Archive for Money Management

How to Achieve Financial Independence

Freedom to Live the Life You Dream Of

What is financial independence? The answer to this question is complex and depends upon who you are asking.

In general, financial independence means that you are able to live the life that you dream of without having to worry about finances. There are a few steps that you can take in order to move toward the state of financial independence. We will discuss them in detail below.

woman standing with her arms stretched out looking at the sky

Invest

You should take up a few investments in order to move toward realizing financial independence. There are many different ways to invest. You may invest in the stock market, an IRA, or a savings account.

Stock market investments are some of the most lucrative investments you can make. When you invest in the stock market, you are able to see financial gains throughout the entire amount of time you invest.

You should do thorough research before you invest in the stock market. This will help you to determine which stocks you want to invest your monies in.

The stock market can help you to gain finances fairly quickly as long as you know which stocks are going up. You should invest in stocks that are on the rise.

You can find information about stock trends by doing a simple Google search on that particular stock. This will pull up results like https://analystratings.net/.

An IRA is another worthwhile form of investment. You may find that you slowly save up significant amounts of money by investing in an IRA.

An IRA is essentially a retirement account that accrues value because of its interest rate. You should keep your monies in an IRA account so that you have money to work with when you retire.

Interest-accruing savings accounts are based on much the same principle as is an IRA. These types of accounts gain interest as the monies sit in the accounts.

You literally gain profits by doing nothing besides letting your monies sit in the bank. Should you let these monies sit for an extended period of time, you will be pleasantly surprised at how much money you can earn.

man holding spread out 20 dollar bills in his hand

Make a Budget

Another way to gain financial independence is to draft up a budget. This will help you to stay more aware of where your monies are going. You should have a budget for groceries, housing, transportation, and miscellaneous. You should draft this budget up carefully.

There is much thought that can be put into drafting up a budget. You may find that it is necessary to calculate your budget to the exact dollar or cent. You can find out the best quality items for the best price and include them in your budget.

You should not go over your budget every month. By staying financially organized in this way, you are sure to see monetary gains in the bank account.

Indulge

Part of your budget every month should be more for recreational indulgences. Being financially free means that every once in a while you allow yourself to enjoy something expensive just for the sake of enjoyment.

There are a number of different ways that you can indulge.

You may take yourself or your friends out for a fine dining experience. This can mean that you enjoy the finest of delicacies regardless of cost.

You may also choose to purchase a luxury grocery item that is outside of your standard budget. Examples of this include aged cheese or decadent ice cream brands.

Just like anyone else, you need to treat yourself to something special every once in a while, regardless of the cost.

Financial Freedom is Possible

It is easy to see that financial freedom is possible. It just requires diligence and best practices.

You may find it necessary to invest in investment accounts in order to maximize your earnings. It is recommended to begin investing in the stock market, as well as in IRAs and savings accounts.

You should develop a careful budget for all of your essential purchases, so as to increase the amount of money that stays in the bank account. You should indulge in something special every once in a while in order to remember that money is a means to enjoy life.

Should you practice these habits, you are sure to gain financial freedom.

Tips on How to Stop Accumulating Debt

Learn the tips you can take to stop accumulating debt now!

hands in the air sinking into an ocean

As a consumer, you know it is very easy for you to have debt. It might take a very short time for you to have thousands of dollars in debt, and what is worse is when it comes time to pay them off.

Debt cases are increasing every day worldwide. It is very hard for people not to get into debt, especially when one has too many responsibilities that require money, such as education and health.

Even though having a little debt is not a bad thing, you can prevent yourself from accumulating large amounts of debt.

There are times when we need to make a purchase for our comfort and health needs.

For example, we might need a new mattress to get our good sleep. The smart thing is to look for a sale, such as a Black Friday mattress sale, and try to pay for your purchase in full. If we can’t pay for it in full, then try to get it paid off as quickly as possible.

Types of Debt

Did you know there are different types of debts? Well, there are good debts and bad debts.

Debts that are regarded as the bad ones are those once taken are accompanied by a huge percentage of interest. For instance, if you purchased an item through debt, you will pay more than the original cost due to the huge amount of interest. Bad debts can hinder you from getting loans when you need it.

The debts referred to as the good ones are the ones, if taken, will add more value to you in the future, such as loans to get an education and buy a house. This kind of debt usually has small repayment interest.

Reason Why People Go Into Debt

To understand the best strategy for you to prevent debts, you must know why people get into debt. Some of the most common reasons include poor spending techniques, medical expenses, reduced income, and inadequate saving methods.

Strategies You Can Apply to Avoid Accumulating Debt

The following are some of the best strategies that you can apply to avoid or to get out of accumulating debts. If you’ve already accumulated debt, learn what you can do if you have too much debt

Never Buy Anything That You Can Never Afford

Buying assets such as a home is one of the major decisions that one can make financially if you are not careful to make a wrong decision. You probably can qualify to take a loan to buy that home, but you should never be in a rush; instead, think through your decision and ask yourself if you can afford the loan you are about to take.

You should know that you should never spend more than thirty percent of your monthly income on repaying a loan. Instead of buying a big house, it is advisable to buy a small house that is not stressful to raise money to reduce the risk of having accumulated debts.

Read: the value of sensible debt.

Live Below Your Income

When you have to purchase something such as a car or a house, you must take a loan to purchase it. You can decide to do away with or reduce some items you buy for a month or year.

You can eliminate your monthly subscription services, do away with entertainment, and other unnecessary spending. Cutting down on some things means that you will save more and you will be able to afford important items without getting into any debt.

Apply for Scholarship

If you are a student, education is very important, but you can apply for a scholarship instead of taking loans to facilitate it. Even though having a loan to ease your education is good debt, you do not have to accumulate debt that you will fail to pay in the future.

If worse comes to worst and you fail to get a scholarship or a sponsor, you can apply for part-time jobs to raise money to facilitate part of your education fee.

Get Good Insurance

In recent years, one of the major causes of having huge debts is health. Even though no one wishes to sick, it important for you to be prepared because no one knows what can happen tomorrow.

If you fall sick and aren’t prepared for it, you can get into huge debts that might be very hard for you to get out of. If you invest in a good insurance policy, you stand a chance of reducing future debts should you fall sick.

Learn how to save money on health care costs

The good thing with the insurance is that you do not have to deposit thousands of dollars. You have to come up with a good plan where you can be depositing a few dollars a month, which can save you big time in the future.

If you wonder how you can avoid accumulating debts, then wonder no more as the above tips will help.

Get Out of Debt in 5 Easy Steps!

Have you had problems with debt in the past? What have you done to relieve them? Comment below and let me know!

Types of Personal Finance Goals to Help You Reach Freedom

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The global crisis has shifted the way we think of many things we used to take for granted. Finances are one of the top concerns during times of uncertainty.

Many people have lost their jobs due to the outbreak. They are now deeply worried about savings, expenses, bills, and the usual do’s of any person of legal age. The landscape is more worrisome for those with children and relatives, depending on their income.

a computer with papers on the side and text overlay

How Can You Master Your Finances?

In this article, we will teach you some key pieces of advice you should embrace in 2020. It all starts by taking one step at a time. You start small, but eventually, you will get to your personal financial goals. First, let us summarize what kind of goals you should set: personal, professional, or other. The following are some examples you can note down:

  •  Become financial free in 10 years,
  •  Save up to 30% of your income,
  •  Be able to spend holidays every year.

Of course, financial milestones vary from one person to another; you should focus on finding yours. What makes you happy may not work for someone else. Take a moment to write down some long-term personal finance goals you’d like to achieve.

man holding spread out 20 dollar bills in his hand

Top 5 Tips to Master Finances

Now that you have a big milestone in mind, you can start working towards it. You can rely on payday depot to get your goals sooner. Their short-term loans can come quite handy in times of low liquidity.

These are some powerful tips you can embrace in 2020 to excel at your personal finance goals:

  1.  Increase your savings up to 20%-30% of income,
  2.  Reduce expenses to a viable minimum,
  3.  Work on a side job or a side source of income,
  4.  Manage your money with care and attention,
  5.  Remember that money is not everything that matters.

While having a comfortable lifestyle is good for your health, you need to avoid taking it too far. You need to find a balance between money and comfort in your life. For some people, this implies working 9-to-5; for others, it may suppose traveling the world with a bag. It depends.

Think of what you’d like to focus on. Do you want to improve your professional career? Do you want to help your relatives? Do you need to spend time somewhere else to relax? Then, focus on this financial goal until you reach it.

woman standing with her arms stretched out looking at the sky

Financial Freedom is Possible

First, what does financial freedom mean? This term is commonly used online and refers to a state where you, and only you, are the owner of your money.

This is a condition most people may dream of, but only the most constant in the will can achieve. You need to stick to a method of your own to make it happen within some years.

For instance, start saving today for a course, for those holidays, or your retirement. In some years, when you have an amount of money to sit on, you will thank yourself for this decision and all the effort.

What’s more, you may be able to live from your savings if you reach the needed cash. In that case, you could also think of helping your loved ones close to you. Isn’t financial freedom wonderful? Get started today.

Read More About Personal Finance…

Comment below and let me know about your personal finance journey!

Securities Demystified

When learning about investing, people hear a lot of terms. It is easy to get confused. When discussing securities, you’re basically just talking about things you already know but haven’t realized it. Equities fall into two basic categories and combine to make a third category. The following is a brief overview of these categories and if you’re interested in actually investing, you should talk to someone with tax trader status. It’s important you get advice before putting any money into any form of investment.

Equity Securities

Equity securities refer mostly to stocks: publicly traded shares of ownership of a company, partnership, or trust. The investor makes money from selling the shares at a higher price, also known as capital gains, or by receiving a dividend from the entity issuing the shares. Dividends are a portion of the entity’s profits spread out amongst the shareholders.

In short, equity means profit, so buying equity security means you have a way to make a profit from the investment. Be aware of any profit made from investing in equity securities, because they can be subject to taxation, even dividends. This is called a capital gains tax, and it can be anywhere from 0%, 15% or even 20% depending on income and filing status. Make sure you get help when preparing your income tax return in order to avoid having a high tax bill because you made a mistake somewhere.

Debt Securities

Debt securities mainly refer to bonds. This doesn’t mean you go into debt investing in these, not unless the entity issuing the bond goes out of business. No, it refers to the fact the entity issuing the bond goes into debt issuing the bond. They are using the bonds as a way to raise money, and when the bond comes due, they owe you the money you loaned them plus interest. Bonds are safer than stocks, but only if the entity remains solvent over the life of the bond.

Hybrid Securities

Hybrid securities are a combination of both stocks and bonds. An example of a hybrid equity security is an equity warrant. These allow shareholders to buy shares at a special price during a specific time such as a limited time sale on shares.

An example of a hybrid debt security is a convertible bond. These are bonds that can be turned into shares in the issuing entity. Entities will issue convertible bonds when their money is tight but their stock is on the rise. The bonds are converted into common stock shares in the hopes the price of the stocks they are converted into will be higher than the market price of the stocks thus encouraging the holder to sell. This then greatly reduces the entity’s debt.

Five Ways to Invest for Retirement is a great article to read about the basics of investing if you want to do further research on the topic of investing in general. The author, and the site, both have a lot of useful information about investing, and not just in securities.

To learn more about securities and the market they are traded in, Investopedia.com explains more about the SEC, the Securities and Exchange Commission.

The information above is just a trio of the types of securities you can invest in. There are more, far more, but these are the best ones for the beginner. They will help you get a toe wet in the ocean of investing and get some experience to keep you from drowning. Securities trading and investing isn’t something to be scared of. They are just another vehicle to make money for retirement, or anything else you need money for and have time to save.

This article is only intended to inform, not to advise. Investing is not a sure-fire way to make money, and everyone has their own reason for wanting to invest. Knowing how much you have and how much risk you want to take, along with having more than a passing idea of what investing entails, will go a long way in helping you make wise decisions about what to do with your money.

Power of Attorney in Estate Planning: Why It Matters

handd holding a pen and signing paperwork

What is Power of Attorney?

The power of attorney is a powerful tool that can impact the lives of yourself, friends, and family long after the principal is deceased. “Power of attorney over a person, who is known as the principal, is most often utilized when the individual handing over power has concerns about their ability to make legal decisions for themselves,” says the Attorney Referral Service by the San Francisco bar association, which can help potential agents (or those who possess power of attorney) claim power of attorney in California.

The power of attorney is not only useful in legal or financial situations involving a deceased person’s estate. Any time you need someone to act in legal matters on your behalf, you can bestow upon them power of attorney to handle your affairs.

You can assign power of attorney for the duration of a short business deal or after a specific future event comes to pass. Some people assign power of attorney for matters of convenience in business, but it is most often used in wills to designate an agent in case of debilitation or death on the part of the principal.

For Your Parents

Having a conversation with your parents about their deaths is not easy business. However, it is a necessary evil we must all eventually go through, and it is better to get it out of the way when your parents are still of sound mind and body.

Encouraging your parents to draft a will or estate plan is in their best interests as well as yours. This becomes especially prudent if you or your parents have a lot of siblings. Estate planning is a great way to ensure that your parent’s friends and loved ones will not be distracted by petty disagreements or confusion after the principal’s death and can focus on mourning properly.

Sit down with your siblings, parents, and any other interested parties to hash out who should be preemptively assigned power of attorney.

For Yourself and Your Children

If one of your children or a third party contests your will after death, your family could be in for a drawn out and painful process. The contestation of a will can lead to more than hurt feelings between loved ones: your last wishes may not be met.

To avoid sowing conflict between family members, you can preemptively assign power of attorney. This itself may lead to hurt feelings, if one child or sibling feels as though they would better serve as the executor of your estate. But it is better to hurt feelings now, when you are alive, than to subject your mourning loved ones later to even more grief and heartache.

Take a hard look at your children, siblings, and spouse. Who has the best understanding of your desires for your assets post-mortem? What does the divestment of your state look like to you? It is important not only to choose someone who has a thorough knowledge of your value system, but also who is fair and balanced in their treatment of others. You want an agent who can navigate strong feelings and who will not take things too personally when things inevitably get heated in the divestment process.

How to Choose an Agent

The nature of being an agent with power of attorney necessitates an even keeled and fair judgment. When choosing an agent for yourself, you should look for someone who has a thorough understanding of what you would like done with your assets after death or debilitation. You want to take care that your agent is committed to the full realization of your wishes after your demise.

If you believe you are a good fit to be an agent for a principal, make your intentions known during the estate planning process. Demonstrate that you have a thorough understanding of the principal’s values and communicate how you would handle any disputes which may arise between family or friends during the execution of the estate.

Choosing an agent to receive power of attorney goes beyond planning for one’s death. If you have health issues or would just like to prepare for any worst-case scenario imaginable, consider a durable power of attorney over a general power of attorney. A durable power of attorney will retain legal standing in the case of your incapacitation, whereas a general power of attorney’s purview ends the moment you become incapacitated.

If you get sick or are otherwise injured and need someone to act on your behalf, it is prudent to assign a durable power of attorney to a trusted individual.