Five Secrets for Long-term Financial Success
Future financial success is not a guarantee that any one of us can rely upon, no matter how wealthy we are now or intend to become.
There are however five future proofing financial steps that we can take to protect our current financial status, improve our future financial prospects and secure our long-term financial success.
1) Know The Different Between Good Debt & Bad Debt
Bad debt is any debt that accrues interest month after month on outstanding balances and includes credit card debt of course, which is now the most common type of bad debt that we are all burdened with. Other examples of bad debt include store card debt, home secured loans other than your mortgage and any money borrowed from lenders dealing with high risk borrowers as they charge the highest rates of interest and have the most restrictive and inflexible terms and conditions.
Good debt is really only your mortgage, although some people would argue with me and include car finance in this category even though a car is not an essential item for most people ? if we’re honest with ourselves! Good debt in the form of your mortgage enables you to afford the roof over your head and for most of us it is the only way we will ever be able to afford a home.
Financing Collectibles for Fun and Profit
With the advent of the internet and especially auction services like those provided by Yahoo and E-bay, serious collectors have much larger arenas in which to buy and sell their wares. This provides the opportunity for quick discovery of hard-to-find items that previously might have taken years to find.
Depending upon the rarity of the collectible and the owner’s awareness of its value, prices may range up to thousands of dollars for something of true quality in above average condition. However, there are still bargains being found everyday. A lot of things are being sold for a fraction of their true values simply because the owner wants to free up some space or rid themselves of what they perceive to be unnecessary clutter.
Savvy collectors know, not only the true values of the items that they collect, but also where and how to sell them for a profit. Unfortunately, if the item available costs more than available cash, the opportunity of a lifetime can remain unrealized. The question is: how to prevent this opportunity from being lost forever.
The answer is financing.
Debt Management ? More Ways to Save on Gas Consumption
The price of gas continues to climb, and with continued uncertainty in the Middle East, they will probably continue to do so. In California and elsewhere, prices for some grades of gas have now reached the previously unthinkable three dollars a gallon. Granted, that is lower than the inflation-adjusted prices of early 1981, but that doesn’t make anyone feel better when they’ve just paid nearly $100 to fill the tank of their sport utility vehicle.
In a previous article, we offered some solutions as to how the average consumer can either save on gas prices or use less gas. These tips included using credit cards with cashback rebates, keeping your car tuned and tires inflated, and keeping the car washed and waxed, which reduces drag. Here are a few additional tips which will help ease the strain of filling your tank.
Accessing Funds You Never Knew You Had- Household Utilities and Mortgage Expense Reduction Plan
For most of us the process of getting out of debt and pursuing a venture that would create an income stream leading to early retirement seems just a pipe dream. It goes without saying; it takes money to make money. Most of us have had our eye on pursuing a stock, invention patent, greater education or a small business only to have our goals cut short because of lack of funds. The fact is we may have access to more funds than we realize. In this article we will discuss the three keys to having your money make more money sooner than later. The three keys are:
Reducing Expenses By Cutting Costs
Reevaluating Your Financial Situation
Freeing Up Financing Funds
Channeling Funds Toward Your Goal
Reducing Expenses By Cutting Costs
The key to finding money is freeing up funds from current expenses. We are all accustomed to doing things like turning out the lights, cutting back on gasoline consumption or reducing heating and air use. We use coupons to cut shopping bills in half and do the two for one meal deal whenever possible. But did you know that if you smoke a pack of cigarettes a day, it is costing you almost $3000 a year. Over 10 years that $30,000 dollars. What could you do with all that money? Improve the quality of life.
Improving Your Financial Position
If you want money you need to learn how to control it. You need to improve your financial education and build your discipline. I am going to reveal to you how you can do both. Let me ask you a very simple question. Do you want money? Of course you do!
Everybody wants money. You might think my next questions are even sillier, but I’ll ask them anyway. Would you like to have money all the time? Do you really want money?
You see what I am asking you, by adding the word “really,” is do you actually want the money itself or do you want the freedom it can buy you? Ahh. Now you see what I am getting at. What you really want is the freedom that the money represents. What you really want is freedom.
Access to money allows lots of freedom.
What would be the point of being a millionaire or even a billionaire if you were serving a prison sentence for the rest of your life? Your loss of freedom would render your prime use for that money next to useless.
Government Grants - Beware of Scams
As the saying goes: “Buyer Beware”. If you see ads claiming you qualify to receive a “free grant” for education, to start a home business or to payoff unpaid bills, be wary. Scam artists will claim your grant application is guaranteed to be accepted and approved, and you never have to repay the money. But the Federal Trade Commission (FTC) warns that these grant offers are often a scam. The grant isn’t free, nor is it guaranteed, nor is a refund.
According to the FTC, some scam artists market “free grants” in classified ads and even provide a toll free phone number. Here’s an example of what happens when you call:
A company representative asks non-threatening, simple questions to supposedly determine if you qualify to receive a grant. The representative then acts as if he/she is checking your eligibility, and then congratulates you as being eligible. But for you to get the grant information from them, they will charge you a processing fee. Although they will promise you that the grant is guaranteed or you can get your money back, the truth is far different.
One Income Source Is Not Enough!
My personal opinion is that in today’s new economy, it is wise to have multiple income streams. Reliance on one income source poses a risk to individuals, entrepreneurs, and even large corporations. A single-source income stream, rather it comes from a job, a million-dollar customer, or a highly targeted market segment can dry up for any number of reasons.
I live in Michigan where many people derive their income from the auto industry. A downturn in that industry can affect masses of people in various industries because their critical source-point is the auto industry. In fact, before I got laid off from IBM last year, Ford was their biggest client here in Michigan. As Ford started making drastic cuts, so did IBM and many other IT consulting companies. This trend happened over and over again and our mid-western economy has still not fully recovered.
People still assume that a job provides security but the reality of unemployment tells an entirely different story. I was laid off for 7 months and I had plenty of time to come to terms with my own financial vulnerability. Financial consultants have always advised a person to have 6 months income saved up and as sound as this advice is, many people don’t even have 2 months income saved up; they are actually living from paycheck to paycheck.
Save On Food - Ten Tips
To save on food, be an opportunist. Buy what you like, but buy on sale. Do you need oranges every day? Buy them when they’re cheap, then buy grapefruit or orange juice when it’s on sale. Opportunism is the key to low-cost living in general. You get everything you like, and lots of variety, because everything goes on sale once in a while. Here are ten more ways to get cheap food.
1. Stock up during sales. We recently bought 20 or 30 cans of tomato paste on sale for 10 cents per can. That’s cheap food. You can do this with all non-perishables.
2. Try store brands. Some are as good as name brands and some aren’t, but all are cheaper. Test them, maybe without telling the kids.
3. Buy fruits and vegetables in season. They are at their highest quality at the point where the price is the lowest.
4. Garden. Gardening can be a great way to stay in shape, and can help you save on food as well.
5. Fruit trees. Even if you don’t like to garden, you can have a fruit tree or two that take care of themselves. We love to snack on the grapes and peaches that grow behind the house.
Saving Dimes Can Go a Long Way
On the other hand, there are those people who are saving dimes and every other cent. Perhaps its because they hate the clutter of change but want to get rid of it instead of letting it accumulate elsewhere or still rely on the fact that change has value and should be used accordingly. For those who find it hard to save, start with a small piggy bank and contribute any lose change to that bank and let it grow. Change that you were going to use to buy a snack from the vending machine or soda, use to contribute to your piggy bank. Bring snacks and drinks from home to save on cash.
Saving dimes may seem difficult to do but as stated before simply start contributing any lose change into a piggy bank. Then take on the next step. If you haven’t created a personalized budget for yourself, now is the time to do so. A personalized budget lets you know how much money you have going out and how much money you have going in based on a monthly budget. Included in money going out will be all expenses for the month from mortgage/rent, utilities, food, gas, etc, and money that you are contributing to your savings. Income sources are listed under money coming in. Ideally you’d like to have more money coming in then going out. If you have more money going out, you are likely in debt, or on your way to debt.
The Magic Of Compound Interest
Christians are called to be good stewards of God’s resources. A steward can be described as someone who manages the resources of another. "The earth is the Lord’s and all that is in it, the world and those who dwell therein"-Psalms 24:1 (The New English Bible). To effectively manage God’s financial resources, it helps to have some understanding of modern day financial concepts, strategies, and mathematical formulas. Compound interest is a great ally in catapulting you toward achieving your financial goals. Through an understanding of compound interest, God can pour out a blessing upon you, which you will not be able to measure! Albert Einstein once called compound interest "the world’s most impressive invention" and dubbed it the "eighth wonder of the world." Compound interest means all the money you’ve invested earns interest and then the combined amount of the original investments plus your interest earns more interest. Compounding means interest added to interest. Compound interest does not produce linear growth like the pattern 1, 2, 3, 4, 5, 6, and so on; it produces geometric growth through compounding like the pattern 1, 2, 4, 8, 16, 32, and so on. Usually, the more frequently your money compounds when earning interest, the better. For example, daily compounding is normally better than monthly compounding, which is better than quarterly compounding, which is better than yearly compounding.
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