" Tomorrow is not a reflection of what happened to you yesterday but rather what you chose to do today."
- Author Unknown
Would you like to raise your credit score in a hurry?
Did you know that there is a program that will give you the appearance of greater assets and payment history that can be acquired from any bank?
I have been telling people for years; Know the rules before you play the game. This, and various other strategies that I write about, are what the wealthy have been doing to achieve their riches. They learned the strategies and techniques necessary to get what they want and need in life. You can do it too. You just need to learn how.
What I write about gives the reader a foundation to build further studies upon and spark, hopefully, something within that makes you want to learn more about a topic.
Increasing your credit score by 40 points and lowering your interest rate by 2% can save you over $100,000 on a 30 year mortgage. Additionally, the higher your score, the less you may have to put down as a down payment.
For example, if your score is between 500 and 619, you will typically have a down payment of 30%. However, if your credit score is between 620 and 699, your down payment could be as low as 5%.
Consumers with a score of 620 to 699 typically do what are known as SIVA (stated income verified asset) loans. They state their income and must verify that they have some type of asset such as savings or retirement account, CD’s, or an annuity.
Consumers that do not have any or enough reserve assets can use a little known method called a Deposit Loan Program.
Here’s how it works.
A bank associated with a Deposit Loan Program deposits $25,000 or more into a bank account in your name and using your social security number. The account is deposit only therefore you cannot withdraw any of the funds.
The only purpose of this account is to make it appear as though you have some type of asset that the bank can verify. The borrower simply lists the bank account on their loan application and the lender contacts the bank and requests a verification of deposit (VOD)
Once the VOD is received, the problem of having no reserve assets is solved. In addition, if the lender requires that the VOD be seasoned (aged a number of months) or sourced (closing costs paid through account) these things can also be handled for a nominal fee.
Deposit loan programs charge a monthly interest rate for this service. This is where they make their money. Let’s say that they charge 1% of the $25,000 example. That would mean that they earn $250 per month. Let’s also say that the minimum term of the loan is 3 months. The total interest paid would be $750.
Another great feature of this program is that once you make your first payment. The account reports to the credit bureaus as a current installment loan.
Deposit loan programs are an excellent tool to build your credit quickly. Once you make your final payment, using our example of 3 months, the account gets reported to the credit bureaus as a paid installment loan of $25,000.
Typically, this program can increase your credit score 80 to 100 points in as little as 3 months.
Wednesday
12 Steps To Financial Freedom - Step 12 - The Beginning Of The End
“Patience and perseverance have a magical effect before which difficulties disappear and obstacles vanish”.- John Quincy Adams
Welcome to the beginning of your new fianacial life and the end to your old ways of being a prisoner of debt. No longer will you dread opening your mailbox to find bill after bill or get anxious every time the phone rings, thinking that it might be a collector.
You’ve come a long way and you should reward yourself, at least with a well deserved pat on the back.
Please take what you learned here and use it as a base or a starting point to expand your search for new and different ways to live your life. There is only a short space available here but if you do some investigation, there is a wealth of information available that didn’t appear here.
You are a changed person. You are a person that now hungers for this information and not only that, you are a person of action.
I would like to invite you to contact me for any advice, tips, resources or consultative services that you feel you might need. I have been personally helping people relieve their debt burden for 17 years and would love the opportunity to help you with yours. I am author of several books on the subject of credit, credit cards and debt education and host a radio show in Chicago called “The Debtonator” soon to be syndicated nationwide.
Let’s face it, almost all of us go through some tight financial times through our lives, but how we look at and face those times can set you apart from the crowd. Some people who are in a tight financial situation will let it take them down and they’ll use it as a crutch and blame all their woes on it, whereas another person in the same situation will say that money is tight, but that’s finances are not the end all and be all of their lives.
Life is what you make it.
Deeply dwelling on your financial situation costs you energy you could be using to improve your situation or at least try to make the best of it!
If you’ve always done things the same way, financially speaking, and your situation hasn’t improved, well then it’s time to do things DIFFERENTLY!
How do you do something about your current financial situation?
Do something different today so you can enjoy tomorrow more!
Welcome to the beginning of your new fianacial life and the end to your old ways of being a prisoner of debt. No longer will you dread opening your mailbox to find bill after bill or get anxious every time the phone rings, thinking that it might be a collector.
You’ve come a long way and you should reward yourself, at least with a well deserved pat on the back.
Please take what you learned here and use it as a base or a starting point to expand your search for new and different ways to live your life. There is only a short space available here but if you do some investigation, there is a wealth of information available that didn’t appear here.
You are a changed person. You are a person that now hungers for this information and not only that, you are a person of action.
I would like to invite you to contact me for any advice, tips, resources or consultative services that you feel you might need. I have been personally helping people relieve their debt burden for 17 years and would love the opportunity to help you with yours. I am author of several books on the subject of credit, credit cards and debt education and host a radio show in Chicago called “The Debtonator” soon to be syndicated nationwide.
Let’s face it, almost all of us go through some tight financial times through our lives, but how we look at and face those times can set you apart from the crowd. Some people who are in a tight financial situation will let it take them down and they’ll use it as a crutch and blame all their woes on it, whereas another person in the same situation will say that money is tight, but that’s finances are not the end all and be all of their lives.
Life is what you make it.
Deeply dwelling on your financial situation costs you energy you could be using to improve your situation or at least try to make the best of it!
If you’ve always done things the same way, financially speaking, and your situation hasn’t improved, well then it’s time to do things DIFFERENTLY!
How do you do something about your current financial situation?
Do something different today so you can enjoy tomorrow more!
Tuesday
12 Steps To Financial Freedom - Step 11 - A Business Of Your Very Own
“Most of the important things in the world have been accomplished by people who have kept on trying when there seemed to be no help at all”- Dale Carnegie
10 benefits to running your own business
People do not work for themselves to get rich; there's lots of research that disproves that common belief. Greed is rarely a motivation for taking the risk of free enterprise. Here are the real benefits:
1. Freedom - No boss means no petty rules, no asking permission to visit the dentist and the freedom to set your own goals.
2. Vision - You want to leave your mark on the world and change something. Running your own business enables you to do this to a greater extent than you could as an employee.
3. Control - You're in the driving seat and no one can come and close down your department as part of some global restructure. Your destiny rests in your hands alone.
4. Choice - There are no policies that dictate the car you drive, the software you use or the colour of the office wall. Your own organisation can reflect your personal taste and style.
5. Ambition - Your ambition is only limited by your ability to grow your business. Equally, if you want to stay small, you can.
6. Safety net - There are lots of insurance products out there that can provide you with a financial safety net. Long term sickness or your sudden death need not mean poverty for your family.
7. Work at home - It's likely you'll start a new business from home. That means you can get up at 0855 and be at your desk for 0900!
8. You choose your team - As you're the boss, you get to hire the people you want and not be stuck with who the boss hires to work with you.
9. Long holidays - Providing you can organise your business to allow it, you can take as much time off as you want, whenever you want.
10. Flexible - You can adapt quickly to new opportunity. You no longer have to feed ideas up the line for other's to make the decision.Over the past decade, a steadily growing proportion of the U.S. population have become attracted to the idea of having their own small business. Not only as an alternative to conventional employment, coping with early retirement or as a way of supplementing a family income, but also for the sheer satisfaction of being an entrepreneur and being rewarded solely on the basis of achievement.
Because different types of income are subject to different tax treatments, it is important to determine that the income in question is in fact from a business and not from rental (ie: renting the basement of your house), employment, a hobby, or a capital gain (ie: income from the sale of a building or land)
People in certain occupations are considered employees for employment insurance and Canada Pension Plan purposes, but are self employed for taxation purposes. Which means that income received will have the applicable taxes deducted and a T4 slip will be generated at the end of the year, but for income tax purposes they will be able to deduct from that income reasonable business expenses incurred to earn that income.
For income tax purposes as well as management of your business you should setup a simple bookkeeping system to include income and expenses. There are several systems available that will benefit you in:
1. Enhancing business information including budgeting and spotting of business trends
2. Readily accessible information that may be required from banks and other lenders
3. Faster processing of your business tax returns (income tax, GST/HST, PST) and assurance that expense deductions are not missed
4. Time savings in cheque processing and potential payroll processing
5. Organized business details in the case of a government audit
Keeping records is important because only those expenses which can be shown to have been incurred to earn income are allowable. Supporting documentation includes purchase invoices, contracts, bank statements, and canceled cheques.
Income tax records must be retained for a minimum of six years. Do not destroy receipts or account records for prior year without written permission from the tax department.
If your revenues are under $30,000 in gross sales you are not required to register for the GST, but may do so if you choose. Whether it is advisable to do so depends on the circumstances.
Business who sell primarily to other businesses may find it to their advantage to register for the following reasons:
Registrants can fully recover the GST paid for business related expenses against the GST they collect Registrants may be able to charge a lower price than non-registrants because they can fully recover all GST costs on supplies Business customers of GST registrants may claim input tax credits for the GST charged to them
Businesses who sell primarily to consumers, or whose product or services is very labour intensive may find it advantageous to avoid registering until required to do so.
Each case needs to be examined individually, taking into account all of the factors involved.
Individuals may claim all reasonable expenses incurred in the conduct of their businesses, provided they are reasonable in the circumstances and are incurred to earn income.
The business plan is a written summary of the overall activities of your business. It is a report on the company's sources and use of funds, management personnel, labour relations, products, services, marketing strategy, production techniques and research. It describes the past, present and future of your operation.
A typical business plan begins with a summary of your idea, the market need, the amount of capital required and the projected financial results. It then includes information about how your company is organized and who is involved. You should also include the research that you have conducted about the industry you are in, and how your product or service differs from your competition. This is a critical step to understanding your business operation and the degree to which you have developed a business plan can mean the difference between obtaining the financing you require and not.
10 benefits to running your own business
People do not work for themselves to get rich; there's lots of research that disproves that common belief. Greed is rarely a motivation for taking the risk of free enterprise. Here are the real benefits:
1. Freedom - No boss means no petty rules, no asking permission to visit the dentist and the freedom to set your own goals.
2. Vision - You want to leave your mark on the world and change something. Running your own business enables you to do this to a greater extent than you could as an employee.
3. Control - You're in the driving seat and no one can come and close down your department as part of some global restructure. Your destiny rests in your hands alone.
4. Choice - There are no policies that dictate the car you drive, the software you use or the colour of the office wall. Your own organisation can reflect your personal taste and style.
5. Ambition - Your ambition is only limited by your ability to grow your business. Equally, if you want to stay small, you can.
6. Safety net - There are lots of insurance products out there that can provide you with a financial safety net. Long term sickness or your sudden death need not mean poverty for your family.
7. Work at home - It's likely you'll start a new business from home. That means you can get up at 0855 and be at your desk for 0900!
8. You choose your team - As you're the boss, you get to hire the people you want and not be stuck with who the boss hires to work with you.
9. Long holidays - Providing you can organise your business to allow it, you can take as much time off as you want, whenever you want.
10. Flexible - You can adapt quickly to new opportunity. You no longer have to feed ideas up the line for other's to make the decision.Over the past decade, a steadily growing proportion of the U.S. population have become attracted to the idea of having their own small business. Not only as an alternative to conventional employment, coping with early retirement or as a way of supplementing a family income, but also for the sheer satisfaction of being an entrepreneur and being rewarded solely on the basis of achievement.
Because different types of income are subject to different tax treatments, it is important to determine that the income in question is in fact from a business and not from rental (ie: renting the basement of your house), employment, a hobby, or a capital gain (ie: income from the sale of a building or land)
People in certain occupations are considered employees for employment insurance and Canada Pension Plan purposes, but are self employed for taxation purposes. Which means that income received will have the applicable taxes deducted and a T4 slip will be generated at the end of the year, but for income tax purposes they will be able to deduct from that income reasonable business expenses incurred to earn that income.
For income tax purposes as well as management of your business you should setup a simple bookkeeping system to include income and expenses. There are several systems available that will benefit you in:
1. Enhancing business information including budgeting and spotting of business trends
2. Readily accessible information that may be required from banks and other lenders
3. Faster processing of your business tax returns (income tax, GST/HST, PST) and assurance that expense deductions are not missed
4. Time savings in cheque processing and potential payroll processing
5. Organized business details in the case of a government audit
Keeping records is important because only those expenses which can be shown to have been incurred to earn income are allowable. Supporting documentation includes purchase invoices, contracts, bank statements, and canceled cheques.
Income tax records must be retained for a minimum of six years. Do not destroy receipts or account records for prior year without written permission from the tax department.
If your revenues are under $30,000 in gross sales you are not required to register for the GST, but may do so if you choose. Whether it is advisable to do so depends on the circumstances.
Business who sell primarily to other businesses may find it to their advantage to register for the following reasons:
Registrants can fully recover the GST paid for business related expenses against the GST they collect Registrants may be able to charge a lower price than non-registrants because they can fully recover all GST costs on supplies Business customers of GST registrants may claim input tax credits for the GST charged to them
Businesses who sell primarily to consumers, or whose product or services is very labour intensive may find it advantageous to avoid registering until required to do so.
Each case needs to be examined individually, taking into account all of the factors involved.
Individuals may claim all reasonable expenses incurred in the conduct of their businesses, provided they are reasonable in the circumstances and are incurred to earn income.
The business plan is a written summary of the overall activities of your business. It is a report on the company's sources and use of funds, management personnel, labour relations, products, services, marketing strategy, production techniques and research. It describes the past, present and future of your operation.
A typical business plan begins with a summary of your idea, the market need, the amount of capital required and the projected financial results. It then includes information about how your company is organized and who is involved. You should also include the research that you have conducted about the industry you are in, and how your product or service differs from your competition. This is a critical step to understanding your business operation and the degree to which you have developed a business plan can mean the difference between obtaining the financing you require and not.
12 Steps To Financial Freedom - Step 10 - Work At Home Opportunities
“Try not to do too many things at once. Know what you want, the number one thing today and tomorrow. Persevere and get it done”- George Allen
Home-based businesses are the trend of the future. Government and industry reports show that increasing numbers of men and women are now opting to work out of their homes. In fact, the latest data from the U.S. Bureau of Labor Statistics show that 4.12 million entrepreneurs are now working at home, most of which are in services industry.
There is no greater way to get out of debt than to increase your income. A work at home business provides a great many benefits for the average family.
7 Benefits of Being a Home-Based Entrepreneur
Entrepreneurs are rediscovering the benefits of working at home. The continuously good performance of the economy, followed by a change in lifestyles buoys well for the home-based entrepreneur. Many people now wants to combine their careers with families, opting out of the rat race to spend more time with their families and take a more proactive part in raising their children. The technological innovations in the past decades have also made working at home easier and more feasible.
You need not look farther than your kitchen, bedroom, den, living room, or garage to find the foundation on which to build your business enterprise. Here are seven reasons why it pays to work at home:
1. To gain personal freedom.
The most enticing aspect of starting a home-based business is the opportunity it provides to gain control over your own life. As a home business entrepreneur, you can shape your work life depending on your goals and environment. There are no bosses to follow, no corporate culture to abide by, and no rigid work schedules nor time clocks. Instead, you have the freedom to work and earn as you choose, in the comfort and convenience of your own homes. Of course, having all the time and freedom to work as you please also has its drawback. Thus, a home business entrepreneur needs to have good time management skills and discipline to push yourself to work.
2. To reap financial benefits.
The financial benefits of working at home are equally attractive. The convenience of having your office a few steps away from your bed allows you to save on commute time, gasoline and transportation expenses. There is also little need to buy power suits and dress up every workday as you can work in your jogging outfit or pajama. Since you work at home, you save on rental payments and overhead costs are cut significantly; allowing you to plough all your capital and profits back into the business. Your earning potential is directly proportional to your performance: no more waiting for your boss to give you your raise or promotion before you can increase your income. More importantly, however, a home business allows people who have been frequently shut out of the job market--homemakers, students, retirees, and the disabled, to name a few-to to create new income opportunities.
3. To exploit tax advantages.
Using your home as a place of business offers a number of tax advantages. For starters, it allows you to deduct a part of the operating and depreciation expenses on your home. This means that a percentage of your rent or mortgage payment, depreciation, property taxes, insurance, utilities, and expenses for household maintenance, repairs, or improvements is deductible. You can also be entitled to deduct expenses from using a vehicle for your business, including gas, insurance, depreciation, and others. Consult your accountant for a careful evaluation of what can be and what cannot be deducted from using your home office.
4. To be with the family.
Many opt to start their business from their homes to strengthen family relationships. A home business allows family members to be involved in the business. Husbands or wives can help in various aspects of the business, while children have the opportunity to see what their parents do for a living. Parents, most especially, can both work and earn, while taking care of their children; although daycare arrangements or babysitter may be needed to help you concentrate on the work at hand.
5. To reduce stress.
Working at home can reduce the stress of juggling the demands of your work life with those of your private life. You can work while staying at home to care for a sick child, or continue to work late at night after preparing and sharing dinner with the family. Since you work alone, there is no office politics and deadlines imposed by your boss. You only need to follow the deadlines and schedules you have set for yourself.
6. For job enrichment.
As a home-based entrepreneur, you are not boxed into one job and given a label identifying you as a researcher, secretary, banker, manager, or administrative assistant. You are free to learn and perform a variety of work-related tasks. If you are a solo entrepreneur, then you even have to be ready of being all things for your business: the strategy setter, marketing and sales person, customer service representative, accountant and bookkeeper, and other roles. You can vary your activities to keep you from getting bored. While it means greater workload, the plus point is that you develop an understanding of all aspects of your own business. More importantly, personal growth is greatly enhanced as you learn what you can (and cannot do) and your goals become much more achievable.
7. To increase productivity.
Many home-based entrepreneurs find that working at home helps them to be more productive. With lesser time dedicated to commuting, there is more time available to work. More importantly, working for your own business - wherein the amount of financial compensation depends on your productivity and business management - increases the level of enthusiasm. Many get so caught up in what they're doing that it's actually hard for them to stop.
Home-based businesses are the trend of the future. Government and industry reports show that increasing numbers of men and women are now opting to work out of their homes. In fact, the latest data from the U.S. Bureau of Labor Statistics show that 4.12 million entrepreneurs are now working at home, most of which are in services industry.
There is no greater way to get out of debt than to increase your income. A work at home business provides a great many benefits for the average family.
7 Benefits of Being a Home-Based Entrepreneur
Entrepreneurs are rediscovering the benefits of working at home. The continuously good performance of the economy, followed by a change in lifestyles buoys well for the home-based entrepreneur. Many people now wants to combine their careers with families, opting out of the rat race to spend more time with their families and take a more proactive part in raising their children. The technological innovations in the past decades have also made working at home easier and more feasible.
You need not look farther than your kitchen, bedroom, den, living room, or garage to find the foundation on which to build your business enterprise. Here are seven reasons why it pays to work at home:
1. To gain personal freedom.
The most enticing aspect of starting a home-based business is the opportunity it provides to gain control over your own life. As a home business entrepreneur, you can shape your work life depending on your goals and environment. There are no bosses to follow, no corporate culture to abide by, and no rigid work schedules nor time clocks. Instead, you have the freedom to work and earn as you choose, in the comfort and convenience of your own homes. Of course, having all the time and freedom to work as you please also has its drawback. Thus, a home business entrepreneur needs to have good time management skills and discipline to push yourself to work.
2. To reap financial benefits.
The financial benefits of working at home are equally attractive. The convenience of having your office a few steps away from your bed allows you to save on commute time, gasoline and transportation expenses. There is also little need to buy power suits and dress up every workday as you can work in your jogging outfit or pajama. Since you work at home, you save on rental payments and overhead costs are cut significantly; allowing you to plough all your capital and profits back into the business. Your earning potential is directly proportional to your performance: no more waiting for your boss to give you your raise or promotion before you can increase your income. More importantly, however, a home business allows people who have been frequently shut out of the job market--homemakers, students, retirees, and the disabled, to name a few-to to create new income opportunities.
3. To exploit tax advantages.
Using your home as a place of business offers a number of tax advantages. For starters, it allows you to deduct a part of the operating and depreciation expenses on your home. This means that a percentage of your rent or mortgage payment, depreciation, property taxes, insurance, utilities, and expenses for household maintenance, repairs, or improvements is deductible. You can also be entitled to deduct expenses from using a vehicle for your business, including gas, insurance, depreciation, and others. Consult your accountant for a careful evaluation of what can be and what cannot be deducted from using your home office.
4. To be with the family.
Many opt to start their business from their homes to strengthen family relationships. A home business allows family members to be involved in the business. Husbands or wives can help in various aspects of the business, while children have the opportunity to see what their parents do for a living. Parents, most especially, can both work and earn, while taking care of their children; although daycare arrangements or babysitter may be needed to help you concentrate on the work at hand.
5. To reduce stress.
Working at home can reduce the stress of juggling the demands of your work life with those of your private life. You can work while staying at home to care for a sick child, or continue to work late at night after preparing and sharing dinner with the family. Since you work alone, there is no office politics and deadlines imposed by your boss. You only need to follow the deadlines and schedules you have set for yourself.
6. For job enrichment.
As a home-based entrepreneur, you are not boxed into one job and given a label identifying you as a researcher, secretary, banker, manager, or administrative assistant. You are free to learn and perform a variety of work-related tasks. If you are a solo entrepreneur, then you even have to be ready of being all things for your business: the strategy setter, marketing and sales person, customer service representative, accountant and bookkeeper, and other roles. You can vary your activities to keep you from getting bored. While it means greater workload, the plus point is that you develop an understanding of all aspects of your own business. More importantly, personal growth is greatly enhanced as you learn what you can (and cannot do) and your goals become much more achievable.
7. To increase productivity.
Many home-based entrepreneurs find that working at home helps them to be more productive. With lesser time dedicated to commuting, there is more time available to work. More importantly, working for your own business - wherein the amount of financial compensation depends on your productivity and business management - increases the level of enthusiasm. Many get so caught up in what they're doing that it's actually hard for them to stop.
Wednesday
12 Steps To Financial Freedom - Step 9 - Accelerating Wealth
“The will to persevere is often the difference between failure and success”
- David Sarnoff
What Do Millionaires Do?
They allocate their TIME, ENERGY and MONEY efficiently, in ways conducive to building wealth.
From a standpoint of investments, the following are some simple strategies that you can use to accelerate wealth building:
Use “bear markets” to your advantage, seizing opportunities to intelligently upgrade your portfolio.
Own stocks for only a few days and create double-digit returns.*
Identify, plan, and implement defensive & exit strategies to limit potential losses or downside risks.
Design a personal financial plan—establish your exact financial destination and learn strategies for accelerating your journey to financial freedom.
You need to be involved with cash flow AND growth investments to create true, lasting wealth. Parking your hard-earned money in one place, like the stock market, and praying that it increases, is the riskiest path of all. When you learn to use your money differently, what used to seem impossible, will become reality.
Universal Laws govern the Universe. They are basic principles of life and have been around since Creation. They are laws of the Divine Universe. Universal Laws apply to everyone, everywhere. They cannot be changed or broken. This universal law is working in your life right now, whether you are aware of it or not. You are attracting the people, situations, jobs and much more into your life. Once you are aware of this law and how it works, you can start to use it to deliberately attract what you want into your life. In using the Law of Attraction, there are several steps that can be taken to get you whatever it is that you want.
Step One Where are you now?
Being honest and clear with where you are now is the first thing you must do. Do not make it a bad thing, even though you are not where you want to be. Recognize “This is where I am, and I’m the one that got me here, and I have to get me out of here.” Don’t criticize yourself for things that have happened to you. You have to keep in mind that if you got yourself into the situation you are in now, you can also get yourself out of it.
Step Two
Where do you want to be?
Decide where you want to be, whether it is starting a business, making a lot of money, or something similar. Be very clear in what it is you want to be, write it down; do not just keep it in your head. When you write it down, keep it clear, if you want an online business where you can wake up and check your email to see ten sales of a hundred dollar product, and that is what you see yourself doing then you have to write that down, write down all the aspects of what you want.
Step Three
Learn to use your tools.
There are multiple things to do in this step, but one tool to use is visualization, taking the time to close your eyes and see the one thing that you what, and believing that you are where you want to be for at least a few minutes a day. Bob Proctor brings up an idea of mental money, and this is what he refers to. If you believe you have money, then you will. Therefore, step three is about using the tools of Laws of Attraction to bring that thing to you. Reading and researching the methods that Bob Proctor has written about and teaches will be very beneficial here.
Step Four
Start to take action.
Starting to take action, look for coincidences or those people who show up in your life that came out of nowhere, is what you have to do to continue your journey through Law of Attraction. You will get a feeling, it will jump out at you, when you meet someone or something that will move you closer to your goal. Don’t question these feelings. This is the universe delivering what you asked for, It is rearranging itself to bring you what you want for your life.
Step Five
Find yourself a mentor.
Go find someone who has done what it is you’re doing, and form a coaching bond with them, because that’s one of the easiest ways to get to where you are trying to go. In fact, Bob Proctor offers a training course for a few lucky internet entrepreneurs that get to study under him for a year. This might be the best way to receive that coaching bond that is beneficial to success.
Step Six
Start your transition slowly.
Taking baby steps is the key to Law of Attraction. Recognize that the journey of a thousand miles starts with a single step. You won’t be able to plunge yourself headfirst into achieving all of your big dreams, because your mind won’t have the ability to believe it when you start out. If you’re ready to make a change, tired of living this mediocre lifestyle, and you’re ready to take it to the next level, remember, there’s many other steps that you can take, visualizing what you want, finding a coach, those are things you can do that are going to get you to where you are trying to go.
Step Seven
Succeed!
Following these steps will put you on your way to becoming a wealthy, happy individual.
- David Sarnoff
What Do Millionaires Do?
They allocate their TIME, ENERGY and MONEY efficiently, in ways conducive to building wealth.
From a standpoint of investments, the following are some simple strategies that you can use to accelerate wealth building:
Use “bear markets” to your advantage, seizing opportunities to intelligently upgrade your portfolio.
Own stocks for only a few days and create double-digit returns.*
Identify, plan, and implement defensive & exit strategies to limit potential losses or downside risks.
Design a personal financial plan—establish your exact financial destination and learn strategies for accelerating your journey to financial freedom.
You need to be involved with cash flow AND growth investments to create true, lasting wealth. Parking your hard-earned money in one place, like the stock market, and praying that it increases, is the riskiest path of all. When you learn to use your money differently, what used to seem impossible, will become reality.
Universal Laws govern the Universe. They are basic principles of life and have been around since Creation. They are laws of the Divine Universe. Universal Laws apply to everyone, everywhere. They cannot be changed or broken. This universal law is working in your life right now, whether you are aware of it or not. You are attracting the people, situations, jobs and much more into your life. Once you are aware of this law and how it works, you can start to use it to deliberately attract what you want into your life. In using the Law of Attraction, there are several steps that can be taken to get you whatever it is that you want.
Step One Where are you now?
Being honest and clear with where you are now is the first thing you must do. Do not make it a bad thing, even though you are not where you want to be. Recognize “This is where I am, and I’m the one that got me here, and I have to get me out of here.” Don’t criticize yourself for things that have happened to you. You have to keep in mind that if you got yourself into the situation you are in now, you can also get yourself out of it.
Step Two
Where do you want to be?
Decide where you want to be, whether it is starting a business, making a lot of money, or something similar. Be very clear in what it is you want to be, write it down; do not just keep it in your head. When you write it down, keep it clear, if you want an online business where you can wake up and check your email to see ten sales of a hundred dollar product, and that is what you see yourself doing then you have to write that down, write down all the aspects of what you want.
Step Three
Learn to use your tools.
There are multiple things to do in this step, but one tool to use is visualization, taking the time to close your eyes and see the one thing that you what, and believing that you are where you want to be for at least a few minutes a day. Bob Proctor brings up an idea of mental money, and this is what he refers to. If you believe you have money, then you will. Therefore, step three is about using the tools of Laws of Attraction to bring that thing to you. Reading and researching the methods that Bob Proctor has written about and teaches will be very beneficial here.
Step Four
Start to take action.
Starting to take action, look for coincidences or those people who show up in your life that came out of nowhere, is what you have to do to continue your journey through Law of Attraction. You will get a feeling, it will jump out at you, when you meet someone or something that will move you closer to your goal. Don’t question these feelings. This is the universe delivering what you asked for, It is rearranging itself to bring you what you want for your life.
Step Five
Find yourself a mentor.
Go find someone who has done what it is you’re doing, and form a coaching bond with them, because that’s one of the easiest ways to get to where you are trying to go. In fact, Bob Proctor offers a training course for a few lucky internet entrepreneurs that get to study under him for a year. This might be the best way to receive that coaching bond that is beneficial to success.
Step Six
Start your transition slowly.
Taking baby steps is the key to Law of Attraction. Recognize that the journey of a thousand miles starts with a single step. You won’t be able to plunge yourself headfirst into achieving all of your big dreams, because your mind won’t have the ability to believe it when you start out. If you’re ready to make a change, tired of living this mediocre lifestyle, and you’re ready to take it to the next level, remember, there’s many other steps that you can take, visualizing what you want, finding a coach, those are things you can do that are going to get you to where you are trying to go.
Step Seven
Succeed!
Following these steps will put you on your way to becoming a wealthy, happy individual.
Tuesday
12 Steps To Financial Freedom - Step 8 - Building Wealth
" Be humble, be big in mind and soul, be kindly; you will like yourself that way and so will other people."
- Norman Vincent Peale
Establishing an emergency fund
This is the first phase of step 8 and it requires you to establish a fund equal to six months your monthly cash flow requirements. If your income was to suddenly stop, what would it take to sustain your standard of living for six months.
There are a few things you should know about building wealth before we actually begin.
1. Start early
More than any one stock or mutual fund pick, the age you start investing will determine how much wealth you build. To illustrate: Employee A starts putting away $100 a month when she's 22. Her money grows at 8 percent a year, and after ten years she stops contributing - and lets her stake grow. Employee B waits until he's 32 to set aside $100 a month, also growing at 8 percent a year, and he keeps it up until he hits 64. When they both retire at 64, she will have $234,600, and he'll have only $177,400.
2. Use your 401(k)
If you are working for a company that offers a 401(k) sign up and watch you dollars grow. Since you're putting in pretax dollars, a 401(k) is an unrivaled savings vehicle, and passing up an employer match is - literally - giving up free money. Confused about how to manage all the choices in your 401(k) plan? New pension legislation is encouraging companies to offer third-party investment advisory services, so call HR to find out if yours offers any on-the-house guidance.
3. Keep it simple
If you have a full-time job and it's not picking stocks, acknowledge that. Choosing three or four index funds - say, an S&P 500 fund, an EAFE fund, and a small-cap stock fund - will give you broad exposure. ETFs (low-cost mutual funds that trade like stocks) are also an easy way to invest in more exotic asset classes, like commodities. If you're close to retirement, consider life-cycle funds from Vanguard or T. Rowe Price, which will automatically rebalance your account according to your goals.
4. Don't try to beat the market
Even the best fund managers have trouble beating the S&P 500, so give up the chase. The most straightforward way to avoid this trap is to diversify your assets and then rebalance your portfolio at least once a year. Check your asset breakdown with Morningstar's free Instant X-Ray tool (www.morningstar.com). Essentially, rebalancing means selling some winners that are taking up too big a share of your portfolio and redeploying that cash to bulk up in areas that have lagged. (Buy low, sell high - get it?)
5. Don't chase trends
You want to grow your money for the long haul, so you can't switch your strategy every time you read the headlines. If you see an asset class that's catching fire - like real estate investment trusts (REITs) in the late '90s or commodities this year - ask yourself some basic questions: Can I describe how it works in plain English? If not, start your research at Investopedia.com. Why is it so popular right now? If the answer is "Paris Hilton bought some," best to stay away.
6. Make saving automatic
No one wants to think about saving - so don't. Already more companies are making 401(k) enrollment automatic (34 percent of big companies, vs. virtually none ten years ago). If you're already maxing out your 401(k), see whether your company can transfer money directly from your paycheck into your Roth IRA or a taxable account. Or ask if your bank can transfer a set amount (even $100 a month) from your checking account into a high-interest-bearing online savings account (check out HSBC's and ING's offerings).
7. Go heavy on stocks
The more time you have, the more risk you should take. If you're just starting out, 80 percent to 100 percent of your assets ought to be in stocks. The simplest trick? Subtract your age from 120: That's the percentage you should have in stocks; the rest should be in bonds. "If you have, say, 30 or 40 years, what happens over the next three months or even three years doesn't matter. If you need the money in two years and it drops 40 percent in one year, that's a problem," says Stuart Ritter, a certified financial planner with T. Rowe Price.
8. Hold down fees
Be wary of any mutual fund charging a management fee higher than 1 percent (a few stellar managers may be worth it; most are not). A manager with a high buying and selling rate (called "turnover") should also set off warning bells. If you aren't interested in watching your fund manager like a hawk, stick with an index fund, like one from Vanguard, where expenses are typically around 0.2 percent. And if you're trading stocks, don't be fooled by low commissions: They add up.
9. Ditch credit card debt
All debt is not created equal, so rank yours by interest rate and pay off the bad stuff first. That usually means credit cards, which can carry interest rates as high as 30 percent. (Compare your card's APR with others at Bankrate.com.) On the other end of the scale are student loans. Those rates are generally between 3 and 6 percent, so consider making the minimum payment and investing in your 401(k) instead. Hey, even Supreme Court Justice Clarence Thomas was still paying off his school loans when he joined the bench.
10. Defer taxes
Eager to lock in your gains on a hot investment? Before you click on sell, consider the tax implications. In a taxable account, you'll pay 15 percent in capital gains taxes every time you sell a winner you've owned for more than a year (the longer you can defer paying taxes, the more time you're giving your money to grow). Come tax time, however, it can be a good move to sell losers in your portfolio to take advantage of the annual $3,000 capital-loss deduction limit and offset any capital gains on your winning picks.
- Norman Vincent Peale
Establishing an emergency fund
This is the first phase of step 8 and it requires you to establish a fund equal to six months your monthly cash flow requirements. If your income was to suddenly stop, what would it take to sustain your standard of living for six months.
There are a few things you should know about building wealth before we actually begin.
1. Start early
More than any one stock or mutual fund pick, the age you start investing will determine how much wealth you build. To illustrate: Employee A starts putting away $100 a month when she's 22. Her money grows at 8 percent a year, and after ten years she stops contributing - and lets her stake grow. Employee B waits until he's 32 to set aside $100 a month, also growing at 8 percent a year, and he keeps it up until he hits 64. When they both retire at 64, she will have $234,600, and he'll have only $177,400.
2. Use your 401(k)
If you are working for a company that offers a 401(k) sign up and watch you dollars grow. Since you're putting in pretax dollars, a 401(k) is an unrivaled savings vehicle, and passing up an employer match is - literally - giving up free money. Confused about how to manage all the choices in your 401(k) plan? New pension legislation is encouraging companies to offer third-party investment advisory services, so call HR to find out if yours offers any on-the-house guidance.
3. Keep it simple
If you have a full-time job and it's not picking stocks, acknowledge that. Choosing three or four index funds - say, an S&P 500 fund, an EAFE fund, and a small-cap stock fund - will give you broad exposure. ETFs (low-cost mutual funds that trade like stocks) are also an easy way to invest in more exotic asset classes, like commodities. If you're close to retirement, consider life-cycle funds from Vanguard or T. Rowe Price, which will automatically rebalance your account according to your goals.
4. Don't try to beat the market
Even the best fund managers have trouble beating the S&P 500, so give up the chase. The most straightforward way to avoid this trap is to diversify your assets and then rebalance your portfolio at least once a year. Check your asset breakdown with Morningstar's free Instant X-Ray tool (www.morningstar.com). Essentially, rebalancing means selling some winners that are taking up too big a share of your portfolio and redeploying that cash to bulk up in areas that have lagged. (Buy low, sell high - get it?)
5. Don't chase trends
You want to grow your money for the long haul, so you can't switch your strategy every time you read the headlines. If you see an asset class that's catching fire - like real estate investment trusts (REITs) in the late '90s or commodities this year - ask yourself some basic questions: Can I describe how it works in plain English? If not, start your research at Investopedia.com. Why is it so popular right now? If the answer is "Paris Hilton bought some," best to stay away.
6. Make saving automatic
No one wants to think about saving - so don't. Already more companies are making 401(k) enrollment automatic (34 percent of big companies, vs. virtually none ten years ago). If you're already maxing out your 401(k), see whether your company can transfer money directly from your paycheck into your Roth IRA or a taxable account. Or ask if your bank can transfer a set amount (even $100 a month) from your checking account into a high-interest-bearing online savings account (check out HSBC's and ING's offerings).
7. Go heavy on stocks
The more time you have, the more risk you should take. If you're just starting out, 80 percent to 100 percent of your assets ought to be in stocks. The simplest trick? Subtract your age from 120: That's the percentage you should have in stocks; the rest should be in bonds. "If you have, say, 30 or 40 years, what happens over the next three months or even three years doesn't matter. If you need the money in two years and it drops 40 percent in one year, that's a problem," says Stuart Ritter, a certified financial planner with T. Rowe Price.
8. Hold down fees
Be wary of any mutual fund charging a management fee higher than 1 percent (a few stellar managers may be worth it; most are not). A manager with a high buying and selling rate (called "turnover") should also set off warning bells. If you aren't interested in watching your fund manager like a hawk, stick with an index fund, like one from Vanguard, where expenses are typically around 0.2 percent. And if you're trading stocks, don't be fooled by low commissions: They add up.
9. Ditch credit card debt
All debt is not created equal, so rank yours by interest rate and pay off the bad stuff first. That usually means credit cards, which can carry interest rates as high as 30 percent. (Compare your card's APR with others at Bankrate.com.) On the other end of the scale are student loans. Those rates are generally between 3 and 6 percent, so consider making the minimum payment and investing in your 401(k) instead. Hey, even Supreme Court Justice Clarence Thomas was still paying off his school loans when he joined the bench.
10. Defer taxes
Eager to lock in your gains on a hot investment? Before you click on sell, consider the tax implications. In a taxable account, you'll pay 15 percent in capital gains taxes every time you sell a winner you've owned for more than a year (the longer you can defer paying taxes, the more time you're giving your money to grow). Come tax time, however, it can be a good move to sell losers in your portfolio to take advantage of the annual $3,000 capital-loss deduction limit and offset any capital gains on your winning picks.
12 Steps To Financial Freedom - Step 7 - Till Debt Do Us Part
" Just because someone is nice and a good person, doesn't mean that you are meant to be together."- Author Unknown
If you read this article and only take with you one thing, let it be that it is strongly recommended that married couples keep their credit separate. You may want to have one credit card together, but make sure that you keep the balance at a minimum.
But for the most part, and this bears repeating: KEEP YOUR CREDIT SEPARATE!
I am in no way anti-marriage, but facts are facts. Over 50% of marriages end in divorce and surprise, surprise, financial trouble is the main cause.
Most young couples come into the marriage carrying their own debt loads, and the debt only increases within the first few years of marriage. Many couples must acquire a place to live, and for most of them, this means buying a home. Add to this debt automobile payments, furniture and appliances for the home, entertainment, vacations, clothing, and the list goes on. Loans from higher education are often added to this load, as well as medical bills. Having children also adds a whole new dimension of debt and financial burdens. It is easy to see why financial problems can be the major focus of stress and unhappiness in young marriages.
When this happens, the credit of both man and wife, if held jointly, takes a beating. Married people have far more to gain by each building strong individual credit reports rather than joining all accounts and building one joint report.
Look at it this way: Take one million couples with pre marital credit. That represents two million credit reports or credit liabilities. When these two million couples get married and they join their credit liabilities together, what was once two million credit reports gets cut in half to one million. The effect is that two people now share one credit report. It’s equivalent to having two life boats in the ocean as opposed to just one. If one was to develop a leak and start sinking, you can always jump ship and get in the other boat. With only one “lifeboat” sinking, without another boat you will be drowning. In this case drowning in a sea of debt.
There are some aspects of marriage that you must realistically look at as being a business and you must make smart decisions and not base them on emotions. I cannot tell you how many married couples I have spoken to that wished they would have known this before they had a financial setback.
it is very important that you have your own credit history. If you were to become separated, divorced or widowed, it would be more difficult to obtain credit without having maintained your own credit standing. No one, when happily married, likes to think of those things, but the fact remains that 74 percent of women will manage finances on their own at some point in their lives.
If you do find yourself carrying a debt load and anticipating marriage, try to minimize the debt as much as possible. Consider down-sizing your car to get out of a car payment. Or perhaps only having one car after you are married would help. Car pooling or taking public transportation is an option for many.
Taking on a temporary second job is a way to make extra money to put exclusively toward debt repayment. Look for other ways to cut back on expenses, such as using coupons for groceries, eating out less frequently and cooking at home, buying clothing at used clothing stores or shopping for sales. Reconsider your cable, internet, and cell phone needs. Could you get by with lesser services for a short period of time in order to pay off debt? The more you can do now to pay down debt, the better off you will be later.
One very important way to decrease debt load is to not go into debt to pay for the wedding! A wedding can be beautiful, special, and memorable without being outrageously expensive. Look past this one, single day to the future and decide whether your wedding day or your marriage is more important. Find creative ways to lower your costs on flowers, food, clothing, and more.
Once you are married, don’t try to accumulate in one year what it took your parents thirty years to accumulate. It is perfectly acceptable to rent a small apartment or home for a little while. Buying the large, family-friendly home can wait until you have a family. Used furniture and appliances are also acceptable and a lot less expensive. Be sure to communicate with your spouse about each other’s debts before getting married, and start working on a budget together.
Work out a plan to pay off the debts as soon as possible and stick to it!
Instead of pulling you apart, working together towards a goal of debt-free living can actually bring you closer together.
If you read this article and only take with you one thing, let it be that it is strongly recommended that married couples keep their credit separate. You may want to have one credit card together, but make sure that you keep the balance at a minimum.
But for the most part, and this bears repeating: KEEP YOUR CREDIT SEPARATE!
I am in no way anti-marriage, but facts are facts. Over 50% of marriages end in divorce and surprise, surprise, financial trouble is the main cause.
Most young couples come into the marriage carrying their own debt loads, and the debt only increases within the first few years of marriage. Many couples must acquire a place to live, and for most of them, this means buying a home. Add to this debt automobile payments, furniture and appliances for the home, entertainment, vacations, clothing, and the list goes on. Loans from higher education are often added to this load, as well as medical bills. Having children also adds a whole new dimension of debt and financial burdens. It is easy to see why financial problems can be the major focus of stress and unhappiness in young marriages.
When this happens, the credit of both man and wife, if held jointly, takes a beating. Married people have far more to gain by each building strong individual credit reports rather than joining all accounts and building one joint report.
Look at it this way: Take one million couples with pre marital credit. That represents two million credit reports or credit liabilities. When these two million couples get married and they join their credit liabilities together, what was once two million credit reports gets cut in half to one million. The effect is that two people now share one credit report. It’s equivalent to having two life boats in the ocean as opposed to just one. If one was to develop a leak and start sinking, you can always jump ship and get in the other boat. With only one “lifeboat” sinking, without another boat you will be drowning. In this case drowning in a sea of debt.
There are some aspects of marriage that you must realistically look at as being a business and you must make smart decisions and not base them on emotions. I cannot tell you how many married couples I have spoken to that wished they would have known this before they had a financial setback.
it is very important that you have your own credit history. If you were to become separated, divorced or widowed, it would be more difficult to obtain credit without having maintained your own credit standing. No one, when happily married, likes to think of those things, but the fact remains that 74 percent of women will manage finances on their own at some point in their lives.
If you do find yourself carrying a debt load and anticipating marriage, try to minimize the debt as much as possible. Consider down-sizing your car to get out of a car payment. Or perhaps only having one car after you are married would help. Car pooling or taking public transportation is an option for many.
Taking on a temporary second job is a way to make extra money to put exclusively toward debt repayment. Look for other ways to cut back on expenses, such as using coupons for groceries, eating out less frequently and cooking at home, buying clothing at used clothing stores or shopping for sales. Reconsider your cable, internet, and cell phone needs. Could you get by with lesser services for a short period of time in order to pay off debt? The more you can do now to pay down debt, the better off you will be later.
One very important way to decrease debt load is to not go into debt to pay for the wedding! A wedding can be beautiful, special, and memorable without being outrageously expensive. Look past this one, single day to the future and decide whether your wedding day or your marriage is more important. Find creative ways to lower your costs on flowers, food, clothing, and more.
Once you are married, don’t try to accumulate in one year what it took your parents thirty years to accumulate. It is perfectly acceptable to rent a small apartment or home for a little while. Buying the large, family-friendly home can wait until you have a family. Used furniture and appliances are also acceptable and a lot less expensive. Be sure to communicate with your spouse about each other’s debts before getting married, and start working on a budget together.
Work out a plan to pay off the debts as soon as possible and stick to it!
Instead of pulling you apart, working together towards a goal of debt-free living can actually bring you closer together.
Monday
12 Steps To Financial Freedom - Step 6 - A New Attitude
“If it is worth doing, it is worth taking a risk."
- Rachelle Disbennett-Lee, PhD
It has been said that you are where you are because you have put that thought in your mind. Because what you put put into your mind comes out in the behaviors of your life. Much like the programming put into a computer comes out in the behavior of that computer.
It’s time to “plow” your mind and your attitudes and plant new concepts, like the ones covered in this article series so far.
Now take the seed of 100 percent responsibility for your life and use what you learned and make some improvements. Plant that seed and cultivate it. Nurture it and work toward reaping a better harvest.
Here is what you’re going to do.
One, you will not use your credit cards until your debts are paid in full. Carry zero balances on most of your credit cards or at least a ten percent credit to debt ratio. The effect this will have on your credit score will pay dividends for the rest of your life.
Second, you will operate strictly on cash while you are paying down your debt. The purpose of this series of articles is not only to get out of debt, but to show you that you can survive on just the cash that you earn.
This brings up our third stage of step 6 and that is now you can focus all your available cash on wealth building. Some strategies and techniques will be discussed in later steps, but one of the first things you should focus on is developing an emergency savings fund. After that you will be concentrating on building long term wealth.
So lets looka at where we are now. We came from point A where you developed a sense of where you were and formulated a budget. You explored what credit and debt is and looked at strategies to use both responsibly. We talked about changing the way we think about finances and made the decision to change our lives and our financial future.
Congratulations. You are now mid way through this series of articles and you have experienced incredible exponential growth. You are well on your way to achieving the debt free life that you desire.
Take a breath and give yourself a big pat on the back. Treat yourself to something that you enjoy. Give yourself a reward.
Your life is being transformed.
- Rachelle Disbennett-Lee, PhD
It has been said that you are where you are because you have put that thought in your mind. Because what you put put into your mind comes out in the behaviors of your life. Much like the programming put into a computer comes out in the behavior of that computer.
It’s time to “plow” your mind and your attitudes and plant new concepts, like the ones covered in this article series so far.
Now take the seed of 100 percent responsibility for your life and use what you learned and make some improvements. Plant that seed and cultivate it. Nurture it and work toward reaping a better harvest.
Here is what you’re going to do.
One, you will not use your credit cards until your debts are paid in full. Carry zero balances on most of your credit cards or at least a ten percent credit to debt ratio. The effect this will have on your credit score will pay dividends for the rest of your life.
Second, you will operate strictly on cash while you are paying down your debt. The purpose of this series of articles is not only to get out of debt, but to show you that you can survive on just the cash that you earn.
This brings up our third stage of step 6 and that is now you can focus all your available cash on wealth building. Some strategies and techniques will be discussed in later steps, but one of the first things you should focus on is developing an emergency savings fund. After that you will be concentrating on building long term wealth.
So lets looka at where we are now. We came from point A where you developed a sense of where you were and formulated a budget. You explored what credit and debt is and looked at strategies to use both responsibly. We talked about changing the way we think about finances and made the decision to change our lives and our financial future.
Congratulations. You are now mid way through this series of articles and you have experienced incredible exponential growth. You are well on your way to achieving the debt free life that you desire.
Take a breath and give yourself a big pat on the back. Treat yourself to something that you enjoy. Give yourself a reward.
Your life is being transformed.
12 Steps To Financial Freedom - Step 5 - Life After Debt
“The borrower is slave to the lender”
- Proverbs 22:7
In step 5, we will discuss types of debt and debt relief options that are available to consumers. We will discuss two types of debt categories; unsecured and secured.
Credit card debt is just one example of unsecured debt. Other examples include medical bills and signature loans.
Credit card companies spend millions of dollars trying to convince people all over the world to use credit cards. Credit cards used wisely can be a great help to manage short term cash flow shortfalls. When not used wisely they can create a lot of problems since credit card company’s main source of profits is from people who are late in their payments and over limit fees, which is why some people compare credit card companies to the loan sharks of the old days.
The difference between secured and unsecured debt is with secured debt, property is used as collateral, such as your home or car. If you experience financial difficulty with your mortgage or car loan, the bank can foreclose on your home or repossess your home.
There are debt relief options available to consumers that experience financial difficulties with their unsecured debt. Since there is no property involved the banks only options would be to charge off the debt as uncollectable. They usually sell this debt for between eight and twelve cents on the dollar to a debt collection agency. Their other option is to sue for a judgment but few credit card banks will do this. You may have a problem with litigation with high medical bills unless you have a third party act on your behalf to settle the debt.
There are some options for debt relief that are available to consumers, each having their own set of pros and cons. They include bankruptcy, debt consolidation, consumer credit counseling and debt settlement and negotiation.
Thanks to a change in the bankruptcy law reform recently it has become almost impossible to claim Chapter 7 bankruptcy, which is total liquidation. There is also Chapter 13 which is a debt repayment program. The problem here is that the repayment terms are usually unrealistic and can only be considered after a consumer gets credit counseling from an approved agency.
This develops another series of problems however. The companies that are approved belong to the consumer credit counseling industry and really do nothing for the consumer to help with their debt. They are essentially companies that serve as an extension of the collection arm of the credit card companies. They do not have the consumer’s best interest at heart. They get funding from the credit card companies in the form of voluntary donations. They will negotiate interest rates with the credit card banks but you will end up paying the entire debt back plus interest. Their programs are usually seven years in duration.
This type of program has many pitfalls for the consumer and other debt relief options should be explored.
There is also debt consolidation where you borrow money using your house as collateral for the debt. I highly suggest you take some things into consideration before getting involved with a debt consolidation loan such as; does it make any sense to try to borrow your way out of debt?
It doesn’t make much sense.
Also, now what was once unsecured debt has become a secured debt. Get into financial trouble again and your house is now on the line.
The only solution that is viable for consumers suffering a true financial hardship is debt settlement. Also called debt negotiation. This program focuses on the entire balance of your unsecured debt and settlements can be made at around forty to sixty percent, including program fees.
- Proverbs 22:7
In step 5, we will discuss types of debt and debt relief options that are available to consumers. We will discuss two types of debt categories; unsecured and secured.
Credit card debt is just one example of unsecured debt. Other examples include medical bills and signature loans.
Credit card companies spend millions of dollars trying to convince people all over the world to use credit cards. Credit cards used wisely can be a great help to manage short term cash flow shortfalls. When not used wisely they can create a lot of problems since credit card company’s main source of profits is from people who are late in their payments and over limit fees, which is why some people compare credit card companies to the loan sharks of the old days.
The difference between secured and unsecured debt is with secured debt, property is used as collateral, such as your home or car. If you experience financial difficulty with your mortgage or car loan, the bank can foreclose on your home or repossess your home.
There are debt relief options available to consumers that experience financial difficulties with their unsecured debt. Since there is no property involved the banks only options would be to charge off the debt as uncollectable. They usually sell this debt for between eight and twelve cents on the dollar to a debt collection agency. Their other option is to sue for a judgment but few credit card banks will do this. You may have a problem with litigation with high medical bills unless you have a third party act on your behalf to settle the debt.
There are some options for debt relief that are available to consumers, each having their own set of pros and cons. They include bankruptcy, debt consolidation, consumer credit counseling and debt settlement and negotiation.
Thanks to a change in the bankruptcy law reform recently it has become almost impossible to claim Chapter 7 bankruptcy, which is total liquidation. There is also Chapter 13 which is a debt repayment program. The problem here is that the repayment terms are usually unrealistic and can only be considered after a consumer gets credit counseling from an approved agency.
This develops another series of problems however. The companies that are approved belong to the consumer credit counseling industry and really do nothing for the consumer to help with their debt. They are essentially companies that serve as an extension of the collection arm of the credit card companies. They do not have the consumer’s best interest at heart. They get funding from the credit card companies in the form of voluntary donations. They will negotiate interest rates with the credit card banks but you will end up paying the entire debt back plus interest. Their programs are usually seven years in duration.
This type of program has many pitfalls for the consumer and other debt relief options should be explored.
There is also debt consolidation where you borrow money using your house as collateral for the debt. I highly suggest you take some things into consideration before getting involved with a debt consolidation loan such as; does it make any sense to try to borrow your way out of debt?
It doesn’t make much sense.
Also, now what was once unsecured debt has become a secured debt. Get into financial trouble again and your house is now on the line.
The only solution that is viable for consumers suffering a true financial hardship is debt settlement. Also called debt negotiation. This program focuses on the entire balance of your unsecured debt and settlements can be made at around forty to sixty percent, including program fees.
Sunday
12 Steps To Financial Freedom - Step 4 - Giving Credit When Credit Is Due
“If you can do a half-assed job of anything, you're a one-eyed man in a kingdom of the blind.”
-Kurt Vonnegut Jr
Why are we obsessed with using credit in this country?
After all, isn’t this country based on the principles of being an ownership society? But if you have debt, whether it is credit card debt, a car loan or mortgage, you really don’t own anything, the banks do. You are merely paying for the privilege of using it.
How’s that for a harsh dose of reality!
Don’t misunderstand me; I believe credit and credit cards are a very useful financial tool, when used properly. That’s the key. Knowing how to use it properly. Having the knowledge and education necessary to not become another heavy debt statistic.
In this, step 4, you will learn what credit is and how to use it wisely.
Let’s look at the common definition for what credit is.
I have stated before that credit gives consumers the opportunity to over pay for goods and services. Credit is the granting of a loan and the creation of debt. Credit cards allow a constant line of credit to spend and be paid off regularly. You usually do not have to pay any interest as long as you pay the full amount by each due date. Before you spend using a credit card, you should be sure you can repay the amount on time, as some credit cards can have very high interest rate.
Debt to Income Ratio
Debt to income ratio looks at how much you owe compared with how much you earn. It usually gives a clear picture of your financial well being. The lower your debt ratio, the more you have left over to save or spend on other things.Your debt ratio is the percent of your monthly take-home pay that goes to paying debts and monthly obligations. You calculate it like this: Take the amount needed to repay debts each month, including rent r mortgage, and divide this by your take-home pay (your net pay after deduction of tax).
Many experts recommend that no more than 15-20% of your monthly household take home pay (excluding rent or mortgage) should be used to pay debts and make loan payments.
Credit to Debt Ratio
Understanding the Credit to Debt Ratio can help you improve your credit score. You need to know what happens when closing credit card accounts and how that affects your FICO score as an important part of getting out of debt and improving your credit rating.One of the biggest fallacies I’ve seen perpetrated on the web, at the bank, etc., is that you should close credit card accounts that you are no longer using to improve your FICO score. When you close the account, your “history” is gone for that credit card … yes, it will still show up on your Credit Report; but the “good history” will no longer be included in the calculation of your FICO score. The formula for calculating your credit to debt ratio is amount of debt used divided by available credit. If you can keep your debt load (the debt part of the debt/credit ratio) under the 50% mark, the better off you will be in the long run.
Finally, when using credit cards responsibly you need to select the right card. Shop around because they all carry different fees and rates. Before applying for a credit card ask yourself these questions:
Why do you want/need a credit card?
Maybe you need one credit card with a special interest rate to transfer balances from multiple accounts or perhaps you need a card specifically for business purposes. Being able to earn rewards, cash back or airline miles for your everyday purchases can also be a reason to get a credit card.
How much do you need to charge at one time?
If the credit card is for business purposes, maybe you need a card with very high or no spending limits. On the other hand, if this is your first card and you are trying to build credit or just want the card for emergencies, then a more modest spending limit may be the better route to go.
How do I want to pay back the charges?
Decide if you want to pay off the entire balance each month or just a portion over each month. Some cards offer advantages for both paying structures.
Do special offers interest me?
Many credit cards offer special rebates, support for a specific organization or other member benefits for using their credit cards. Decide if this is important to you when choosing your card.
Managing Credit
Now that you know what type of credit card you want, it is time to manage your credit.
A credit card is a responsibility, not a right. Understanding why you want a credit card, knowing how the credit card process works and picking a credit card that works best for you will help you avoid debt management pitfalls. Use your credit card to extend your buying power while keeping in mind that a credit card is not free money.
To maintain a good credit rating, you will need to pay your credit card statements in a timely manner, according to your agreed-upon terms of use. Never only pay the monthly minimum and if you could pay off your balance in full each month, do so. You will be far better off. Be responsible with your credit and enjoy the benefits credit card possession can bring. If you have questions or concerns about what is the right card for your specific credit or financial need, talk to a professional financial advisor.
Take the extra step and be sure you understand everything you need to know before applying for a credit card.
-Kurt Vonnegut Jr
Why are we obsessed with using credit in this country?
After all, isn’t this country based on the principles of being an ownership society? But if you have debt, whether it is credit card debt, a car loan or mortgage, you really don’t own anything, the banks do. You are merely paying for the privilege of using it.
How’s that for a harsh dose of reality!
Don’t misunderstand me; I believe credit and credit cards are a very useful financial tool, when used properly. That’s the key. Knowing how to use it properly. Having the knowledge and education necessary to not become another heavy debt statistic.
In this, step 4, you will learn what credit is and how to use it wisely.
Let’s look at the common definition for what credit is.
I have stated before that credit gives consumers the opportunity to over pay for goods and services. Credit is the granting of a loan and the creation of debt. Credit cards allow a constant line of credit to spend and be paid off regularly. You usually do not have to pay any interest as long as you pay the full amount by each due date. Before you spend using a credit card, you should be sure you can repay the amount on time, as some credit cards can have very high interest rate.
Debt to Income Ratio
Debt to income ratio looks at how much you owe compared with how much you earn. It usually gives a clear picture of your financial well being. The lower your debt ratio, the more you have left over to save or spend on other things.Your debt ratio is the percent of your monthly take-home pay that goes to paying debts and monthly obligations. You calculate it like this: Take the amount needed to repay debts each month, including rent r mortgage, and divide this by your take-home pay (your net pay after deduction of tax).
Many experts recommend that no more than 15-20% of your monthly household take home pay (excluding rent or mortgage) should be used to pay debts and make loan payments.
Credit to Debt Ratio
Understanding the Credit to Debt Ratio can help you improve your credit score. You need to know what happens when closing credit card accounts and how that affects your FICO score as an important part of getting out of debt and improving your credit rating.One of the biggest fallacies I’ve seen perpetrated on the web, at the bank, etc., is that you should close credit card accounts that you are no longer using to improve your FICO score. When you close the account, your “history” is gone for that credit card … yes, it will still show up on your Credit Report; but the “good history” will no longer be included in the calculation of your FICO score. The formula for calculating your credit to debt ratio is amount of debt used divided by available credit. If you can keep your debt load (the debt part of the debt/credit ratio) under the 50% mark, the better off you will be in the long run.
Finally, when using credit cards responsibly you need to select the right card. Shop around because they all carry different fees and rates. Before applying for a credit card ask yourself these questions:
Why do you want/need a credit card?
Maybe you need one credit card with a special interest rate to transfer balances from multiple accounts or perhaps you need a card specifically for business purposes. Being able to earn rewards, cash back or airline miles for your everyday purchases can also be a reason to get a credit card.
How much do you need to charge at one time?
If the credit card is for business purposes, maybe you need a card with very high or no spending limits. On the other hand, if this is your first card and you are trying to build credit or just want the card for emergencies, then a more modest spending limit may be the better route to go.
How do I want to pay back the charges?
Decide if you want to pay off the entire balance each month or just a portion over each month. Some cards offer advantages for both paying structures.
Do special offers interest me?
Many credit cards offer special rebates, support for a specific organization or other member benefits for using their credit cards. Decide if this is important to you when choosing your card.
Managing Credit
Now that you know what type of credit card you want, it is time to manage your credit.
A credit card is a responsibility, not a right. Understanding why you want a credit card, knowing how the credit card process works and picking a credit card that works best for you will help you avoid debt management pitfalls. Use your credit card to extend your buying power while keeping in mind that a credit card is not free money.
To maintain a good credit rating, you will need to pay your credit card statements in a timely manner, according to your agreed-upon terms of use. Never only pay the monthly minimum and if you could pay off your balance in full each month, do so. You will be far better off. Be responsible with your credit and enjoy the benefits credit card possession can bring. If you have questions or concerns about what is the right card for your specific credit or financial need, talk to a professional financial advisor.
Take the extra step and be sure you understand everything you need to know before applying for a credit card.
Saturday
12 Steps To Financial Freedom - Step 3 - A Change of Habit
Good habits result from resisting temptation.
-Ancient Proverb
Are you finding it hard to make ends meet?
Wondering how you can squueze more money out of your paycheck?
Worried each month that you will run out of money, not to mention having enough to set aside for retirement?
You're not alone. Many of us are feeling the pinch of inflation. With higher gas prices and housing costs reaching into the stratosphere, it's becoming harder and harder to save.
There's no doubt about it. The price of everything is going up. In addition, we are constantly being bombarded with enticing ads that tempt us to buy all sorts of things we don't need robbing us of the ability to save. We need to be more careful how and where we spend our money in order to be able to save it.
Being frugal isn't about deprivation. It's about finding ways to do the things that you want at a price that you can afford. Living debt free is about affording your lifestyle. In this, step 3, you will learn how to live within your means and get the most out of life on your existing income.
Coupon Clipping
You may not realize this, but groceries are right up there with your highest monthly bills. Most people spend more on food than they do on their car, making it the second highest monthly expense! The only thing you spend more on in a month is your home.
Maybe you used to laugh as you watched people pull out their coupons, but the truth is that coupons can save you hundreds of dollars every year. On average, you could easily save from 5% to 15% on every $100 of grocreries you purchase. Seek out supermarkets that will double, some super stores even triple, the face value of manufacturers' coupons.
Froogle
The Internet is a great place for bargain hunting—especially when you know where to look for the bargains. www.Froogle.com , is a shopping search engine powered by Google, offers just such a place.
Use Froogle to:
Compare prices
Search within your price range
Get store ratings
Get product ratings and reviews
Prescription Drugs
Prescription drug costs can be outrageous, even when you have health insurance. Here are nine ways to cut those costs.
1. Ask for Drugs with Generics
Drugs reps are good at swaying doctors towards the newest and most expensive prescription drugs, so you can’t always assume that your doctor is going to prescribe the most affordable drug option. Before you leave the office, ask if the medication prescribed has a generic. If it doesn’t, follow up by asking if there’s a drug with a generic that would work as well for your condition. It’s a simple question that could save a lot.
Want to be a more informed consumer? Pick up a copy of The Pill Book, and you can quickly check to see which drugs have a generic.
2. Seek Samples
Doctors’ offices and hospitals often receive samples of new prescriptions. If you doctor insists on a name-brand medication, ask if he has any samples that he could give you. With a bit of luck you could receive a full course of an antibiotic or a month’s supply of a maintenance drug free of charge.
Did You Know? Pharmacies also receive free sample from drug companies. Check with your pharmacist to see if they have any free samples of over-the-counter medications that you need. This can be a great way to try out new allergy or heartburn medicines, among others.
3. Request Coupons
Coupons aren’t just for groceries. Check with your doctor and pharmacist to see if they have any coupons or rebate offers for the prescriptions that you take. Still no luck? Visit the manufacturer’s website to request coupons by mail.
4. Shop Around
You shop around for everything else, so why not your prescriptions? Before you have any prescription filled, call around to several local pharmacies to find out who has the best price on your medication. This is especially beneficial if you don’t have drug coverage—as the base price can vary extensively from pharmacy to pharmacy.
5. Go the Mail Order Route
More and more insurance companies are pushing the use of mail order pharmacies, so check with your provider to see if they offer any discounts for using such a service. Often, you can get a three months supply of your prescription for the cost of a single co-pay—a very good deal indeed.
6. Split Pills
If you are taking a tablet that comes in more than one strength (say 15mg and 30mg), you may be able to cut your medication costs by having the higher strength tablets cut in half. Talk to your doctor and pharmacist to see if this is a viable option for you. Most pharmacies will happily split the pills for you, but you can purchase an inexpensive pill splitter, if you need to do it yourself.
7. Ask about OTCs
Many of today’s over-the-counter drugs are former prescription drugs. Before you fill a prescription, talk to your doctor to see if an OTC might meet your needs.
8. Use a Discount Card
No prescription coverage? Don’t resign yourself to paying full price; instead check around to see if you’re eligible for a prescription discount card with any organization that you belong to—say AARP or even your auto insurance provider (mine offers a discount card to all members).
No luck turning up a free card? Shop around for a paid pharmacy discount card. In most cases, the savings will more than make up for the cost of membership.
9. Investigate Hardship Programs
Budget too tight to cover the medication that you need? Don’t do without! Check with the maker of your prescription to see if they offer any hardship programs. You can often get your medication for free or at a reduced cost, if you can’t afford to pay retail.
Dining Out
Sometimes there's nothing better than a meal away from home, but how can you justify the cost when you're committed to the frugal life?
Do you deprive yourself of the experience entirely?
Resign yourself to fast food when what you really crave is a meal at a nice restaurant?
Not at all. Learn how to eat out for less, and then enjoy your meal guilt-free. Here are some tips:
1. Share a Meal
Restaurant portions are often huge, so consider splitting a dish with someone else. If you ask, many establishments will even divide your order onto two plates before bringing it out to you. The unexpected bonus for your frugal efforts? Fewer calories and fat grams hitting your waistline.
2. Drink for Free
Drinks can really add to your tab, particularly if you’re drinking something that is billed by the glass. To keep your check as lean as possible, order water (almost always free), or opt for a beverage that comes with free refills—soda, coffee, ice tea, etc. Can’t do without that alcoholic beverage? Order one glass, and then stick to water for the rest of the meal.
3. Clip and Save
Coupons aren’t just for groceries. Flip through your local newspaper and junk mailers, and you’re likely to find lots of restaurant coupons. Buy one get one free offers can make a big dent in the price of eating out, so they’re worth the search time. For even more savings, consider investing in a school coupon book or an Entertainment Book, if they are available in your area.
4. Go Kid-Friendly
Lots of establishments feature special nights where kids eat free with the purchase of an adult entrée. Do a little research to find restaurants in your area that do this, and you could slash your meal cost in half—now that’s sure to make you and the kids happy.
5. Skip Dinner
No, I’m not suggesting that you skip dinner entirely, but I am suggesting that you consider skipping dinner out. Eating out at dinnertime is often much more expensive that eating out at lunchtime—even if the same foods are on the menu. Make the switch to mid-day meals, and you’ll avoid the higher price tags and probably the crowd as well.
6. Order By Phone
If it’s the restaurant food that you crave and not the restaurant experience, you can cut your costs by ordering your food to go. Many restaurant chains now offer car-side service, making it easy for you to get your favorite meals to go. How does this save you money? By taking the sit-down experience out of the equation, you can skip the drink order entirely and also avoid having to pay a tip—a savings of 15 percent by itself.
-Ancient Proverb
Are you finding it hard to make ends meet?
Wondering how you can squueze more money out of your paycheck?
Worried each month that you will run out of money, not to mention having enough to set aside for retirement?
You're not alone. Many of us are feeling the pinch of inflation. With higher gas prices and housing costs reaching into the stratosphere, it's becoming harder and harder to save.
There's no doubt about it. The price of everything is going up. In addition, we are constantly being bombarded with enticing ads that tempt us to buy all sorts of things we don't need robbing us of the ability to save. We need to be more careful how and where we spend our money in order to be able to save it.
Being frugal isn't about deprivation. It's about finding ways to do the things that you want at a price that you can afford. Living debt free is about affording your lifestyle. In this, step 3, you will learn how to live within your means and get the most out of life on your existing income.
Coupon Clipping
You may not realize this, but groceries are right up there with your highest monthly bills. Most people spend more on food than they do on their car, making it the second highest monthly expense! The only thing you spend more on in a month is your home.
Maybe you used to laugh as you watched people pull out their coupons, but the truth is that coupons can save you hundreds of dollars every year. On average, you could easily save from 5% to 15% on every $100 of grocreries you purchase. Seek out supermarkets that will double, some super stores even triple, the face value of manufacturers' coupons.
Froogle
The Internet is a great place for bargain hunting—especially when you know where to look for the bargains. www.Froogle.com , is a shopping search engine powered by Google, offers just such a place.
Use Froogle to:
Compare prices
Search within your price range
Get store ratings
Get product ratings and reviews
Prescription Drugs
Prescription drug costs can be outrageous, even when you have health insurance. Here are nine ways to cut those costs.
1. Ask for Drugs with Generics
Drugs reps are good at swaying doctors towards the newest and most expensive prescription drugs, so you can’t always assume that your doctor is going to prescribe the most affordable drug option. Before you leave the office, ask if the medication prescribed has a generic. If it doesn’t, follow up by asking if there’s a drug with a generic that would work as well for your condition. It’s a simple question that could save a lot.
Want to be a more informed consumer? Pick up a copy of The Pill Book, and you can quickly check to see which drugs have a generic.
2. Seek Samples
Doctors’ offices and hospitals often receive samples of new prescriptions. If you doctor insists on a name-brand medication, ask if he has any samples that he could give you. With a bit of luck you could receive a full course of an antibiotic or a month’s supply of a maintenance drug free of charge.
Did You Know? Pharmacies also receive free sample from drug companies. Check with your pharmacist to see if they have any free samples of over-the-counter medications that you need. This can be a great way to try out new allergy or heartburn medicines, among others.
3. Request Coupons
Coupons aren’t just for groceries. Check with your doctor and pharmacist to see if they have any coupons or rebate offers for the prescriptions that you take. Still no luck? Visit the manufacturer’s website to request coupons by mail.
4. Shop Around
You shop around for everything else, so why not your prescriptions? Before you have any prescription filled, call around to several local pharmacies to find out who has the best price on your medication. This is especially beneficial if you don’t have drug coverage—as the base price can vary extensively from pharmacy to pharmacy.
5. Go the Mail Order Route
More and more insurance companies are pushing the use of mail order pharmacies, so check with your provider to see if they offer any discounts for using such a service. Often, you can get a three months supply of your prescription for the cost of a single co-pay—a very good deal indeed.
6. Split Pills
If you are taking a tablet that comes in more than one strength (say 15mg and 30mg), you may be able to cut your medication costs by having the higher strength tablets cut in half. Talk to your doctor and pharmacist to see if this is a viable option for you. Most pharmacies will happily split the pills for you, but you can purchase an inexpensive pill splitter, if you need to do it yourself.
7. Ask about OTCs
Many of today’s over-the-counter drugs are former prescription drugs. Before you fill a prescription, talk to your doctor to see if an OTC might meet your needs.
8. Use a Discount Card
No prescription coverage? Don’t resign yourself to paying full price; instead check around to see if you’re eligible for a prescription discount card with any organization that you belong to—say AARP or even your auto insurance provider (mine offers a discount card to all members).
No luck turning up a free card? Shop around for a paid pharmacy discount card. In most cases, the savings will more than make up for the cost of membership.
9. Investigate Hardship Programs
Budget too tight to cover the medication that you need? Don’t do without! Check with the maker of your prescription to see if they offer any hardship programs. You can often get your medication for free or at a reduced cost, if you can’t afford to pay retail.
Dining Out
Sometimes there's nothing better than a meal away from home, but how can you justify the cost when you're committed to the frugal life?
Do you deprive yourself of the experience entirely?
Resign yourself to fast food when what you really crave is a meal at a nice restaurant?
Not at all. Learn how to eat out for less, and then enjoy your meal guilt-free. Here are some tips:
1. Share a Meal
Restaurant portions are often huge, so consider splitting a dish with someone else. If you ask, many establishments will even divide your order onto two plates before bringing it out to you. The unexpected bonus for your frugal efforts? Fewer calories and fat grams hitting your waistline.
2. Drink for Free
Drinks can really add to your tab, particularly if you’re drinking something that is billed by the glass. To keep your check as lean as possible, order water (almost always free), or opt for a beverage that comes with free refills—soda, coffee, ice tea, etc. Can’t do without that alcoholic beverage? Order one glass, and then stick to water for the rest of the meal.
3. Clip and Save
Coupons aren’t just for groceries. Flip through your local newspaper and junk mailers, and you’re likely to find lots of restaurant coupons. Buy one get one free offers can make a big dent in the price of eating out, so they’re worth the search time. For even more savings, consider investing in a school coupon book or an Entertainment Book, if they are available in your area.
4. Go Kid-Friendly
Lots of establishments feature special nights where kids eat free with the purchase of an adult entrée. Do a little research to find restaurants in your area that do this, and you could slash your meal cost in half—now that’s sure to make you and the kids happy.
5. Skip Dinner
No, I’m not suggesting that you skip dinner entirely, but I am suggesting that you consider skipping dinner out. Eating out at dinnertime is often much more expensive that eating out at lunchtime—even if the same foods are on the menu. Make the switch to mid-day meals, and you’ll avoid the higher price tags and probably the crowd as well.
6. Order By Phone
If it’s the restaurant food that you crave and not the restaurant experience, you can cut your costs by ordering your food to go. Many restaurant chains now offer car-side service, making it easy for you to get your favorite meals to go. How does this save you money? By taking the sit-down experience out of the equation, you can skip the drink order entirely and also avoid having to pay a tip—a savings of 15 percent by itself.
Friday
How To Live Debt Free - Step 2 - Defining Moments
“Make all you can, save all you can, give all you can.”
- John WesleyEnglish religious leader (1703 - 1791)
Your current financial situation is not necessarily your fault. I’m sure that you are like most people and never were taught by family or the educational system about how credit works. Few ever learn the power of compound interest or what credit really is.
Think about it for a moment. Where did you get your financial training? Where has the result of that training gotten you?
You are about to learn throughout the entire course of this series how to manage financial resources such as:
- Credit Management
- What To Do With Your Paycheck
- How To Plan Your Financial Life
- How To Plan For Retirement
In Step 1, we discussed internal change. A definition of insanity is doing the same thing over and over and expecting a different result. You need to change the way we feel and act about our finances. So let’s look at what credit is. If I was to ask ten people, I’m sure I would get pretty much the same answer. It would be something like credit is the opportunity to buy now and to pay later.
That may hold some truth but look at it this way:
Credit is the opportunity to pay more for a product or service than is being asked.
Looking at it this way produces a different inner feeling, doesn’t it? Does it make you feel a bit foolish? Does it make you mad that you have become a prisoner of debt?
So ask yourself, what are you willing to do to change? Be specific. The more clear you can be with this answer, the better off you will be.
The next thing you need to do in this step is to develop a plan. Set some goals. Develop a plan of action and work it. You start this process by determining what you want, the end result that you desire and work backwards. Dare to dream. Remember when you were a child and thought the world was wide open and you could accomplish anything. Get back to that type of dreaming. The sky is the limit.
When you’re finished with your dream list, take a moment to examine what you wrote. Did you impose any limits based on other people’s beliefs or cultural beliefs? If you did, start the process over again. You will feel it when it is right for you. Make it personal. You might want to complete this sentence: “If I had all the time in the world, and all the money I needed, I would…..
What is on your list? Does it include a big house and a fancy car? Maybe an expensive vacation or two? That would really be a great life, wouldn’t it?
Maybe…..maybe not. In reality, you’ve probably never lived that way and don’t know what it would be like. You have based your decisions because you have been conditioned to think that this is what you want. This is an advertiser’s definition of success.
Or maybe it is what you really want.
Only you can decide. Only you know what is in your heart. Don’t let me put any limitations on your dreams. Really, explore what you truly want out of life. Maybe, and I don’t know if this is your truth but, are you trying to keep up with the Joneses? Many people have followed the Joneses right into the poor house, so make sure, beyond any shadow of a doubt that you have determined what you really want out of your life
- John WesleyEnglish religious leader (1703 - 1791)
Your current financial situation is not necessarily your fault. I’m sure that you are like most people and never were taught by family or the educational system about how credit works. Few ever learn the power of compound interest or what credit really is.
Think about it for a moment. Where did you get your financial training? Where has the result of that training gotten you?
You are about to learn throughout the entire course of this series how to manage financial resources such as:
- Credit Management
- What To Do With Your Paycheck
- How To Plan Your Financial Life
- How To Plan For Retirement
In Step 1, we discussed internal change. A definition of insanity is doing the same thing over and over and expecting a different result. You need to change the way we feel and act about our finances. So let’s look at what credit is. If I was to ask ten people, I’m sure I would get pretty much the same answer. It would be something like credit is the opportunity to buy now and to pay later.
That may hold some truth but look at it this way:
Credit is the opportunity to pay more for a product or service than is being asked.
Looking at it this way produces a different inner feeling, doesn’t it? Does it make you feel a bit foolish? Does it make you mad that you have become a prisoner of debt?
So ask yourself, what are you willing to do to change? Be specific. The more clear you can be with this answer, the better off you will be.
The next thing you need to do in this step is to develop a plan. Set some goals. Develop a plan of action and work it. You start this process by determining what you want, the end result that you desire and work backwards. Dare to dream. Remember when you were a child and thought the world was wide open and you could accomplish anything. Get back to that type of dreaming. The sky is the limit.
When you’re finished with your dream list, take a moment to examine what you wrote. Did you impose any limits based on other people’s beliefs or cultural beliefs? If you did, start the process over again. You will feel it when it is right for you. Make it personal. You might want to complete this sentence: “If I had all the time in the world, and all the money I needed, I would…..
What is on your list? Does it include a big house and a fancy car? Maybe an expensive vacation or two? That would really be a great life, wouldn’t it?
Maybe…..maybe not. In reality, you’ve probably never lived that way and don’t know what it would be like. You have based your decisions because you have been conditioned to think that this is what you want. This is an advertiser’s definition of success.
Or maybe it is what you really want.
Only you can decide. Only you know what is in your heart. Don’t let me put any limitations on your dreams. Really, explore what you truly want out of life. Maybe, and I don’t know if this is your truth but, are you trying to keep up with the Joneses? Many people have followed the Joneses right into the poor house, so make sure, beyond any shadow of a doubt that you have determined what you really want out of your life
Thursday
How To Live Debt Free - Step 1 - A Time For Change
“When the water reaches the upper level, follow the rats.”
- Claude SwansonUS politician (1862 - 1939)
As Glenda the Good Witch told Dorothy when starting her on the yellow brick road to Oz, “it’s always best to start at the beginning.” If you follow this program faithfully, you will be financially independent in a short period of time. The goal of this series of articles is not only to get you out of debt, but to show you how to pay off all of your debts and be completely free of your financial obligations. You will be living the true American dream. That is the dream of ownership. You will go from owing to owning.
This series will show you exactly why you are in debt so you can avoid those mistakes in the future. You will learn how to build wealth. There is only one truly real definition of being financially independent and that is to be financially dependent on no one. You will be completely independent of your job, any person and certainly independent of any government support.
So what is the first step?
There are two parts.
Step 1/ Part 1 – Where Are You Now?
· How much debt do you have?
· What is your current income level?
· How much do you save?
· What do you spend your money on?
· What can you do differently?
After you figure out the answers to the above questions, giving yourself the most candid, honest answers you can, no matter how painful, you can establish a budget. A budget that you can stick with but not so rigid that there is no room for alterations along the way.
There is a process that I like to call my 30 day challenge. For the next 30 days, get a receipt for every purchase that you make, no matter how small – no matter how large, get a receipt and put them in an envelope. Write on them what the purchase was for if you must. At the end of the 30 days, look at what you spent your money on. You will be in for quite a surprise.
It is amazing what we really spend money on. Five bucks for a Starbucks coffee. Two dollars for this, ten dollars for that. Is it really all necessary? Could we have done without any of these things?
Step 1/Part 2 – Internal Change
The only way that you are ever going to change your financial situation is to change the thinking patterns that got you in debt in the first place. You become what you think about. So it only stands to reason that by changing what you focus on will give you different rewards.
You need to develop a personal discipline. The things that you must do might seem a bit uncomfortable or unfamiliar. You will need to step out of your comfort zone and think differently. You will need to think outside the box.
And finally, you will need to put forth the work that is necessary to achieve the financial independence that awaits you. It is your destiny. You must not be denied. Reach deep inside yourself and commit yourself to this process.
Make that commitment now.
You will become transformed, without a doubt.
In our second step, you will learn about credit. What it is. How it was developed.
Why it has become a crutch in your life and how to use it without getting in financial trouble.
- Claude SwansonUS politician (1862 - 1939)
As Glenda the Good Witch told Dorothy when starting her on the yellow brick road to Oz, “it’s always best to start at the beginning.” If you follow this program faithfully, you will be financially independent in a short period of time. The goal of this series of articles is not only to get you out of debt, but to show you how to pay off all of your debts and be completely free of your financial obligations. You will be living the true American dream. That is the dream of ownership. You will go from owing to owning.
This series will show you exactly why you are in debt so you can avoid those mistakes in the future. You will learn how to build wealth. There is only one truly real definition of being financially independent and that is to be financially dependent on no one. You will be completely independent of your job, any person and certainly independent of any government support.
So what is the first step?
There are two parts.
Step 1/ Part 1 – Where Are You Now?
· How much debt do you have?
· What is your current income level?
· How much do you save?
· What do you spend your money on?
· What can you do differently?
After you figure out the answers to the above questions, giving yourself the most candid, honest answers you can, no matter how painful, you can establish a budget. A budget that you can stick with but not so rigid that there is no room for alterations along the way.
There is a process that I like to call my 30 day challenge. For the next 30 days, get a receipt for every purchase that you make, no matter how small – no matter how large, get a receipt and put them in an envelope. Write on them what the purchase was for if you must. At the end of the 30 days, look at what you spent your money on. You will be in for quite a surprise.
It is amazing what we really spend money on. Five bucks for a Starbucks coffee. Two dollars for this, ten dollars for that. Is it really all necessary? Could we have done without any of these things?
Step 1/Part 2 – Internal Change
The only way that you are ever going to change your financial situation is to change the thinking patterns that got you in debt in the first place. You become what you think about. So it only stands to reason that by changing what you focus on will give you different rewards.
You need to develop a personal discipline. The things that you must do might seem a bit uncomfortable or unfamiliar. You will need to step out of your comfort zone and think differently. You will need to think outside the box.
And finally, you will need to put forth the work that is necessary to achieve the financial independence that awaits you. It is your destiny. You must not be denied. Reach deep inside yourself and commit yourself to this process.
Make that commitment now.
You will become transformed, without a doubt.
In our second step, you will learn about credit. What it is. How it was developed.
Why it has become a crutch in your life and how to use it without getting in financial trouble.
Wednesday
The Fastest Way Out Of Debt
“Change begets change”
- Charles Dickens
- Charles Dickens
There is one sure fire way that is guaranteed to get you out of debt.
STOP CHARGING!
Simple as that may be, if you just stop charging now, you still may have debt obligations that you need to take care of. So what would be the best way to achieve the goal of eliminating this debt.
There are many strategies that you can employ to get you out of debt but there are several things that you nust do first to lay the groundwork for becoming debt free. It all starts with you.
Excessive credit card debt is a growing sickness in America, and like many illnesses, people tend to ignore the problem until it's of epidemic proportions. Take control now and eliminate credit card debt before it threatens your financial health.
You must change the way you think about money, credit and debt. You must change the way you act and feel. You must change. PERIOD.
To eliminate credit card debt as rapidly as possible at the lowest possible cost to you, I recommend using a tried-and-true credit card debt elimination method often recommended by financial experts. I call this method the Credit Crunch.
1. List all of your credit cards, including the balance, the interest rate, and the minimum payment percentage and the minimum payment according to the latest statement. The minimum payment percentage can be found in the small print on your credit card statement or your cardholder agreement, and is usually between 2 and 2 1/2 percent of your balance.
2. Rearrange the list so the credit card with the highest interest rate is at the top and the credit card with the lowest interest rate is at the bottom.
3. Add up the required minimum payments for all the cards.
4. Decide how much money you can come up with each month, in addition to the total minimum payments on all your credit cards, to apply to your credit card debt. If you don't believe you can afford to pay any additional amounts over the minimum payment, it's time to do a budget and find ways to cut your expenses
5. Each month, pay the minimum balance on each credit card except the one with the highest interest rate. On the credit card with the highest interest rate, pay the minimum balance PLUS the additional amount you've identified to reduce your credit card debt each month.
6. Continue to do this until the first credit card (the one with the highest interest rate) is paid off entirely. Then take the amount you were paying on that credit card (which is now paid off) plus the amount of the minimum balance on the second credit card, and apply the total to the second credit card each month until the balance is paid off, continuing to pay the minimum balance on all the other credit cards.
7. Continue crunching your payments on the credit card with the highest interest rate as described above, until all credit card debts are paid off.
Some financial experts recommend paying off the credit cards with the lowest balances first, rather than working on those with the highest interest rate. I disagree with that approach because although it might make you feel better to see the number of credit cards with balances decline, that good feeling will cost you money. Balances with higher interest rates accumulate interest costs more quickly, meaning you pay more to the credit card company in interest and less in actually paying down the principal amount that you owe.
Tuesday
Breaking The Bank
It is usually considered a good business practice that if you would feel ashamed to discuss with your family, to look elsewhere for a business model.
A growing number of card issuers have increased their profits by loading their credit cards with practices that consumers find themselves caught in from which they cannot escape. In addition, these same credit card companies, through intense lobbying have gotten a bankruptcy bill passed that makes it almost impossible for consumers to discharge their debt through Chapter 7 bankruptcy.
Credit card companies charge fees for things like paying your bill over the phone, which can average $5 to $15 per transaction, and there has been a 110 percent increase in charging over limit fee’s when it was other bank fee’s that put them over the limit in the first place.
These monthly fees are charged every month a consumer carries a credit balance higher than their credit limit, when the bank can simply enforce the credit limit to prevent consumers from exceeding it. They actually think they are doing the consumer a favor by accepting a charge that will trigger this over limit fee.
But the excess fees are only the tip of the iceberg. The disclosure statement that comes with every credit card issued, has gone from one to seven pages of small, incomprehensible print that even has some attorney’s scratching their heads as to what this statement is trying to say. The disclosure is loaded with one sided terms and conditions that are geared to bury a consumer, with increased interest and fees. There is even one condition that allows the credit card issuer to change any of the terms at their whim.
That last sentence has me even scratching my head. Why would anyone ever agree to such an agreement?
Another hidden fee that traps consumers is one they never hear about at all, the "interchange fee" that retailers pay to process transactions made with credit cards. Merchants have been waging war with the credit and banking industries to disclose and standardize these fees, which they say amount to a "hidden tax" on consumers.
The credit card companies have long profited from placing hidden fees and practices on unsuspecting merchants and consumers. The interchange fee is the biggest fee consumers have never heard of and accounts for more than the total of all other consumer fees combined.
Now, the industry has come up with ever more aggressive marketing campaigns, usually targeting consumers through direct mail solicitations and on college campuses, developing a whole new market of consumers willing to accept subprime interest rates and an excessive fee structure.
The average household will receive between 50 and 75 credit card solicitations in the mail this year. The number of solicitations mailed in 2006 was a record 8 BILLION! That doesn’t even include their other, more aggressive, marketing strategies.
With the continuing slump of housing sales causing more defaults and foreclosures, and job growth continually shaky, consumers need help from their debt.
A growing number of card issuers have increased their profits by loading their credit cards with practices that consumers find themselves caught in from which they cannot escape. In addition, these same credit card companies, through intense lobbying have gotten a bankruptcy bill passed that makes it almost impossible for consumers to discharge their debt through Chapter 7 bankruptcy.
Credit card companies charge fees for things like paying your bill over the phone, which can average $5 to $15 per transaction, and there has been a 110 percent increase in charging over limit fee’s when it was other bank fee’s that put them over the limit in the first place.
These monthly fees are charged every month a consumer carries a credit balance higher than their credit limit, when the bank can simply enforce the credit limit to prevent consumers from exceeding it. They actually think they are doing the consumer a favor by accepting a charge that will trigger this over limit fee.
But the excess fees are only the tip of the iceberg. The disclosure statement that comes with every credit card issued, has gone from one to seven pages of small, incomprehensible print that even has some attorney’s scratching their heads as to what this statement is trying to say. The disclosure is loaded with one sided terms and conditions that are geared to bury a consumer, with increased interest and fees. There is even one condition that allows the credit card issuer to change any of the terms at their whim.
That last sentence has me even scratching my head. Why would anyone ever agree to such an agreement?
Another hidden fee that traps consumers is one they never hear about at all, the "interchange fee" that retailers pay to process transactions made with credit cards. Merchants have been waging war with the credit and banking industries to disclose and standardize these fees, which they say amount to a "hidden tax" on consumers.
The credit card companies have long profited from placing hidden fees and practices on unsuspecting merchants and consumers. The interchange fee is the biggest fee consumers have never heard of and accounts for more than the total of all other consumer fees combined.
Now, the industry has come up with ever more aggressive marketing campaigns, usually targeting consumers through direct mail solicitations and on college campuses, developing a whole new market of consumers willing to accept subprime interest rates and an excessive fee structure.
The average household will receive between 50 and 75 credit card solicitations in the mail this year. The number of solicitations mailed in 2006 was a record 8 BILLION! That doesn’t even include their other, more aggressive, marketing strategies.
With the continuing slump of housing sales causing more defaults and foreclosures, and job growth continually shaky, consumers need help from their debt.
Monday
Why The Rich Get Richer
Did you have enough money last month to pay all your basic bills in full?
If you are not sure, look at your paychecks and bank statements for a typical month and compare them to your bills, payments, and withdrawals. It's hard to get rich if you are sinking into a quagmire of debt.
Even families with good salaries can allow expenses or debt levels to get too high. Examples include not paying off your full credit card balance every month, or spending more than you take in. Habits like these can cost you a lot of money in the end and are bad financial practices.
Get yourself into a position to cover all your main living expenses. Ideas can range from finding a cheaper place to live to brown bagging lunch more often. Debt is very expensive, especially if you are paying high interest rates, which could be the case with some credit cards, payday loans, and tax refund anticipation loans. It can take just a few months to run up enough debt that could take years to pay off, especially if you only pay the minimum balance on your credit cards each month.
Who wants to cope with debts for years and years?
It's fun to wear designer clothes and to drive a fancy car. However, the real signs of success are tougher to spot. The success habits of the rich have been studied and they are all things you can do yourself:
Pay all bills on time.
Keep track of expenses.
Pay credit card balances in full every month.
Put aside enough for emergencies - at least 3 to 6 months of pay.
Put money into money-earning investments out of every paycheck.
·Bankruptcy laws changed in 2005, making it harder for debtors to avoid paying off at least some of the money they owe. Don't count on bankruptcy laws to shield you from creditors.
·Major financial problems can happen. Have an emergency fund set aside to protect against job loss or an expensive medical problem.
·If you are counting on your family to rescue you, maybe you should think again. Can you be sure that relatives will be able to pay off your debts? Would you feel good about having to ask for support?
·Protect yourself and your family. Keep spending modest, lower your debt, and pay yourself something each month. Investments can help your money grow.
If you want to live like the wealthy, you need to start acting like them. You cannot and will not ever unless you change your habits and patterns.
When do you want to be wealthy?
If you are not sure, look at your paychecks and bank statements for a typical month and compare them to your bills, payments, and withdrawals. It's hard to get rich if you are sinking into a quagmire of debt.
Even families with good salaries can allow expenses or debt levels to get too high. Examples include not paying off your full credit card balance every month, or spending more than you take in. Habits like these can cost you a lot of money in the end and are bad financial practices.
Get yourself into a position to cover all your main living expenses. Ideas can range from finding a cheaper place to live to brown bagging lunch more often. Debt is very expensive, especially if you are paying high interest rates, which could be the case with some credit cards, payday loans, and tax refund anticipation loans. It can take just a few months to run up enough debt that could take years to pay off, especially if you only pay the minimum balance on your credit cards each month.
Who wants to cope with debts for years and years?
It's fun to wear designer clothes and to drive a fancy car. However, the real signs of success are tougher to spot. The success habits of the rich have been studied and they are all things you can do yourself:
Pay all bills on time.
Keep track of expenses.
Pay credit card balances in full every month.
Put aside enough for emergencies - at least 3 to 6 months of pay.
Put money into money-earning investments out of every paycheck.
·Bankruptcy laws changed in 2005, making it harder for debtors to avoid paying off at least some of the money they owe. Don't count on bankruptcy laws to shield you from creditors.
·Major financial problems can happen. Have an emergency fund set aside to protect against job loss or an expensive medical problem.
·If you are counting on your family to rescue you, maybe you should think again. Can you be sure that relatives will be able to pay off your debts? Would you feel good about having to ask for support?
·Protect yourself and your family. Keep spending modest, lower your debt, and pay yourself something each month. Investments can help your money grow.
If you want to live like the wealthy, you need to start acting like them. You cannot and will not ever unless you change your habits and patterns.
When do you want to be wealthy?
Friday
Living Debt Free
If you dream of living debt free while you watch the bills come rolling in every day, you are not alone.
What does it really mean to live debt free?
What would your life be like without any debt? No mortgage, no car loan, no credit cards. It may sound like an impossible dream, but is it really?
On a national level, Americans are incurring more debt and saving less than ever. The average U.S. household with at least one credit card carries a balance of $9,523 in debt, and the savings rate is at a historic low of less than 1 percent.
A recent survey of over 1000 consumers revealed that most people have no strategy to manage their debt and they continue to dig themselves deeper by planning to make large ticket purchases in the near future.
There is a definite pattern that is developing in our country as evidenced by this survey. People plan to spend but do not plan to save.
The fact is that you can lead a debt free lifestyle and all it requires is that you change your mindset. Change the way you look at bills and money. Take a proactive stance and do not settle for anything less than living debt free.
See, the problem comes when people get so caught up in making a living that they neglect to design their life. What separates the family that is struggling every month to pay their bills and the family that seems to be living comfortably? Income? Not on your life. What makes these families different is what’s between their ears. The way they think, act and feel about their finances.
So what inspires people to live debt-free?
People that live debt free have a unique perspective on spending. They "go without" certain luxuries. The people who live without debt don't think they're sacrificing anything, but they certainly don't spend what other people spend, and that's because living without debt at some point involves lifestyle changing decisions. In America, debt has become the new national pastime, with baseball and mom’s apple pie coming in second.
Today the average student steps brightly into the working world with no less than $19,200 in student loans, according to lender Nellie Mae. Flash forward a few years, and their soon saddled with $92,600 in mortgage debt and $9,200 in credit-card debt, according to the latest household averages from the Census Bureau's 2005 American Housing Survey.
Consumer debt is the greatest prescription for damaging your financial health. Consider this: Since 1995 nonmortgage consumer debt has increased 112% to nearly $2.4 trillion, according to the Federal Reserve.
Some other interesting facts from the survey state:
80% of the respondents said they don't plan to seek professional help to manage their finances or debt.
30% said they'll develop a plan on their own but they don’t know how.
43% said they have no intention of developing any kind of financial plan.
33% of those concerned about their debt have a debt-to-income ratio of 50% or above, about 10% higher than the national average. Nearly 25% have a debt-to-income ratio exceeding 50%. Financial planners say a debt-to-income ratio of about 33% is manageable.
19% of respondents concerned about debt said they plan to purchase a car in 2007, and 21% plan to make home improvements valued at more than $5,000.
96% have outstanding balances on their credit cards or have personal loans, and 37% of those make only the minimum monthly payment.
Despite growing debt and lack of a budget, 70% of the respondents said they're not knowledgeable about personal finance.
What does it really mean to live debt free?
What would your life be like without any debt? No mortgage, no car loan, no credit cards. It may sound like an impossible dream, but is it really?
On a national level, Americans are incurring more debt and saving less than ever. The average U.S. household with at least one credit card carries a balance of $9,523 in debt, and the savings rate is at a historic low of less than 1 percent.
A recent survey of over 1000 consumers revealed that most people have no strategy to manage their debt and they continue to dig themselves deeper by planning to make large ticket purchases in the near future.
There is a definite pattern that is developing in our country as evidenced by this survey. People plan to spend but do not plan to save.
The fact is that you can lead a debt free lifestyle and all it requires is that you change your mindset. Change the way you look at bills and money. Take a proactive stance and do not settle for anything less than living debt free.
See, the problem comes when people get so caught up in making a living that they neglect to design their life. What separates the family that is struggling every month to pay their bills and the family that seems to be living comfortably? Income? Not on your life. What makes these families different is what’s between their ears. The way they think, act and feel about their finances.
So what inspires people to live debt-free?
People that live debt free have a unique perspective on spending. They "go without" certain luxuries. The people who live without debt don't think they're sacrificing anything, but they certainly don't spend what other people spend, and that's because living without debt at some point involves lifestyle changing decisions. In America, debt has become the new national pastime, with baseball and mom’s apple pie coming in second.
Today the average student steps brightly into the working world with no less than $19,200 in student loans, according to lender Nellie Mae. Flash forward a few years, and their soon saddled with $92,600 in mortgage debt and $9,200 in credit-card debt, according to the latest household averages from the Census Bureau's 2005 American Housing Survey.
Consumer debt is the greatest prescription for damaging your financial health. Consider this: Since 1995 nonmortgage consumer debt has increased 112% to nearly $2.4 trillion, according to the Federal Reserve.
Some other interesting facts from the survey state:
80% of the respondents said they don't plan to seek professional help to manage their finances or debt.
30% said they'll develop a plan on their own but they don’t know how.
43% said they have no intention of developing any kind of financial plan.
33% of those concerned about their debt have a debt-to-income ratio of 50% or above, about 10% higher than the national average. Nearly 25% have a debt-to-income ratio exceeding 50%. Financial planners say a debt-to-income ratio of about 33% is manageable.
19% of respondents concerned about debt said they plan to purchase a car in 2007, and 21% plan to make home improvements valued at more than $5,000.
96% have outstanding balances on their credit cards or have personal loans, and 37% of those make only the minimum monthly payment.
Despite growing debt and lack of a budget, 70% of the respondents said they're not knowledgeable about personal finance.
Thursday
A Judge That C.A.R.E.'s
With consumer debt rising and the national rate of savings decreasing a New York bankruptcy judge has become tired of seeing people burdened with credit card debt in his courtroom and has decided to do more than help them untangle their finances.
In Bankruptcy Court it is not unusual to see debtors with over 15 credit cards and credit card debt equal to one, two or even three times the amount of their annual income, and no assets to show for it.
Judge John Ninfo II founded Credit Abuse Resistance Education, or CARE. It sends volunteers from the bankruptcy system, judges, trustees and private attorneys, to talk to young people around the country about developing good money skills and avoiding debt traps.
CARE is among the 180 organizations that make up the JumpStart Coalition for Personal Financial Literacy. Laura Levine, JumpStart's executive director, said CARE and other groups "do an amazing job, often with few resources," in trying to bring basic financial skills to the nation's youth.
She gives the coalition an A for effort, but acknowledges it has a way to go to deal with "a big problem that's not going to be solved overnight."
Financial education needs to be ingrained in our childrens heads from an early age with simple savings training in students as young as kindergarden age. When they learn to count and to use basic math skills, they need to be taught the importance of money and saving. We are sending these same children the wrong message by their parents spending habits.
Judge Ninfo uses real stories from his bankruptcy courtroom in Rochester, N.Y., to educate students about the potential dangers of misusing credit cards.
He tells of a couple who didn't even earn $50,000 a year but ran up more than $50,000 in credit card debt by taking repeated trips to Disney World "to keep the kids happy." And of an accountant who racked up $80,000 on her credit cards "keeping up with the Joneses and everybody else." And the man who accumulated $100,000 in card debt but wasn't worried because he intended to pay it off when he won a lottery.
Ninfo believes stories like these prove his point that the lack of financial literacy has moved beyond the problem stage to the crisis stage.
"We truly have a national epidemic of financial illiteracy in this country," Ninfo said in an interview. "We in the trenches of the bankruptcy system see it every day."
The idea behind the bankruptcy professionals' participation in CARE, he said, was "to be proactive to get the word out to people instead of being the ones who have to clean up the mess all of the time."
In a recent talk at the annual convention of the National Business Education Association in New York, Ninfo urged the teachers and school administrators in attendance to teach credit and debt education in their classrooms.
The fact that there has been a 96% increase in bankruptcy filings in the age group 25 years or less during the past 10 years demonstrates that there is a tremendous and immediate need to improve the financial literacy of students. I believe that providing students with credit abuse resistance education is the most valuable contribution that bankruptcy judges, court and clerk’s office staff, and attorneys can offer to the parents and students in their communities.
The CARE Program's presentation is long PAST DUE! College students both want and need this information before they step on campus.
“Some of those kids don't pay down their school debts but continue to borrow - eventually ending up in bankruptcy court”, Ninfo said.
In Bankruptcy Court it is not unusual to see debtors with over 15 credit cards and credit card debt equal to one, two or even three times the amount of their annual income, and no assets to show for it.
Judge John Ninfo II founded Credit Abuse Resistance Education, or CARE. It sends volunteers from the bankruptcy system, judges, trustees and private attorneys, to talk to young people around the country about developing good money skills and avoiding debt traps.
CARE is among the 180 organizations that make up the JumpStart Coalition for Personal Financial Literacy. Laura Levine, JumpStart's executive director, said CARE and other groups "do an amazing job, often with few resources," in trying to bring basic financial skills to the nation's youth.
She gives the coalition an A for effort, but acknowledges it has a way to go to deal with "a big problem that's not going to be solved overnight."
Financial education needs to be ingrained in our childrens heads from an early age with simple savings training in students as young as kindergarden age. When they learn to count and to use basic math skills, they need to be taught the importance of money and saving. We are sending these same children the wrong message by their parents spending habits.
Judge Ninfo uses real stories from his bankruptcy courtroom in Rochester, N.Y., to educate students about the potential dangers of misusing credit cards.
He tells of a couple who didn't even earn $50,000 a year but ran up more than $50,000 in credit card debt by taking repeated trips to Disney World "to keep the kids happy." And of an accountant who racked up $80,000 on her credit cards "keeping up with the Joneses and everybody else." And the man who accumulated $100,000 in card debt but wasn't worried because he intended to pay it off when he won a lottery.
Ninfo believes stories like these prove his point that the lack of financial literacy has moved beyond the problem stage to the crisis stage.
"We truly have a national epidemic of financial illiteracy in this country," Ninfo said in an interview. "We in the trenches of the bankruptcy system see it every day."
The idea behind the bankruptcy professionals' participation in CARE, he said, was "to be proactive to get the word out to people instead of being the ones who have to clean up the mess all of the time."
In a recent talk at the annual convention of the National Business Education Association in New York, Ninfo urged the teachers and school administrators in attendance to teach credit and debt education in their classrooms.
The fact that there has been a 96% increase in bankruptcy filings in the age group 25 years or less during the past 10 years demonstrates that there is a tremendous and immediate need to improve the financial literacy of students. I believe that providing students with credit abuse resistance education is the most valuable contribution that bankruptcy judges, court and clerk’s office staff, and attorneys can offer to the parents and students in their communities.
The CARE Program's presentation is long PAST DUE! College students both want and need this information before they step on campus.
“Some of those kids don't pay down their school debts but continue to borrow - eventually ending up in bankruptcy court”, Ninfo said.
Wednesday
Liars, Lawyers, Con Men And Thieves
Do you know the difference between a run over skunk and a debt collector in the road?
Skid marks in front of the skunk.
Debt collectors have been correctly branded the worst type of collection agents. Their operations are from a computer driven database provided to them by the very people you trusted this personal information with, your creditor. By the time a collection agency gets your account, it has been “charged off” for non-payment and sold for between 8 and 12 cents on the dollar. Commission is the way they make their money, usually between 15 and 25 percent, and some have stepped across the line of decency and what they can legally do.
It is an industry where deception, lies and threats are considered standard business practices and bonuses are paid for the higher amount of money they convince you to send. They seldom use their real names and usually bounce from job to job and hide behind the anonimity of the telephone.
Collectors generally see themselves in a position of power, more than willing to take advantage of a consumer with lies and intimidation tactics. They will misrepresent themselves and try to wear you down because a portion of what you send them is theirs.
They will try to call you at work, threaten to talk with your family and neighbors, threaten to arrest you and even threaten wage garnishment. One of the very first jobs I ever had was collector of bounced checks. I was a senior in high school and got very little training. I was told to do whatever I had to do to collect on the checks. The name I used was Sargent Boyce and I always had a police scanner with the volume up just enough to be heard by the person I called. I never said that I was a member of law enforcement but the implications were always there and I know that the people I was speaking with felt very intimidated. This practice was not only encouraged but rewarded by my then employer.
Consumers rarely complain about these tactics, perhaps because of being intimidated or embarassed over the circumstances of being in debt and suffering a financial hardship. But I truly believe that it’s time for the consumer to fight back. Understand your basic rights under the Fair Credit Reporting Act. Learn exactly what the debt collector can and cannot do and challenge them on violations. Once they know that you know what your rights are, they will back off for fear of getting sued. Turn the tables on them!
The National Cosumer Law League (NCLC) and the National Association of Consumer Advocates (NACA) will help you pursue agencies and collectors that violate the law and your rights. There is also The Federal Trade Commission (FTC) and the State Attorney General’s office where complaints can be filed. You can even complain about illegal collection practices to your original creditor.
What I would recommend is that you set up a tape recorder and tell the collector when they call you will be starting to record the conversation. This will be rather intimidating to the collector and they will be on their toes to stay within the limits of the law. Also, ask the collector to provide you with the name of the original creditor, their contact information such as the address and phone number, the collection agency that they represent and their contact information, any file number related to the debt and, this always get’s them, their full name, address and phone number. Under your rights under the FCRA, you are entitled to all information in relation to the debt and their personal information is part of that information. Arguably, they don’t have to give you their home address or phone number but it does turn the tables on them.
Also, there is the Cease Communication letter that you can send to the collector, that states that you do not do business with hird party collectors and are not, by law, required to do so. This stops the calls immediately.
Skid marks in front of the skunk.
Debt collectors have been correctly branded the worst type of collection agents. Their operations are from a computer driven database provided to them by the very people you trusted this personal information with, your creditor. By the time a collection agency gets your account, it has been “charged off” for non-payment and sold for between 8 and 12 cents on the dollar. Commission is the way they make their money, usually between 15 and 25 percent, and some have stepped across the line of decency and what they can legally do.
It is an industry where deception, lies and threats are considered standard business practices and bonuses are paid for the higher amount of money they convince you to send. They seldom use their real names and usually bounce from job to job and hide behind the anonimity of the telephone.
Collectors generally see themselves in a position of power, more than willing to take advantage of a consumer with lies and intimidation tactics. They will misrepresent themselves and try to wear you down because a portion of what you send them is theirs.
They will try to call you at work, threaten to talk with your family and neighbors, threaten to arrest you and even threaten wage garnishment. One of the very first jobs I ever had was collector of bounced checks. I was a senior in high school and got very little training. I was told to do whatever I had to do to collect on the checks. The name I used was Sargent Boyce and I always had a police scanner with the volume up just enough to be heard by the person I called. I never said that I was a member of law enforcement but the implications were always there and I know that the people I was speaking with felt very intimidated. This practice was not only encouraged but rewarded by my then employer.
Consumers rarely complain about these tactics, perhaps because of being intimidated or embarassed over the circumstances of being in debt and suffering a financial hardship. But I truly believe that it’s time for the consumer to fight back. Understand your basic rights under the Fair Credit Reporting Act. Learn exactly what the debt collector can and cannot do and challenge them on violations. Once they know that you know what your rights are, they will back off for fear of getting sued. Turn the tables on them!
The National Cosumer Law League (NCLC) and the National Association of Consumer Advocates (NACA) will help you pursue agencies and collectors that violate the law and your rights. There is also The Federal Trade Commission (FTC) and the State Attorney General’s office where complaints can be filed. You can even complain about illegal collection practices to your original creditor.
What I would recommend is that you set up a tape recorder and tell the collector when they call you will be starting to record the conversation. This will be rather intimidating to the collector and they will be on their toes to stay within the limits of the law. Also, ask the collector to provide you with the name of the original creditor, their contact information such as the address and phone number, the collection agency that they represent and their contact information, any file number related to the debt and, this always get’s them, their full name, address and phone number. Under your rights under the FCRA, you are entitled to all information in relation to the debt and their personal information is part of that information. Arguably, they don’t have to give you their home address or phone number but it does turn the tables on them.
Also, there is the Cease Communication letter that you can send to the collector, that states that you do not do business with hird party collectors and are not, by law, required to do so. This stops the calls immediately.
Tuesday
The Power Of Compound Interest
In my passion to educate consumers about credit, credit cards and debt, I have developed a fondness for college students. Especially those that are bombarded and targeted by the credit card companies marketing efforts.
People have asked me:
“If I had once piece of financial advice to give to college students, what would it be?”
An interesting question. But my answer is that college is way too late to start teaching about personal finance. By this time your children have already developed bad spending habits. Where did they learn these bad habits?
Guess!
They learned them from their parents. We have become a buy now pay later society with very little emphasis on saving. The average American unsecured debt is more than their annual salaries. Money management is a lesson that we must teach our children not long after they learn to walk. Credit card debt is historically high and this is why teaching children about money management is vital to our future.
Teaching complete financial management and planning for current and future spending AND SAVING is necessary to becoming financially independent and, as a parent, it is your responsibility to give your children the tools they need to succeed in life.
I don’t mean to sound harsh but parents, for the most part, are falling far short of the mark in this area of child development.
Teach them to plan well for wants and needs and teach them the difference. A new iPod is a want, food is a need. Teach them how to manage money and they will thank you when they get older. Teach them to save. To budget.
Let them learn from your mistakes. Let them see the hardships that debt brings. Face it. Credit card debt is just the opportunity to pay more for a product or service. Let them experience that. Teach them about compound interest.
A good lesson was learned on the golf course when two friends decided to “make it fun” by placing a wager on each hole. The bet was for a dime and on each hole the bet would double. Let’s do the math. The first hole is ten cents. The second hole is twenty and the third is forty cents. Not bad, just a friendly wager, right?
By the time they reached the ninth hole the bet was for $25.60. OK. Still not so bad for golf buddies. The tenth hole was $51.20, the eleventh hole was $102.40 and the twelfth hole was for $204.80! Now, if we were golfing this game, we would be getting a bit nervous. Hole 13 - $409.60. Hole 14 - $819.20. The bet continues to rise. By the 18th hole the bet will be a whopping $13,107.20!
THAT is the power of compound interest.
Do your kids a favor. As a parent, we always want more for our children they we have. Teach them about money, money management, spending and saving.
So what would I say to a college student?
JUST SAY NO!
Say no to the credit card “pushers” that stalk students on college campuses nationwide, enticing the unknowing student with their drug of credit. Don’t fall for the visions of buy beer and pizza now and pay later. For a $30 beer and pizza tab, making the minimum payments, you will have finally paid for that little harmless party in about seven years and you would wind up paying well over $100!
AGAIN, that is the power of compound interest.
People have asked me:
“If I had once piece of financial advice to give to college students, what would it be?”
An interesting question. But my answer is that college is way too late to start teaching about personal finance. By this time your children have already developed bad spending habits. Where did they learn these bad habits?
Guess!
They learned them from their parents. We have become a buy now pay later society with very little emphasis on saving. The average American unsecured debt is more than their annual salaries. Money management is a lesson that we must teach our children not long after they learn to walk. Credit card debt is historically high and this is why teaching children about money management is vital to our future.
Teaching complete financial management and planning for current and future spending AND SAVING is necessary to becoming financially independent and, as a parent, it is your responsibility to give your children the tools they need to succeed in life.
I don’t mean to sound harsh but parents, for the most part, are falling far short of the mark in this area of child development.
Teach them to plan well for wants and needs and teach them the difference. A new iPod is a want, food is a need. Teach them how to manage money and they will thank you when they get older. Teach them to save. To budget.
Let them learn from your mistakes. Let them see the hardships that debt brings. Face it. Credit card debt is just the opportunity to pay more for a product or service. Let them experience that. Teach them about compound interest.
A good lesson was learned on the golf course when two friends decided to “make it fun” by placing a wager on each hole. The bet was for a dime and on each hole the bet would double. Let’s do the math. The first hole is ten cents. The second hole is twenty and the third is forty cents. Not bad, just a friendly wager, right?
By the time they reached the ninth hole the bet was for $25.60. OK. Still not so bad for golf buddies. The tenth hole was $51.20, the eleventh hole was $102.40 and the twelfth hole was for $204.80! Now, if we were golfing this game, we would be getting a bit nervous. Hole 13 - $409.60. Hole 14 - $819.20. The bet continues to rise. By the 18th hole the bet will be a whopping $13,107.20!
THAT is the power of compound interest.
Do your kids a favor. As a parent, we always want more for our children they we have. Teach them about money, money management, spending and saving.
So what would I say to a college student?
JUST SAY NO!
Say no to the credit card “pushers” that stalk students on college campuses nationwide, enticing the unknowing student with their drug of credit. Don’t fall for the visions of buy beer and pizza now and pay later. For a $30 beer and pizza tab, making the minimum payments, you will have finally paid for that little harmless party in about seven years and you would wind up paying well over $100!
AGAIN, that is the power of compound interest.
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