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Where We Provide Resources and Guidance.

The Road To Financial Freedom

Few people get rich all at once. The chances of winning a lottery or receiving inheritance are very small. Here are 7 steps to becoming financially independent. With patience and hard work, you can follow these steps and find financial freedom for yourself. 1) The Financially Dependent stage is when you depend on others. This is the transition stage from receiving financial aid from parents to being financially solvent. It’s important to understand that it is ok to be in this stage while you get on your feet, but that it is not a means to an end. You must use this time to plan and work towards creating a financial plan that is independent. 2) Financially Solvent. In this stage you are capable of supporting yourself with your own income, and you no longer rely on the financial assistance of your parents. This is the phase in which you must start a savings account, and think about budgeting so that you can be in a strong position within a few years. 3) Financially Stable. You become financially stable when you not only cover your current expenses with your income, but in addition you can free up some cash for emergency cases. When you are able to create such a buffer, then you have reached financial stability. 4) Financially Secured.You become financially secured when you no longer have to work full time to cover all your expenses. For example, some of your expenses (housing, utilities, insurance, etc.…) may be covered by your income from your investments.When you are able to cover all your expenses with your investment income, then you have achieved a high level of financial security.... read more

How Early Retirement Planning Can Save You Big Bucks

Saving for retirement is becoming more and more important. To live the life you dream after retirement, you no longer can rely only on savings plan offered by your employer, or on social security alone. You should begin planning your savings for your retirement as soon as possible. Why is  a Retirement Plan needed? A retirement plan helps you to set your goals, decide at what age you want to stop working, and lead the life you want to lead after retirement. Drafting a retirement plan helps you to calculate how much you need to save now to have your dreamed retirement life. A retirement plan helps you decide where to invest by taking into consideration your income, risk tolerance, and age. Retirement Plan Examples     Saving for 40 years Saving for 30 years Saving for 20 years Monthly Investment $ 100.00 $ 100.00 $ 100.00 Interest Rate 4% 4% 4% Total Contribution $ 48,000.00 $ 36,000.00 $ 24,000.00 Total Interest Earned $ 70,196.00 $ 33,405.00 $ 12,677.00 Total Value of The Investment $ 118,196.00 $ 69,405.00 $ 36,677.00   The earlier we begin to contribute to our savings, the greater the outcome we receive after retirement as a result of compounding interest. That is why the decision to start saving money in your 20s can be one of the best financial decisions you make in your life. Here are some tips to get the most from your Retirement Plan Start contributing to your retirement as early as possible Set up automatic withholding from direct deposits in your current account, and have them go into a special retirement account. Take... read more

Types of Investment

Types of Investment Do you have free cash and want to invest it without worrying about losing the money?  Unfortunately, this is where you get into the realm of risk and return. Getting high return sometimes requires risk. However, while prices of corporate stock and bonds can experience significant upsides and downsides, many government securities are risk free and guaranteed by the Federal Government. There a few  types of investment to keep in mind, which we will overview below. Savings Accounts Savings accounts are the most liquid type of investment. Money is always available for withdrawal from the account. You should only check that the saving account is FDIC insured (Federal Deposit Insurance Corporation). Maximum amount coverage at one bank is 250,000$, so ensure that you do not put more than that in one bank. Certificate of Deposit Certificate of deposit is a great tool to use when saving money for a big purchase, such as saving money for the down payment of a house or a car. CD’s pay a higher interest rate than a savings account, but are less liquid. You can get a CD with a term starting from 3 months to 10 years. You can also build a CD ladder and strategically manage your money. This involves buying multiple CDs at one time, but with different maturity periods: 1 year, 2 years, 3 years, 4 years, and 5 years. Your CDs will mature every year giving you two options; to cash out the funds, or roll them over into a new CD with a 5 year maturity term. “I” Saving bond Buying “I” saving bonds... read more

How To Manage Your Credit Card

Chances are you have been advised to obtain (or avoid) a credit card at some point in your life. But before getting one you should ask yourself whether you need it or not. Credit Cards have the potential to be one of the most divisive products. Try asking around about credit cards and you will find many people that pay their bills using one, along with others that will assure you that credit cards are pure evil. First, a Credit Card is nothing but a financial tool, and in order to benefit from it, you should acquire all the necessary skills and knowledge about it that you can. Credit Cards allow holders to borrow and spend money within an agreed limit. After using funds, the borrower will be charged interest until the credit balance is cleared. Every month the credit card owner gets an itemized bill of everything he/she has spent during the whole month. Some cards offer interest free grace periods, and if the owner clears the credit balance within the grace period, no interest is charged to them. You should check whether the card offers a grace period or not, as this can save you a lot in the long run. Terms and conditions differ from bank to bank, so carefully review all the terms and conditions offered when you decide to get a credit card. Lastly, always make sure you have enough funds to make the minimum repayment on your credit card. Failing to do so can trigger default notes which can affect your future credit rating. Tips on choosing a Credit Card With credit cards, people usually spend more money than they... read more

To Rent or to Buy?

 Buying a house is one of the biggest financial decisions a person can make in their life. Before making a decision that can affect your future, spend some time to think about whether buying a house is better than renting one. The best way to make the right decision is to consider all the factors that affect  you and your family. Every individual should look at his or her unique situation and conditions. However, here are some tips to help you identify the advantages and disadvantages of both options and choose the best one for you. Benefits of buying a house The biggest benefit to buying a house is that after paying the mortgage you will become the owner of it, and will not have to worry about where you and your family will live. Another benefit is the increase of property value you own. The increase in value gives you an opportunity to sell the property at a higher price in the future and receive capital gain. Otherwise, when renting the house the increased value remains with the property owner. Moreover, the ladder can bring an increase in the rent over time. However, note that houses do not always go up in value. There are several tax advantages when buying a house. Interest paid on mortgage is tax-deductible, hence decreasing the income tax you pay. You should consider not only mortgage payments when buying a house, but also property taxes, insurance payments, and maintenance expenses. In a rent situation, these are fully financed by the owner. As Robert Kiyosaki outlines in his bestseller “Rich Dad, Poor Dad”, buying a house can be a... read more

Reasonable vs. Unreasonable Debt

Avoiding debt and bankruptcy isn’t always easy, especially when necessary expenses put a hole in your pocket. But while some debt may be hard to avoid, other forms of debt can take place due to financial negligence. In this article we overview the difference between reasonable and unreasonable debt, and how you can avoid falling into the pitfalls of irresponsible financial activity… Reasonable Debt AWhen we speak of reasonable debt we’re talking about items that are more on the scale of necessity These are basic tools or vital things used to improve our general way of life. 1. Buying a new house It is very rare that the average American can pay upfront money on a home, which is why loans are such a very important commodity. Of course, in 2008 we saw the abuse of such loans with the eruption that shook up our financial institution. After the gratuitous use of them, we finally realized that there should be strict laws enforced on who is able to be granted such loans. That should not suggest that if a financially responsible person is in legitimate need of them that they should be denied. Housing is a basic human need so this is a reasonable debt, so long as the home purchase is being paid off in a timely manner and is not excessive otherwise it is hard to classify it as such. 2. Purchasing a reliable vehicle As people have to travel further distances for work, school or child care, it is a fair request to want a safe and reliable vehicle. This also falls under the category... read more

Questions To Ask Yourself Before Making A Purchase

In todays economy, it is no wonder why we find ourselves overwhelmed with debt, and often times wonder if we even needed the item(s) we bought to begin with. It can be important to use scrutiny in your purchasing decisions, but sometimes it’s hard to decide what to buy and what to leave on the shelf. Here are some questions to ask yourself before making large or small purchases to avoid this mental turmoil in future.    Is this an item(s) I want or need? Often times we deceive ourselves that an item we want is something we need. This relates to the instant gratification which is so prevalent in our society. Upscale marketing is geared to circumvent the base line psychology so we are stimulated to purchase items not deciphering the difference between the two. So instead of being taken in by the product or item take a moment before pulling out your wallet and get real with yourself. If you have to convince yourself of a definitive reason to have this item or product, chances are you’re just in want and not in need.   Can this be considered an investable item? If you make a purchase for an item it is a good option to consider it an investment on a large or small scale. You are choosing to spend your money on this purchase so it should be in your best interest to know it will be of use to you in a rewarding and financial beneficial way. If you feel as if the purchase gives you more loss than gain in the long run,... read more

7 Financial Pitfalls To Avoid

  There is no question that creating savings is important for your future. But there are a variety of financial pitfalls that anyone can end up falling victim to. These pitfalls are dangerous because they can drain your savings and create financial stress for you over time. Often times we fall into these habits without noticing the long term consequences, and what we think is a normal part of our lives is really a behavior that is draining money straight from our pockets. Today we overview 7 of the most prominent pitfalls, and how to avoid the vicious cycle that can result in bankruptcy… 1. The Party Animal: This person spends most of their money each week on trips to the bar or to the grocery store for party supplies. He/she doesn’t hesitate to buy a $12 mix drink or 8 bottles of wine for house guests. Sure, it’s great to be social, but if you’re picking up a $50 tab 5 days a week, or spending close to the same amount at the grocery store for a social gathering, you can quickly find your finances dwindling. Try to limit yourself to only one or two trips to to bar each week (or less), and if you’re going to host guests at your house, consider doing a potluck instead of buying everything on your own.  2. The Shopaholic: This person is obsessed with buying new things. As soon as they make a pay check, they go to the store to spend it. While it’s always nice having new things, it’s important to keep your purchases in moderation. If you find yourself spending... read more

Risks and Benefits of Private Student Loans

While federally backed student loans offer favorable rates and, in the case of subsidized loans, help you avoid substantial interest payments while you’re in school, these loans aren’t for everyone. There are limits on how much you can borrow, and not all students qualify for federal loans. The private student loan market is a much riskier place to pursue a loan, and private student loans typically have much less favorable terms. With the right approach to your financial health, however, private student loans can help you fund your education without landing you in financial misery. Risks of Private Student Loans When you take out a private student loan, you’re taking on significant debt, exposing you to the risk of damaged credit and difficulty paying back the loan. You can also borrow more with a private loan than with a federal one. This creates the temptation not only to fund school, but also to fund your entire life – including parties, vacations, and other luxuries – with loans. Doing so can quickly create an avalanche of debt. Benefits of Private Student Loans Since private loans are issued directly through a bank, your school can’t place limitations on what you borrow or what it can be used for. This means that students taking a hefty course load can use the loan to pay for living expenses, to cover books, or to fund a study abroad program. The funds will be directly disbursed to you, and you can often borrow much more than you can with a federal loan – making it easier to pay for tuition at a pricey school. Tips... read more

Student Loan Risk: Co-Signing

Student loan risk is real, and most student loan co-signers are parents for one simple reason: when people actually do the research about what’s involved in co-signing a student loan, parents are typically the only ones willing to take on such a risk. Unless your child absolutely needs a co-signer, it’s much better to avoid co-signing; in many cases, it may even be better to take out your own loan on your child’s behalf, since you can at least ensure that it is timely repaid. Be sure to seek professional consultation before making any definitive decision. But to get you started on your research, here is a short list of some of the more important risk factors: Student Loan Risk #1: No Control Over Payments When you take out your own loan, you’ll receive monthly statements, but a co-signer won’t receive this bill. This means that, if you want to ensure the borrower hasn’t defaulted, you’ll have to remind them to make payments or call customer service to check the status of the loan every month. This creates more work than you’d have if the loan was your own loan, and means that, if you want to protect your credit, you’ll have to come up with the money if the borrower misses a payment. Student Loan Risk #2: Liability if the Borrower Defaults The primary risk of co-signing a loan is that you will be liable for the balance if the borrower defaults. This means the loan can harm your credit, and the lender can sue you if you don’t pay. If you’re sued, you could be stuck paying attorney’s fees and court... read more