Helping You Avoid Life's Financial Mistakes

10 Ways To Make The Financial Crisis More Fun

October 10, 2008 By Leave a Comment

Are the emotions of the current financial crisis getting out of hand?

Lately the financial crisis has taken a toll on almost everyone including you.  This situation has been striking at millions of Americans and the world for most part.  Everyone from those that have jobs at these financial institutions, government officials, to shareholders like you and me who may have money invested with some of these companies or in market at one place or another.

Along with this great financial crisis comes great stress on people and heavy emotions that people have been raging like anger, frustration, and many others.

I’m sure you felt them, too.

So in this post I thought I would share the lighter side and share some humor and laughter.  Hopefully cheering you up a bit.
I was recently watching The David Letterman Show and seen a great top ten list he did recently.  If you would like to watch this clip click here.

10 Ways to make a financial crisis more fun.

10. Take a page from president Bush and ignore it.

9. When Dow Jones drops more that 800 points, every American gets free mozzarella stix at  Applebee’s.

8. Replace Lehman Brothers with the Wayans Brothers.

7. File bankruptcy 3 times and the 4th on is free.  ( My Favorite)

6. Invest half your portfolio in liquor, the other half in strippers.

5. Goodbye repo man, hello repo monkeys.

4. Don’t call it a “bailout or a “rescue” call it a ” fun-nancial crisis.”

3. Put it all on Ball State and give the 16 points.

2. Enjoy blank stare when Katie Couric asks Sarah  what “FDIC” stands for.

1. Hire O.J. and his goons to steal back your money.

I hope you have found these as funny as I have.

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The REAL Reason You Can’t Get Out Of Debt

October 8, 2008 By 1 Comment

The Real Reason

If you have been in debt for some time you will understand what I am about to discuss.  If you have been trying to build up your emergency fund you will understand what I am talking about. If you are trying to achieve financial independence then you will understand what I am about to relay to you.

In this article I am going to hopefully point out some reasons why you may not be out of debt or achieved much of anything else.  Giving you the REAL reason you can’t get out of debt.  My outcome in this post is to show you that it’s not any one thing that is stopping you for getting debt free…

It’s YOU!

Let me explain.

In life there is a certain area where you feel comfortable at.  For example there are certain financial debts you are comfortable with say your mortgage, car loan, and credit cards.  Certain amounts of income you are comfortable with and use to, and in general certain ways you just like to do things. 

That certainty is what may be holding you back from going on to the next level in your life.  Wether it’s your debt or anything else you are trying to achieve.

Your Comfort Zone 

Your comfort zone is the area where you feel certain the most.  When you step out of your comfort zone you start to feel uncomfortable.  Maybe your late on a payment or taking on a new debt say buying a new car.

You know what I’m talking about.  You’ve had those butterflies in your stomach.  If you have a story about stepping out of your comfort zone I would love to hear it in the comments.

When I started my first business I had those butterflys in my stomach as well, but there is one very important quote that I will never forget.

You must step out of you comfort zone in order to achieve success.

Think about that once.  Anything you have ever want to achieve that took some sort of effort such as getting debt free or being a financial success you had to get uncomfortable in order get there. 

For example when I start this blog I had to step out of my comfort zone.  A million thoughts raced through my head such as what will people think, how will this work, or can I actually do this.  I’m sure you’ve been there.

Why you aren’t moving to the next level?

Think about it this way.  If you were a thermometer and you were always comfortable at say 80 degrees and this is where you see yourself the most comfortable.  Then all of a sudden something happens and life has given you 50 degrees.  Your boss is getting on you at work, your debt is piling up, you missed a payment on your mortgage.  Things seem uncomfortable.  Then several weeks pass and things seem to get better.

Have you ever wondered why this happens?

It’s because your identity is to stay consistent with the way you see yourself.  If you are at 50 degrees and you’re comfortable at 80 degrees a subconscious alarm goes off in your head telling you that you need to correct this.

However the same it true the other way.  If life has given you 95 degrees and  you got a promotion at work, you paid off your credit cards, your emergency fund is fully funded you will subconsciously bring yourself back down to 80 degrees.  You’ll let things slip and fall apart.  You won’t even know you are doing it to yourself. 

Ever done this before.  I know I have on many of occasion’s.  If you got a good story to share here leave a comment.

How can you stop this cycle?

Stopping this cycle is not going to be easy to do but you can do it. 

  • Don’t ignore the situation.  Telling yourself that you don’t do that will only take you longer to climb out of that hole you may be in.  Recognize your situation and look for a solution.
  • Get a mentor.  This is my best advice to you.  They can help you from seeing 80 degrees all the time to helping you crank up the heat a bit and putting you at 105 degrees. 
  • Educate yourself.   Education is the reason why we have more consumers in debt than ever.  Start reading some books, listen to some inspirational speakers, sign up to the Stumble Forward RSS.  The education is worth it.

Are you facing some of these situations?  Feel free to tell us your story and leave a comment.

Filed Under: Debt Managment Tagged With: , , , , ,

Are Payday Lenders Good For Consumers – Revisited

October 6, 2008 By 7 Comments

 Why I Am Revisiting?

A month ago I did an article called Are payday lenders good for consumers.  It was meant just to be a smaller article talking about some the issues that Ohioans will be facing this November. 

Or so I thought.

The article ended you becoming very popular and controversial.  With 17 comment left by readers who all had different opinions about the situation.  So I decide to revisit the issue read over all the comments again and meditate on which may be the right decision.

I have received many comments from Donnie who explained that 391% interest is to much for anyone to pay on a loan and repeated that this is a trap to Ohioans.  He explains that this is more or less predatory lending tactics that they are using to bring in customers and lock them in with high interest rates.

However Casey and Tara believed that the fee was only $15 for a two week loan which was better that paying an over draft fee.  They also believe that there would be 6000 jobs lost as a result.  They believe in the freedom of choice should be preserved to the consumers.

So in this article I have decide to go through all the facts and see how this might relate to you as the consumer and let you decide from there.  If you feel these fact differ from what you know let a comment at the bottom of this article.

The Facts ( or at least what I have read)

  • If the issue passes the maximum loan amount will go from $800 to $500.
  • If the issue passes the borrowers would have 30 days to repay the loan otherwise if it doesn’t there will be no time period.  (Not sure on this one let me know what you think?)
  • If the issue passes the maximum interest rate would be 28% and if it didn’t it would be much greater than that.
  • If the issue passes the government will be able to look at your financial records and decide if you will be able to have a loan or not. ( not sure if this true either.)

What’s true and what’s not

  • Here are some video I came across.  I couldn’t find any on you tube saying vote No on issue 5 so here is a link to those videos.
  • The next video here is from those that are getting the raw end of the deal from payday lenders watch it and see what you think.  You can also check out the vote Yes on website.

 

  • This next video is from the CBS Evening News talking about the payday lending as a whole across the country.  This is a disturbing video.  Check it out and let me know what you think.  Leave me a comment on how you feel about this.

 

My thoughts on the subject

I have been thinking about this issue a lot recently and have tried to put myself in the shoes of the consumer.  My thought is if I were a consumer going to a payday lender to get a loan would I want to pay 300% interest or would I rather pay 28% interest.  Sounds like a pretty simple decision to me.

The other things that I don’t understand is that they say that 6000 jobs will be lost.  All they are doing is limiting the interest rate, loan amount, and time frame for the repayment.  How will this lose jobs for us in Ohio? 

Finally, if you would care to share your thoughts on the subject please leave me a comment.  I also plan on doing a follow up article again in a few more weeks to display and discuss the comments that were made.

Filed Under: Market Updates Tagged With: , , ,

The Decision That Could Hurt You

October 1, 2008 By 2 Comments

Savings or debt?

Recently I was reading in a couple forums and I’ve found a few people asking what would be better, to save money or concentrate on paying off your debt first? 

While I’m not going to say which one is better my outcome here is not to give you a direct answer to that question but to help you make the decision which would be better for you to do first.

Which would you do first?

Depending on your situation this question can have a multitude of answers.  If there is a preferred way you would go about this leave me comment.  If it’s hard for you to decide on which would be the option to place the most importance on don’t worry your not the only one.  But I do want to make one thing clear first.

Making a decision is better than making none at all.  Even if it may be the wrong decision.

I’ve seen this many times sometimes we just can’t make up are minds about which way to handle things.

And then it happens.  NOTHING!

We literally lock up and do nothing.  The worst part about that is we allow ourselves to stop simply because we may not like the outcome we are going to face.  Don’t worry about whether it is wrong right.  Sometimes just taking action is all you need to do to get the ball rolling. 

In fact you may be saying to yourself that you want to take some time to review your options.  Thinking this will give you a clearer path to follow.  Though what I have found is that taking action clarifies your thought process and helps you make better decisions. 

If you don’t believe me try it once.

So here is a simple exercise I want you to do to help you consider what may be the best option for you.

Compare and Contrast

Take out a sheet of paper and write savings on one side and pay debt on the other.  Now on the savings side write all the great things that would happen if you saved more money than pay off your debt.  List as many as you can.  Then do the same on the other side with the pay off debt option.

For example,  on the saving side you might put:

  • Build up an emergency fund
  • Have extra spending cash
  • Save for retirement
  • Save money for kids college funds

Then for the paying off debt side you might put:

  • Pay off credit cards
  • Frees up $80 a month from credit cards
  • Pay down mortgage balance
  • Creates more equity in my home

You get the idea. 

Once you are finished simply see which side has the most points that you would agree with.  Not just the ones with the most points but the ones you feel hold the most weight in your oppinion.  Which would you weigh heavily in?  Leave me a comment how you feel about this.

Everyone’s situation is always different.

Nobody has the same exact situation.  So in order for you to decide there are some key factors you may also want to think about.

  • How much debt do you have?
  • How long would it take you to pay off your debts?
  • What debts do you have to pay off?
  • How old are you?
  • How much do you have saved up?
  • How long would it take you save that money up?
  • What are you saving for?

Is debt the right answer?

In reviewing the questions above if you have a lot of debt and it will take a long time to pay it off you may want to start here.  However it also depends on what type of debts you have and your age.  The reason you need to consider is at what age do you stop paying debt and save for retirement.  If you pay off all your debt your entire life but never save any money to retire on you may end up facing some tough decisions.

If you want to put your own debt plan together read this first.

Age has a big weight in this issue. 

The sooner you start saving money the better and the easier it will be to fund your retirement, save for college funding, and save for an emergency fund of all things. 

If you are older and close to retirement and haven’t saved any money yet it may be to late.  There may be some other options here but saving money is not one of them.  I’ll talk about this in future articles.

To learn more about why saving now is better read this article.

Is saving the right answer?

Again it all depends on how much money you have, what you are saving for, and of course how long it will take.   If you are 60 and just starting to save for retirement you aren’t going to get to far.  On the other hand if you were 25 you may want to start saving now.  At least in your 401k program to start.  When it comes to saving it’s never to early to start.

Compromise

In most cases though you just won’t do one or the other unless it’s the only way to handle the situation.  Most of the time you will be doing both but placing emphasis on one more than the other. 

For example,  you may be deep in debt but at the same time you may be saving money in your 401k program at your job if they offer one.  This could be a possibility.  That’s what this is all about the options you have avaliable.

Finally, think about the different opportunities available.  Make sure you take the time to come up with a few ideas to handle the situation don’t just do the one that sounds best to you.  Then do the most important step.

Take Action!

So?  How do you handle this situation?  Would you pay off you debt first or would you save the money or would you compromise on the situation?  Leave a comment and let me know.

Filed Under: Debt Managment Tagged With: , , , , ,
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