The One Part of Budgeting That No One Talks About

Personal Note: Budgeting, including household budgeting, is one of the most beneficial practices in personal finance matters. The moment we start experiencing lack of proper control in financial related areas of life, it is very easy to lose our peace of mind, our ability to think constructively and expose ourselves to serious dangers of deteriorating health. As Bern endeavors to make clear in this article, making adequate provision for future earnings, when creating our personal or household budget, is a vital aspect of the all-important budgeting practice; and we cannot afford to do without it if we are truly sincere about experiencing long-term success in our personal finances.

The One Part of Budgeting That No One Talks About
By Bern Walters

The Importance of a Household Budget

No matter if you are a college student, a family of four, just graduated, or you have been in the workforce for any length of time you should have some level of understanding about the importance of money management. The first thing that is considered in the creation of a budget is the present earnings at the time, and secondly, any future earnings. However, in some scenarios this second aspect of the budget process is sometimes overlooked when most people sit down to create a personal or household budget. The reason behind the need to enter a forecast for future earnings is because of possible growth through pay raises and cost of living adjustments sometimes provided by employers.

Furthermore, this second aspect should enter into the future goal category. When building a financial management model, a budget, the present and possible future earnings are only part of the picture. Each financial plan should contain a goal or set of goals with which to set or build the framework and structure of the financial model. The standard entries such as expenses, overhead or liabilities, and earnings equate to cash flow. A budget, therefore, is a roadmap of, and for the direction and amount of cash or earnings, an entity receives and moves. The entity can be any one of the aforementioned to include the possibility of a business.

Large and Small Businesses Do It, So Why Not You

Determining your goals as a family, a postgraduate, or a student means that some thought as to where you see yourself financially in the future takes place. When looking at the big picture, so to speak, this means planning for change and setbacks. The change looked for is the potential of future gains through raises, investments in real estate, buying a home, having a family, retirement, and funding your children's education. This translates into preparing for the bumps along the way or the setbacks by creating savings accounts and retirement funds such as a 401k or a Roth IRA. Life insurance enters into the broader picture of preparing for medical emergencies and even sudden death.

By making a budget and entering a forecast of future earnings, it helps you keep track of both spending and savings and aids in monitoring the path towards the goals you have set. This also helps avoid running into the chance of having to declare bankruptcy. This last item becomes a concern when someone is living beyond his or her means by spending more that they earn. This can happen very quickly and easily where credit is concerned. Which is why budgeting is so important. Having a little debt is healthy where having a lot of debt is detrimental for two major reasons.

Having Too Much Debt

The first reason too much debt is harmful is it creates anxiety and stress to occupy the mind, which in turn can cause a persons health to deteriorate and cause poor judgment in financial matters making things worse. Secondly, the loss of a home and personal possessions can result through having to declare bankruptcy, in a worse case scenario. At present, getting out from under large amounts of debt has become less stressful because more and more people are beginning to realize that setting a budget helps them achieve their financial goals by having a tool to monitor their cash flow.

Yes, having a budget helps diminish debt through the allocation of funds put towards certain areas that need the most attention. This is particularly important where a budget did not exist beforehand, i.e. the debt was realized. This shows the importance of having one in the first place so things will not get out of hand causing in large amounts of debt. However, as a college graduate who is saddled with their student loans, this is the opportune time to sit down and create one. Specifically, after the student enters the workforce full time, seeing the income received and looking at a forecasted scenario that includes debt reduction, cost of living expenses, and investment funding, (retirement and life insurance).

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3 Reasons Why Investing is “Risky”

Personal Note: Robert Kiyosaki is definitely one of my most respected mentors when it comes to personal finance. In his usual straightforward, uncomplicated manner, Robert challenges the prevalent notion that investing is risky. The honest truth is that, as human beings, we are always afraid of the unknown. However, once we gain adequate knowledge and understanding of the unknown, the fear factor is automatically dispelled. Investing is the same: as long as we lack the required training, control and knowledge, we will continue to believe investing is risky.

Written by: Robert Kiyosaki

The importance of training, control, and knowledge

Many people think that investing is risky. When I was growing up, my poor dad believed this. Because he valued comfort and security, he felt that smart people got a good job and saved their money.

My rich dad, on the other hand, felt that my poor dad’s plan was risky. He aspired to own his own businesses and to invest his money rather than save it.

As a young man, I had to decide for myself who was correct, my poor dad or my rich dad. It was not an easy decision. Both men were confident in their opinions, but after much questioning and study—as well as an understanding of what I wanted in life—it was clear that my rich dad’s path was the path for me.

Along the way, I learned 3 key reasons why my poor dad really thought investing was risky—and why it was, for him and others like him.

1. Lack of training

Most people go to school to be trained on how to be an employee or self-employed. School teaches us things like reading, writing, and arithmetic, all good things and useful for the work world. It teaches us how to execute on orders from our superiors and be where we’re told to be at the right time – the mindset of an employee.

School doesn’t teach how money works, or how to have it work for you. It doesn’t teach you the skills necessary to become a business owner or an investor. Those are skills that you must seek out and teach yourself.

As a result, most people simply lack the training necessary to know how to invest in a way that isn’t risky. And without training and knowledge, investing is risky.

2. Lack of control

During the last Great Recession, I’m sure that many people came to believe that investing was risky as they watched their stock portfolio’s tumble. The reality is that most people don’t have a true investment plan.

Instead, they work hard and hand over their money to an “expert” who invests it in some mutual funds, stocks, and bonds. The problem is that these types of investments leave you very little control.

You are at the mercy of the markets and managers. That is a position of risk.

Successful investors, on the other hand, strive for as much control as possible when it comes to their investments. That is why I invest in businesses where I have decision-making power, and it is why I love real estate. In both cases, I have a lot of control over what happens with my investment.

3. Lack of knowledge

Most of us know intuitively that if you want a real deal, you need to be on the inside. You often hear someone say, “I have a friend in the business.” It doesn’t matter what the business is. It could be to buy a car, tickets to a play, or a new dress. We all know that “on the inside” is where the deals are made.

The investment world is no different. As Gordon Gekko, the villainous character played by Michael Douglas in the movie Wall Street, said, “If you’re not on the inside, you’re outside.”

Employees and self-employed people generally invest from the outside. They have limited knowledge of what they are actually investing in. Those who operate as business owners and professional investors have detailed knowledge of what’s going on inside of their business or their investments.

They are the drivers of the business or investment, and because they have the insider knowledge that goes with that, their investments are far less risky.

Moving from a position of risk to a position of security when it comes to investing takes financial education and practice. I encourage you today to take an honest look at your investment position and to take the steps necessary to gain training, control, and knowledge. It will be one of the wisest decisions you can make.

Common Mistakes People Make With Their Personal Finances

Personal Note: One striking thing about this article is how Shantel made it clear right from the start that attaining financial security does not have anything to do with our individual levels of income. A lot has to do with our mindset and the in-depth understanding of our current financial situation (where we are), our desired personal finance goal (where we want to be) and the plan and strategy we have, in a well laid out manner, on how we intend to achieve the desired goal. She also reminds us that, if we work toward achieving our financial security goals appropriately, we would always be able to enjoy a certain degree of fun and joy that comes with staying the course.

Common Mistakes People Make With Their Personal Finances
By Shantel Haines

Common Mistakes People Make With Their Personal Finances

Talking about personal finances is not a subject that most people enjoy. The reality is people generally assume that personal money difficulties are from a lack of money to work with. However, money management and handling proves to be more of a challenge than not actually having enough money.

It may surprise you to know there are as many high income earners that have challenges managing their money as there are those in the smaller income categories. Further, happiness and success in dealing with money have little to do with the amount of money but, rather what is expected and wanted from that money in terms of what it brings to your life.

What are the common mistakes that many people make with regard to managing their personal money?

This includes the practical difficulties with:

Organization and Structure

Many people don't have structure in how they manage their personal finances. There needs to be a set direction and plan for how money will be used now and in the future. It sounds good to talk about this, but many individuals do not know how to tangibly have a workable set of activities that will keep them moving forward and having a practical set of good money practices in dealing with their money. Only with structure and organization, can a good money plan be adhered to and the benefits realized. Once these personal money practices are in place and tailored for the individual, then momentum can take over and it becomes part of who you are and in your actions in dealing with your money.

Money inflows and outflows

Knowing exactly what money that you have coming in and leaving your "money reality" is again not something in a tangible sense that people know how to deal with. They may know what that is (or not) but how to do this is something else. Think of it like using a calculator, it is convenient and obviously more efficient, but you still should know HOW it is computing and arriving at its answer. Can you answer why you need to know your cash flows each month? Do you know what your net worth is? These answers are the keys to being able to put together a true understanding of what you have been doing with your money and what behaviours you may need to change.

Money Intention

The realization that money is not meant to be all used at once. Some of it is for your current use, but an amount must be left for near-future use and then a portion for further-future use. Preserving and safekeeping your money for the time ahead together with using money for cultivating strength and fun in your overall life is important and essential for you to be able to work with your money. Having a specific method of understanding what you want from your money and clarity about your intentions for your money, are key.

Confidence

Building your money confidence is at the center of actually working with it. Becoming grounded with your relationship with money and knowing how to approach the whole question of money is rooted in how confident that you are. You must build your confidence about money through enhancing your money mindset and character. This is achieved with allowing yourself to think differently and to adjust your thinking that will free you to the point of building confidence with your money.

Keeping the Fun

Your personal money is not just about earning money and paying bills! There is supposed to be a certain degree of fun and joy that comes from achieving and having what you want for the money that you earn. Coming to terms with what that is, how to obtain this and organizing yourself to have what you want will help you to work towards what you believe will make you happy. Often times, people work for things they don't want while ignoring or not being truthful to what they really do want. Making decisions, being in tune to your desires and having a plan will greatly help you to stay true to your purpose and eliminate that which you don't want with your money and your life.

Dealing with your personal money can be one of the most intimidating and frightening subjects for people to deal with.

However, it need not be if you learn how to:

• Work with your personal money inflows and outflows
• Preserve and safe keep your money for the future
• Create your money intention for strength and for fun
• Enhance your money mindset and character
• Build your money confidence

To your personal money confidence...

By coming face-to-face with your money, you can look forward to starting fresh - cleaning up old habits and embarking on a new path for yourself, with renewed hope and optimism. http://goo.gl/IuojZO

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Setting Realistic Financial Goals

Personal Note: Personally, the wisdom Dan shared in this article is coming at an appropriate time. While a number of us have often succeeded at being disciplined as regards our personal finances – specifically in the area of spending less than our incomes and paying ourselves first – once in a while, certain “essential” demands challenge that healthy habit. This article helps us in maintaining our focus and serves as a reminder that, with determination and continuous learning, we can steady our gaits and keep ourselves firmly on our individual paths to financial security.

Setting Realistic Financial Goals
By Dan Annweiler

Money is one of the greatest concerns for the vast majority of people. We all need money to survive, to eat, dress ourselves, pay the bills and have some fun. When money is not enough, it's very easy to slide on the descendant path of debt, without too many possibilities to escape the trap once we are caught inside. Few people who are in financial trouble know that there is a way out, but it requires a good personal discipline and the understanding of the personal finance management principles and rules. This article contains a few tips that might prove useful, so keep on reading.

The first step in seeing yourself out of trouble is to estimate how big the trouble is in the first place. You need to create a spreadsheet containing your monthly net income and your expenditures. Be as detailed as you can, because it is important to see exactly why you can't make ends meet and where you could possibly cut from in order to be able to recover.

The main rule of a healthy family budget is to always spend less money than you make. You should setup a savings account and direct 5%-10% of your earnings into it prior to paying any bills. Even 2% of your monthly income could be something if you stick to this habit long enough. The key thing here is to set this money aside before spending on everything else, otherwise your best laid plans won't work, especially if you are already in trouble.

Entertainment is good, but it shouldn't throw you into even bigger debt. Budget for some inexpensive entertainment every month, but consider cooking with friends rather than going to expensive restaurants, for instance.

When you make your family budget, don't forget to include expenses that occur only once or a few times a year. Insurance, car maintenance or medical expenses may fall into this category. Don't overlook them, because they are important and they will ruin your budget if you don't expect and plan for them.

If you don't make enough money to cover all your current expenses, consider what you could be cutting without suffering too much. You may be able to take the bus instead of driving your car, for instance, or maybe you could ride your bicycle. When shopping for groceries, you could watch and take advantage of special discounts, promotions or coupons. When you are at home, maybe you have the habit of keeping the lights on in all rooms, even if nobody stays there. Consider switching off what you don't need. It's good for your finances, as well as for the environment.

Be careful with your money and you'll see getting rid of problems is not an impossible task.

We offer personal finance tips and ideas that will help you improve your finances, manage your debt, increase your credit scores and save money on TV and telephone services.

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People Don't Plan To Fail, They Fail To Plan

Personal Note: This is one of those articles that sort of jolt you from financial slumber. In a very pragmatic and candid manner, Ken reminds us that the future is certain and it approaches without caring whether we are prepared for it or not. The statistics of individuals that fail to plan is just staggering, but it is a wake-up call that we need to take the bull by the horns and start, or remain persistent in, taking those necessary steps toward our financial security.

People Don't Plan To Fail, They Fail To Plan
By Ken Moraif

Check out these statistics: Seventy-two percent of Americans, once they reach the age of sixty-five, depend on Social Security, charity and family for income. Seventy-two percent! Twenty-three percent have to continue working. Only four percent are financially secure, and one percent are wealthy. That means ninety-five percent of people in the United States, the richest country that has ever existed, either have to continue working or rely on charity, Social Security and family for their income once they hit sixty-five. That's mind-boggling!

I don't think those people planned to fail; many of them just failed to plan. If you don't want to be in that ninety-five percent, I suggest you start making your plan today, beginning with these five steps:

Step 1 - Determine your goals. Ask yourself where you want to be in five years. Then write it down. A goal is a dream you put into writing. There is amazing power in writing something down.

Step 2 - Gather up all of your investment information. You may have accounts spread all over the place. Figure out where everything is. Get all your records together. Get organized so you can determine where you are financially right now.

Step 3 - Consult with a professional. There are some things in life that are way too important for you to do by yourself. You don't perform surgery on yourself, right? Professionals can tell you where you're weak, where you're strong. Seek advice from financial advisors, tax professionals, and people in the legal profession. Even the best athletes in the world have coaches that help them. The same principle should apply when it comes to your finances.

Step 4 - Decide to pay yourself first. If you're still working, you should be maxing out all the opportunities you have to save money. Do it. Take that money away from yourself before you get your greedy paws on it. You'll start to see your account grow, and as it does, you'll be motivated to save more. It's a wonderful thing and you should do it. Now.

Step 5 - Review your plan once a year. Look at where you are, not only based on where you were a year ago, but in regards to the five-year goal you made in Step 1.

If you start planning now, I think there's a better chance you'll be in the five percent of people who are financially secure after sixty-five. And that's where I want everyone to be. I'd like to convert the whole country to the idea of planning to increase their chances of being financially secure.

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Is Saving Your Money Really The Way To Build Your Wealth?

Is Saving Your Money Really The Way To Build Your Wealth?
By Omar Best

Many people, including myself, were trained to believe there is only one way to live our life. Many of us were led to believe that you should:

• Go to college so you can secure a good job.
• Once you secure that good job you should make your supervisor happy so you can get a bigger paycheck.
• Save your money.
• Then retire.
• Receive your retirement check.
• Die.

If people choose to follow this path, then that is their decision. The major issue here is that many people were only taught one way to live their life. Ironically, some individuals will say that the so-called elite or top 1% intended for it to be that way. The strange thing is most of the super wealthy have decided to go about their life in a way that goes against the grain.

Of course, as much as they may want to, the rich have not uncovered a way to live forever. But you better believe they are trying to figure it out.

Continuing on, as a youngster in high school we were not told to become entrepreneurs, invest in stock, or invest in real estate. We did not have any investment classes or business classes available to us in high school. As a result, you have many people who have no idea of how to start a business or the different investment opportunities available to them.

So what is it that the rich do that is so different?

The wealthy do many things differently from the average person, but the significant difference is that wealthy individuals choose to invest money versus saving it. The rich recognize that they can make more investing their money instead of putting it in a bank account. In spite of all that, if there are not any good investments out there, then they will most likely consider putting their money in a low interest savings account. However, the wealthy are always searching for investment opportunities that will earn them the best return for their money. When they uncover that money making investment, the cash in that low interest account is coming out.

Here is the difference in the thinking of a wealthy individual and the average individual.

The average individual would rather save $100 a month in a retirement account for 25 to 30 years and then start collecting their pension check of $3000 month at 67 years old when they retire.

The rich also views investing as a risk, but they look at investing as an opportunity to make more money versus losing money. Rich people would rather invest $6,000 in a venture that will earn them $100 a month in cash flow for the next 10 years. In addition to that, they realize that the venture or investment will be increasing in value.

If you truly want to be wealthy, then shouldn't you try to do what the wealthy do? If you wanted to be a good football player, you would not emulate Micheal Jordan.

With that said, you should consider learning about your investment alternatives outside of your pension plan and bank savings account. You really need to understand that there are other investment alternatives other than a simple bank savings account like real estate and stock investing.

Lastly, when you begin to discover these alternative investment vehicles your family and friends will try to discourage you. Many people will advise you that these investments are dangerous and that you will lose your money. These same people will tell you that you should continue to live the way that you are living and that money is not everything.

Ultimately, you have to make the choice on whether you will find out about other types of investment vehicles or not. However, you need to recognize that in order to change your financial status you will have to change the way you think about finances.

Learn more ways to invest your money at http://howtobeastockmarketplayer.com/2012/03/stop-letting-the-banks-have-all-the-fun/

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How Managing Your Energy Can Make Managing Your Money Easier

How Managing Your Energy Can Make Managing Your Money Easier
By Frederick W. James MD

Managing your money well requires you to manage your energy and your emotions well, we all know that. How much harder is it for you to resist the temptation to overspend or to stay committed to your daily personal finance planning habits when you're physically exhausted? On the other hand, how much easier is it for you to remain hopeful and enthusiastic about your financial situation and practice good spending habits when you have a lot of energy and focus?

Considering this, let's look at some things you can do to ensure that you have all the energy you need to stay committed to your plan for creating financial freedom.

Sometimes Less is More

If you're working extra hours to earn more money, it's important to consider the impact on your ability to be productive and to do the best job possible. There are times when you can do more and more before the good old law of diminishing returns starts to chip away at your ability to get the best results. Your body needs time to rest, to relax and to refocus, that is if you want to live a long and healthy life.

This downtime is beneficial to evaluating your progress and reworking your personal finance planning, a key activity that I teach my coaching clients. So the first thing to ask yourself is... how are you using your energy, and are you giving yourself the time needed for recharging?

The Great Energy Paradox

I doubt I have to sell you on the benefit of good exercise. Do you know why many people avoid exercise? Is it because they don't have the energy, or because they don't have the time? Ironically, this is the very reason why you need to commit fifteen to thirty minutes a day to cardiovascular exercise or strength training. The more you do this, the more energy you'll have, the more focused you'll be and the more you'll get out of the time that you have.

Eating Healthy is the Best Way to Spend less Money

Eating healthy is another one of those paradoxical things that people don't do because they either don't have the time or don't have the money. It might interest you that the leading cause of personal bankruptcy is medical bills, and a poor diet is certainly an invitation for health problems. Perhaps not right away, but eventually poor eating habits will catch up, and when they do you'll find that they've been collecting "compound interest" the whole time.

So if you want to make sure you have the energy and the willpower to stick with your personal finance planning commitments and to manage your money well, follow these simple tips. You'll be glad that you did.

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Developing A Life Plan To Live Without Money

Personal Note: Terry, in this article, could be taken as a pessimist, but, in actual sense, I believe he is only being pragmatic since we don’t always choose life’s battles. No one prays to be in a seemingly hopeless financial situation, but it’s a possibility. However, the beauty of success is that it isn’t primarily dependent on life’s circumstances but on how we react to them. In short, this article gives us an insight into how we could “thrive” during extremely trying financial times - as that would probably be the only way to live to fight another day.

By [http://ezinearticles.com/?expert=Terry_Phong]Terry Phong

Times are tough and it got me to thinking, how would I survive without money? Do I have a life plan to survive when all sources of income are no longer available? These are some tough questions to ask one self. Just how prepared are we when tragedy strikes?

The best defense is preparing a good offense for if indeed we find ourselves without an income. You can start implementing the ideas that will help you conserve your resources and begin saving today. You do not have to wait until your family's income is gone before you begin.

Think simple. What do you need to survive, food right? Gardening or growing your own food is how people did it before super markets came along. The ability to harvest your own crop full of free vegetables is a tremendous savings. It may not be free at first, there is that initial investment but once you get past that, you will have a blissful bounty season after season.

You can learn all about gardening through books at your free local public library. Technical advances in gardening have allowed people to grow more even if space is limited by using the square foot gardening method. You can also grow vegetables in large containers, and buckets.

There are many benefits to gardening. It is not only fun but is also a form of physical activity.
You get a certain joy when you are eating food that you have grown your self. Get your children involved by letting them help to plant seeds and pull weeds. This is an excellent way to teach them about responsibility and contributing to the family. Planting a garden now will help you to survive later should your family income disappear. Gardening will help you build both skills and memories for a lifetime.

People from days of old knew how to get by with very little because they understood the concept of preserving. You simply save and use what you have. People applied this concept to food by canning and freezing the excess, mainly the leftover from their harvest. Canning is not just limited to vegetables. You can also can soups, stews, and even meats. This will serve you well for when there is little money to buy food. Once again, you can use your local library to research more on canning. There are even free resources such as freecycle.com that will give you free canning supplies.

Depending on where you live, homesteading can really help in becoming self-sufficient. Having a chicken and a rooster will provide you with eggs that you can eat or sell. Livestock is not always feasible if you live in the city but the benefits of raising your own chickens to gather your own eggs are much greater when you do not have an income.

What did people do to get what they wanted before currency came along? They traded things, also known as bartering. You simply exchange a good or a service you wanted for something else you want. A good example of this would be fixing your neighbor's car in exchange for food from his garden.

There is a website called "One Red Paper Clip.com" where this one person traded a red paper clip all the way up to getting a house. You can check out the amazing story yourself. It just goes to show what you can do when you look for ways to be creative. A word of caution though, just be smart when bartering and do keep a record of your transaction. Just because you are not using money does not mean you are exempt from your taxes. Uncle Sam will still want to know how you acquire your stuff.

It is a very scary thought to many to have to think about surviving with little or no money. However, when push comes to shove we do need to find a way to survive. I hope that none of us have to experience such hardship but the truth be known there are many who have no choice. If we do not develop a life plan to live without money now, we may find ourselves as another victim instead of being a victor in life's situations.

About the Author:

Terry Phong has a background in Human Development and loves people in general. To get more information on personal development for success follow the link => [http://inspirationallifeplancoaching.com/]http://inspirationallifeplancoaching.com/.

2009

Article Source: [http://EzineArticles.com/?Developing-A-Life-Plan-To-Live-Without-Money&id=5176150] Developing A Life Plan To Live Without Money

Personal Finance Advice You Can Use

Personal Note: In this short but helpful article, Nikky shares with us “some great tips” that will definitely assist us in improving our personal finance. The tips aren’t ones we’ve probably not heard about on several occasions, but constantly reminding ourselves of them would go a long way in keeping us focused.

By : nikky Howard

The topic of personal finance is not a popular topic with most people. Most of us are struggling to get control over our personal finances and it is a losing battle. However, there is hope for even the most lost among us. There is plenty of personal finance advice out there and all it takes is reading some that advice and putting it to work to begin down the road to control over your personal financial situation.
The following are some great tips in a variety of areas of personal finance:

- Set spending limits. Give yourself an allowance to curb unnecessary spending throughout the week.

- Save for large expenses. Set a goal to save for a large expense, that way you know you can afford it and will not end up draining your bank account to make the purchase.

- Prioritize your spending. Learn to identify what you must have, what you need and what you want and prioritize in that order.

- Pay your bills on time. This eliminates late fees which can add up over time.

- Track your spending habits. This will help you identify wasteful spending so you can make a positive change.

- Look for savings everywhere. Shop at dollar stores, join discount clubs and use coupons.

- Always shop around before making a large purchase. Compare prices and look for the best deal.

- Save. No matter what start a savings plan. If the only thing you can do is save change then that is at least a start. If you can afford more then add it to your budget.

- Invest smartly. Know yourself when making investments. Learn about your investing personality so you feel comfortable with your investments.

- Stay on top of investments. Do not just hand your money over to a broker. Keep track of your investments and make sure you are always in loop about anything going on with them.

- Know when to get professional help. If you are in a financial crisis seek help. There are plenty of companies out there who will help you for free to get your finances back on track.

Your personal finances are important. Do not let them slip out of your control. Avoid living beyond your means and letting your finances run your life. When you get control over them you will find you are much happier and that you feel as if you can spend without worrying.

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What We Can Learn From the Rule of 72

Personal Note: In this very helpful and instructive article, Zigfred places emphasis on the importance of compound interest in achieving our personal finance goals. With high level of discipline, soberness of mind, and continuous learning, the “Rule of 72” simply becomes a very powerful tool in creating an enviable and a sustainable financial lifestyle.


By [http://ezinearticles.com/?expert=Zigfred_Diaz]Zigfred Diaz

The Rule of 72 is simply a label given to the principle of compounding interest. It includes a very simple mathematical formula that explains how money grows. Compounding is very simply, earning interest on your money and then re-investing that interest. The Rule of 72 illustrates very clearly how it is done.

The Rule of 72 can teach us a couple of important lessons. Here are some of them:

1.) Money is like a fruit tree - When you plant a tree, you don't expect it to bear fruit overnight. Neither does your money. You give it time to grow just like a tree. The Rule of 72 teaches that if you give more time to your money to "compound", you can expect bigger returns. There will be more illustrations in my next post.

2.) Interest rate is the key - The Rule of 72 teaches that the higher the interest rate, the faster your money will double, and the faster it does, the more money you earn. Especially if you keep your money invested for a long period of time.

3.) Money does not grow on trees - This saying simply means you cannot make money without working for it. Nothing ever comes in life free - definitely not money. The Rule of 72 teaches that to get more money out of what cash we have, we need to exert all effort to get the highest interest rate possible while ensuring that we do not carelessly engage in risky transactions or business deals that seem too good to be true.

4.) Make money work hard for you - Why should we work hard for money when we can make money work hard for us? That is right. The best way to financial freedom is to let money work hard for us. Money is very much different from human beings. It doesn't get sick, get tired or complain. The Rule of 72, which is all about the concept of compounding interest, teaches us that interest when re-invested begets more interest.

5.) The concept of the "Automatic Money Machine" - The Rule of 72 fully supports a powerful concept in personal finance called Passive income. Personal finance experts talk of two kinds of income: active income and passive income. An example of active income is your day job where you have to be physically present and doing some work for your boss in order to earn your salary. Passive income is an "automatic money machine" where you don't have to do anything to earn an income. You just sit there and watch money come in. However, passive income does not start automatically. You need to do something at first, after which you will start to reap the benefits and just wait for money to come in. Interest income is a good example of passive income - your money earns interest without your doing anything to earn that interest. The Rule of 72 demonstrates what passive income is.

So those are the valuable and powerful lessons in the areas of investing, business and personal finances coming from the Rule of 72. These are the reasons why I call the rule as the foundation for all investing.

Zigfred Diaz is a businessman and a stock market investor. He regularly blogs about personal finance and how to invest in the stock market. Click on the following links, if you would like to know more about the [http://www.stockmarket-investing.com/the-foundation-of-all-investing-the-rule-of-72/]Rule of 72 or how to do [http://www.stockmarket-investing.com/]stock market investing intelligently.

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A Quick Step-by-Step Money Making Idea to Effortlessly Make Money with Money

Personal Note: In this simple but very helpful article, Dean discusses a few of the main pillars of success in our personal finance. It’s easy for us to disregard these very important “truths” but if we could discipline ourselves enough to stick to them, achieving our financial goals is virtually guaranteed.


By : Dean Relax

Instead of working for money, it is much easier to make more money with money. That is, if you put your money to work instead of you. If you take the statistics, you can easily verify that most of the world's high earners are either entrepreneurs or investors who wisely leverage their money. So not only it is easier to put money to work to make more money, but it has infinitely greater potential than anything one can achieve by working a job for money.

I'm discussing today the best and most innovative money making idea that can apply to everyone - whether you're a college student, grandma or going through your mid life crisis and have realized everything you've ever done to make money hasn't really been worth it. All you need to do is to understand the value and power money has, especially when it comes to making money. Once you understand this money making idea, you can implement it straight away with minimal cost and effort.

- Start with a Small Amount

You can start with a small amount of money and allow it time to grow. To make money with money, you don't need to be a millionaire at the beginning. In fact, anyone who is fond of a coffee or pizza once every so often can enter into this unique money making idea because it costs only roughly the same amount. Today is the day for you to realise that you no longer have to work hard all the time for your money. Put your money to work so you don't have to!

- Set Realistic Goals

Since you are starting with a small amount, don't expect to see an unrealistic return. It is also better not to spend all the returns in the initial phases but rather to reinvest them into your investment system to make even more out of it. For example, say you have invested $5 in a month and get a return of $(5+1=)6. Then the thing to do which will put a rocket into your investment growth is to invest that $6 into the next investment vehicle. It will help you to reach your desired goal at a much faster rate.

- Understand the Core Logic

You must understand the core logic behind the success of the money making plan you are using. When you are investing your money, you must realize the proposed plan and the mathematics supporting the profits you are aiming for. It is vitally important that you realize the basic money making idea of the particular business before you invest your money.

- Verify the Reputation

When you join any business as an investor, you must check the records, reputation and performance of the company, no matter how much or how little you have invested. If you are planning to invest your money into some business that does not have any solid track records, it is better to stay away from it. Also you must check if the company is paying returns on time to its investors so that you can count on collecting your profits promptly when they are due.

If you don't follow these rules, you are risking your money for nothing. On the other hand, if you're investing in a business that follows all these points satisfactorily, you are on your way to establishing a successful investment portfolio and a great money making idea.

If you're not really keen doing this all on your own, have you thought about joining an investment alliance?
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Personal Finance Tips - How You Know You Are a Millionaire

Personal Note: In this article, Jono, in a way, expatiates on the Be-Do-Have philosophy: Naturally, we like to have what we desire in our personal finances (as well as other areas of our lives) but we usually fail in our quest because we dwell more on the less important phase – the finishing line, where we’ve already achieved our goals – at the expense of the more critical phase – the actual race, where we orchestrate all that’s necessary to achieve our goals.


By [http://ezinearticles.com/?expert=Jono_Johnson]Jono Johnson

Being a millionaire doesn't mean only hefty bank accounts, big properties and flashy cars. It is just as much about attitude. These are the traits that can show you arrived in the select elite of rich people.

You can not become rich without these traits. And the good habits don't disappear just because your bank account reached a seven-digit figure. You still don't believe in financial shortcuts and you can smell a fishy financial scheme from a distance.

You are still conscious about your spending, and still assign your own value to different goods. And you have the power to say "no" if the price of an object is more than it is worth to you. Your financial goals are still written down.

You continue to work, and don't understand those who say that if they were millionaires, they wouldn't work. You may quit your job if you don't like it, but you do something you really enjoy, because you know that work gives a sense of purpose and accomplishment in life.

You don't try to keep up with anyone anymore. Your know what your values are, and you refuse to follow the crowd just because you want to fit in. You don't see earning money as a competition: you focus on the things you want to do, and you are not interested in what others do.

No matter how much money you have, you still regularly update your goals. You know that growth is the only way to be insured against inflation and the devaluing of your money. You are still able to act on any changes may occur in your personal goals and priorities.

You don't let anyone take care about your financial health. You do listen to advices, but you keep your financial authority only to yourself, because you know that nobody cares about your financial health as much as you do. In the same time you are conscious that it needs thought and energy to competently manage your money.

You have the ability to say "no" when you feel like it: not because you are a bad person, but you can see what is your and your requester's best interest. If you feel that these requests have no guarantee that the investment will pay off, you can say "no" without feeling guilt.

You know that the secret of building wealth is maximizing returns while minimizing risk, so you don't understand people who don't maximize their returns because they are more risk-averse than you are. You know how to manage risk, so it doesn't scare you.

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A Plan to Double Your Wealth With the Rule of 72

Personal Note: In this helpful article, Jason prescribes a simple math formula that could assist us in setting our personal finance goals. We are usually in a much better position to create a feasible plan – that could be followed easily – when we work with very simple formulas like the one explained in this article.


By [http://ezinearticles.com/?expert=Jason_Markum]Jason Markum

If you are interested in doubling your wealth, it doesn't really mean much unless you create a specific time frame first. If you have any assets or investments that produce income, they will probably *eventually* double your wealth, and you won't have to do anything. Of course it may take 200 years. That's the point of having a time frame.

Yes doubling your wealth within a certain time frame, takes a little bit of planning on your part. Luckily you found this article!

If the money you've invested remains constant, that is, you don't add any to it, then you can use the so-called rule of 72. All you have to do is divide the number 72 by the number of years within which you would like to double your wealth. The number you get when you do that calculation ends up being the percentage you must earn on the money you've invested in order to double your wealth.

For example if you wanted to double your money in 10 years, your investment would need to produce 7.2% increases (72/10) for each of those years. If you wanted to double in five years, you would need to return 14.4%. And if you wanted to double your money in two years, you need to earn a 36% gain on that investment. Pretty easy huh?

If you would like to know what your current investment portfolio is producing, and whether it is producing up to your expectations, review things very carefully. Think about getting rid of investments that aren't doing very well and taking the money and reinvesting it in something that performs better. Think of it this way; look at each of your investments and ask yourself this question... "if I had the cash again when I make the same investment?". If the answer is no, then you know it's time to sell that investment and reinvest into something else.

Good portfolios for building wealth are diversified, and also balanced. For me personally, a good balance is about one third of my assets in stocks, one third in real estate that produces income, and one third in other things; things like annuities and gold, and municipal bonds; things like that.

However your portfolio seems to be balanced, it will grow far quicker if you continue to add to it in a regular fashion. For me I like to add a percentage of all the income I bring in to my investments. This can be in the form of automatic payroll deductions, or an automatic checking account transfer system, or however you'd like to do it yourself.

No matter what you do, it is important for you to remain educated about all of your investments, and upcoming investment opportunities. The more you know about an investment to less risky it becomes. And the closer an eye you keep on your investments, the less chance they will decrease dramatically before you notice and take steps against the loss.

So there you have it! Remember the rule of 72, it's a good plan for setting a time frame for doubling your wealth...

Jason has been writing articles online for over thirteen years. When not writing about finance, Jason runs a very useful website about [http://www.edonatecar.com/]donating cars to charity where he will answer the age old question; [http://www.edonatecar.com/where_can_i_donate_a_car.cgi]where can I donate a car which you definitely need to know!

Article Source: [http://EzineArticles.com/?A-Plan-to-Double-Your-Wealth-With-the-Rule-of-72&id=3577266] A Plan to Double Your Wealth With the Rule of 72

Nine Reasons For Your Money Trouble

Personal Note: In this very helpful article, Steven reinforces the fact that, usually, the primary steps we need to take in order to achieve our personal finance dreams aren’t any elaborate, hardly-within-our-control steps, but those “simple” ones that are very much within our ability: they don’t cost anything – in terms of money – to actualize, they only require a resolved mind.


By [http://ezinearticles.com/?expert=Steven_Gillman]Steven Gillman

People have money trouble for different reasons. On the other hand, there are some mistakes and bad financial habits that are common in these situations. This explains why some people have these problems with money over and over. See if any of the following apply to you.

1. Not wanting to think about money.

If you didn't pay attention or think about where you were going when driving you would probably get lost and have accidents more often. The same is true of money. Many people just don't like to pay attention to it or think about it. Perhaps something from their past has caused them to think it isn't right to think about it, but the results are continual problems. Give it some thought.

2. Blaming situations and other people.

Sometimes a person is partly right about whose fault it is that they are broke or in financial trouble. But even then focusing on blaming outside forces it is the absolute worst approach to solving the problem. When you blame you give away power. Always look at what your role in the problem is and what you can do to correct or improve the situation.

3. Wanting appearances over reality.

If you want to look wealthier, go get a loan and buy that new car today. If you want to be wealthier, that's the worse thing you can do. Did you know that 40% of millionaires buy used cars? But this isn't about cars. It's about building wealth and using your money wisely. You probably can't guess who around you is a millionaire. Give up trying to create the illusion and start working on the reality.

4. Not knowing where it goes.

One big reason many people have money trouble is that they have no idea where the money goes. I had a friend who had pizza delivered three times per week for about $20 each time. I'll bet he didn't know he was spending over $3,000 per year on that one habit. Write down everything you spend and what you spent it on for a month or two and see what's really going on.

5. Not calculating real costs.

Once people decide they want something, they often play games with their own minds. They say "It only costs..." and ignore all the ongoing costs. When you buy a boat, for example, you have to consider not just the payments, but the cost to operate it, the insurance, the annual license and registration costs, repairs and maintenance, and so on. I can assure you that some people are paying $200 for each use of their small boats without ever knowing it. Do the math.

6. Thinking debt buys more things.

It is true that you can have more things right now by putting them on your credit cards. The part people forget is that this makes everything more expensive, and if you pay more for everything you buy, doesn't it make sense that over the course of your life you can't buy as much? You get better prices for cash, and you save the interest charges as well. Debt is for homes, business and investments. Pay cash for everything else.

7. Not controlling fixed expenses.

There are expenses you can easily stop at any time, like going out to eat or buying music. Then there are your more or less fixed expenses, like rent, electricity, gasoline for the car, insurance and so on. If your fixed expenses are too high you are in trouble every time your income dips or is interrupted, or something expensive happens. Rent a smaller place if necessary, get a high-mileage (used) car, and try to keep all the fixed costs in your life to half of your income.

8. Thinking financial surprises are unpredictable.

If unexpected car repairs or other surprises that cost less than a thousand dollars are the source of your financial problems, you need to start thinking about this differently. You don't know when the washing machine will die or when your insurance rates will rise, but you do know that these "surprises" will happen at some time, so you can plan for them. Set aside money every week for sudden expenses and it will be there when you need it.

9. Helping friends and family too much.

I have seen many people get into money trouble because of their generosity. Every time they have a bit of money saved a friend or family member has a need for it, and they help - or so they think. Money rarely changes people's situation if they don't know how to use it. And never quite getting your own financial situation right makes you less able to help others. Set your own house in order first, and then give wisely.

Copyright Steve Gillman. Learn more about avoiding [http://www.themeaningofmoney.com]Money Trouble, and get the free Money Matters Newsletter at: http://www.TheMeaningOfMoney.com

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Stop Worrying About Personal Finances and Enjoy What You Have

Personal Note: One of my most cherished statements happens to be the title of a book: Enjoying Where You Are On The Way To Where You Are Going (by Joyce Meyer). I believe the statement succinctly describes the priceless message Jay is trying to pass across in this article. I believe a major gauge of success in personal finance is the ability to enjoy the process of achieving our financial goal, and not just arriving at the destination. After all, “ultimate destination” in itself is arguably an illusion – at least in this life.


By [http://ezinearticles.com/?expert=Jay_F_Scott]Jay F Scott

If you are like most people, your finances is not where you want them to be at the moment. Some people spend their time worrying about how they will get their finances in order and forget to enjoy what they already have.

Yes! Your finances is important and you should work hard to get it under control, but spending your time worrying will not help you. Achieving your financial goals will not happen over night, it will take time. As long as you continue to give it your best and complete your short term goals, success will come. In the mean time try to enjoy your life. One of the worst mistake you can make it leaving entertainment out of your budget. We are human and we need to laugh and have fun.

The only time you should have your finances on your mind is when it is time to deal with them. When you get your check, when you are paying your bills or when you are allocating your savings, the rest of the time should be spent having fun with your family and friends.

If you have a hobby make time for it, if you don't then find something you love and do it. If it cost money, work it into your budget, if it is expensive save for it. Spending time with your family should be a priority over everything, do not let money stop you from having fun. Save for a family vacation, if money is tight, have one every other year instead of every year. If you can not afford to go to the movies rent a movie and watch it at home together, do not cut out entertainment completely for yourself and your family, it will never work.

Life is short and you cannot take your money with you when you die. Spending your time worrying about money will only make your life shorter and miserable. Go out and enjoy what you have and stop killing your self worrying about what you don't have. What are you waiting for, GO!

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Article Source: [http://EzineArticles.com/?Stop-Worrying-About-Personal-Finances-and-Enjoy-What-You-Have&id=3545877] Stop Worrying About Personal Finances and Enjoy What You Have

How to Become Financially Intelligent in the 21st Century

Personal Note: In this article, Chris talks about the place of goal-setting in becoming financially intelligent. From a viewpoint, it’s arguable that we first need to become financially intelligent to be able to set informed personal finance goals; but “digging deeper,” we would realize that, while the above statement is true, we also become financially intelligent only by taking the first baby-step in setting financial goals and refusing to stop setting them regardless of how many times we “stumble” – a cyclical process, so to speak.


By [http://ezinearticles.com/?expert=Chris_Parkins]Chris Parkins

Financial Intelligence is a matter of retraining yourself to make your money work for you instead of just spending it. You can have all the luxuries in the world, but without a means to make your money work then all you will have is a bunch of stuff you may have to sell later down the road. You can have all the assets, but unless they are working for you they may be worth little. Understanding how the financial system works will help when you plan goals.

When beginning to plan your goal think about what you can do that will result in the financial goals you want to achieve. Will this idea continue to make you money in the future or it is a passing fancy? It is also important to think of the liabilities you have and those that you may face along the way. By having a clear picture laid out you are able to adjust to situations as they arise and act in a positive manner.

People who are successful have a clear goal in mind. They are focused and have thought out their plan so that they can see the final results. They also have the drive and determination it takes to accomplish these goals. When you create a plan to achieve your goals, whether you start with planning a day ahead or a month down the road you are stepping toward obtaining your dream.

There are several traits that will help you become financially intelligent. This includes thinking creatively. This is an invaluable asset, in which you are able to creatively solve the challenges you face. If this means stepping up when you realize no one else has a clue what to do, then so be it.

Once you have set your goals and you know what must be done and you will have to negotiate with others in order to succeed. By learning to negotiate it means you will never take no for an answer, and will succeed by working together with others to accomplish your goal.

In order to be successful you also need to know how to communicate. You will find that not everyone thinks the same way you do, so learning to communicate to a wide audience is important. And, part of being a good communicator is the ability listen, and then you will be able to respond appropriately to the situation.

Another key trait is to never let your emotions get the best of you. If you are faced with a difficult situation you need to remain focused and consciously be able to respond to the event. Flying of the handle and getting mad can be considered unprofessional and will accomplish nothing except showing you cannot handle the situation.

Being financially intelligent is a way of rearranging your thoughts to see the world in a new way. Once you have determined your path and goals, then you will need to market them. You will have an advantage over your competition because your will know how to communicate your goals, and the benefits of working with you.

Just as with your health, it is wise to seek the advice of a professional when you have questions about your educational and financial well being.

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Top Five Tips For Success With Your Financial New Year's Resolutions

Personal Note: As we’ve started a new year, many of us, possibly, have also started working toward our individual New Yew resolutions – including financial ones. In this article, J. Douglas Hoyes offers a few helpful tips on how to carry through our personal finance plans this year. Like most other tips, they aren’t ones we’ve most likely haven’t heard before, but reminding ourselves of these insights would go a long way toward keeping us on track.


By [http://ezinearticles.com/?expert=J._Douglas_Hoyes]J. Douglas Hoyes

As we suffer through a very long recession, many people will want to start the new year off with their financial New Year's Resolutions. Here are my top five tips for success with your financial New Year's Resolutions:

1. Set real, measurable goals. "I want to save money" is not a goal. "I want to save $50 per week" is a goal. "I want to save $50 per week so I can buy a $5,000 car in 100 weeks" is a clear, measurable goal. If you goal is clear and measurable, you are much more likely to succeed.

2. Make a plan to reach your goals. You want to save $300 per month: how are you going to do it? Make a list of specific expenses you can cut to reach your goal, or identify ways to increase your income. A goal without a plan to achieve the goal is not a real goal.

3. The best way to reach your goals is by making a personal budget. A budget is just a list of what comes in and what goes out every month. It doesn't have to be fancy. Use a piece of paper and a pencil, or a computer, but put it in writing! You need a list in front of you to see what you can cut.

4. If you have debts, make a plan to pay off your debts. Every financial expert will tell you to start a savings plan, but if you are in debt a savings plan is not your priority: your priority is to get out of debt. Start by making a list of your debts: write down the name of the lender, the amount owing, and the interest rate. Many people have no idea how much they owe in total until they write it down. Then, prioritize your debts in the order that you want to pay them off. Don't make the mistake of trying to repay your smallest debts first so that you have fewer bills to pay; instead, start with your highest interest rate debts. Paying off a department store credit card with a 25% interest rate will save you more money in the long run than paying off your line of credit with a 10% interest rate.

5. Finally, if your goal is to get out of debt, and if your budget tells you that it will be impossible to deal with your debts on your own, research your options and then get professional help.

There are lots of resources on the internet to help you get out of debt and succeed with your financial New Year's Resolutions, but only if you do the work and start now.

J. Douglas Hoyes is a chartered accountant and licensed trustee in bankruptcy, and he works with people in financial trouble. More information on New Year's Resolutions can be found on the Hoyes Michalos blog: http://www.hoyes.com/blog/2009/12/top-five-tips-for-financial-new-years-resolutions.html

Article Source: [http://EzineArticles.com/?Top-Five-Tips-For-Success-With-Your-Financial-New-Years-Resolutions&id=3488714] Top Five Tips For Success With Your Financial New Year's Resolutions

The Curse of Karma and How to Turn Your Bank Account Into a River of Money

Personal Note: One mystery in life is how we are able to condition our minds – consciously or unconsciously – to create the reality we desire or fear. Just as I believe Mike tries to explain in this insightful article, we attract the things we believe in: somehow, we strive toward or succumb to a certain lifestyle – whether we crave it or not – when we believe that is what we deserve. We can always increase our level of self-worth when we consistently try to do right and create value.
Karma, though much related to Hinduism and Buddhism, is a widely accepted principle of life and as Mike alluded to, it’s also experienced in our personal finances.


By [http://ezinearticles.com/?expert=Mike_Suggs]Mike Suggs

People are basically good. So why do so many of us work ourselves to the bone and still have trouble making ends meet? This article teaches you what money is and why you may never have enough. Once you understand it, you'll never again have to be without it.

Did you know that Karma is much more about what you do to yourself than about what you do to others? Karma is simply receiving into your life a reflection of what you have been projecting. But you project onto yourself long before you project onto life around you!

Why? Because you are basically good and you will condemn yourself to a much worse fate than anyone else could care to bestow upon you.

Whenever you do anything that you know in your heart is wrong or unjust you subconsciously booby trap yourself to prevent goodness from entering your life.

Such is the case with money. Money is nothing more than an idea wrapped inside of an agreement.

The idea is that instead of hauling around our goods to exchange for things we need, we will use money with which to trade. Money is easy to carry around.

The agreement is that money has value and will be a universally acceptable means of exchange for goods and services.

When you receive goods or services in exchange for your promise to pay, you become party to a solemn understanding. If you don't pay when promised or pay less than promised or don't pay at all the system breaks down.

If you don't honor your end of the solemn agreement, you will at that very moment subconsciously set yourself up to making sure you receive less money in the future. Why? Because you are basically good and in your heart you know that you committed an injustice.

You will feel that you don't deserve money. That's the computation you subconsciously make and with it you will, all by yourself, sabotage your ability to receive money into your life. You will unwittingly take measured steps to prevent money from entering your life and that is the Curse of Karma.

Chronically miss payments on credit cards and you will erect another dam in your river of money. Take on debt that in your heart you know you shouldn't and you will punish yourself by attracting less and less money into your life.

People who seem to always have plenty of money have at least this in common: They honor their agreements when it comes to money and they spend within their means. They are able to pay their obligations not because they do have money, but because they don't breach the solemn understanding regarding money and therefore always attract enough of it to pay their obligations.

The next time you wonder why more money isn't coming into your life think about this: Do you have a history of not honoring your agreements regarding money or in generally giving less in value than you receive? If your answer is "Yes", then be assured that on some level you feel you don't deserve money and you will sabotage your ability to attract it.

Here's what you can do: On a daily basis focus your thoughts on asking for enlightenment or guidance to these questions:

1. How can I make myself more valuable?
2. How can I provide more value to others and improve their lives?
3. How can I give more value at work?

When you get your answer(s), dive in and deliver value in abundance beyond what is expected of you. Then, remember what caused it and enact firm policy in your life to make sure it never ends!

Summary: To grow a fat bank account, keep your word regarding money, spend within your means and deliver value in abundance.

by Mike Suggs

© Mike Suggs - All Rights Reserved

The material in this article is from Chapter 10 of my 100 page ebook "Better Believe It!". Help me with my research by
answering one survey question and you can download it for FREE! For the survey and your FREE ebook Click Here Now: http://stepbystepebooks.com

Article Source: [http://EzineArticles.com/?The-Curse-of-Karma-and-How-to-Turn-Your-Bank-Account-Into-a-River-of-Money&id=3400835] The Curse of Karma and How to Turn Your Bank Account Into a River of Money

Three Steps to Get Your Money Headed in the Right Direction

Personal Note: I believe Andrea’s analogy between weight loss and personal finance is very apt, and drives home a very important lesson: Sustained success in our finances, as well as other areas of our lives, requires conscious and deliberate search for knowledge, which must culminate in focused actions.


By [http://ezinearticles.com/?expert=Andrea_Travillian]Andrea Travillian

Trying to get your financial life pulled together can be overwhelming and confusing. You may know that you need help but don't know where to start or if it is even possible to get things turned around.

So you decide to ignore it and hope for the best.

If your doctor told you to lose weight or you would be unable to walk in a year, but you knew nothing about weight loss or if it was even possible, would you ignore your doctor and hope for the best?

Losing Weight is more than one issue

Losing weight is many issues that show up in one outcome. Not only is weight affected by your eating habits but also by your exercise level and type, your stress levels, the amount of sleep you get, mental blocks, health issues and many more! To lose weight you must figure out exactly what is causing your problem, and this is typically more than one issue in play!

Money is the same. The status of our money is affected by many things, including debt, insurance, overspending, savings, emotions and many more. To begin to fix your money problems you first need to figure out what is causing them.

Losing Weight is easier when you get help

Trying to go it alone in a subject that you are not familiar with can be overwhelming. If you have never lifted weights before you would have a friend show you the ropes, attend a class or hire a trainer. After all you don't want to hurt yourself the first day out!

Money is the same. While money gets easier and easier to understand as you learn more, it still helps to asking a knowledgeable friend, attending a class or hiring an expert can make things faster and easier. This reduces your times of making mistakes!

Losing Weight happens one day at a time

Most of us don't go to bed thinking I want to lose ten pounds and wake up in the morning and it is gone. Instead we have to adjust our lifestyle to include fewer calories, more exercise and a healthier relationship to ourselves and our bodies.

Yet again, money is no different. You don't go to bed thinking I am going to pay off all my loans and in the morning they are gone (unless of course you have the money and you just write the check). Instead you have to adjust your lifestyle to increase income, decrease debt, increase savings and build a healthier relationship with money.

Getting Your Money Body Turned Around

So how do you apply the ideas we talked about above to start your money transformation?

1. Solving your money problems is probably going to be more than one issue. So start making a list of everything that you can think of that affects your money. Then start reviewing those to determine if they are part of the problem. Then start working on those that needs adjusting.

2. When you are confused and need help, do not be afraid to ask for help. Help will you learn more and make bigger steps in the right direction.

3. Breathe each day and know that as you make positive changes they will eventually have an impact on your financial health. It takes every day making little steps of progress but you will get there.

Just like your doctor ordered you to lose weight or you would not be able to walk, I encourage you to get your money turned around or you won't be able to walk through your ideal life. The confusion and what to do will slip away with the following of these three steps. Why don't you start today and start planning for the best.

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Managing Money

Personal Note: While the insights Carl shared in this article are probably not different from those we’ve always heard, they are priceless enough to be reemphasized again and again. I really agree with his view on the importance of setting desired goals before making any serious personal finance decisions – as the goals act as guideposts and motivational tools.
However, although I also agree with Carl’s overall take on the “good debt, bad debt” concept, I don’t agree debt on a home or an investment property is always a good debt.


By [http://ezinearticles.com/?expert=Carl_McLean]Carl McLean

What do we all want when it comes to attaining and securing wealth? We want a sense of long-term security and the peace of mind that it brings including lifestyle and advantages to our family.

What do millionaires do that others don't? They do not over consume. They are ready to sacrifice something today in order to achieve greater wealth and prosperity in the future.

Does this paint a good picture of who we are and what we want? This then leads me to say that money must be managed and if you spend more than you make, you surely are heading for trouble, that simple. So where to begin? Many people would say to make a budget and save money. However, in addition to that, I would suggest that prior to making a budget; you should set realistic and attainable goals. Once goals are set, you can then set a budget that will enable you to reach them whatever they are. Make sure that you write your goals down and put them up where you can see them every day.

To begin with, you should monitor your expenses over an entire month. This little exercise will give you the framework for your budget template. Ultimately, you want to reduce your debt load so you must put serious thoughts into curbing bad spending habits, differentiating between good and bad debts and establishing an emergency fund.

For some people, bad habits to consider would be smoking, consuming too much alcohol. For others, it could be that $4 or $8 a day latte fix. Other items to consider could be, collecting CDs and DVDs, what about eating out, buying expensive clothing, going to the movies, buying brand new cars, flying first class, dry cleaning clothes you can wash and more. Remember that I am not saying not to do some of these things but simply keep it reasonable.

Next, would be to differentiate between good and bad debts. A good debt is one that produces cash flow and the bad debt doesn't. Good debts grow in value such as a home, an investment property or a business while bad debts are loans made on depreciating assets such as cars, boats and trips. I do not say that you must not do these things; I am only saying to exercise good balance and not be tempted by excessive consumption.

Finally, set up that emergency fund that will take you through tough times. The problem here however is that some people think that an emergency fund is a line of credit, bank overdraft or a home equity loan. What I suggest doing is have between $1,000 and $2,000 in a saving account and have up to six months worth of you current income in a NON RRSP investment account that can be easily liquidated. That way, your money will grow a bit faster than in a regular bank saving account. An emergency fund is a test of your willpower and discipline. It's hard to build but once built, it is easy to upkeep.

Saving money is easy to say but not so to do. There are constant temptations out there that play with your mind so remember what millionaires do and sacrifice something today for greater wealth tomorrow. It does not take much so set yourself up on a monthly saving plan and stick to it so do not put it off, do it. I would add that a good saving plan is not purchasing your monthly quota of 6/49 tickets. Remember that everything is about balance so enjoy.

Carl McLean CD, BCom AMP specializes in residential mortgage financing and credit management in Victoria BC. He is an Accredited Mortgage Professional with Dominion Lending Centers Rochar Financial, 2950 Douglas St. [mailto:carl@rocharfinancial.com]carl@rocharfinancial.com 250-405-4352 http://www.carlmclean.com

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