How Americans Get Into Debt… Simple Story

This is how Americans get into debt.  By reading this story, you might find yourself somewhere in the mix and see what trajectory you’re on.

There is a concept called “tunnel vision” also known as Kalnienk vision, which is loss of peripheral vision with retention of central vision, resulting in a constricted circular tunnel-like field of vision.

When it comes to personal finance, I’ve seen this happen so many times.  When I’m fixated a buying something, you’re in this “tunnel vision” and don’t realize how your buying decisions are getting twisted and warped.  series of these mistakes can bring about disaster into your personal finance.

I hope this story will help you take a look at your current personal finances and get you out of your tunnel vision.

Here’s A Story Of Rob And Jean

Rob and Jean are hardworking, middle-class Americans.  Rob is a fireman in the city and Jean is a real estate broker who earns commissions based on sales.  They have two kids and live modestly.  They own a house in a modest suburb where the schools are known for their strong scores.

Rob and Jean bought their home in 2008.  After a couple of years, they realized that the value of their house and their equity in it has grown substantially.  On top of this increased equity, interest rates had dropped.  They heard from friends that they could refinance their mortgage every month than they were paying.  They called a mortgage broker who confirmed it was true.

The mortgage broker explained that with a lower interest rate, Rob and Jean could use the increased equity in their home to take on more debt and a bigger mortgage while paying the same or lower monthly payments.  Because the value of the house would continue to rise, they could then refinance again in the future to cover any new debts.

Rob and Jean couldn’t believe their luck.  They refinanced.  They paid off their credit card debts and one of their cars, bought the season tickets Rob always wanted (lower section), and even upgraded their kitchen with stainless-steel appliances and granite countertops.  The best part was that their monthly payments would be considerable lower for the next three years.

Rob and Jean then became a little looser in their spending.  The kids’ clothes came from mall, not just the discount chains.  Dinners and nights out became more frequent.  Soon the credit card balances began to grow again.  They didn’t worry because they figured they could just refinance again as the mortgage broker represented.

But then Jean’s sales slowed throughout 2012.  Worse still, the value of their house had not appreciated like it had in the past.  No bank would accept their application to refinance.  Then the rate on their three-year adjustable rate mortgage increased dramatically.  Now, more money than they could afford had to get other mortgage each month.  They had to start picking which bills they could afford to pay and which bills they should try to pay next month.

Soon the calls started coming.  The mailbox was filled with stacks or letters that neither of them wanted to open.  Rob and Jean felt tension between them like never before.  Even the kids began to worry.  The worst part was the persistent and harassing phone calls and visitors at all time of the day, any day of the week.

Read Also : 5 EASY STEPS TO FIND A JOB IN AMERICA WITH JOBCENTER

They felt depressed and inadequate because they were unable to provide for their family.  They both felt that they were the subject of whispers wherever they went.

For Rob and Jean, the downturn of the economy and the housing market and the decline in Jean’s commissions caused them to fall behind in paying their debts.  For others, it could be job loss, sickness, medical emergency, the need to care for a family member, years of spending too much, the need to care for a family member, years of spending too much, or simply the slowdown in a business or the economy overall.  While the underlying reasons may differ, the results are the same.  The bills aren’t getting paid on time.

What We Could Learn From Rob And Jean

The story of Rob and Jean is all around us.  I know few of my friends just on top of my head whose had this similar situation.  What we can learn from this story is very simple.  I can give you a list, but I want to just state some core principle that I’m taking away.

Just like how Rob and Jean didn’t get into this situation over night, they are not going to get out of it over night either.  They are going to have to be honest with their situation and make drastic lifestyle changes.

The principal here is to NOT increase your spending along with your income.

Many Americans feel entitled to spend whenever they feel like they saved some money.  And this is very detrimental to personal finance.  In most cases, we don’t bother to know exactly how much more we’re allowed to spend, but instead we go by our gut feeling.  But whatever we attach on top of our current expenses tends to lead to other expenses that follow.

For example, if I upgrade my car from Honda Accord to a Cadillac, extra expenses is not just the car payment.  Do you see where I’m going with this?  It’s like that with many other upgrades we in our lives.  I go from $200 suits to $500 suits and now that I know what $500 suit feel like, there’s going to be a huge lump on my through to swallow for me to go back to the $200 suit.

Keep you expenses where it is and keep exercising good personal finance rather its raining or not.

Keep in mind that not just Americans, but we all don’t have an income problem, but a spending problem.

Question To You

This is the principal I’m drawing out from this story.

What personal finance principal were you reminded from this story?  Do share…

1 comment

Posted at 22:23 |  by Nagendra

Yet another 5 Ways to Make Money Online Without a Website

You can moke money online without having your own website. This article will show you five ways you can do it.

On the Internet you can find numerous ways to make money online without a website. Below are types of online program that you can join without having any website.

1.Online Surveys

The idea of online survey is that you will be given a survey that has to be completed by you to earn money. This surveys is conducted by companies who are observing the community to discover the best way to market their product or services. The amount of money you can earn per survey depends on the importance or the length of survey. Some survey companies doesn’t reward you with money. Instead, they giving you prizes/gifts or entering you to a lucky draw.

2.Get Paid to Read Email/Get Paid to Signup/Get Paid to Surf

From the description above, you know what you have do to make money. Yes, only by reading emails and click the advertisement inside or by signing up to various free to join programs or surfing on the internet you can make money online. Although the money you can earn isn’t much, this is the most convinient way to make money.

  

3.Online Investment

This program requires you to invest on their programs for a certain period of time and in return you will get the amount of interest based on your investment. This type of program involve a high risk, just like other offiline investment. It also has the big chance of losing your money, because many of this programs are scams. Only a few of this type of program are legitimate. Usually, they offer a low rate of interest, but still higher than most bank offers.

4.Ebay Business

Ebay is a well known service that allows people to sell and buy products through an online auction. You can sell your antiques or stuffs that you no longer want to Ebay. Though selling your old stuffs and sell them to an online auction seems like not promising, there are actual people who has make a full time income on Ebay.

5.Marketing Affiliate Programs with Pay Per Click (PPC) Advertising

Recently this is maybe the most popular way to make money online without having your own website. The concept is by joining an online affiliate programs that will give you commission to sell their products and then advertise the product on sites that has Pay Per Click Advertising. PPC Advertising is a powerful advertising campaign that charges you a small amount of money when someone click your advertisement. 

If that person decide to buy the product your promoting, you get profit from your commission reduced by your investment on the PPC Advertising. The most famous PPC service is Google Adwords, run by Google. Just be sure that your investment on the PPC service doesn’t exceed the amount of commission you get from the affiliate program.

Note :

As you can see, each program has their own advantage and disadvantages. The last two ways mentioned above is considered more promising than the top three. In order to make a significant income with the last two programs, you have to know its secrets and techniques. Fortunately, there are many ebooks and articles online that can help you to get the best of those programs.

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Posted at 23:07 |  by Nagendra

Easy Way to Make Money with Car Without any Investment

In this post, you will know the ways to make money with car online. 

You are surely thinking that ” I am making a joke” or ” i have gone nuts” but seriously this is a very excellent way for making money off your car. If you are  fond of driving or traveling from one city to another city then this way saves your money and meet people heading your way as well as you can earn up to $1000 of a month also.

Yes! you are seeing right $1000 of a month by just renting your car. Isn’t it amazing?? For this purpose, just you have to list your car, control your price and who rents your car and when. Now you are thinking that where should go for the listing and all the above purpose then I want to say that there are some official websites available for serving your purpose of making money with a car by ride sharing.

Websites Which serve the purpose to make money with car :

 

                              

RelayRides

RelayRides are a nationwide community of unbeatable selection for renting your perfect car. The World Alexa Rank of RelayRides is about 80,601. The RelayRides zone totally depends on Owners and Renters.

About Owners :

Owners list their car online in just a few minutes and make their business profile. Now in the next step they get approved and get into the charge of who can drive their car. Now they meet with renters and hand them keys and also check their driving license. Now last Owners count their cash with the safety and insurance guaranty of RelayRides. Renter will return owner car at the end of the trip by saying thanks you. 

About Renters :

Renters first find their choice of car in the list of thousands. List is featured by filters and recent reviews. After the selection of car, this is the time for a trip. Simply Renters meet owners to pick up their keys. RelayRides provide 24/7 protection on the roadside, while driving. At the end of a trip, Renter will return owner car saying thanks you. 

Surely a very exciting way to get money from your car. Official Website is here : https://www.relayrides.com/

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Posted at 06:41 |  by Nagendra

10 steps to choosing the best money investment

Lets us see the 10 steps to choosing the best money investment.. 

 

 1. Investing money – how much do you have to invest?

Are you looking to invest a lump sum, or to set aside a regular monthly amount? Maybe a short term investment or longer? And how much money do you have available?

Certain assets require a lump sum investment, such as corporate bonds or when you’re putting down a deposit to purchase a property, and others offer the flexibility of either lump sum or regular contributions, such as a cash ISA or stocks and shares ISA.

Some investments also have a minimum financial commitment, so knowing what you can afford and whether you plan to make a one-off or an ongoing saving is a good starting point.

2. How long do you want to invest money for?

Or, put another way – when will you need access to your money? Certain investment products run for a fixed period of time, so if you have a specific date in mind as to when you need access to your capital, then some product types won’t be right for you. In addition, certain investments, such as shares, are much longer lasting and shouldn’t be considered as short term investments.

That’s because although shares have historically increased in value over the long term, they can fluctuate in value in the short term. It’s recommended that you invest money at least five years to be in a good position to ride out these fluctuations.

3. What are you planning to use the money for?

We all have different reasons for saving, and the purpose of your investment can affect how much risk you’re prepared to take with your money. If your investment is to pay for your children’s education, then you may be investing over a long period of time, and looking for a higher return, as a result you may be inclined to choose a higher-risk investment option.

Conversely, if you’re investing money to pay for an overseas trip, or a new car, you may be investing for a short period of time and want certainty about the outcome of your investment, and you may feel more comfortable with lower risk short term investments.

4. Do you need an income from your investment?

If you’re looking for a regular income from your investment then this will influence your choice of product. A pension is probably the best-known investment vehicle for providing an income in retirement.

There are other investment products available that can also provide a regular income such as annuities, or corporate bond funds, alternatively you could choose to invest in a buy-to-let property to provide you with a rental income.

Consumers may wish to seek professional advice first before taking out such products as they often require a huge commitment.

5. What age are you?

Attitude to risk can change with age. Longer term, higher risk investment options may be more attractive to someone in their thirties than to someone who is getting close to retirement.

People tend to invest money in lower-risk products as their retirement approaches.

6. What are your personal circumstances?

If you’re a parent with financially dependent children, then you’re probably going to be more cautious with your savings than someone who’s single and doesn’t have any dependants, and therefore more likely to choose a low to medium risk and possibly short term investment. For someone who’s self-employed the priority may be finding a product that allows flexible contributions to suit a more erratic income pattern.

It’s important that you to take a close look at your circumstances and how they affect what investment you opt for before you make a commitment.

7. Do you have other investments?

If you already have a number of investments and feel that your future financial requirements are well taken care of, then you may be willing to take a higher risk with your next investment. However, if this is your first and only investment then you may be more conservative in your choice.

8. What are your values?

It’s important that you feel comfortable with where your money is going, so if you have strong beliefs then it’s worth seeking out an investment that fits with these. There are a number of green and ethical investments  available as well as investments that are designed for specific cultural groups.

9. What’s your risk profile?

How do you feel about investment risk? Not everyone is happy riding out the ups and downs of the stock market, and if the thought of a particular investment makes you lie awake at night, then it’s probably too risky for you.

10. How much flexibility do you need?

When you invest money, it gets tied up and is no longer easily accessible. But, if you have a sudden need for cash how quickly and easily can you liquidate your asset? And what’s the penalty for doing this?

If you think this may be an important factor for you then it’s worth knowing up front what the implication of getting out of an investment early is – if indeed it’s possible.

Once you’ve answered these questions you’ll have a better idea of the type of investments that would suit you. Financial advisers tend to recommend having a portfolio of investments, that way if one investment performs badly, you have others to fall back on. It also means you can plan so you have short term investments as well as long-term ones.

You may need to consult an appropriate professional – financial adviser, accountant or tax specialist – about the tax implications of any particular investment in relation to your own circumstances.

It’s also a good idea to review your portfolio on an annual basis after you’ve invested money. Circumstances change, so it makes sense to check that it still represents the best investment for you.

Posted at 19:12 |  by Nagendra