Browse Month

July 2019

Get Rich These Days

building your career

There are jobs which pay very well (i. e. manager positions), with which it is not difficult to build a fortune. With conscientious career building, very much dedication and with some luck it can be achieved.

The question is how great is the sacrifice we have to bring, and whether the high salary compensates it.

becoming a criminal

There are many immoral or criminal ways of making money. I don’t want to give tips anybody, the media give us information about such cases in many ways all the time.

I wouldn’t urge anybody to choose this way. In this case we risk not only money, but stricter penalties, too (i.e.prison).

with talent

Many people get their wealth by being good at something, eg.: sportsmen, musicians, writers, artists. Others invent something new, it is enough to think of the internet millionaires being born by the dozens these days.

Most of those who have such a career behind them, say that the way leading to success is not a smooth one but loaded with hindrances, and it is not as simple as it looks like. Nevertheless I wouldn’t reject this option.

with luck

We can be lucky many ways in our lives: we can win the lottery, we can inherit suddenly, or, we can find some art treasure in the attic.

A very insidioudanger lies in the way of those who became rich thanks to luck.

Many of them are not used to handling great wealth, so the money leaks from their hands. When the money is over, they can even have a great amount of debts, and finally they can find themselves in a worse situation.

If you get wealthy unexpectedly, it is highly recommended to ask for advice from a financial expert.

Certificate Of Deposit Accounts

Certificate of deposit accounts are special accounts offered by banks & brokers, they’re basically the reverse of a regular loan: the investor loans their money to the bank for a specific period of time during which the bank pays you interest for the use of the funds.Traditionally interest is generally paid periodically based on a percentage, or other predetermined factor (such as the stock market), for the life of the CD.

Many institutions offer fixed interest rates but variable interest rates are also available. This type of account differs from bank savings accounts in that depositors can not withdraw the money at any time; they have to wait for the them to mature or pay a severe penalty.

Certificate of Deposits are perceived as safe because they are insured via the FDIC. The FDIC is federal insurance coverage provided by the government, instituted during the Great Depression, it was meant to provide consumers reassurance & protect against bank runs.However, there is a cap on the volume of funds insured by the FDIC per account.

Since the FDIC is backed by the United States Treasury, many people look at CDs as the ultimate risk-free” investment. As such, rates of return tend to be very low, but are still a bit above savings account rates to compensate people today for their income being tied up with the bank. Normally certificates provided by smaller banks, who have great monetary needs, will offer a greater interest rate than large banks flush with cash. Because of this consumers can typically find much far better return rates for their investment at smaller banks.

The reality is that there is no such thing as an investment that carries no risk. There are dangers associated with CD accounts that many shoppers do not take into account.

The first danger is the inflation threat. Lets imagine you tie up your savings in a 5 year CD with a 2% rate of interest, but, during those five years, inflation spikes to 5%. Because of the high penalty for accessing your money before the term ends, your money is inaccessible and is essentially dwindling away and losing value. On the other hand, for those who had access to their money via a standard savings account, you could simply withdraw the cash and invest in something tangible, like assets or land, prior to it becoming worthless.

One more commonly overlooked threat, which can be closely related to inflation, would be the rate of interest threat. If an investor deposits funds a 5 year CD with a 2% rate of return,and the base rate of interest spikes to 4% in the following days or weeks, then there is an opportunity cost to holding the money. An individual with a common savings account around the other hand, will see their rate of interest adjusted as the rates spike. Of course in a savings account the rate of interest is usually lower to begin with.

Inflation and fluctuating interest rates are risks that increase with the term of your investment. The longer the time before to maturity, the much more considerable the chance of interest and inflation changes.Short term CDs, on the other hand have incredibly low threat simply because there might be less opportunity costs more than the shorter time. Because of this, many investors choose options with shorter terms, or options that allow them some control in case of inflation of interest spikes.

Ways You Can Detect a Financial Fraud

  • Read your monthly bank statements. Know every purchase and credit to your accounts. Scammers can steal your information and set up charges you might mistake. Check for hidden “membership” fees or any other unapproved charges.
  • Give to recognized charities. When a disaster occurs, your instinct is to give to those who lost their homes, clothes, etc. Do your research and give to a recognizable charity or a credibly ranked one. You can find more donating tips by using a website like Charity Navigator.
  • Investing is taking a chance. There is no sure profit when investing. An investment opportunity with a low-risk, high-return investment can strike red flags! Take time to learn about the product and company beforehand. Also, prepare for a sales pitch. Watch for words like ‘guarantees’ and ‘promises’ with little ‘financial risks’.
  • Don’t deposit a check from, or wire money to, an unknown recipient. The law requires banks to have deposited checks available within days. However, to recover a fake check can take weeks. Someone who overpays using a check is likely connected with fraud.
  • Use strong passwords. Passwords should have eight or more characters. Use a combination of letters, symbols, and numbers that have no significance to you or records that lead back to your password.
  • Don’t reply to messages that ask for personal or financial information. These messages are likely waiting in your inbox, but send via telephone or text message too. Do not click these links or return these calls, remember you are a click away from a fraud.

Clean Up Your Budget

  • Clean up and clean out our house this fall and have a yard//garage sale. This is going to be a LOT of work, but in the end, we will have extra space AND some extra cash to put toward bills or savings.
  • Pay bills second, pay ourselves first. This means taking the 30 seconds to log in to the bank account and throw in some extra cash into the savings account. This is like, rule #1 of saving. Rule #2 is “Don’t touch your savings unless it’s an emergency, and even then, reconsider it!” Haha. Okay maybe not, but clearly for us financial discipline is lacking.
  • Create a daily spending limit and stick to it. That’s right. Daily. Because sometimes, those of us who aren’t so good with budgeting, need serious boundaries. This way, we can really look at “What am I spending my money on? Is this a necessity, a treat, or should I//do I need to save my daily allowance for something in a few days?”
  • Commit to paying down debt. There are a few ways to do this effectively, but, as I’ve been reading, the simplest is to take it in small chunks and pay off the smallest one first. Then tackle the next smallest, and so on. This is a great way to see progress! (And I like to see progress sooner than later!) There is a school of thought–and a wise one at that–that says pay off the debt with the highest interest rate. This is a really good idea too.
  • Focus on needs instead of wants… for now. I think we have to look closely what we want to spend our money on… for me, I like getting my nails done. I also like buying clothes for myself and my family. But right now these things need to be put on hold. We have more than enough, and frankly–even though I loathe it–I can do my own nails for a little while. I don’t want to deprive anyone, but I think it is a valid exercise to simplify life a bit; get creative with what we have, use what we have, and then, after a period of two or three months, see where our financial priorities are.
  • Choose DIY over convenience. This sort of goes hand-in-hand with #5, but I think it’s worth mentioning on its own. It takes five more minutes each morning to make your own cup of coffee rather than shelling out $2.00 for it everyday. ($2.00 x 7 = $14.00 a week! That’s $56 a month!) It takes 10 minutes to pack a lunch at home. See where I’m going here? Time and money are definitely precious commodities, but again, if you’re on a budget, it’s time (no pun intended) to consider what is worth our time versus what is worth our hard-earned money. 10 minutes for a healthier lunch packed at home means more to me than ordering a quick lunch in the cafeteria and not really knowing where the food actually came from.

 

Calculate a Debt to Income Ratio

First, you need to find your gross monthly income. This is listed on your pay stub or leave and earnings statement. If you don’t receive a pay stub, you can use the W-2 form that you receive at the end of the year from your employer.

Second, you need to know the total minimum monthly payments you make each month towards debts. The easiest way is to review your monthly bill statements to find the minimum amount due each month. Another way is to find payments listed on your credit bureau report (CBR). If you don’t have a copy of your CBR, then you can obtain a free copy of your credit report once a year from an online source, or contact your financial institution for more information. On the CBR from TransUnion, the monthly payment will be listed under TRADES>TERMS. Depending on the company (TRADES) they can report your debt as “Min97” which means Min payment is $97, or “24M204” which is 24 monthly payments (TERMS) at $204 a month. The minimum and monthly payment, and monthly term, will be different for each person depending on what is owed. You can also contact each company that you pay a monthly payment to and find out the minimum monthly payment amount. Don’t forget to ask if they report to the credit reporting bureau agency.

Finally, once you have the gross monthly income and your total minimum monthly payments of your debts, you divide your total minimum payments by your gross monthly income.

See calculation example below:

Total Minimum Monthly Payments (debt) =$1,000

Gross Monthly Income (income)=$2,000

Divide $1,000 by $2,000 =.50 or 50% debt to income (D/I) ratio

So, what does this mean for you? This means that 50% of the money you make goes to debts. How do you feel about that? Great I hope! If you have a 100% debt to income (D/I) ratio that means you have no money left for essential needs like food. Having 50% debt probably means you are living paycheck to paycheck, but able to pay all of your bills on time, go out to eat once in a while, or go on vacation. Now you know, it can be good that the D/I ratio is at 50%, but what do financial institutions think if you have a 50% D/I ratio?

Financial institutions know you need some debt in order to build a credit score. They prefer your D/I ratio to be under 50%; ideal is 30%; best is under 10% because that means you have more money to pay back your loans.

Beware! There are some financial institutions that will loan you money if you have a higher D/I ratio, but they usually charge extremely high interest rates-making it very difficult to pay back. You can always call and see if they will tell you what their requirements are to obtain their lowest rate.

Debts Are Down in Phoenix

A Leap in the Right Direction

People are making finances, and paying off debts, a priority again and that’s a great shift. Writing off uncollectible debts is also on the rise, and that’s contributing to these lower numbers. When considering the 25 areas surveyed, only four reported a debt increase, and none were in Arizona. Phoenix folks have something to be proud of, and this is a great trend that will hopefully continue to grow.

Overall, Phoenix residents aren’t leaping on opportunities to take on more debt. They’re doing better at managing their credit cards, they’re not financing vehicles they don’t need and the mortgages that are getting approved are manageable for most. Basically, people in Phoenix are treating their credit seriously, just like they should. Gone are the free-for-all years when McMansions were standard and everyone drove a luxury car.

Avoiding a Fallback

Even though Phoenix residents are spending more carefully, there’s always the risk of slipping back into bad habits. Just one faux pas or an emergency can reverse these efforts. For example, a medical emergency or layoff can quickly undo a year or more worth of work. It’s crucial to pay off debts, but every budget should allow for an emergency fund. Ideally, a person or family should have a year’s worth of emergency funds in place, but any amount is better than none.

It’s also crucial to save for retirement and/or contribute to a 401(k) as well as actually designing and sticking to a budget that works. This means there are options for entertainment and no surprise bills down the road. Paying off debts is just one aspect of financial savviness, but it seems like these Arizona residents have that part down. It’s a tough climb out of debt, but with the right tools in place, it can be done-and the Valley residents are proof of that.

Secrets of Well Managed Checking Accounts

Don’t ignore your statements.

This seems so obvious – to the point of not even worth mentioning. But it’s amazing how many of us fail to look at our statements every month, or to look at them thoroughly. Besides balancing your account – in other words, reconciling your posted balance against outstanding drafts or checks that have not been presented for payment – you need to examine your account thoroughly every month to make sure there isn’t something there that is out of place. Did the restaurant you went to a couple of months ago record a five dollar tip or a $25 tip? Did the shoe store who took your catalog purchase back really process the credit to your account like they were supposed to? Are there fees or debits that you can’t seem to account for? These are just some of the issues you’ll want to bear in mind as you’re studying your statement.

View your bank as a partner, not just a provider.

Even if you have the most basic of checking account products, your bank should demonstrate an interest in helping you manage it successfully. (And if they don’t, shop around for another bank.) Ask a banking customer service representative what tools, consumer education, and resources your bank provides or recommends to help their customers manage their finances properly. You may be surprised to learn that your bank offers website articles, free online or in person classes, apps, or even just free friendly advice that can help you run your checking account and your overall for personal finances with great efficiency.

Take the terms of your account seriously.

If your checking account agreement assesses additional fees for transactions that exceed a certain number, or for minimum balances that drop below prescribed amount, it’s important to take those restrictions seriously. Blowing them off here and there may not seem like a big deal at the time, but over the course of a few years it’s easy for those extra fees to pile up.

Ways to Improve Your Finance

  1. Begin Using a Budget. There are many people who consider budgets to be factors that are limiting their freedom. If you want to have a better financial freedom in the future, ensure that you have a well detailed budget. No impulse buying should be encouraged. In short, tracking ones spending and living within a budget allows one to get used to a lifestyle that is within their budget.
  2. Slash your Expenses and Spending. The perfect time to figure out why you have been spending more than you need to be spending is at the end of the year. Dig into you your bank statements and check to find out where the spending was unnecessarily low. How much do you spend on entertainment, groceries, transport etc and what is it that you can do to reduce such expenses. Make a budget that cuts all those extra costs and live within the budget.
  3. Pay Yourself First. After you start saving, you will have money starting to pile up. The most appropriate thing is to pay you first by bumping up one’s retirement contributions or to transfer some certain amount of money to a savings account. You can as well do both.
  4. Completely Dump Debt. List all the debts you owe others and prioritize them according to highest interest rate or size of the balance. After you have had a budget and started realizing much savings, start paying your debts from the highest prioritized moving downwards till you clear all the debts. In short, crate an actionable plan and get out of debt.
  5. Get Right with Retirement. In case you have been borrowing money from your work sponsored retirement plan account, you are headed for trouble at retirement. At your savings rate, will you achieve your retirement goal? Discuss this with a financial planner and make appropriate steps to track your investments.
  6. Contribution Beyond the Company Match is Paramount. If you fail to contribute the required amount in to your retirement plan account as per the company’s full match, experts will tell you that you have lost tens of thousands of money over your lifetime. Don’t waste this free money. Take full advantage of it.
  7. Open some Health Savings Account. If you have a HDHP (High-deductible health insurance) plan, it is prudent that you save money for future health service expenses in the tax advantaged HSA (health savings account).

Money and the Laws of Value

Money as a Store of Energy

Money is a store of economic energy. Without the awareness, acquisition, organization, and perfection of these internal values in any man, wealth creation in a sustainable manner is impossible. Poverty resulting from lack of cash or tangible assets is temporary and easily curable; however, poverty resulting from lack of discovery or awareness of these internal sources of wealth is permanent and cannot be cured by the acquisition or possession of money or tangible assets. Attempting to cure malaria by the use of pain relieving tablets is at best a temporary solution. Unfortunately, most people looking for money usually neglect and disrespect their internal primary source of wealth. According to Mark Victor Hansen “You do not have wealth, you are your wealth”! The earlier you come to the full realization of this universal principle, the quicker you will be on your journey to financial success.

External sources of values are those invisible assets outside a person that is relatively fixed and is accessible to every man equally. These include: Time, Problems, and Relationships. Everyman has equal access to these three variables; and they are unavoidable raw materials for the creation of every form of tangible wealth.

Money Creation Process

Three variables therefore determine the quantity of money a person can legally create over a given period of time: The number of internal sources of wealth discovered and properly harnessed; Amount of external sources of values efficiently utilized; and how much of the outputs of the combination of those variables that is successfully delivered to those who need them in exchange for money. For instance, the income that an employee will ultimately earn will be determined by how much of his talents, passions, and skills he is able to discover, improve, and convert to expertise. Combined with how well he is able to manage the time, opportunities, and relationships available in his work to generate and deliver the expected results consistently over a period of time.

Laws of Value

Since we now understand that, value is the source of money; and that money cannot exist alone without corresponding value; understanding the principles and laws of value will enable us create and sustain money in a legal and enduring manner.

” In every human relationship or interaction value is always flowing but money may not”

Since value is an invisible carrier of money, you may be gaining or losing money without you being consciously aware of it. Every time you come in contact with or spend some time with people, you will either increase or decrease your cumulative value whether or not money exchanged hands during such interaction. That means if you are in a high paying job, but spend a lot of time with people with poverty mind set or low expectation individuals; your net cumulative value will gradually reduce to reflect your dominant mind set. This will naturally reduce your productivity on your job resulting in stagnation or ultimate downsizing! Conversely, if every time you have a meeting with a prospect he comes out feeling he has added more value than he gave during the interaction; he’ll seek more opportunities to receive such values, on a more frequent basis – which means the consummation of a business relationship and the signing of contract!

On a daily or weekly basis, if your interaction or association is more with those who drain value from you without offering equivalent or more value in return, you will eventually become money poor.

“Value like water has three states, as long as value keeps flowing, under the right circumstance and conditions, it will freeze to tangible money”

Many people get discouraged when they begin to offer value and they don’t immediately receive the money equivalent of such values. Such frustration often leads to compromise, mediocrity in service delivery, untimely resignation, and quitting from entrepreneurial venture. But, think about it this way, it takes time for water to become ice in a deep freezer even under the consistent application of electrical power. Even when you are delivering value consistently, it takes some time for the value to be appreciated and recognized for its money worth by other people.

Most of the world’s leading successful people have gone through times when the values they offered were not immediately rewarded with money. Zig Ziglar in his autobiography stated that his first 3,000 speeches were given for free. Anthony Robbins – the renowned author and personal achievement expert said that “in his first six months as motivational speaker, all his speeches were given free, and he had an average of 5 speaking engagement every day”.

Federal Debt

Not any more though. In recent years this has certainly not been the case. Less money coming in every year with more going out has put us in a position where the United States debt is so high there are some who wonder if we will ever come out of it. This has also resulted in some of the worst infighting in recent memory among members of both political parties in Washington. According to them, it is the other party’s fault for the growing federal debt.

And if you listen to the “experts” there are as many different viewpoints as there are people in the know. Some think that there are ways out of our national debt mess, even though it may take a number of years. While some think that the United States’ role as the leader of the world may be coming to an end. For the most part though, most of the financial gurus fall somewhere in the middle when analyzing and forecasting the federal debt situation.

One thing is for sure. In order to straighten out this serious mess that is the federal debt or we can say Government debt, it is going to require cooperation between both political parties. They are going to have to come together for the good of the American people, as well as the financial stability of our nation and find solutions that are going to work and whittle down this quickly growing USA debt. If they don’t then the nation can just expect more of the same old same old.

If there is one place where there is a general consensus, it is in the area of defense spending. The long drawn out wars in Afghanistan and Iraq along with massive military and defense expenditures has really put a strain on the nation’s coffers. There is now way a solution will be found for the federal debt crisis without decreasing the massive amounts of money going toward defense.

  • 1
  • 2