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How Secure Are Your Finances?

April 11, 2013 Comments off

Being secure in your financial situation is a goal that almost everyone wants to pursue. How exactly can you assess whether or not you are truly secure in the current situation you’re in, no matter how stable it seems? Read on to find out!

financesBackup Money
One of the best ways to tell if you are secure is by gauging whether or not you have backup money. In the event that you were to be let go from your job, would you still have enough money to pay the rent or mortgage? Some experts suggest that you should have three months of bills saved in an emergency fund at all times. If this isn’t your present one, start working toward saving up that money. Even if you have a month saved up now, you would at least have that time period to start looking for a new position.

Consider Total Income
Now, if you are living with another person, you should consider the total income. For example, when couples are first starting off and say, purchasing their first house, it’s so important to make smart financial decisions. For example, in the event that one of you were to lose your job, it would be very helpful if the other person were able to cover all of the necessary bills by him or herself. While you might not be going out to fancy dinners anymore, you would still have enough cash to cover your basic needs.

Job Security
You also want to ensure that you have a steady income throughout the year, so it’s wise to know where you stand in terms of job security. In an economic climate like the one that exists today, answering these questions can be really tough. However, it is completely necessary to do so. Think about whether you are truly secure in your job and be honest with yourself. Perhaps speak with your supervisor to gauge their approval level and the future of your company – if you level with them, they will return the favor. If you are worried, it’s smart to at least seek out a part-time position to cover you if you were to lose your job.

Debt
Another way to consider your financial security is to examine the amount of total debt you have. It’s difficult to be entirely financially secure when you have large amounts of debt. If you were to stop bringing in income, then you might wind up defaulting on your payments or receiving terrible credit scores, both of which could cause even more financial problems for you in the future. While it might be impossible for you to pay off all of your debt right now, you should at least start working on a plan. Try to pay as much as possible and never make late payments, as this will negatively affect your credit. If you have student loans, look into every option out there to find out the best way to pay them off.

By simply looking at all of these factors, you should be able to determine how secure your finances really are. However, it’s also a smart idea to speak with a certified financial planner or an accountant. These professionals can provide a very helpful outside perspective of your financial situation and work to get you on a stronger path, if necessary.

Categories: Building Wealth

How to Become A Smarter Consumer and a Wealthier Citizen

February 9, 2012 Comments off

Personal financial sustainability and success is dependent upon more than just getting lucky with a good job or a good investment. It takes active management of your consumer behaviors. If you want to be a smarter consumer and a wealthier citizen, you do not need to do anything radical. All you have to do is make smarter choices in your life.

Tip #1 – Avoid Disposable Products

The concept of disposable products seems to be a blessing. Items are inexpensive, easy to use and require no maintenance. However, the concept of disposable products was not produced to make your life easier. Instead it was designed to make manufacturers richer. You can save hundreds or even thousands of dollars a year simply by investing in reusable products, as opposed to paying for disposable products.

Tip #2 – Avoid Heavily Marked-Up Products

Other drains on your personal wealth are products that are severely marked up. Coffee house coffee in particular is a major drain on your personal wealth. Instead of paying $5 or more for a cup of coffee or tea, make your coffee at home or purchase it pre-made from a gas station or diner for between $.50 and $1 a cup.

Tip #3 – Know the Value of Products You Buy

You can spend a lot of money on products that really are not worth what they cost. Before you buy any product that is supposed to be “green” or “economical,” make sure that these claims are backed up. Some products may claim a lifetime of savings that sound appealing, but when compared to other products may turn out to be not such a great deal.

Tip #4 – Eliminate Duplicate Services

Today most people have cable subscriptions, Internet subscriptions, land lines and cell phones. In total these subscriptions can end up costing individuals $300 or more per month. When you break down what you are offered by each of these subscriptions you may be surprised to find out that there are overlaps in what you are paying for. For example, landlines and cell phones offer the same basic service, telecommunication. In most cases land lines really do not make financial sense as cell phones offer lower cost services for long distance and local calls. Eliminating your cable subscription can also make sense as you can get free or low cost access to the same basic programs that cable offers online through such programs as Hulu, Netflix, and Amazon Prime.

Tip #5 – Be Aware of What You Spend

Track what you spend so you do not mindlessly shell out money. This will help you control your assets and preserve your wealth.

Understanding Wages in America – Why the Rich Get Richer

February 8, 2012 Comments off

wages in America

When we finish school or we graduate from university, most of us are starting our lives with very little in terms of material and financial wealth. Yes, countless young adults get a substantial start in life because their parents are wealthy, but for the overwhelming majority, things are very different. With this in mind, have you ever sat down and thought about the actual irony regarding the wage system, not on in the United States, but internationally as well?

Irrespective of what qualifications we have, most of us have to start at the bottom of the ladder in terms of wages. This of course is at a time in our lives when we really are in need of some serious money to buy our own transport, and ideally, also a home of our own. In a nutshell, those who are in the age group requiring the most money are in fact the ones earning the least amount of money. By the time you reach your sixties, when you already have everything you need, you end up earning a better wage than ever before. Life would be so much easier if this scenario was reversed, thus allowing us to earn a decent wage at a time when we need it the most. Unfortunately, however, that’s just not how life works, and it’s one of the reasons the rich keep getting richer.

Did you know that the top 1% of people, based on financial wealth, actually saw their fortunes increase by a staggering 275% between 1979 and 2007? In contrast, the financial gains amongst people considered to be poor only rose by 18% during the same period of time. To put this in perspective, let’s just say that the after tax income of the top 1% had more than doubled by 2007.

I won’t attempt to list exact figures here as far as actual earning are concerned, but you can be rest assured we’re looking at billions, if not trillions of dollars. This is money that in a sense is no longer in circulation. It’s owned and managed but the top 1% of Americans, which of course means less money has been distributed amongst other income groups.

Surely, this trend cannot continue indefinitely without it resulting is some dire consequences? Already we are seeing very visible signs that people want to see wealth being distributed realistically. All the recent protests, such as Occupy Wall Street for example, bear testimony to the way an increasing number of people are beginning to feel.

Quite often, people earning millions of dollars per year are actually taxed at a lower rate than ordinary middle-class income earners. President Obama wants to see this change, and has recently floated the idea that people who earn more than one million USD per year should be taxed at the same rate as middle income earners.

As is to be expected, this proposal is being fiercely contested by those that stand to be affected, should the proposal become law. Some say they deserve to be taxed at a lower rate because they routinely take risks which could easily see them lose a considerable amount of money, and that even with a lower tax rate; the government still gets more tax from a very wealthy person than it does from a middle class earner.

Others, many of which no doubt have vested interests, argue that such a law would likely result in a class war. They say it’s akin to stealing from the rich in order to help the poor, and this could possibly cause a great deal of resentment.

Even it tax rates are adjusted in order to tackle the current inequality of wealth distribution; the rich will continue to get richer. With effective measures in place, the poor might not get poorer, but their wealth will almost certainly never increase at the same rate as it does between the rich.  The bottom line is – the more money you have at your disposal, the easier it is to make money.

A person with a vast amount of money can open or buy new businesses; they can invest in stock markets and so on, whereas the average person who works a 9 to 5 job simply doesn’t have spare cash to work with. As the saying……you need money to make money.

In general, people’s wages are also not increasing in line with rising inflation, and this is a fact that can be verified by any large payroll companies. Even though the average person was earning less two or three decades ago, they were for the most part living a higher standard of life. The might be earning more now, but the increase in wages is not enough to compensate for the ever increasing cost of living.

One thing is for certain – unless the issue of wealth distribution inequality is addressed effectively and relatively soon, the current system is inevitably going to buckle under the strain.