Imagine that you recently received a rare seed for a money tree. This seed, if nurtured correctly, will begin producing a million dollars a year when it reaches 5-years of age. As it matures and the $20 and $50 bills are ripe for the picking, your money tree can be sold for tens of millions of dollars. Sounds good, right?

The catch is that during its infant years, the money tree needs a lot of care and has a very slim chance of maturing. It requires you to wake up early in the morning to feed it and talk to it. You have to read the money tree stories and do a lot of research on how to care for it properly. There are times when it will get sick and not show any signs of life for months at a time, but only your dedicated care can keep it going. The baby money tree is exhausting.

Then, one day after three exhausting years of caring for your money tree, some optimistic signs begin to appear. You see one of the leaves budding and take the form of a dollar bill. You get so excited you can’t sleep at night. You call in sick to work for a week straight just to sit and watch the money tree grow. It starts to produce a minimal amount of money, not enough to support your family, but you’ve decided to quit your job to nurture the money tree fulltime.

After two years of maxing out your credit cards, borrowing money from family and friends, and being unable to substantially support your family, the money tree suddenly bursts with bills. Every morning you wake up to find more and more money around the base of your tree, as the $20 leaves quickly ripen. You’ve struck gold and successfully raised a prosperous money tree.

After your tree grows into a fruitful, blossoming money tree, you decide to put the money tree up for sale just to see what kind of offers you’d receive. After many offers you decide to sell the tree for $15 million. That is enough for you to retire comfortably and not have to worry about caring for the tree. But before you sell the tree you pick one of the seeds and put it in a safe place just in case you get bored during your early retirement.

A year later you decide you want to see if you can get lucky and successfully raise another tree. You find that your experience taught you well and you are more easily able to raise the tree, and it grows bigger and faster, and as a result your wealth is rapidly growing.

Realizing the work involved and the risk that your efforts may amount to nothing, would you attempt to raise a money tree?

Just like the money tree, building a business is the best way to accumulate wealth. It can be exhausting and at times feel like a wasted effort, but after much dedication it can become the ultimate money machine that is worth 10 times its income potential.

If you have the drive, passion and the wherewithal to build a business, give it a shot. Don’t quit your job today to expect a source of income tomorrow though. Entrepreneurial advisors suggest analyzing your hobbies and interests – things you already do – and find a way to turn those activities into a profitable part-time, home-based business. As a result, your passion will get you through the infant stage of your business, and times when there seems no hope for success.

Millionaire Money Habit: Building a real life money tree is a great way to boost your earnings, increase investment funds and potentially build a multi-million dollar source of income. Be prepared to sacrifice your nights and weekends, and time with your family and friends. Your passion will get you through the exhaustion, and your goal at the end will be a very fruitful reward of thousands of bills. Who said money doesn’t grow on trees? - RT

This article over at DebtFREE-Revolution about who is to blame about student credit card debt got me thinking about my college experience. By the time I graduated from college, I had racked up thousands of dollars in credit card debt. After I graduated I moved to Chicago where I had a job that barely allowed me to make ends meet, and having to cut that check every month to pay my credit card bill didn’t help. What’s worse is that I knew that a lot of those credit card charges were a product of late night bar tabs, road trips and long distance phone calls.

For many students, college is the first time that they are independently responsible for their finances, and obtaining a credit card is an experience that can make or break their financial future. Credit cards can establish good credit or drive a student deep into debt. Not only do students have to avoid the temptation of using their credit card like cash, but they are also inundated by special offers and gifts for opening new accounts.

I remember the first time I reviewed my credit report shortly after I graduated from college. I had a dozen or so credit card accounts that I didn’t even know I had. You know what they were from? Each time I filled out credit card applications to receive free t-shirts and discounts at retail stores I was being approved for a new credit card. I think I had about 6 or so credit cards just from CitiBank.

Getting a first-time credit card in college is not such a bad idea though. It’s great to have on hand in case of emergencies, or to help finance educational expenses. But it is important to be educated about your options and how their use can affect your credit score and finances.

College students are prime targets for banks and credit lenders, so don’t be lured by free flat screens, laptops and t-shirt offers while on campus. Credit companies prey on college students who are anxious to spend money, have not developed any money habits, and are generally naïve as to how credit cards work. Eighteen-year-old students often view credit cards as free money, which the lenders count on. The more students charge, the more likely they will incur late fees, maintain balances on high-interest credit cards and pay the minimum payment, keeping them as debt-accumulating customers for years to come.

What to Look for When Choosing a Credit Card in College

Not all credit card offers are created equal. When picking your first credit card, make sure it is a major credit card, such as a Visa or Mastercard. As a young adult with little or no credit history, you should be able to get approved for a credit card with a annual percentage rate (APR) in the mid-teens. This is the rate you are charged for any credit card balances that you carry, or don’t pay off in full the previous month.

Although you can find an offer for 0% APR for the first 6 – 12 months, don’t take this as an invitation to go on a spending spree. Do take advantage of credit cards that offer rewards programs, such as AMEX Blue Cash, which offers 5% cash back on purchases. Over the course of time you can earn some extra money, travel points or other nice gifts.

Your credit card should not have any annual fees, and make sure there is a grace period for your payments. While cramming for finals, you may forget to drop a check in the mail to pay your balance. If your credit card has a 20 day grace period, you’re in the clear.

What to be Look out for with Credit Cards

While credit cards can bail you out in an emergency and help you establish a good credit history, watch out for these pitfalls:

• You’re a Target: Generally speaking, college students are irresponsible with money, have no experience with paying their bills and managing finances, and will do anything for a free t-shirt.
• Never Take a Cash Advance: Cash advances on your credit card are deadly. The interest charges you will incur will kill you, and the interests starts accumulating the moment you receive the cash.
• Don’t Overdue It: Maxing out your credit card can actually damage your credit score. Stay below 30% your credit limit in order to establish a good credit history that will build a good credit score. In other words, if you have a $1,000 limit, don’t use more than $300 of your credit.
• Only One Card is Needed: Having multiple credit cards is just a disaster waiting to happen. As a college student there should not be a need to have more than one credit card.

Millionaire Money Habit: Credit cards can be a very helpful tool to help you establish or build credit and assist when you need money in an emergency. It is very easy to fall for the temptation to spend more than can be handled, which is not a good way to start your financial future. Only spend what you can afford and only charge what you intend to repay in full when you bill is due at the end of the month. -RT

Here is a list of some of the best personal finance articles from my favorite personal finance websites. To kick start your week, spend some time digging through the Millionaire Money Habits archives and the links below to improve your financial literacy and increase your net worth.

Reminder: What’s your biggest financial mistake? Submit your story and win a must-read book to help you accelerate your wealth accumulation plan.

Spotlight: at The Dough Roller tells us to reflect on how money affects our lives by asking ourselves 3 Simple Questions That Can Change Your Life.

Investing and Retirement Planning:

• The 10% Return on Equities Myth at Blueprint for Financial Prosperity
• Diversification and the 401(k) at Mrs. Micah
• Retirement Advice I Didn’t Want To Ignore at Paid Twice
• Does Most Financial Information Keep the Middle Class in Their Place? at The Simple Dollar

Credit Cards:

• Cash Advances: Stray Not into Temptation! at Gather Little by Little
• Why do Credit Cards Give Cash Back Rewards? at Credit Withdrawal
• Going Nowhere Fast with Minimum Payments DebtFree Revolution

Taxes:

• 5 Crazy Tax Write-Offs at Prime Time Money
• Ten Tips for Avoiding an Income Tax Audit at fivecentnickel.com

Economy:

• 5 Strategies to Survive An Economic Slowdown at Moolanomy
• Survive A Recession, Think Long Term at The Digerati Life
• Is Generation X Responsible for the Real Estate and Mortgage Problems? at Generation X Finance

Money Carnivals:

• Festival of Frugality
• Money Hacks Carnival
• Festival of Stocks
• Carnival of Debt Management

Millionaire Money Habit: To build wealth, you need to perpetually improve your financial literacy. Digest as much information as possible and stick to a plan that works for you. In addition to the articles above, pick up one the recommended books found at the footer of this website, and be sure to subscribe to the RSS feed or by email to be notified of new articles.