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The Law of Success > LESSON THREE THE HABIT OF SAVING > Flashcards

LESSON THREE THE HABIT OF SAVING Flashcards

1
Q

What is the primary reason many people do not save money?

A

They lack understanding of how to save

Saving money is essential for success, but many people struggle with the practical steps to do so.

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2
Q

What does the Law of Habit state about actions and habits?

A

Repetition of any act leads to habit formation

Habits shape personality and influence actions through mental pathways.

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3
Q

How do habits influence daily actions without conscious thought?

A

Once formed, habits compel action automatically

For example, taking the same route to work becomes automatic over time.

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4
Q

What can happen if a person focuses on the Fear of Poverty?

A

It limits earning capacity and invites failure

The subconscious will accept limitations, leading to a cycle of fear and missed opportunities.

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5
Q

What is the significance of the Definite Chief Aim in saving money?

A

It provides a clear goal for earnings and savings

Setting a definite aim allows the subconscious to work towards achieving that goal.

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6
Q

What must one do to increase their earning power according to the lesson?

A

Demand increased earning power and save a percentage of earnings

This dual approach fosters financial independence.

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7
Q

How does the Fear of Poverty relate to the habit of debt?

A

Debt exacerbates the Fear of Poverty, leading to paralysis of ambition

Individuals trapped in debt often lose hope and confidence.

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8
Q

What are the two classes of debts described in the lesson?

A
  • Debts for luxuries that are dead losses
  • Debts incurred for professional or business trading

The first class should be avoided, while the second class can be acceptable if managed wisely.

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9
Q

What is the consequence of living beyond one’s means?

A

It often leads to speculation and deeper debt

Speculation rarely leads to recovery from debt and more often results in greater financial loss.

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10
Q

What is the relationship between negative states of mind and the Fear of Poverty?

A

Negative states attract similar fears, worsening the situation

For example, fear of poverty can lead to fear of ill health and old age.

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11
Q

What is one of the most destructive fears discussed in the lesson?

A

Fear of Poverty

This fear can lead to a cycle of negative thinking and outcomes.

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12
Q

What steps should one take to overcome the Fear of Poverty if in debt?

A
  • Quit buying on credit
  • Gradually pay off existing debts

These steps help alleviate the pressure of debt and allow for a focus on prosperity.

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13
Q

What does the author suggest about the impact of negative thinkers in a business environment?

A

They can destroy the motivation and productivity of others

Organizations thrive on positive thinking and abundance.

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14
Q

What is the psychological effect of focusing on poverty in conversations?

A

It reinforces a poverty consciousness

People who talk about poverty often manifest it in their lives.

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15
Q

How can one begin to cultivate a prosperity mindset?

A

By thinking and talking about prosperity and abundance

This shift in mindset can lead to new opportunities.

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16
Q

What does the author mean by ‘You are a human magnet’?

A

You attract people and situations that reflect your mindset

Positive thoughts attract positive outcomes.

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17
Q

What is the significance of the statement, ‘We talk and think only of abundance here’?

A

It emphasizes a positive mindset in the workplace

A focus on abundance fosters a productive and successful environment.

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18
Q

What can excessive focus on negative events in media lead to?

A

It can create a panic and reinforce negative habits

Sensational journalism can influence public perception and behavior.

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19
Q

What is the connection between debt and emotional well-being?

A

Debt can lead to stress, dissatisfaction, and even suicide

The burden of debt affects mental health and relationships.

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20
Q

What are the two definite steps to overcome the Fear of Poverty?

A
  1. Quit the habit of buying on credit. 2. Gradually pay off existing debts.
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21
Q

What habit should be adopted as part of one’s Definite Chief Aim?

A

The habit of saving a regular proportion of income.

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22
Q

What must replace the ‘spending’ habit for financial independence?

A

The ‘saving’ habit.

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23
Q

True or False: Merely discontinuing an undesirable habit is sufficient for change.

A

False.

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24
Q

What is the consequence of discontinuing a habit without replacing it?

A

The old habit may return.

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25
What is the object of the psychological formula in Lesson Two?
To develop Self-confidence.
26
What is essential for the successful operation of business?
Reserve Funds.
27
What do Savings Accounts provide for individuals?
Essential support for success.
28
What happens to individuals without a savings fund?
They suffer from missed opportunities and unexpected emergencies.
29
Fill in the blank: The average person spends from $5.00 to $50.00 a month for _______.
[useless merchandise or entertainment].
30
What does the successful accumulation of money require?
A willingness to subordinate the present to the future.
31
What tragic story is told by the young man's expense account?
He saved only 53 cents from a $20.00 weekly income.
32
What could the young man have saved if he had reduced his expenses?
$5,000.00 by saving $25.00 a month over ten years.
33
What is a common misconception about saving money?
That saving a few dollars a week cannot lead to wealth.
34
What should be done with the table showing savings over ten years?
Copy it and display it as a reminder of the value of saving.
35
What amount would have grown to $94,000.00 if saved and invested?
$47,000.00 spent over ten years.
36
What psychological impact does the habit of spending have?
It is often more appealing than the habit of saving.
37
What qualities are developed through the Habit of Saving?
* Self-control * Self-confidence * Courage * Poise * Freedom from Fear
38
How should one determine how much to save?
It depends on various conditions, some controllable and some not.
39
What is often included in the 'recreation' budget item?
Expenditures that do not truly 'recreate'.
40
What does a man's monthly budget reveal about his lifestyle?
It can provide insights into his life quality and choices.
41
What is a significant issue with the 'entertainment' budget item?
It often depletes income and can harm health.
42
What is the author's stance on morality in the context of success?
The focus is on facts that build success, not moral preaching.
43
What was the author's experience with money spent without saving?
He spent $47,000.00 without anything to show for it.
44
What is the importance of saving money according to the author?
It can lead to financial freedom and opportunities.
45
Who became interested in the Law of Success philosophy?
Mr. Mellett ## Footnote Mr. Mellett believed it offered sound counsel to young men and women.
46
What significant event occurred in July 1926 involving Mr. Mellett?
He was assassinated from ambush ## Footnote Four men, including a former member of the Canton police force, are serving life sentences for the crime.
47
What was the average monthly payment a bank teller spent on liquor?
$75.00 ## Footnote This was a significant portion of his $150.00 monthly salary.
48
What was the monthly bootlegger’s bill of a bank official earning about $8,000 a year?
More than $500.00 ## Footnote This was during the three months that his activities were checked.
49
What percentage of high school students believed the savings habit was essential for success?
5% ## Footnote This was from a total of 11,000 students surveyed.
50
What is the primary reason for the increasing wealth gap mentioned in the text?
The spending habit ## Footnote Many people spend every cent they earn.
51
Fill in the blank: F. W. Woolworth devised a method of catching ______.
nickels and dimes ## Footnote His method netted him over ONE HUNDRED MILLION DOLLARS.
52
What color are Five and Ten Cent Stores typically painted, and what does it symbolize?
Bright red ## Footnote Red denotes danger and symbolizes the spending habit.
53
What do many parents unknowingly contribute to in their children?
The spending habit ## Footnote Through overindulgence and lack of training in saving.
54
True or False: The habits of early childhood do not affect adulthood.
False ## Footnote Early childhood habits cling to us throughout life.
55
What is the key to achieving financial independence according to the text?
Systematic saving of a definite proportion of income ## Footnote This is irrespective of the amount of income.
56
Fill in the blank: If a man saves nothing, he is absolutely sure never to be ______.
financially independent ## Footnote This rule applies regardless of income size.
57
What confession does Mr. W. C. Freeman make in his story?
He spent all the money he earned, approximating one million dollars ## Footnote He expressed regret for not saving even ten percent.
58
What did Mr. Freeman earn money from before he entered advertising?
Teaching and writing news letters ## Footnote This included working in country schools.
59
What significant life event occurred in Mr. Freeman's life shortly after his marriage?
His father died tragically ## Footnote This resulted in the family needing to pull together financially.
60
What did Mr. Freeman do to increase household income after marriage?
Took in boarders ## Footnote His mother opened their home to help with expenses.
61
What lesson did Mr. Freeman fail to learn from his early experiences?
The value of money ## Footnote He did not appreciate the importance of saving.
62
What drove Mr. Freeman to seek more income after the birth of his son?
Desire to provide for his family ## Footnote He did not want his family to continue supporting him.
63
What motivated the author to take on selling books?
The desire to make more money to support his family.
64
What was the author's initial salary from selling books compared to his teaching income?
Fifty dollars a week, which was four times more than he made teaching.
65
What lesson did the author learn at the Morning Star newspaper?
There is more money to be earned by selling advertising than by writing for newspapers.
66
Fill in the blank: The author earned _______ from an advertising stunt about the south Jersey oyster industry.
three thousand dollars.
67
What did Sam Hudson encourage the author to do?
To get located in a big city for better job opportunities.
68
What position did the author hold at the Germantown Gazette?
He was in charge of the advertising department.
69
What additional job did the author take on while at the Germantown Gazette?
Gathering social news for the Sunday edition of the Philadelphia Press.
70
True or False: The author was good at budgeting his expenses.
False.
71
What was the author's income increase after moving to the Philadelphia Press?
He was invited to join the advertising staff, which led to a big increase in income.
72
What did the author do with his income that led to accumulating debt?
He spent money as fast as he made it.
73
Fill in the blank: The author felt that he was able to relieve his mother of any ________ after his increased earnings.
cares or responsibilities.
74
What was the author's attitude towards his financial situation despite accumulating debts?
He did not worry about his debts, thinking he could pay them off anytime.
75
What significant lifestyle change did the author make after receiving advice from friends?
He sold his horses and traps and moved back to the city.
76
What was the total amount of due bills the author had when cleaning out his desk?
Over forty thousand dollars.
77
Who offered the author a job at the New York Evening Mail?
Henry L. Stoddard.
78
What amount did the author earn from syndicating advertising talks during his time at the Evening Mail?
More than fifty-five thousand dollars.
79
True or False: The author successfully managed to save money from his earnings.
False.
80
What was the outcome of the author's financial situation in 1915?
He went on his own in the advertising business and continued to spend money rapidly.
81
What drastic lesson did the author learn from his financial troubles?
He needed to curb his expenses to avoid losing friends and financial support.
82
What inclination could have potentially saved the author from financial difficulties?
Curbing expenses by ten percent ## Footnote The author reflects on how a small change in spending habits could have significantly altered his financial situation.
83
What event marked the crash in the author's affairs?
Forced into bankruptcy ## Footnote The author experienced a severe financial downturn that led to bankruptcy, which he felt deeply ashamed about.
84
How did the author initially attempt to recover from his financial situation?
By moving to Florida to find work ## Footnote The author believed Florida would offer opportunities to rebuild his finances after bankruptcy.
85
What lesson did the author learn regarding financial recovery?
The importance of giving through useful service ## Footnote The author emphasizes that contributing valuable service is essential for financial success.
86
What percentage of his income does the author plan to live on after recovery?
Forty percent ## Footnote The author intends to live modestly and allocate the remaining income for savings and debt repayment.
87
What should a family with an income of $100 a month set aside for savings?
$10 to $12 ## Footnote This is part of a budget guideline for families living on a limited income.
88
What is the recommended budget for food for a family earning $200 a month?
$35 to $45 ## Footnote This reflects a practical approach to budgeting for essential expenses.
89
True or False: A single man earning $300 a month should save less than a man with a family earning the same amount.
False ## Footnote A single man's budget allows for greater savings compared to a family with dependents.
90
What is a common financial mistake made by families when purchasing automobiles?
Buying beyond their means ## Footnote Many families purchase cars that are too expensive relative to their income, leading to financial strain.
91
What is the consequence of failing to develop a habit of saving?
Poverty in old age ## Footnote The author warns of the long-term repercussions of not saving, particularly as one ages.
92
What does forming the savings habit require regarding social relationships?
Secluding oneself from extravagant social circles ## Footnote To save effectively, one must often limit interactions with those who spend excessively.
93
What benefits are associated with the habit of saving money in terms of employment?
Preference in positions of responsibility ## Footnote Saving money is often linked to desirable traits in employees, making them more employable.
94
How did Henry Ford influence his employees regarding savings?
Encouraged them to save and spend wisely ## Footnote Ford's initiatives aimed to promote financial prudence among his workforce.
95
What opportunity did the young man in Philadelphia seize due to his savings?
Rescuing his printing plant with $900 ## Footnote His savings enabled him to invest in his employer's business during a financial crisis.
96
Who provided financial backing to Henry Ford in his early days?
Friends who had saved money ## Footnote Ford's initial success was aided by friends who were able to invest thanks to their savings.
97
What concept is highlighted by the success stories of individuals like John D. Rockefeller?
The importance of saving money ## Footnote Rockefeller's wealth stemmed from his early savings habit, which helped him secure funding for business ventures.
98
Fill in the blank: A budget system should be maintained by every person, both the married and the _______.
single ## Footnote The author advocates for budgeting as a crucial practice for financial health.
99
What was the initial salary mentioned in the text?
$30.00 a month
100
What habit did the author emphasize as crucial for financial trustworthiness?
Habit of Saving
101
What was the first question asked by the printing supply house manager?
Have you saved any money of your own?
102
How much did George B. Williams save weekly for nearly four years?
$15.00 a week
103
What significant financial request did the author make to Mr. Williams in 1918?
Credit amounting to many thousands of dollars
104
What amount of credit did the author eventually get?
Upward of $30,000.00
105
What does the term 'character' refer to in the context of savings?
Characteristics developed from the formation of the Habit of Saving
106
Who preferred to loan money to a man of sound character over a spendthrift?
J. P. Morgan
107
True or False: A small savings account can be sufficient to start on the path to financial independence.
True
108
What amount did the young machinist initially save?
$200.00
109
What was the outcome of the young machinist's investment in the inventor's business?
Sold his half interest for $250,000.00
110
Fill in the blank: The real start of nearly all fortunes is the formation of the habit of _______.
saving money
111
What does the author suggest is a consequence of not forming the habit of saving?
Being sentenced to a life of hard labor
112
What is described as the greatest thing in life?
FREEDOM
113
What does the author say is necessary for real freedom?
A reasonable degree of financial independence
114
According to the text, how can one escape life-long toil?
By forming and adhering to the habit of saving money
115
Who is quoted in the text regarding the importance of being true to oneself?
Shakespeare
116
What positive action does the author suggest when feeling uncertain?
Smile

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