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Jeremy Schalf

Ways to Save Money Every Day

Avoid Buy One Get One Free Offers

These are a waste of money for two reasons.

First they encourage you to buy more of an item than you really need.

Second they are often not true offers because the shops will increase the price of the item and you get a false discount.

Only buy what you need.

Buy Own Brand Goods

If you buy something with a brand name, you are wasting money on the maker’s advertising. It doesn’t matter whether it is clothes, cars or food, companies spend millions trying to persuade you to buy their goods and you foot the bill.

You can save a small fortune over the course of a year by switching to own brand products which are often even made in the same factories as the big brand goods.

Why Buy New?

There are certain things that we buy that we can find used and save a ton of money on.

Cars are the obvious one, why pay sales tax on a brand new car when you can buy used and put the savings to work for you.

Clothes are another area you can save money. Nowadays even the wealthy are tightening their belts and selling their unwanted items. Thrift shops often have barely worn designer clothes available for a fraction of the price you pay in the shops. Another good place to find good, cheap clothes is the internet, eBay and Craigslist are the bargain-hunter’s friend!

Join a Library

If you read a lot of books why spend money on them that you can use to pay your debts when they are free to borrow at your local library. More and more libraries even lend out eBooks now for reading on Kindles.

If you have friends who read, arrange book-swaps and save that way too.

Don’t Waste Food

I know it sounds obvious, but don’t throw away good food. If you have leftovers why not use a crockpot to prepare a delicious meal for when you come home from work. Not only does this save you money, but time as well. I sometimes think my wife loves her crockpot more than me!

Clip Coupons

If you are not doing so already, collect coupons wherever you see them. Not only will this save you money, but they can also help pay for the occasional treat, something you would not normally buy.

Intelligently Eliminate Your Debts

You must intelligently employ a strategy to repay your debt. Pay at least 20% or more of your total income toward your existing debts. When paying off multiple debts, always pay more money to the debt with the highest interest rate first because the higher the interest rate, the greater amount of money you pay to that debt over time. Repaying debts with higher interest rates faster than those with lower interest rates saves you money and allows you to repay all of your debts in less time.

Example: You make $3,000 per month from your primary job and have a car loan and a credit card bill that must be paid off. You have $600 per month, or 20% of your income, that can go toward this goal. Your car loan has a balance of $4,000 at 6% interest per year with a monthly payment of $290. Your credit card has a balance of $7,500 at 21% interest per year and a minimum monthly payment of $206.

After paying the combined minimum payments of $496 for both the car and credit card, you have $104 remaining in your budget of $600. The extra $104 should be used to repay your credit card because it has thehighest interest rate. Paying the credit card’s minimum payment, plus an extra $104 every month, will save you over $10,000 in interest and completely pay off this debt in 32 months.

Once your credit card is paid off, apply the $310 (remember, this is the credit card’s $206 minimum payment plus the extra $104) you were paying on the credit card toward your car loan. Pay the $290 minimum monthly payment on the car loan plus the old credit card payment of $310 for a combined payment of $600.

Repeat this process until all your debts are paid.

Before you repay any debt, make sure you understand the terms under which you borrowed the money. Some debts can’t be repaid faster than what was first agreed to when you initially borrowed the money. If you have any doubts and questions about your debts, seek professional advice.

Toward Financial Freedom

  • Only I can’t grasp how to manage money. If possible I would announce through a megaphone that several individuals didn’t receive the money memorandum. YOU ARE NOT ALONE! Current statistics report that relatively seventy percent of people live paycheck to paycheck. With this percentage, it is reasonable to assume these individuals do not have savings. They also have a considerable amount of indebtedness. Another report I read from Learn Vest, stated seventy-six percent of people feel that their personal finances are out of hand. Basically, three quarters of people feel their personal finances are uncontrollable and that they do not know how to make their money work for them. If you are in this group, reading this should decrease your isolated feelings. Actually, the majority of people right now don’t understand money.
  • I feel confused, guilty and humiliated because I don’t know about money. This is indeed a subdivision of number one and it causes people to feel that they are some how lacking because they don’t know how to manage money well. My perspective is how can you know how to manage money if you were not taught? Correct money management skills are not part of our school’s curriculum. It is an integral problem that most individuals do not understand how to manage their personal finances. I learned proper money management in college. School was where I realized that my parents educating me about money was not the general rule. I advise people to release the shame because they didn’t acquire the information on how to manage money. After this recognition, request help to learn how to premeditate and initiate a can-do attitude with your cash flow. Stop the guilt and confusion and proceed with kindness toward yourself and your past financial actions.
  • Managing My Personal Finances is very hard and takes a lot of time. Most of my clients’ focal point is their work, family and living well. These are great goals but they leave restricted amount of time to manage their money. They are in need of a fast centralized process that they can integrate easily in their swift moving lifestyles. The disappointing concern is adults outlook, which is that they feel they earn an acceptable salary and money management is hard. It is hard and takes lots of time. This idea has become adequate. It is time to consider how wonderful we want this aspect of our lives. Taking the initiative to know where you are financially and where you want to be is empowering. It enables you to organize a structure to joyously use the money on what they really want while saving and decreasing their debt. I guarantee money management can be easy and efficient as long as you actively do the work. It is important that you proactively create a stable financial plan then implement it.

Savings Accounts vs Investing Accounts

Investment Accounts

There are numerous types of investment accounts. There are a plethora of services offered with both discount brokers and full service brokers. Most people go to full service brokers because they like face to face transactions and customer service while others prefer internet based discount brokers because they don’t value face to face interactions. Since Millennials are tech savvy and don’t have money to be throwing away for steep fees, most young investors go the discount route.

I own an account with a discount broker because I like to micro manage my investments and I firmly believe Millennials should go in this direction as well. Most accounts are free to open, and I highly recommend using TD Ameritrade because of their vast array of pointers and customer service that goes above and beyond most other companies.

Savings Accounts

Savings accounts do have great benefits. Savings should be allocations of cash put aside for short term goals. Savings should also be used for personal expenses like loan payments, utility bills, and insurance. Savings accounts should also be used for anything in life that will require a large amount of cash in five years or less. The stock market can fluctuate and losing value of money while trying to achieve a short term goal is counter productive.

Become a Corporate Authorised Representative

Organisations or companies holding a license (AFSL) are able to legally provide the full range of financial services, including providing advice on investments and financial products such as savings plans, pensions, RSA products and insurance or selling products directly to clients. They are also permitted to act as investment managers and can look after a portfolio of investments for clients and engage in dealing activities. They can invest and sell stocks, shares and commodities on behalf of their clients, alter financial products or underwrite securities and interests. Many also deal in foreign exchange contracts, securities and off-market Over-the-Counter (OTC) derivatives.

Since it is possible to sub-authorise individuals, some of these companies offer a programme under which they agree to train and appoint a corporate authorised representative under the terms of their license, allowing individuals to become accredited by the Australian Securities & Investments Commission (RG146) and start to offer some or all of the financial services provided by the licensee.

There are a number of benefits to talking this route to becoming accredited and fulfilling ASIC obligations. If you sign a contract to act as a corporate authorised representative and provide financial services under its license, the company will usually provide a full training program to teach you about the financial products, the benefits and drawbacks of each and will provide you with the knowledge you will need to be able to deal successfully.

Many even provide dedicated one on one support during training to make becoming accredited as easy as possible. It is worthwhile looking for a company that does offer this service as it makes it far easier if you ever need some assistance, and being trained one on one means you are able to take things at your own pace. This can be especially important when learning the ins and outs of some of the more complex products such as derivatives. You may also be able to carry on with training after becoming accredited to help you provide a better service to clients or develop your own business. Many companies offer a range of optional continuing professional development training sessions to its corporate authorised representatives, making it much easier than going it alone.

Eliminate Debt Forever

Most debts can be divided into good or bad debt, depending on whether it is tax deductible or not. You might decide to start with your bad debts before tackling the good debts, however you will eventually want to pay off all your debts, good as well as bad. True wealth comes from your net worth and the assets you own that bring you an income. Financial independence comes from making enough money from your assets to exceed your expenses. Remember, DEBT IS NOT WEALTH. Debt is debt and will eventually have to be repaid.

Firstly, work out what extra money you can put aside to add to your debt repayments. Any extra amount you can add to your repayments will help reduce the debts so much quicker.

Next, compile a list of all your debts. Include your mortgage, car loans, credit cards, store cards, loans from friends and family, school fees, anything that you owe basically.

Write them on a piece of paper down the page or put them into a spread sheet.

  1. Write down what it is, eg. home loan, credit card, car loan store card etc.;
  2. List the remaining balance owed (what is left to repay, not the initial loan amount, so unless you haven’t made any payments yet, this should be less than the value of the total loan);
  3. Then put the minimum monthly payment;
  4. You can also put in the interest rate for your information.

You should have four columns. You will need a fifth column. This is for your debt ratio calculations on each loan to work out your order of repayment.

Taking the first debt, divide your monthly payment into your debt balance. This should give you a number. So for example, if you have a $2,000 loan, and your monthly repayments are $100, the debt ratio is 20.

$2000 ÷ $100 = 20

Now do this for all your loans to give you your debt ratio number for each loan.

Rewrite your list or rearrange your spread sheet in order of the loan with the lowest debt ratio to the highest debt ratio.

This is the order in which the debts will be repaid. What’s important to note here is that the earlier debts to pay off are not necessarily the debts with the highest interest rates. The ratio lists the debts in the order that have the most impact on your cash flow.

Add the extra money calculated earlier to the first debt payments on the list, while still making the minimum monthly repayments on all the other debts. Keep paying off the number one debt on your list, with the extra payment until this one is paid off.

Now, if this was a credit card or store card debt, this does NOT mean that this is now available for spending again. Remember the goal here is to eliminate all your debts, not incur new ones.

In addition, this money is not available for you to spend yet. We’re on the path to financial independence remember, so we will have some short term pain for long term gain.

The entire amount that was used to pay down the first item is now available to be put into the second debt on your debt ratio list AS WELL AS the minimum monthly payment for this debt.

When the second item on the list has been repaid, the entire amount is now used to pay off the third item on the list.

So now the repayment amount is the minimum monthly payment for this debt PLUS the minimum monthly payment for the previous debts PLUS the extra amount you were able to put aside in a bid to actively reduce your debt.

You will find that because you are making extra payments, your repayment time is drastically reduced. You might even find that a debt further down the list which you haven’t gotten to yet, actually gets paid out before you have a chance to get to it, as you are still making the minimum monthly repayments into this debt. If this happens, add this minimum payment to your other debts.

Because you were already making minimum monthly payments to the other loans with just a bit extra into the current loan, you’ll find you don’t even miss the amounts you are directing into the next debt on your ratio list, as you were already making this payment anyway. Now it’s being put to a good purpose in reducing the amount of “dead money” interest you are paying.

Keep doing this until all your debts are repaid. Now, and this is very important, DON’T GET INTO FURTHER DEBT. Keep one of you credit cards if you must, and pay it off IN FULL at the end of each cycle.

Since you didn’t miss the money when it was being used for debt reduction, you can now redirect this “spare” money into your savings and investments.

Debt Of A Nation

In two distinct periods in our history has a sitting President tried to empower the public while reigning in the Nations debt. One during a time of the greatest internal struggle for national preservation namely the Civil War and another were we were headed into one of the greatest challenges that perplexed a nation primarily the Vietnam conflict. In 1861 President Lincoln needed money to continue to fund the Civil War. Bankers at the time were charging over 28% interest. Rather than pay up that high interest Lincoln pressed congress to authorize the Treasury Department to print full legal tender treasury notes [this is what the Constitution originally implied with no interest attached] to pay for the costs incurred form the war. When congress passed this legislation Lincoln stated ” We gave the people of this republic the greatest blessing they ever had. Their own paper money to pay their won debts.” Thus Greenbacks became the name this currency was called. To Lincoln’s credit the passage of the Merrill Tariff Revenue Act in 1861 along with establishment of the first ever income tax, a flat 3% on incomes above $800 [today equates to $19,000] all increased financial revenue to fund the Civil War.

Lincoln’s troubles began almost from the time he took office. By 1862 congress repealed the flat tax and instead established what was to become the basis of the complex tax system that we have today. A more progressive tax structure putting more of a burden on the less wealthy. Another set back was the National Bank Act of 1862. This act let banks become national in that they are charted by the Federal Government and authorized to issue interest bearing notes secured by Government bonds similar to what Alexander Hamilton did after the Revolutionary War in the creation of the First Bank of America. Passage of this bill ensured a market for the Federal Debt since the new National Banks would now be required to buy those bonds.

Had the National Bank Act failed to pass Congress Lincoln stressed that “Money is a creature of Law and the original issue should be maintained by the exclusive monopoly of national government. the Government should stand behind it’s currency, credit, and bank deposits of this nation. No individual should suffer a loss of money through depreciation or inflated currency or bank bankruptcy;” would have benefited the American public in a time of great uncertainty. Look what happened in 2008 with the Federal Reserve Bank running the show. Millions of our citizens suffered great financial loss. All the Federal Reserve does is loan money to the government at interest. What drives up our national debt higher are privately owned banks, the Federal Reserve, and a nation that continues to be engaged in armed conflicts anywhere in the world.

The London Times in 1863 who favored the Bank of England’s monetary policies wrote ” If that mischievous financial policy, which had it’s origin the North American Republic, should become indurate down to a fixture, then that Government will furnish it’s own money without cost. It will pay off debts and be without a debt. It will have all the money necessary to carry on it’s commerce. It will become prosperous beyond precedent in the history of the civilized government of the world. The brains and the wealth of all the countries will go to North America. That government must be destroyed or it will destroy every monarchy on the globe.” The wealth of the United States is in the hands of the private bankers not the American public. It is no wonder that the English were trying to help the Confederacy. When Lincoln issued the Emancipation Proclamation in 1863 the British populace who were opposed to slavery quietly withdrew their support of the Confederacy while Russia grew more supportive of the Union cause which helped the North and Lincoln preserve the Union.

In repealing the greenback law congress passed the National Bank Act in it’s place. All national banks were to be privately owned and the national bank notes they issued were to be interest bearing. The National Bank Act also provided that the greenbacks be returned as soon as possible as they came back in the payment of taxes. A hundred years later the United States Treasury Department computed the amount of interest that would have been paid if 400 million dollars would have been borrowed at interest instead of being issued by the Treasury Department as Abraham Lincoln initially did. Because of the greenback resolution the United States Government saved 4 billion dollars in interest. President Lincoln followed the exact interpretation of the United States Constitution by the government creating it’s own money interest free.

More recent President Kennedy in 1963 almost one hundred years after Lincoln undertook the gauntlet of reducing our national debt again following the Constitution issued Executive order 11110. This order circumvents the Federal Reserve Bank an makes possible the Federal Government not the banks print interest free money. In 1963 the Treasury Department under President Kennedy issued $4,292,893,825 interest free money. What is so startling is that not long after Kennedy’s death all the United States notes, which Kennedy had issued, were called out of circulation.

Info of Debt Counseling

The law states that clients who are no longer able to meet their debt obligations should choose debt counselling before any legal actions are filed against them. Also, see to it that you learn about the benefits and drawbacks of this service.

Once you choose debt counselling, your creditors will be notified by your debt counselor. This is an advantage on your part since you will be able to show your creditors that you are sincere about changing as well as serious about your predicament. Also, your debt counselor will help you organize your finances by merging all your existing loans into a single file. This will allow you to make only a single repayment per month. Your creditors, in turn, will send your payment to your creditors.

Your repayments are going to be restructured for any outstanding debts; but your debt counselor will still set aside a fair amount for your food, transport, and other necessities. Until you are under debt review, you will not be subjected to legal charges for non-repayment of debt. In addition, there is a good chance that your credit ratings will improve once you choose debt counselling.

This service also typically involves engaging in negotiations with creditors to set up a debt management plan for the client. This plan may help you have reduced interest rates, fees, and payments. Moreover, your debt counselor will help you avoid stressful situations such as having to deal with your creditors. Instead of answering calls or sending payments yourself, your debt counselor will do these things for you. He will even be the one to make clarifications with your creditors.

Keep in mind that although debt counselling offers plenty of benefits, it also has several drawbacks. Fees, for instance, are inevitable. Even if you choose a non-profit company, you will still have to pay a fee. Nothing is completely free since the company still needs to pay their employees, get legal requirements done, and file paperwork to stay in business. Also, you have to be very careful when choosing a debt counselling company. Choose one that will have your best interest at heart.

Many debt counseling companies are either funded by creditors or are in close ties with creditors; and even though your credit status can improve in the future, being under debt review can also hurt your credit score. Your credit score may go down because your creditors will tell the credit bureaus that a debt counsellor is handling your trade lines. You will also not be able to use your credit card and your accounts will be frozen. You will not even be allowed to apply for new credit or credit extension.

Grabbing Success From Debt

When I got my first credit card, I was so excited that I wanted to pay everything that I need through it though I have cash. I seemed to be able to handle things at first but after few months I lost control of my spending. I have been spending beyond my earnings. Since I was very busy during those days, I was not able to check my credit score. It was so bad that after about a year my credit score has gone low.

I started to hold things up. I began to live a very simple life trying not to spend a penny a day but it still didn’t work. I needed to ask for help. I started to look for solutions online and it seemed that I get no answers from forums and other group discussions until I decided to search for possible credit counselor or credit counseling service in my area. I was so happy that they were able to help me even though I was not talking to them in person. They helped me through the process online and everything seemed to work like magic.

My credit counselors worked with me in creating a working debt management plan and they also negotiated with the creditors to ensure that I could really pay on time and that I would not be paying the compounded rate that I was supposed to pay. The main thing that must be checked out when looking for a reliable credit counselor is to look for some companies or organizations that have good reviews and have been known for the services that they offer. They may be a bit expensive at times but they are worth the price.

Consequently, everything that failed should be a lesson learned and never go back to the same experience again. Experiences of other people can be a good guiding lesson that we must follow. Had I read about handling credit cards wisely before, I may not fall into this problem. But anyhow, I really learned a lot from it and I wanted to share the same experience that more people may avoid what had happened to me. Furthermore, I would just like to say that seeking help from credit counseling service really works most of the time!

Wisdom of Warren Buffett

During the 2008-2009 stock market crash, when the nation was in a total panic, he invested $5 billion with Goldman Sachs and got a terrific deal. According to “What Buffett deal says about Goldman Sachs”, 3-28-2013 Forbes, Buffett agreed to give Goldman $5 billion in late September 2008. In return, Goldman handed over $5 billion in preferred shares and a warrant that would allow Buffett to purchase an additional $5 billion shares at a price of $115, even though the shares were trading at $125 at the time, so in the money from the beginning.

For the preferreds, Goldman agreed to pay Berkshire a yearly 10 percent dividend, with option of buying back the stock at any time for 10 percent more than what Berkshire had paid, which Goldman did in April, 2011 for $5.5 billion. Linus Wilson, a finance professor at the University of Louisiana at Lafayette, who has looked at the Goldman deal, puts the dividends at $1.3 billion. So that gives Berkshire a total return of $1.8 billion on the preferreds.

Now come the warrants. In the deal struck on Tuesday, Buffett’s firm won’t have to put up the $5 billion to buy the 43.5 million shares it has a right to purchase, which would be worth $6.4 billion today. Instead, Goldman is going to give Buffett the difference in stock at the time of the deal. Buffett’s return is the same, but he’s left with a much smaller stake in Goldman. All told, that means Buffett is walking away with a $3.2 billion profit on his four-and-a-half-year-old investment in Goldman, for a return of 64 percent. A classic value investor move. Swoop in when others are selling, and pick up dollars for pennies. Buffett’s legend is secure.

The investing public might need Buffett to remind them to “Be Fearful When Others are Greedy”. In a September, 19, 2013 interview on CNBC, Buffett said that “Stocks are more or less fairly priced now. “We don’t find bargains around but we don’t think things are way overvalued either. We’re having a hard time finding things to buy.”

The stock market reached its low around March 9, 2009, and it’s been more or less a booming market for almost five years. However, January 2014 saw the Dow-Jones stock market index dropped 5.3 percent and the S&P 500 slid 3.6 percent, their worst monthly percentage declines since May 2012. “When the first month of the year is negative, the chances of finishing the full year in the plus column drop to roughly 50-50, according to the Stock Trader’s Almanac (Source: “S&P 500 ends January with a loss: Bad 2014 Omen?” by Adam Shell and Kim Hjelmgaard, found in 1-31-2014 USA Today).