need to work for the rest of your life. This is ultimate financial
independence. Be free from your mortgage, transportation, food, employment, and taxes. By this
time of your life you should be able to live very comfortably on the income you saved and
invested.
Principle #23 Personal Retirement Plans
In addition to social security and employer retirement benefits, you can set up personal
retirement plans. Following is a description of some personal retirement plans. Preserve your
assets by calculating your retirement needs with the future value function.
Principle #24 Calculating Your Retirement Needs
You must determine the impact of inflation on your living expenses. Find a good median on what
you need to invest and go for it. Your retirement should be a calm one. It is obvious that if you
preserve your savings and spend only the income you produce you will have a great retirement.