Financial experts have long debated the best strategy for paying down debt. Some advise paying off debt in the order of APR, taking on the loan with the highest interest rate first. With this approach, you reduce the amount spent on interest charges every month and free that cash up to chip away at the rest of your debt. Others, including personal finance guru Dave Ramsey, advise tackling your smallest debt first, regardless of the interest rate; when that’s entirely paid off, you move on to the next smallest, and so on. Which approach is better?
Well, Ramsey’s “snowball” method eliminates the total number of different debts faster, but in fact it is also likely to result in paying more in interest over the duration of the debt reduction plan. So the smarter approach, then, is to first pay off the debt with the highest interest rate, right?
Inflation is described as a worldwide increase in cost and drop in the buying value of money. While phases of low inflation can be useful for customers; soaring inflation can be advantageous for debtors. Periods of depression may be unfavorable for people, particularly when deflation brings about a decline in the cash flow. Under such a phase of low money supply, it’s quite natural for people to face a lot of debt problems. At this point of time, it’s very essential to choose the best debtmanagement program. With an increase in price, you’re able to purchase less with the same amount of cash. For instance, if five years back you could buy a candy and a pencil for $1, you may now get just a candy for that $1.
Effect on debt If the net amount of liabilities and interest remain steady at a fixed rate, the price of debt will decline. As an example, if a phase of inflation takes place, salary will rise with inflation. However, as debt is not attached to inflation, increased wages will help Read the rest of this entry →
“Why is it that people don’t become wealthy?” In a country like ours, with the opportunities that we have, why is it that so few people retire financially independent? And I eventually found the answers. Here are what I consider to be the five reasons why people don’t become wealthy.
First, at the top of the list, is that it never occurs to them. The average person has grown up in a family where he has never met or known anyone who was wealthy. He goes to school and socializes with people who are not wealthy. He works with people who are not wealthy. He has a reference group or a social circle outside of work who are not wealthy. He has no role models who are wealthy. If this has happened to you throughout your formative years, up to the age of twenty, you can Read the rest of this entry →
I finally broke down and climbed aboard the already crowded iPad2 bandwagon. Space was limited as I am quite late in joining the masses. I have used this device several times prior to purchasing it and have been very pleased with the iPad2 processor speed, the vivid screen, the intuitiveness and abundance of apps. The size and weight of the iPad2 offer the best of both worlds at 7.3in x .4in x 9.5in and only 21.2oz. The battery life is insane compared to my PC laptop battery.
The following story took place 2 years ago. I have decided to share this today because it has been recently brought to my attention that timeshares are still thriving, lying, stealing, and scamming people.
This article is being created to help and inform anyone who buys a timeshare specifically in Mexico. I screwed up when I bought a timeshare last week and the sad thing is that I knew better, however, against my better judgment, I did so anyway. Hopefully this thread will help someone who may have made the same mistake resolve it before it is too late. This is also to shed some light on some laws that protect the consumer. The key is “time” (your legal cancellation period). I will tell you how to get out of a timeshare.
I take this opportunity to share an experience and hopefully save at least one person many years of stress and financial erosion from a poor decision. Read the rest of this entry →
Seems like the BULL is back! I believe that they bull had never left – of course that would depend on which bull one is referring to.
Two years ago tomorrow, will mark the birthday that the S&P 500 index hit a 12-year low after the financial crisis. Today, the Dow Jones at 12,000 has nearly doubled since March 9, 2009 when the panic stricken market was at its lowest in recent history. The Dow Jones is trading at only 2,000 points below its 2007 all-time high.
Statistical evidence provided by Investment Company Institute indicates that the individual investors have regained a degree of confidence in the market. This assessment has been gathered by the $24.2 billion invested into U.S. stock mutual funds since the beginning of this year. Still a ways away from the $96.7 billion withdrawn back in 2010.
Choosing the business that sparks your interest is a daunting task for some, while being a no-brainer for others. A business that you are genuinely passionate about is a key ingredient required for the success of a business. Once you have chosen the venture that you would like to start, the next step is determining how much capital will be required for funding your small business.
The capital funding for your small business can come from many sources. I believe that the hands-down very best source of capital funding is Read the rest of this entry →
I visited Macy’s this evening to see if there were any President’s Day sales. I was told by the sales associate that if I purchased a minimum of $100 I would receive 25% off. I chose a few items and tried to pay with cash and I was told that I could not pay with cash, and that I had to pay with credit card of some sort (a Visa/Mastercard logo debit card would have worked too). I was waiting for the associate to laugh, but he was absolutely serious. To make matters worse, I have to come back on the 24th to get what I bought as part of the stipulation to get the 25% off. Clearly a forceful ploy to get you to come back to their store to entice you to buy again.
I am a little disappointed in Macy’s to say the least. While I am not going to banish myself from their store, I will not engage in a forceful transaction like that again.
I thought it might be helpful to know that savings institute, Flagstar Bank is offering 1.5% APY on their FDIC-insured “SMART Savings Account”. In this low interest rate environment, this has been the highest savings rate that I have seen in over a year. I am not sure how long this offer will be in effect, but it may be worth checking it out. Read the rest of this entry →
Gold! Gold! Gold! Determining whether to invest in gold will yield many types of responses. The gold commodity as a long term investment vs. a short term investment will yield and even greater opinion diversity. With any investment, my advice will be that you research, research, research! I am never afraid to share my own opinion on any topic; however, my goal isn’t necessarily to persuade people to do what I do just because I am doing it. I urge my readers to do as I do from an investment perspective or from a budget perspective because they understand the why, behind my strategy and agree with it. I do not advise anyone to make life choices solely because someone else is doing it, or because someone else told them to do it. Read the rest of this entry →
Return on invested capital: Investing vs. Prepaying the Mortgage
Is it better to build an investment portfolio or prepay my mortgage? This has proven to be a very popular question among our readers. Let’s assess which is the ideal choice.Which is more beneficial, and entirely paid-off home, or the return on invested capital of a well funded investment portfolio? Either option will put you in a good place, but which option is “better”? I think that it depends on the individual and their situation. Read the rest of this entry →
Frugal people and cheap people seek to spend the least amount of money possible. The biggest difference between frugal people vs. cheap people is the presence or absence of pressure to spend money on necessities.
I have witnessed debt-ridden, financially irresponsible people change their lives by creating and sticking to a budget. This process enabled them to control their spending, saving and investing amounts. The turning point for these newly cost conscious people occurred when they discovered how much they could save and invest if they cut out some expenses. This knowledge lead them to cut and reduce expenses over time to the point that even necessities were on the chopping block and it was at this point that the boundary between frugal and cheap had been crossed. Read the rest of this entry →