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Jeremy Schalf

Tips for Paying Down Debt

  • Try to pay more than the minimum monthly amount required by your card issuer. Keep in mind that paying just the minimum amount required by your card issuer can cause your interest charges to balloon out. So, if you are serious about your desire to pay down what you owe, in the soonest possible time, then try to consider how you can allocate more funds to pay off your monthly credit card bills.
  • Come up with strategies that you can use to gradually pay down your credit accounts. To do this, you may decide to concentrate first on paying the debt that imposes the highest rate of interest. After all, this strategy is proven to help consumers save a great deal of money on interest charges. You may also decide to settle either the oldest or lowest credit transactions, whichever you find easier to pay off first.
  • Alter your spending habits. It would be counterproductive for you to continuously use your credit card to finance your purchases as well as your monthly bills, especially when you have started working on your plan to get rid of your credit card debt. This means that you have to limit the use of your card account until you are able to fully retire your credit obligations. So, you may need to change your spending habits and activities, for the time being. For example, you should resolve to use cash to pay for all your transactions. And you may need to lay low on the use of the extra facilities of your card account, such as cash advance.
  • Seek for professional assistance. You may also decide to seek professional help, especially if you do not have any prior experience in paying off huge credit card debt. Look for blogs and articles written by finance experts on how you can get rid of your debt, fast. You may also decide to sign up for credit counseling services. After all, a certified financial adviser can provide you with helpful tips that you can use not only to completely retire your financial obligations, but also to fully-rehabilitate your credit history.

Profitable Options for Gold Investors

Physical Gold

The simplest way to buying physical gold is to procure bars and coins. The practice has been widespread for a long time and continues to be a favorite of many people that enjoy having physical possession of this precious metal as a kind of investment. Possessing gold in its physical form brings peace of mind to many.

However, one must be careful and do some homework when buying gold. It is reported that Chinese-made counterfeit gold coins are in circulation in the US market. So, you should stick to buying gold coins produced in government-owned mints only. Often, these are sold at a premium. Some of the recommended gold coins worth buying are the American Eagle, Canadian Maple and South African Krugerrands.

Gold Mutual Funds

The benefits of buying mutual funds are well-known. Investing in gold mutual funds allows you to expand or restrict your risks. When considering to invest in such mutual funds, look for funds that have stocks in companies using modernized techniques of mining and purifying the metal. You stand to profit more through such companies, compared to old companies following the traditional style of mining, or those that are rather new in this business.

ETFs

The latest trend is to buy stocks of SPDR Gold Trust ETF. This is an exchange traded fund (ETF) and its working is just like any other stock or a mutual fund. The main benefit of this kind of investment is the fact that you are saved the hassle of looking for a source for the gold and you also avoid any expense for its safe storage.

Junior gold stocks

If you have the capacity to take more risks, you can invest in these stocks, which are most likely not to have their own mines. Generally, they are occupied with the exploration of gold and thus more prone to incur loss. Their capital is quite low, compared to matured gold companies.

Gold futures

Unless you are a highly experienced investor, you should refrain from this activity. This is easily the most difficult form of investing in gold and it is very risky. Trading in gold futures is too difficult to be understood by majority of investors.

Laws Affecting Money

Growing up I think it’s safe to say that, we all learned how to earn money. Go to school, do well then get a good job. A good job with benefits that pay well and has security. Then there are jobs that aren’t secure and most times don’t require good education. They are the jobs that are based on commission. For many people, it’s a bad word that they run away from but for the ones that work at it, it pays well. Dividends. Whichever way you choose to earn money, your goal should be to earn as much as possible when you’re young. Earning money is simpler than making money but the result is the same, you would have obtained money that needs to be managed. The choice to make money instead of earning money will most times depend on how you were raised. Employees earn money and the self-employed or business owner make money. Either way we choose to get money, we are all subject to laws that regulate the various methods. If you are an employee then your concern should be the Employment Standards Act, which protects the rights of employees. The ESA sets out the minimum you should be paid, how you should be treated and a few benefits that you are entitled to such as vacation pay and holiday pay. If you’re self-employed or own a business then Income Tax Act and various Municipal By-laws should be of more concern for you.

Managing money, not a lot of us were taught this or it wasn’t emphasized. Managing your money is all about budgeting it. Simple, yes but a difficult habit for many to adapt. Most people just think of their bills when they get paid. Now the tools for creating a budget can be as simple as a piece of paper and a pen or a software like excel or even more advance Microsoft Money. Whichever you choose it is important that you make it a habit. Don’t worry too much about staying on track because that comes with time. Just start. When you start try to create budgets that are one to two months ahead only till you get better at staying on track. If you are not paying your bill on time you may end up in collection where a collection agency starts calling you to get you to pay your debts. In this case you would be affected by Consumer Protection Act and the Collection Agency Act. “The average Canadian’s consumer debt load hit $27,485 at the end of 2012, a six per cent increase over the previous year’s level and the first time the figure has been above $27,000.”, according to http://www.cbc.ca. This amount doesn’t include mortgage debt but things like credit cards, car loans and lines of credit. Here is a tip about dealing with collection agencies, you can request that they only contact you by mail and not call you anymore. If they don’t comply with your request then you can report them to Consumer Affairs which would issue them a fine. Individuals whose income and other assets are not sufficient to pay their financial obligations as they come due are insolvent. At this point you might have to declare bankruptcy. In which case, you would be affected by the Bankruptcy and Insolvency Act. This act performs 3 functions: protect creditors, give debtors a clean slate and help debtors and creditors compromise. So it is important that you manage your money well.

Now if you can do a decent or great job at the former two then you have some money to invest. Now you’re ready to have money work for you instead of you working for money. At this point I suggest you speak to a financial professional. Make sure they are qualified. It’s best to talk to your bank. Make your banker your friend. Have a regular dialogue with an account manager at your bank. Do your own research on investments but keep it simple. If the book starts out with formulas then put it down and look for another book. There are 4 basic things you should know about investing. One, start now. Long-term compounding is one of the most powerful tools available to investors. With compounding, your savings generate earnings, which are then reinvested to generate their own earnings. It’s never too late to start, but the sooner you begin, the better. Two, don’t avoid risk; manage it. A well-balanced portfolio divided among asset classes such as stocks, bonds and cash equivalents may help you manage risk and reduce the ups and downs of the market. This is where your banker plays a big part when you’re starting. Three, maintain a long-term outlook. Investing is not a sprint, it’s a marathon. Four, Avoid or postpone taxes when possible. This means deposit heavily into your RRSP then into your TSFA then if you got any left over to invest talk to your banker. The Securities Act protects investors from unscrupulous investment professionals and other investors.

Easy Debt Elimination Methods

Debts can always have very bad effect on your life especially if you want to borrow loans from the banks. This is because debts usually have very huge effects on your credit score. It would therefore be very important that you find a way of eliminating debts. This calls for a lot of financial discipline when it comes to using credit facilities like the credit cards. To help you eliminate debts easily, there are always a number of steps that you may take.

These steps include avoiding impulse buying as much as possible. Impulse buying can always lead to exhaustion of your resources way too far before your next pay day. This may force you to borrow more funds from friends or lending institution. This will in turn lead to increase of your debts. It is therefore important to eliminate impulse buying as an easy way of debt elimination.

Stop Spending What You Can’t Afford In order to eliminate debt, it is important that you stop spending what you can’t afford. If you can’t afford it, then don’t buy it. Many people today are living above their means, putting themselves further and further in debt. If you want to pay off debt, stop spending. If you don’t take this step, you will never be able to fully get out of debt.

Another easy way of debt elimination is using common sense when you go shopping. This may seem very obvious but is very efficient and effective. This will help you getting into much debts that would prove very difficult to repay. To easily achieve this, it is always advisable that you pay for everything you buy in cash and only utilize your credit cards during emergencies.

You may also research on money saving opportunities like the low interest rates and credit card offers. This can help you save a lot of money on interest rates you pay. Credit card offers will also allow you shop at reduced prices and this may help reduce that amount of debts that you take.

Only Use Cash Let’s face it; it’s far too easy to pull out a credit card whenever we see something we really want, and for someone struggling to clear his or her debt, this can spell disaster. Additionally, it’s incredibly more difficult to keep control of your spending when using credit cards. On the other hand, when you pay for everything with cash rather than with plastic, you tend to be far more careful with regards to your spending.

You can also eliminate your debts by repaying for you in good time. This will eliminate the fines that you pay late may be charged. This in a way will also help in debt elimination.

There is no doubt that if you have a serious debt problem it can really cripple you in so many ways that it takes over your entire life. If this is the case then you should really try to get some help with your situation and for this you can consult a number of debt relief companies no matter where you live.

Ways to Make Extra Cash Today

  • Babysitting
    Babysitting is a very easy to make some extra cash when you are in need. If you have a young neighbor or young brother or sister you can probably make about $15 an hour to watch them for short periods of time. Offer to watch your friends kids so they can go out on a date, it is fairly easy to find a kid who needs a babysitter.
  • Return Past Purchases
    Recently bought some electronic or got a crappy gift and still have the receipt? There’s a good chance that you can take the product back to the store you purchased it at and get that money back for yourself. A very easy way to get some extra cash for yourself.
  • Recycle Scrap Metal
    Have a car? You can go around your town during trash day and take scrap metal from people’s trash, like copper piping, and sell the metals to scrap metal yards. A very easy way to make some cash today and it offers a great opportunity to make a lot of it.
  • Sell Roadside Items
    You can buy a $5 30 pack of water and sell the bottles for a dollar a piece on hot days. It is a quick and easy way to make an extra buck for those desperate times. While it may be embarrassing, chances are you can sell a few packs of water in under an hour, making you a lot of cash.
  • Make Things to Sell
    If you are crafty you can make your own business and sell things such as t-shirts, soaps or perfumes. You can sell your product on websites like Etsy and make a lot of money for yourself.

Protect Yourself From Fraud

Secure Servers

The way most online identity thieves acquire your private information is by making fake wi-fi hotspots or creating dummy shopping sites. When you are online shopping, make sure that you know the site, know the server and make sure the site looks real. Is there comments, reviews, photos of the products? Do they have a secure log-in space with functions to weed out automated bots? Is there a “Contact Us” section? Are there other reviews of the site online that you could be looking through? These are a few of the things you can look out for before you enter in all your payment information. In addition, do not log-in to a wi-fi network that you don’t know. If you are at public place using their wi-fi, make sure your firewall is in place and do not go shopping or pay bills while on a public server.

Shredding Sensitive Documents

Another way frauds get a hold of your financial information is by going through your trash. Yes, all those bank statements and credit card bills that you throw away without a second thought, people can go through your garbage, collect these documents and construct new accounts under your name. With a simple credit card application and a change of address form, they can begin using your name to make big purchases without you ever knowing about it. And you’ll be none the wiser, until you go to buy your dream house and your credit is very bad. Instead, tear up or shred those documents so they cannot be reconstructed.

Look Closely at Statements

Most people just do a cursory glance at their bank statements and then throw them away. But if you look closer you may be able to see the fraud. If you notice charges that you don’t remember making or the purchase location cannot be determined, you could have a problem on your hands. As stated earlier, many thieves use untraceable servers to steal money, so be sure that you can remember making any and all purchases on your account. Often, they will make small purchases, less than $10. The charges are so small so you’ll just brush it off as a coffee stop or snack break that you forgot. But when it happens a few times a week for a year, those charges add up. Sign up for online banking apps so that you can see your accounts at any moment as well.

Online Payday Lender

Monthly budgets are meant to be monitored. It is important to know where your money is going and to be aware of the balance throughout the month. Too many overdraft charges eat away at income because an individual ‘though’ that they had enough money in the bank to cover the bill. These types of charges are often caused by the lack of financial awareness. Along with this charge, a merchant whose payment did not go through will also charge their own fee. Late fees and NSF fees only add to the cost of a money mistake. Anytime you can avoid these types of fees, the better off you will be. Avoid embarrassment with businesses and prevent future repercussions by maintaining enough money in your account to cover approved payments.

Some people use online direct payday lenders to keep fees out of their bank accounts. The simple transaction of getting extra money into the bank in order to cover scheduled or emergency costs is cost effective when the loan is paid quickly. The key to a short-term loan’s effectiveness relies on being able to pay back the lender on time. Look closely at the next paycheck and what demands are placed on it within your budget before you commit to using a portion of your payday to pay off the direct lender. The last thing you would want to do is to pay more than what is necessary.

There are many repeat short-term loan customers who appreciate the cost effective quick money option. They use them for emergencies when other options are no longer available. This often means that credit cards are no longer an option. The majority of Americans would normally use credit cards to pay for unexpected bills rather than turn to a payday lender online. Not all people continue to have credit as an option. The search for a best direct lender is often the next step in finance solutions.

These fast cash loans will not support all money problems. Most often these loans are processed for a few hundred dollars. The high interest is then limited by a small balance as well as a fast payoff. In order to insure that you keep the costs low, it makes perfect sense to pay the loan off as fast as possible. Some borrowers choose to spread the cost out over a few paychecks while paying the balance down each time. Lowering the balance with each payment keeps the extra cost of interest declining as well.

What can your budget afford? Make sure you understand the answer before you obtain any outside money. If the cost of the loan is a burden, then don’t do it. Talk to family or possibly a close friend who may be able to lend you money or at least point you in a direction you can afford. Getting help for a money emergency should set your budget back on track not knock it off completely.

Personal Financial Self-Improvement

  • List your income and expenses. List where the income and expenses come from, whether the expenses are fixed or variable, and what expenses you know will be coming up in the future. This will give you an overview of what you have to work with.
  • Create a Wants and Needs list. Please ensure you know what the differences between the two are because they can easily be mistaken when we really want something. For example, that cup of Starbucks coffee every morning is really a want… the first step to recovery is admitting you have a problem. I gave up my Starbucks addiction because I realized I was spending nearly $100 (give or take a few days) a month there. That’s $100 that can be better spent on things I need, like new shoes for my kids, food for my animals, laundry soap, etc.
  • Get rid of the credit cards. They are evil, horrible things that try to rule our lives. If you can’t purchase something with cash, then save up for it, but please, please, please don’t put it on credit! Ask anyone who has credit cards… it’s a black hole that you continuously drop money into every month. For example, say you have a $2,500 credit card that you accidentally maxed out (we never really mean to max it out… we just found more stuff we need). Say your APR is around 18% (average); you’d be paying about $38 per month in interest. So, maybe you’re paying $50/month toward this credit card debt… you’re only paying $13 toward the actual debt, which would take you 334 months (27.8 YEARS) to pay off, and you’d have actually ended up paying $8,397 for the $2,500 worth of purchases. Again… a black hole that you drop your money into. Don’t do it!!
  • Create an emergency fund. No, I’m not talking about an emergency fund for things like a new pool table, or a new outfit (unless, of course, it’s a necessity). I’m talking about an emergency fund to live off of in the event of an actual financial emergency (i.e. your refrigerator goes out, your car needs new brakes, you need to pay your homeowners deductible to fix the AC in the middle of summer). Ideally, you’ll want to have three to six months of your monthly income put up. I know it’s hard to get there (I’m still working on it), but budget in a little money each month to get started.

 

Money Market Accounts

Interest

Money market accounts are usually subject to higher interest rates. This means that you get more for doing essentially the same thing as keeping your money in a classic savings account. This is because money market accounts are pooled in a different fund used by investors to produce higher profits. This more aggressive form of investing can potentially open up to loss of funds, but this is highly unlikely and has never actually occurred. With the risk being this low, the higher interest rates are widely accepted as a smart trade off.

Access to Funds

Another benefit is that you have more access to the money you deposit into it. Unlike a savings account where you may withdraw a maximum of three times per month, you are allowed to withdraw or transfer out six timers per billing statement. Additionally, most banks will allow you the option to write checks directly from it. Even better, many banks will also allow you to pair a debit card with the account for easier withdrawals and spending. This allows for greater flexibility than a standard savings account.

Security

As mentioned above, these accounts have never lost any money. This makes them a safer place to leave your money while still receiving a decent return. With the volatile nature of the stock market, this is certainly a better guarantee to maintain and build your funds.

Drawbacks

While a money market account is more appealing than traditional savings in terms of returns, it certainly does not compare to the returns of a mutual fund or other stock options. If your primary interest is to generate greater income, then this safer option might not be for you. To put it into comparison, a stock can return on average 8-10% while these bring closer to 2-4%. At best, you are looking at making half of the amount.

Discreet Millionaire

Figures from the Tax Policy Center say if your annual household income is $107,628, you are in the top 20% of income earners. If you exceed $148,687, you are in the top 10%. The top 5% earn over $208,810. And if your household income is over $521,411, congratulations. You are one of those “1% ers” and likely demonized by those who view hard work and risk-taking as a matter of luck or good genes. However, like a company, your personal balance sheet should be the determining factor. If you make $200,000 a year it does you no good if you’re spending $210,000.

You may in fact just appear rich instead of actually being rich.

Take for example the recent news about NBA legend Alan Iverson. Shockingly, a man who before age 35 had amassed a fortune more than the average person will see in a lifetime had blown it all. To quote from the article: “Iverson blew through his money at an alarming rate on gaudy jewelry, expensive cars, and other frivolous purchases. In 2012, a Georgia judge garnished his wages to satisfy a $859,896.46 debt to a jeweler.”

Huh? Almost a million dollars to a single jeweler! Here is a man who not only looked rich but actually was rich. But because the desire to look rich overwhelmed him, he is now begging for change on the street. He does stand to get $30 million from a trust, but not until age 55. It will be interesting to see if he learns his lesson, if he can survive until then. My guess is that $30 million will be gone before he reaches “official” retirement age.

This is why net worth is a far better gauge of true wealth than income. The Federal Reserve Survey of Consumer Finances indicates a net worth of $415,700 puts you in the top 20% of households. You are in the top 10% if your net worth is $952,200. (Dr. Thomas J. Stanley – author of The Millionaire Next Door – says that one in eight American households has a net worth of $1 million or more. That’s close) If your net worth totals $1,863,800, you are in the top 5%. And if you have a household net worth of $6,816,200, ta daa- you are in the top 1%… and possibly frowned upon by redistributionists who resent folks that live beneath their means, save regularly and handle their financial affairs prudently.

Most millionaires are quite the opposite of being big spenders. They spend far less than they can afford on all commonly owned assets. The want to-be’s, on the other hand, (people with average or higher than average income but little net worth) are merely “aspirational.” They buy expensive clothes, top-shelf wines, luxury cars and often more house than they can comfortably afford.

It’s ironic the very same thing that makes them APPEAR rich prevents them from ever BEING rich.

How then do you become rich if you aren’t currently? The basic formula is pretty simple: Maximize your income (by upgrading your education or job skills). Minimize your liabilities (by living beneath your means). Save the difference in an IRA or 401K (I know easier said than done.) And follow proven investment principles.

Sure you must learn to be frugal. But eventually becoming financially free, to be able to do and go wherever you want, not have to depend on a bonehead of a boss or the federal government is what I consider rich. What a feeling.

Some people refuse to change, but the bottom line is clear: If you want to be rich, you have to stop appearing like it and actually start living like the many real millionaires you won’t see on TV.