Are You a Financial Bull or a Financial Octopus?
To understand investment, you have to find out what kind of financial animal you are. Whether you believe in behavioral analysis or not, let us tell you that even Stanford and MIT are engaged in these studies. In addition, they’ve come up with pretty interesting analyses of real-world investment behaviors.
For example, a financial bull would be the big risk-takers. Willing to win everything or lose everything, financial bulls take risks like no one else. When they do lose, they don’t quit but become more aggressive in the effort to regain what is lost. Financial octopi on the other hand, have their hands on just about every kind of investment but they lack direction.
Why Credit Card Repayment is an Investment
You might get a very sour feeling in the pit of your stomach when you repay your credit cards. However, here’s the truth: you’re investing in your future when you’re repaying your debts. The reason for this is simple. Since most credit cards are operating at interest rates beyond 12%, you’re losing more money by not paying for something that you used yourself.
Let’s say you owe $28,000. How much would your debt be in a year? More than $70,000. Imagine saving that kind of money if you pay for the $28,000 as quickly as possible. When money is involved, keep a close fist. The closed fist in itself is an investment.
A Wonderful Retirement is a Debt Repayment Away
Let it be said that a retirement would only be comfortable if you know what you will be doing years and years before the retirement. Everything that you do with your money now has an effect on your last forty years here on Earth.
If you don’t believe us, then look to the streets. How many old people do you see out there who are struggling with unemployment and with no home? How many used to be big spenders but experienced poverty after losing their assets to unpaid, high-rated loans and debts?
We know you see the picture, so make sure you’re ready for that future if ever you decide that you don’t want to start saving for your retirement now.
No to Subprime: Forever!
If you didn’t get the loan that you wanted, then a subprime loan won’t be of much help. Don’t substitute a small pit for a bottomless one. If you have a history of poor income and an inability to pay interest rates and full debts on time, then don’t use subprime lending companies.
Do you know what subprime means? It means that you’re bound to pay more than what regular loans require. You’re going to be tossed around in a laundry machine full of blades for a few years. Your assets, including your home and car would all be in danger. People think it’s an easy way out; but it’s not.
Pre-Marriage Contracts
Before you jump into the whirlpool that is marriage and family, it’s time to sit down and think of a good way to protect yourself from financial ruin if ever things don’t work out in the end. Get yourself a pre-marriage contract. A civil contract, signed in the presence of a good lawyer can be of help when you’re walking amidst the debris of divorce.
It would also clear things up when you’re talking about real property and other liquid assets. These contracts would protect the both of you because it was signed with a clear head and more or less equitable predispositions. Think about it; some things really need paper and ink.
Should You Buy a New Home?
In the United States, getting a new home can be easy if you have the money. This is becoming rarer. Most people want to find the house first before planning on how to get the money. This is a very bad practice. The money should be planned and earned first, before the expenditures.
If you want a new home, make sure that you have what it takes to buy the home and to maintain it until your kids are old enough to leave home. This means more than three decades of responsibility. Are you up for the responsibility? If by any chance you are unsure, then rent first. Renting doesn’t mean you’re going to own the place eventually, but it’s a good temporary situation.
Why Young Professionals Are Generally Broke
When we talk about young professionals, we often come up with visions of wealthy, upwardly mobile individuals with lots of cash. That’s not necessarily true. While it’s true that young professionals are more open to many jobs, they still carry the burden of having absolutely nothing to depend on than their paychecks.
Living from paycheck to paycheck has never been an easy thing. There are more responsibilities to take care of, but never enough money to go around. In these instances, a person can end up falling deeply into debt and never recovering.
If you think you’re heading down that path, then it’s time to get some professional help, even if just in the form of professional budget software.
Divorce and the Ripples in the Empty Pool
When you end up being single after twenty years of marriage, things can become ugly very, very quickly. This is why you should be very clear about the conditions of the separation. Don’t allow your partner to get everything. Have a good divorce lawyer split the estate equitably. Don’t leave your other half in the cold either.
Divorce is about starting over. That includes your financial life. Make sure that before you sign on the dotted line, you’ve already reviewed twice or thrice the conditions of the separation and distribution of the accumulate wealth. Don’t burn bridges; never burn bridges. Make new friends in the process, including your estranged partner.
How Online Advisors Can Wreck Your Financial Life
Your financial life is a determining force. Whether you accept it or not, you hold on to nothing else except your own hard-earned money. That’s why you should be very careful about so-called experts on the Internet. More than half of these advisors don’t know what they’re talking about.
You can avoid incompetent people. However, what if you come across a seemingly competent and legitimate business but still end up being swindled? What do you do?
First, refuse any service that asks for access to your bank accounts. If they want to do that, have them give you a physical address where you can come and evaluate their services from there.
How Super-Savers Do It
Do you ever wonder how Super-Savers do it? How do they end up saving thousands of dollars a year by doing nothing special? If we look at the habits of thrifty people, then we would realize that they’re not doing anything special. They’re just more practical!
For example, have you ever thought cooking at home and putting your lunch and snacks inside a brown bag? Have you ever thought of not going out during weekends and using your DVD as an alternative entertainment center? All these small expenditures add up to thousands of dollars a year. Eliminating them would mean you’re saving the same amount or even more. So the next time you want to buy something off a store, think thrice before doing so!