Financial Truths Archives — Page 2 of 10

All Is Not Lost

November 7, 2013 By Shane Ede 13 Comments

I can’t tell you the number of times that, in our seemingly never-ending struggle with debt, that I’ve seriously contemplated just giving up. Just throwing in the towel and saying f-it. You know it’s bad when you catch yourself fantasizing about it. About how much easier your life would be without the struggle. Just declaring bankruptcy, taking the hit on your credit score, and moving on with your life.

Even now, after having written about personal finance for over five years, I still find myself in that place occasionally. We let our budgeting lapse, and inevitably our spending gets out of whack again. Something happens, and the emergency fund just doesn’t seem to cover it all. Or, worse, doesn’t seem to replenish itself as quickly as it should.

I can try and lay the blame somewhere. That always helps, right? If it isn’t my fault, then I can’t be blamed for it. I can’t be the one that everyone points to as the failure. I can deflect that attention to someone or something else. That helps. Until it doesn’t.

Every single time, it’s really me that deserves the blame. It wasn’t the boss that refused to give me a raise. It wasn’t the heater in the car that needed to be fixed. And it certainly wasn’t the kids that needed to eat. It was me. Every. Single. Time.

I failed to negotiate the raise. I failed to have enough saved up to make that repair. I failed to budget properly to make sure that we wouldn’t have to cut corners at the grocery store. Me. I did that.

I could just give up. I could miss having to work harder to be paid appropriately. I could miss having to pay attention to my budget to save money for car repairs, or to pay for groceries. I could do that. Giving up would be so easy.

Until it isn’t.

How to Make a Million Dollars Through Investment (and Other Ventures)

September 29, 2013 By Thomas Bawdy 10 Comments

If you’re set on the idea of earning a million dollars, there are likely tons of people out there telling you that your goal is unattainable.

They’re wrong.

Making a million dollars is feasible as long as you know what you’re doing and have a plan on how to get there. If you’re not sure where to start, check out the following methods and tips on how to earn a million dollars.

Save Your Money

Image via Flickr by kenteegardin

Do you want to earn a million dollars without putting very much extra work into it? Then cut back on your spending habits and put your cash in the bank. If you simply put $5 in a bank account each day with 10 percent interest, you’ll have a million dollars after 42 years. Want to make it quicker? Save even more money.

This tip isn’t all about putting your money in the bank, however. You have to live a frugal life, and most people who succeed at this live below their means. Drive used cars, cut coupons, watch for sales, skip cable, forget the morning coffee — following these frugal tips can help you save to your first million.

Invest in the Stock Market

The stock market could help you earn dollars without stashing it all away. Instead of just saving it, you’re making it.

If you start out with $5,000 and invest $500 per month, perhaps your goal isn’t that far-fetched. If you average 10 percent annual yields, you could reach your goal in 29 years. That’s not a bad retirement fund.

If you do choose to invest in the stock market, it’s a good idea to head to an investment agency such as Fisher Investments to help you manage your portfolio.

Invest in Real Estate

Image via Flickr by Philip Taylor PT

There are many options that you have for making money in real estate, and each method could put you on your way to your first million. Check out these ways you can make money with real estate:

You can purchase homes, fix them up, and make profit by reselling them.
You can rent out your property. You can expect as much as 8 percent annual returns on rent.
Make profits from business ventures that take place on the property, such as farming or mining.

Start a Business

In the book The Millionaire Next Door, the authors state that most millionaires lead normal lives, not the fancy life you see portrayed by Hollywood. The authors outlined several characteristics that they noticed most millionaires share. Among these characteristics, the authors found that most millionaires own their own business and they love what they do.

Don’t jump the gun just yet and believe that this is a get-rich-quick scheme. You can’t just start a business and expect things to run smoothly while watching the profits roll in. There’s a few things you need first:

A really good idea
A strong business plan
A profitable market
Money to invest in the business

When starting a business, you can sell products, services, or consultation services, and you can work in a physical location or have a business based online. If you really want to cash in, the secret lies in launching a successful startup and selling your business.

Become an Expert

Image via Flickr by Pete Prodoehl

If you’re really set on your goal of a million dollars, you can quickly claim this by becoming an expert in your field of interest. Invest in your education, take advantage of opportunities, and learn as much as you can.

Once you become an expert, you can charge for consultation services, sell books, give speeches, sell advertising slots on your website, and hold leadership positions. As you do this, you’ll see your income rise.

Before you’re ready to jump into your studies, let’s explore a few tips that can help you earn via this method:

People have to like you. Make sure you practice your public speaking skills.
To make any money, you must have something important to say. If you’re consulting, writing books, or hosting seminars, your success depends on the amount of people who are willing to listen. Again, you’ll only make money advertising on your website if you have people coming to the site interested in your content.
You better make sure you are an expert. A degree doesn’t necessarily make you an expert. Do research and get involved in your field.

If you’re motivated and willing to put in the time, a million dollars isn’t an unrealistic goal. So stop letting people tell you that you’ll never make it! These few suggestions can help make you a millionaire.

Are You a Financial Pessimist?

July 29, 2013 By MelissaB 8 Comments

A few weeks ago, I shared that we’re all financial optimists, and it’s hurting our bottom line. Like many, I’m guilty of thinking that my experience is common of most people. Because I’m a financial optimist, I assume many people are, too.

How Financial Optimism Affects Our Finances

We’re digging our way out of some serious debt, and part of why we have that debt is because of financial optimism.

Four years ago, we took out student loan debt so my husband could finish his Ph.D. We knew once he finished the long haul of finishing the degree and then completing a two to three year post-doc that finally he would begin to make a good salary. That’s still true today, but we’re slowly trudging that long path. Two more years until the post doc is over.

What we didn’t anticipate in our financial optimism is how long the road would be and how painful these years of low income and high student loan payments would be.

But I digress.

Financial Pessimism Isn’t Much Better

Clearly I shouldn’t have stated “we’re ALL” financial optimists because the comments on the post made me start thinking about the flip side–financial pessimism, which is nearly as bad as financial optimism. Financial optimists make their decisions based on a bright future that may or may not come. (That’s how we justified taking out $30,000 in student loans.)

Financial pessimists often make their decisions based on fear and assumptions of what might go wrong in the future. Though this seems like a much better place to be than a financial optimist because the pessimist is protecting what they already have, it’s not really. Pessimism can stagnate your growth.

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My friend’s dad (I’ll call him Tom) inherited $100,000 when his uncle died. (His uncle had never married and didn’t have children of his own.) Tom had never seen that much money at once, and the idea of putting it in the stock market scared him. He was afraid he would lose it. Instead, he promptly put it all in a 10 year CD and earned a measly amount of interest. Plus, that money was locked up for years!

His fear and pessimism cost him money. Yes, he kept the money safe, but it was unavailable for 10 years, and he only made enough to cover the cost of inflation. He didn’t let the money work for him and grow because he was driven by fear.

Financial pessimism can also cause you career stagnation. Elizabeth has been at her job for 20 years now. She finds the job exhausting; over the last few years, more and more people were cut from the staff, but those positions were never filled. Elizabeth is now doing the work of several people; she often doesn’t get to go home early enough to see her young children before they go to bed. She wants a change, but she’s afraid that she won’t find a job that pays as well or has such good benefits. Her fear leaves her stuck in a position she doesn’t like, working too many hours, counting down to retirement that is another two decades away.

Financial optimism can hurt your bottom line by giving you confidence to spend money you assume you’ll make in the future. Financial pessimism can hurt you because you’re often fueled by fear which can cause stagnation and limit your financial growth.

What do you think is the best strategy to remedy financial optimism or pessimism?