Mistakes Or Not, These Financial Issues Can Be Crippling

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How did your finances get in such a dire state? I made a mistake! You cry out in the hope that admitting you made an error will solve the problem. But of course, it doesn’t, and that’s why you need to avoid making the mistakes in the first place. There are various errors in judgement that will end up costing you a fortune and will put your finances in a difficult, somewhat dicey position of recovery. So, what mistakes are we talking about here? We’re glad you asked because once you realise what these errors are you should be able to completely avoid them.

Blood In The Water

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Do you know where loan sharks get their name from? Sharks are attracted in the wild by blood in the water. Supposedly, they can smell it from miles away. The name is particularly apt for a loan shark because they too feast on someone who is in desperate need of help and support. The difference is of course that a shark doesn’t pretend to offer first aid whereas a loan shark does. They’ll tell you how much the loan could help you providing you with the support that they can see you desperately need. They’ll offer you reassuring words about how it’s completely affordable and even give you friendly tips about how to make sure you can pay it back.

The problem is that this is a business and for a loan shark, it’s actually better if you pay it back later. This rises the interest to the point where they get big bucks from you and a lot more than you previously borrowed. A lot of people falsely assume that those who borrow from loan sharks do so for silly reasons such as a family trip to Hawaii. However, that’s not true, and most instead do it so they can cover the expense that they didn’t see coming but that they do have to pay. Or, they simply use it to pay off the bills that were a little larger than normal monthly charges. It’s easy to slip into a trap like this and far more difficult to climb out.

Before you turn to a short-term loan company, do make sure that you have exhausted every other possible option. Even paying on a credit card may be better than spending money on a loan company because at least with a credit card, you’ll typically know what type of interest you’re looking at before it grows out of control.

I’m Fine

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Arguably two of the most dangerous words in the English language and not just because they are often uttered moments before someone explodes in anger. To explain how these two words can impact your finances, we need to explore an example. Let’s say that you are involved in a car accident. Now, for many people, the first thing most people would do is either contact their lawyer or head to the doctor, particularly if the incident wasn’t their fault. However, some people don’t like to make a fuss, or they just don’t like these kind of jolts out of their daily schedule. And, if the insurance company is going to cover the cost of the car, there’s nothing to worry about right? After all, you feel fine apart from an aching in your back, but that’s nothing. That will surely go away in a couple of months right?

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Perhaps it does but then a year or two later it returns, worse than ever. Now, at this point, you might put two and two together, realising that the accident did cause a problem with your back. It is only then you decide to contact a lawyer. Firms like Lopez & Humphries PA see this all the time. The problem is that by this stage there’s not a lot they can do. A back injury could have been caused by a variety of incidents, and it’s very difficult to prove it was a result of the crash. Particularly, if you didn’t go and see a doctor. You see the problem? That’s why you should always contact both a legal rep and a doctor after an accident, typically in that order.

You might say, okay I’ve been injured, and it’s clearly long term but how is that going to impact my finances? Well, people suffering from serious long-term injuries often need more medical care which costs more money. On top of this, there’s the issue of debt. You may not realise this, but people with serious long-term injuries are far more likely to experience debt at some point in their life.

No Service History? No Sweat

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Finally, sometimes, a crippling blow to your finances can just be due to a bad financial investment, and that’s certainly true in the case of second-hand cars. If you speak to a financial expert, they will usually tell you that buying a brand new car is always a bad monetary move. The reason? Well, it’s the depreciation. After owning a car for just a couple of years, the price of the vehicle drops far below what you bought it for. The only exception to this rule is if you accidentally buy a car destined to be a classic. But then the car is only valuable if you keep it in good condition. This means it can’t be a runaround vehicle.

This might all be true, but if you buy a car second hand, you run the risk of purchasing a dud. A vehicle that will cost you a fortune over the years in repairs and other problems. Eventually, that vehicle becomes a financial nightmare that you just want to get rid of. You can’t think of course because then you’ll have no car at all.

That’s why you always need to consider a second-hand car purchase carefully. Check around and make sure that it hasn’t been damaged seriously and that there are no signs of severe problems. If in doubt, hire a guy from a repair shop to check it for you, and they’ll tell you whether it’s going to be a money pit.

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Investment options for the self-employed

As a self-employed person, finding a suitable option for a financial pension is indispensable. Government and corporate funds offer a wealth of choice. Here are some other investment options you can consider.

Stocks are the star of the market

This security is the best known in the market. Blue chips are suitable as a beginner-entry and long-term investment option.

Stocks also offer dividends. This is distributed annually. Stocks could be used to generate a passive additional income. Careful adherence to principles and strategies can minimise risk and generate profits. Particular attention should be paid to IPO’s something of a double edged sword a company’s Initial Public Offering is often an incredible opportunity but one fraught with risk, the until now private company has clearly been doing well enough that it anticipates a positive reception however it is not uncommon for bounces early as the market has no historic trend data making technical analysis impossible.

Stock CFDs

With CFDs, (contracts for difference), you take a position on the value of the underlying asset such as a stock, currency pair or commodity.

When you trade CFDs, you do not physically own the underlying instrument. You only speculate on whether the financial instrument you are investing in will rise or fall. For this reason, CFDs are generally free from Stamp Duty. As a rule, CFDs are traded off-exchange.

CFDs can be a superb opportunity for the self-employed investor as they require only a small start up fund to make large trades due to the power of leverage, simply put you can keep the bulk of your money in your savings or other investments and still use it to trade. However it should be noted that with the potential for big risk there is also a potentially huge reward. If you’re left holding a bet when the market moves against you you can end up losing far more than your initial holding deposit.

Diversifying your portfolio: funds

Funds have the advantage of diversification. Many investors put their money in a variety of securities. A distinction must be made between active and passive funds. With active funds, your portfolio will actively be managed by a fund manager who will be able to respond appropriately to the prevailing economic climate. Passive funds on the other hand, have the advantage of lower costs and the chance of a long-term high return.

Exchange-traded funds

Exchange-traded funds (ETFs), for example, invest the collected assets in a specific index, such as the DAX, Dow Jones or Nikkei 225. This purchases the stocks that are in the corresponding index, ie the performance of the ETF is equal to that of the index. Savings plans make it possible to pay a fixed amount at regular intervals.

The ups and downs of the stock market are important in determining your profit. At low prices, the investor buys more shares for the same money than at high prices. If the index or market should collapse, there is the opportunity of a manual purchase at favourable prices. Nevertheless, risk cannot be switched off, and losses are always possible.

Bonds are an alternative to credit

Companies use investment bonds when they need capital and the sum cannot be borne by a single financial institution. The money needed is divided into many small bonds and offered for sale to the public in the market. In addition to annual interest gains, price gains are possible upon payment of the debt at the end of the term.

Creditworthy companies with an attractive interest yield are viewed by many as a potential investment opportunity, especially when market interest rates are low.

Finding the right product

Ultimately the level of risk steps up in hand with the level of reward, for a self employed person you may find that you’re asset rich, but cash poor for this reason margin products often look attractive, however these are inherently risky, other product fads such as cryptocurrency trading carry even more risk.

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Curb Your Spending With These Simple Tips

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In this consumerist society, it can be extremely easy to get carried away with your disposable income each month. It can even be easy to get carried away with money which you don’t have. It is incredibly easy to get items on finance nowadays, and banks are all too happy to offer out loans with interest so high it can only be described as extortion. You may have fallen into this trap in the past and be looking at options like consolidate payday loans just to climb back up the credit score ladder and above the red line. Everyone either knows someone that has been ins this position or has been in the same position themselves – and it is extremely common nowadays. Even though we know it’s not worth it, through constant encouragement to spend, and being told we need luxury items – which incidentally we don’t need – we are led to the financial hole that many people don’t realise they’re in until they hit the bottom. Saving and paying debts off is not easy – if it was the banks wouldn’t have so many loan options, and no one would need them due to the extensive amount of money in their bank accounts. Alas, that is not the case, and we are encouraged to spend, spend, spend. Here are a few tips to help you keep on top of your spending and take back control of your finances.

Declutter

One of the best ways of not spending money is to throw things that you don’t need away. It opens your eyes to how much junk you had in the first place and shows you the extent of how money is wasted by spontaneous purchases. Yes, the sorting hat from Harry Potter World was severely overpriced, yet you said you’d treasure it forever, and now it is collecting dust. It happens to everyone. Your eyes become bigger than your wallet and before you know it you’re travelling home with three full bags of things you really didn’t need. Those three bags have now become bin bags – and it really gives you a new perspective on purchasing – a perspective that will be invaluable to your savings account.You already have enough things you didn’t need – you don’t need more.

Change Your Mindset

When it comes to thinking about your money, how do you measure it? By the amount that is in your bank? The amount of your monthly income that is disposable? The amount you owe to debt companies? Whichever way you think of it, it may be time to take on a new perspective. Whenever you’re out shopping, think of the price of an item as the number of hours you had to work to earn the amount of money. If you had to work all those hours again just for this item, would you still want it at the end of the shift? If the answer is no, then the item is not worth it. If yes, it still doesn’t mean you take it to the counter straight away. You then have to ask yourself if it is something you need or just something you desperately want that is going to collect dust like the previously mentioned Harry Potter souvenir? If it is the latter, you need to put it back on the shelf and walk away. Though out of your comfort zone, you will feel good for doing it. If you are still thinking about it in a few days time, you may be able to justify going back and buying it. But, the chances are that the impulse to buy would have worn out by then, and you will have forgotten all about it. When you are addicted to spending it is not the item that matters, it is the act of paying for something that is so addictive. Controlling that urge is the only thing that is going to help you to start breaking the habit.

Are Sales Actually Bargains?

Sales can be an extreme money grabber for people who like to spend because it is driven into you that you are getting a really good deal. However, at the end of the day, how good is the deal you are getting? You will also save more money by not spending any at all, no matter what the percentage off. Rarely items in sales are things you actually want or need; it is just the excitement of saving a bit of money that people radiate towards. It is important when shopping in a sale to go back to the mindset previously mentioned. The item may have 20% off, but may still cost you two full days at work – is the little bit of money you’re saving really worth it? Probably not.

Hopefully, this has given you some food for thought on how best to go about curbing your urge to spend and helping you to keep your pennies in your wallet, rather than in the hands of the commercial world.

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Common Mistakes to Avoid When Buying Insurance

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No matter whether you are looking to buy car insurance or a life insurance policy, there is no denying that the process can be somewhat overwhelming. After all, there are so many different options to choose from, and there is the industry jargon to contend with too. Irrespective of the type of insurance you are interested in, it is vital to approach the process with care. This involves avoiding the common mistakes made by others, which are explained in further detail.

Choosing the wrong type of insurance policy – Nowadays, there are so many different types of insurance policies to choose from. This can lead people to be confused when determining what type of policy is right for them. One good example of this is choosing between critical illness cover and income protection policies. A lot of people assume that these are the same thing, but that is not the case. Critical illness cover will only cover you for a number of serious conditions, which will be outlined in your policy. Every plan is different, though, so you need to read your contract to determine the exact list of illnesses that are covered. With income protection, you will be covered if you are out of work for a valid reason for a set period of time. For example, your policy may pay out after four weeks of being out of work if you have broken your leg while scaffolding. A broken leg is likely to be something that isn’t covered in a critical insurance plan.

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Elf-Employed? The Freelancer Struggle During The Holiday Season

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One thing that self-employed people struggle with at the best of times is the holiday season, regardless of whether it is Christmas time, Easter, or you just need a break, the difficulty in taking time off, whether self-imposed or not, is that you don’t get paid for it. So, the self-employed group of workers needs the same amount of time off like everybody else, but because of the nature of the work, this is seldom the case. And as nice as it would be to give yourself those four weeks off, you know deep down that it’s not plausible. So, what can you do to lessen the burden of not being paid, but while also having a good time yourself?

Plan Ahead

Yes, this is, unfortunately, the most sensible solution. You know your working patterns, and you know when you are liable to burn out, so you should structure your finances accordingly. Lots of people make the mistake of taking one job after another, and before they know it, they have worked 6 months straight without a break. While you may be rolling in the monies, your health reserves are very likely at an all-time low. You may have thought instead it’s worth taking a loan out to help cover those free dates in the calendar that you have set aside, but if you get into the habit of taking a loan out so you can enjoy yourself, the burden of debt will very likely rear its ugly head. But while there are resources online on how to deal with debt, the best approach is to plan your finances accordingly. If you’ve been self-employed for some time, you know the peak and off-peak seasons so you can plan your breaks around those.

Holiday With The Family

This may not sound like a great sounding option, but the one thing about taking a vacation back at your parents’ house, or in your hometown, is that it will be a lot cheaper than going to the Algarve for two weeks. And besides, your parents would be happy to see you, even if they didn’t show it! And, time it around peak holiday seasons, like Christmas, and you will get fed! This means that minimal money will be spent on your part and you get a decent break. If this doesn’t appeal, then it’s a Netflix box set, your pajamas, and some chocolates for a week. Again, cheap and cheerful, and it achieves the desired effect!

Being A Social Butterfly

Wild nights out are incredibly expensive, instead, why don’t you propose to have a gathering at your home, or someone else’s? Dinner parties, parties, or any type of social gathering which doesn’t require you to go anywhere, is very cheap, and you will be grateful for the break away from your self-employed life. No doubt, you have been slaving away, day in and day out, for months on end. So, make the most of your time off, and socialize!

Being self-employed doesn’t mean constant vacations where you have no money, but if you find yourself in these trappings consistently, not only should you have a reassessment of how you tackle self-employment during the holiday season, but also how you tackle your finances.

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Are Your Debts Your Age?

Debt has become the cross to bear almost all adults have to live with these days. Answering why would be like trying to make sense of anything Jaqen H’ghar has ever said (a little Game of Thrones reference for you there), which is nigh on impossible. At the more innocent end of the scale it has a lot to do with unexpected circumstances popping up in your life, at the more sinister end of proceedings it is to do with the lack of any formal education on money matters, and somewhere in the middle, it is to do with the cost of living.

Whatever the case, debt is something most adolescents don’t think about, getting help with paying debt down is something all middle-aged Americans have to focus on and enjoying a debt-free retirement is something more and more retirees are seeing as a pipedream.

To break this epidemic down a little more, we’re going to delve into the circumstance of each age group, something that will help you know you’re not alone and hopefully motivate you to change your fortunes, literally.

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Under The Age Of 35

The average debt for a household whereby the main breadwinner is under the age of 35 is a staggering $82,764. That is quite terrifying because most people won’t have started accumulating debt until they were eighteen, which makes that a dozen years of heavy spending. Of course, not all households that fall within this age bracket have debt, which is why this is simply an average based on those that do. It also worth pointing out that a mortgage is a big chunk of this – the average mortgage debt at this age is $143,890.

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Between 35 And 44

No surprises for guessing what happens here because, with more years to accumulate date and upsize a home, the debt increases with those that fall within this age group. In fact, the people residing in this bracket have the highest average debt of all at $153,239, with the average mortgage debt being closer to $190,000. This is a terrifying number if your debt is made up of personal loans and credit cards and not a mortgage and just one of the reasons why staying out of debt needs to be of the utmost importance to people growing up.

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Between 45 And 64

This is where the debts a household has accumulated starts to decline, which will have a lot to do with the sudden rise in average salaries at the age too. More money means less financial burden when paying off debts. For those closer to the 44 -ear marker, debts will stand at around $150,000, with this figure slipping away to $131,000 in that twenty year period as they start to focus on the kind of retirement they want to enjoy. They may well have assets that are worth a lot more than this figure or they may have a negative net worth. It i a flip of a coin at this age.

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Between 65 And 74

Most people hold the same dream: to be debt free by the time they retire. Unfortunately, though, this is becoming less and less realistic, especially for us Americans, and by unrealistic we mean carrying the burden of $108,765 with us. That is quite substantial. It is also worth pointing out that many of these secured debts are held against an average mortgage of $130,400.

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A Millennial’s Guide To Mastering The Art Of Investing

Just because you’re twenty-something doesn’t mean you don’t have your financial head firmly screwed on. Now that you have a secure career, a good monthly salary and you have managed to pay off your lingering student debt, you may find yourself with disposable income every month. At the moment you are squirreling this extra cash into your savings. However, there’s a niggling voice telling you that this money could be better invested elsewhere to enable you to see more lucrative returns on your excess cash. You’re not wrong. Take a look at this helpful guide to point you in the right investment direction.

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Your Mortgage

It may not sound like an investment but if you’re lucky enough to own your own home, making overpayments on your mortgage means that you’ll end up paying it off a lot quicker. While you may not see lucrative returns as such, you may find that you are mortgage free and own your home outright two, five or maybe even ten years earlier than you expected. This is a massive asset that you can claim much quicker leaving you with even more disposable income to invest at a later date.

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Real Estate

The old adage is that bricks and mortar is the safest investment. If you’re after a long-term investment that isn’t super high risk, real estate is a viable option. You could choose to purchase a property in an up and coming urban area with your client focus being young professionals and long-term leasing. However, you could also take a look at the world of vacation lets. Companies like Chinquapin real estate can guide you through the process of purchasing a property in an established area that already attracts holidaymakers. The maintenance costs may be greater, and you’ll need a greater emphasis on marketing your property, but get it right, and you could have near maximum occupancy every year and secure a much greater rental yield than with a more traditional long-term lease. Just ensure that your income from the rent exceeds your mortgage repayments so you won’t be out of pocket.

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Forex

If you’ve always fancied yourself as financially astute and keep up with the nuances of the investment world, you may want to try your hand at a bit of Forex trading. By trading in currencies you are embarking on a more high-risk investment, but naturally, the rewards can be more lucrative. Predicting how foreign currencies will fluctuate takes practice which is why you should set up a free dummy account and ‘pretend’ you are trading with monopoly-esque money. This way you can master the art of trading before you commit to investing your hard-earned cash.

Being young and affluent means that you’re in an incredibly fortunate position. The fact that you’re reading this post shows just how keen you are to invest your money wisely. Follow this advice, and you could find that your money, invested astutely, could go a lot further than you think.

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How Important is a Healthcare Insurance?

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Healthcare Insurance: Do you have one?

Let me tell you how my family struggled in paying for medical bills of my brother and my mom when they got sick. We lost whatever money we had including resources and such when my brother was diagnosed with leukemia. It was a six-month battle that we didn’t won. We lost my brother and we also lost big time in paying for all the medical bills incurred during those six months and after. The same thing happened when my mom got diagnosed with a rare kidney disease. My mom and the family battled it out with amyloidosis of the kidneys for three long years. My mom was in and out of the hospital, had four to six specialists who checked on her regularly, and was in several medications for her other internal organs. You can just imagine the amount of money we needed that time for her to get better. Which in the end didn’t really took place because she lost the battle to her disease.

Two sickness and deaths in the family. Both times we lost so much money, which was not really an issue with us, but had there been health insurances in both cases, we wouldn’t have had to undergo so much stress in looking for money to pay for their medical bills.

That’s how important healthcare insurance is!

We learned our lesson. We had to go through the process of grieving and rebuilding our resources once again. Twice. But now that we know what to do, we are getting healthcare insurance so that when it happens again, which I pray so hard that it won’t, we have something to fall back on, to tap into.

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