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Archive for Personal Finance – Page 3

The Worst Financial Advise You Shouldn’t Take

By BankAim · Comments (0)
Thursday, August 4th, 2011

There are a lot of financial gurus out there who claim to know everything. They advise you to do this and that, and of course, we believe them. But aside from these “financial gurus” the worst financial advice we sometimes take is from well, mom and dad, friends who are actually broke, and even salespeople in the mall. Remember, there is such a thing as good advice, and bad advice. So when you see these tips below, unleash that rebellious spirit in you and don’t listen!

1. Cut up your credit cards! – This is probably one of the most common “remedies” that some financial gurus go out and proclaim for consumers to quit getting themselves into credit card debt. But seriously, will cutting up your credit cards erase that mountain of a loan you just took? The answer is no. So there really is no sense in cutting up credit cards. The best remedy is to establish a financial plan on how you can pay off your credit card debts, and diligently follow it. Then if you have more cards than you need, go to your bank and cancel the card. Simple.

2. Find a Stable Job That Gives Good Benefits! – This is definitely the advise that comes from mom and dad. Ever since kids learn how to read and write, mom and dad are educating them to be good employees. For parents, this is the best advice they could ever give, but finding a stable job with good benefits just isn’t enough anymore. Parents should teach their children to be more financially wise. That doesn’t mean that getting a job is bad, it only means that children should expand their financial potential by investing, taking calculated risks in business, and achieving financial freedom. Admittedly, this is difficult to do if you’re an employee.

3. There’s no need to look at the numbers, the property says it all! – This advice goes to inexperienced real estate investors who think they have a good deal just by looking at the property. Sometimes, unethical (or ignorant) real estate agents can urge you to buy a property off the bat resulting in bad investments or negative cashflow. When it comes to investing, it’s always about the numbers.

There is so much bad advise circulating the financial world that some of us get duped in believing them. The general rule of thumb is to accept advise only from successful people (not the ones who are broke!) and learn to throw caution to the wind when following advise from people you don’t really know.

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Cashflow 101 – A Game That Teaches Investing

By BankAim · Comments (0)
Tuesday, July 26th, 2011

One of the most classic board games that people will never forget is Monopoly. It’s the first of its kind where the player wins by being the richest in the group, and getting the other players bankrupt. Today, there is a new board game that attempts to upstage Monopoly, and strives to teach people financial literacy.

It may seem puzzling at first how a board game can be the key to financial success, especially when the a cardboard game, some paper money and tokens cost $200 in all. But those who begin to understand the principles of the game can really attest to the way the game opens your mind to the world of personal finance and investing.

Cashflow 101 was created by millionaire Robert Kiyosaki, the author of Rich Dad Poor Dad, and the Rich Dad series. His mission “to elevate the financial knowledge of humanity” came alive upon the popularization of this board game. So what exactly is in it?

The game consists of a board, paper money, 4 pads of game cards, occupation cards, tokens, playing dice, and an instruction manual. So how can all of this amount to $200?

Basically, it’s not the added cost of the materials that gave the board game its price, it’s the education it gives. Think about going to a finance seminar with a well-known financial guru, how much will that cost? Probably way more than $200.

The Cashflow 101 game encourages its players to keep track of their financial statements, make investment decisions regarding small and big deals, and even keep up with extraordinary life events such as having a baby and losing your job. The beauty about the game is that it exposes you to things that could happen to your life. Whether you make the wrong decisions or the right ones, it’s just a game! And when it happens in real life, you’ll know what to do.

It is said that every time the Cashflow game is played, players get different life and finance lessons, and it’s advised to keep on playing the game until you’re ready to apply the lessons for real. Opportunities include investing in the stock market, buying real estate properties, entering into a limited partnership, starting a company, and even buying gold. You’ll also be faced with unusual circumstances such as when your sister-in-law borrows money.

Cashflow 101 is a game that brings to light the rat race that we are all stuck in. The goal of the game is to get out of the rat race and into the fast track. The way to do it is by increasing your passive income, and making it bigger than your expenses.

Though the game could be considered as “expensive”, just remember that it costs a whole lot more to be financially ignorant. Get yourself in the game, and find out if you’re living in the rat race and what you can do to get out of it.

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Why First Time Home Buyers Should Get A Real Estate Agent

By BankAim · Comments (0)
Wednesday, July 20th, 2011

First time home buyers don’t really know what they’re looking for. Sure they have an idea as to what they like (condition and appearance-wise), but they usually don’t really know about the other details that come with buying a house. Here’s why home buyers should consult with a real estate agent:

1. Helps In Seeing the True Value of Homes – Experienced real estate agents who know their market can tell you about the prices of comparable homes without having to bat an eyelash. They know which houses are being sold, and at what price, giving you an idea of how much the house you plan to buy should really be selling for.

2. Points Out Potential Resale Points – Most first time home buyers may not really settle in that house for the rest of their lives. That is why it would be wise to think about the resale price before even purchasing the home. Real estate agents can give an insight about what are the advantages or disadvantages of the home such as being placed on a busy street, or if there are any issues with the homeowners association.

3. Ability to Negotiate – Good real estate agents can help the buyer negotiate a better price with the seller. Since they know the facts and potential negotiation points, they can help get a better deal without just blurting out a price out of the blue.

4. Give Priceless Advice – Although real estate agents are not lawyers, appraisers, contractors or the like, they have much experience with home dealing that they already know each aspect of the home buying process. They can point you to the right direction, and give you the correct questions to ask.

Real estate agents may have a professional fee, but this can be offset by the amount of service that they can give and the advice they can offer. When dealing with a real estate agent, look for the most experienced ones, and those who are truly honest in their dealings. Look for referrals, and see which ones provide you with the real value you should be getting.

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The Richest Man In Babylon: Five Laws of Gold

By BankAim · Comments (0)
Saturday, July 9th, 2011

The book “The Richest Man In Babylon” is a compilation of parables set in the city of Babylon. Each story tells a tale involving money, where people had different beliefs, values and attitude towards it. Within each story lies a financial lesson, helping people understand better by letting them have the experience, not the fact.

There was once a story where a father sent his son on a journey, leaving to him two things only. The first was a big bag of gold, and the second was a large stone tablet encased in cloth. During the beginning of his journey, the son handled his money poorly, only to lose it all to other people who were wiser than he.

It was only then that he decided to open the bag where the stone tablets were. That was where he discovered the Five Laws of Gold.

The Five Laws Of Gold

1. Gold cometh gladly and in increasing quantity to any man who will put by not less than one-tenth of his earnings to create an estate for his future and that of his family.

2. Gold laboreth diligently and contentedly for the wise owner who finds for it profitable employment, multiplying even as the flocks of the field.

3. Gold clingeth to the protection of the cautious owner who invests it under the advice of wise men in its handling.

4. Gold slippeth away from the man who invests it in businesses or purposes with which he is not familiar or which are not approved by those skilled in its keeping.

5. Gold flees the man who would force it to impossible earnings or who followeth the advice of tricksters and schemers or who trusts it to his own inexperience and romantic desires in investment.

These rules are nothing short of practical, yet they are overlooked by many. Usually it is experience that teaches the rules as people go along in life. But these Five Laws of Gold make it clear what it takes to become rich. The son then read and understood, slowly regaining the wealth he had lost. He returned victorious to his father, making it known to all that he was now a man.

These laws go beyond the pages of a book, and the author has made it clear that these rules apply well in our lives. Perhaps if we all followed them, we would all be on our way to riches like Babylon gold.

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The Difference Between Bad Debt and Good Debt

By BankAim · Comments (0)
Friday, June 24th, 2011

DEBT.

Whenever we see the word, we shudder. It’s that word that makes our stomachs churn, our minds reel, our hairs stand up… ok, so maybe the last one is an exaggeration. The point is, many of us believe that debt is bad, bad, BAD. The irony of it though, is that the ones who think that debt is BAD, are the ones who actually sink into the hole of financial ruin. On the other hand, the ones who believe that debt can be GOOD, are those who seem to be on the road to financial freedom. So what exactly is it about debt? Is there really such a thing as Good Debt?

The simple answer is YES. Good debt does exist. It just depends on how you use that debt to either get ahead, or be left behind. Here’s the simple principle behind it:

Good Debt puts money in your pocket. While Bad Debt takes money out of your pocket.

Does that sound confusing? I mean after all, when you take on debt, that means you’re already in way beyond your means! Well, the thing is, even if you’ve taken on a loan that’s much bigger than your current income, it’s completely fine, as long as that loan can pay for itself.

Let me give you an example. Let’s say you took on a loan to buy a property. Obviously you’re going to need to pay the bank back every month. Let’s say your monthly amortization is $3,000 per month. Now, you’ve taken this property and had it rented out for $6,000 per month. This allows you to pay off your $3,000 monthly amortization, while keeping the other $3,000 for yourself! Basically, what you’re doing here is using other people’s money to gain even more money. This type of good debt is also known as leverage. Sounds familiar?

Now what about bad debt? This one is more familiar to us. Let’s say you needed to buy a car, desperately needed it to get to and from your workplace. You take on a loan and surely, this is good debt right? After all, the car is a necessity! Well, it may sound that way, and it may feel that way. But is this debt putting money into your pocket? Of course not! In fact, it’s even taking more money out of your pocket with the gas, maintenance, and cleaning you need to do.

So when it comes to debt, it’s important to look at the numbers, and not at your feelings. Even though it may feel good to obtain something, (because it’s being sold so cheap, it’s a bargain! or I really need this thing, it makes my life so convenient!) the bottom line is, does this debt give you money or does it make you lose money?

It’s really all a matter of logic. So save yourself from the trouble of bad debt, and go the next level by learning all about good debt, and what you can do to master it. Next thing you know, you’ll be so deep in debt, but yet so rich at the same time. Because you know, you’re deep in GOOD debt.

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10 Must Have Habits of Millionaires

By BankAim · Comments (0)
Friday, June 17th, 2011

Do you want to be a millionaire so freakin’ bad? Well, you just might be able to do it. Turns out, most millionaires have the same habits. And probably if you make these habits yours too, you just may end up as one. Here are the 10 Millionaire Habits seemingly ordinary people have taken, to become the millionaires they are today.

1. Millionaires Think Big – People don’t become millionaires with small thinking. Most millionaires started out with nothing but a dream. At times, people would think they were crazy, or that they were aiming too high. In the end, those who think big are the only ones who can do big things. After all, everything starts with your thoughts.

2. Millionaires Have A Bias For Action – All millionaires have a bias for action. They don’t just think about what they want, they go out and get it. For them, time is more important than money, and every minute wasted is money lost.

3. Millionaires Plan Ahead - Millionaires always look forward to the future. They are visionaries, seeing what other people cannot. They think of their future just as much as they think of the now. It’s no wonder their futures become so bright. They’ve planned it a long long time ago.

4. Millionaires Give Back – Most millionaires are generous. They love giving back to charities, institutions, and people who deserve financial aid. This is because many of them believe that there is enough money to go around for everyone, so they have absolutely no problem in sharing.

5. Millionaires Network – They say a person’s net worth is based on the person’s network. Millionaires are well aware of that. They also know that the path to success is not done alone. That is why they endeavor to meet new people everyday, gain new connections, and keep the ones they’ve had a long time ago. They use their network to bring themselves up, but also bringing those same people up with them.

6. Millionaires Have Focus - Millionaires are some of the most focused people on the planet. They know what they want, and they do that just one thing all day, every day, until they achieve success in it. Once they’ve stabilized one area, that’s the only time they move on to another. They know that focus can bring better and faster results.

7.Millionaires Are Leaders - Millionaires are leaders. They have the ability to bring people together towards their vision, making their goals a reality. Their leadership allows them to build companies, institutions, and teams that are excellent like they are, allowing them to achieve bigger results.

8. Millionaires Have A Thirst for Knowledge – Millionaires never stop learning. They are always ready to take in the newest information, and they are never too arrogant to believe that they know everything. Knowledge and a curiosity for things help them improve their craft, making them more likely to succeed.

9. Millionaires Are Not Afraid of Failure – Millionaires are never afraid to fail. And when they do, they just get right on back and do it again until they succeed.

10. Millionaires Persevere - And finally, millionaires persevere. Whatever the obstacles, whatever the challenge, millionaires are so focused on their goals that they do everything in their power to make it happen. For them, no is not an option, and when doors close, windows open. And when they do, they take that opportunity and make it big.

Habits are not made overnight. They have to be practiced everyday, done everyday, for it to be inculcated in our minds and hearts. If we want to be millionaires, we have to take these habits and make them our own. Start with one until you master it, sooner or later, you’ll find yourself a millionaire.

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5 Surefire Ways NOT to have Money

By BankAim · Comments (0)
Tuesday, June 7th, 2011

You must be rubbing your eyes right now and wondering if you’ve read the title right. 5 surefire ways NOT to have money? Who would want that? Would it surprise you if I said that this person could be YOU. That’s right, unconsciously many of us engage in behavior that totally repel money instead of attracting it. Find out how you manage NOT to have money, and what you can do to change it:

1. Settling for less – First, think about the amount of money you would like to have every month. And not just the amount you’ll be able to live with, but an amount that would make you gasp with amazement, sing with joy, and dance with jubilation. I’m sure your basic salary doesn’t even come close to that amount. Now let’s say by some miracle, you receive half of that amount. I’m sure you’d be happy. Then the next month it’s only a quarter of the amount, then an eighth, then a sixteenth…. until you find yourself back to the same amount you’ve had before. What does this say about us? It means we’re all too content to settle for less, not knowing that we end up right where we once were.

The Cure: Don’t settle for less! If you have a financial goal, make sure to achieve it. If you missed the mark at first, persist until you get it.

2. Believing the rich are “evil” – Money is evil. How many times have you heard this before? And do you believe it? Chances are if you think money is evil, money won’t come to you at all! After all, you wouldn’t want to be evil would you? The thing is, money isn’t evil. It’s what you do with it. If you use it for charity and good works, that would hardly be evil would it?

The Cure: Think that money is good. It’s just in the way you use it.

3. Sour graping – “Oh, I don’t need that kind of money anyway.” Sometimes, a good money making opportunity passes us by and this is our response.

The Cure: Instead of sour graping, turn the situation into something positive such as, “I will get it next time!”

4. Saying “I can’t afford it” – Oh yes. The ever resounding words “I can’t afford it”. You say it, your parents say it, your friends say it, everyone says it! If it gets grilled to your system then your brain will be trained to think that you just can’t afford it!

The Cure: Instead of saying those debilitating words why not say, “I choose not to buy it yet”, and this isn’t lying because you know you have other priorities as of the moment.

5. Thinking about what you don’t want versus what you do want - A classic example of this is, “I will no longer be in debt, I will no longer be in debt!” what exactly is that person thinking of? That’s right – Debt! Because of the repetition in your thoughts, you are actually attracting debt instead of repelling it.

The Cure: Instead of thinking about what you don’t want, think about what you do want. Like “I’m going to be financially free”.

Try to assess yourself if you’re guilty of these money repelling thoughts and habits. Notice how much it’s embedded in your thoughts and behavior and be conscious in taking the steps to change. Sooner or later, you’ll attract more money than you ever did.

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Top 3 Deadly Mistakes Retirees Make

By BankAim · Comments (0)
Sunday, April 24th, 2011

It’s no surprise that most baby boomers are facing gloom in their retirement. With the way the economy is going and the slashes in healthcare benefits, there isn’t much to look forward to when it comes to retirement. Aside from the economic factors that just can’t be controlled, there are even three deadly mistakes that roughly half of American retirees are making. Find out what they are, and find out how you can avoid them:

1. Using Social Security Benefits Too Early

The longer you keep yourself from using your Social Security benefits, the higher the amount you can get. Unfortunately, according to Social Security’s Annual 2010 Statistical Supplement, 47 percent of Americans who retired in 2009 started using their Social Security benefits at the young age of 62. This is the youngest possible age for benefits to start, but it also gives the lowest possible benefit.

Having a Social Security income can matter a great deal. After all, you’re being paid a monthly benefit for the rest of your life, no matter how old you get or how bad the economy becomes. But the longer you wait to use the benefits, the higher the payments you can get. Just don’t delay using them after the age of 70 though, because the payouts plateau at this age. Again, delaying claiming the benefits can result to bigger payouts. If this can be done, then it’s better to actually discipline yourself.

2. Using Up Retirement Savings Too Quickly

The moment Americans retire, they start spending their retirement savings as if they’ve won the lottery. They tend to underestimate for how long the savings are supposed to last to meet their current and future needs. 36 percent of retirees have no set plan of how much to withdraw and when to withdraw the savings, leaving a much to fear when they have medical emergencies or if they live too long.

The best thing to do is plan just how much you’ll be needing, planning for at least 20 years or more. It can be scary to think about the consequences of outliving your retirement savings.

3. Not Having Enough

And finally, even before Americans retire, most of them don’t really know just how much they will need once they retire. According to the 2011 Retirement Confidence Survey made by the Employee Benefit Research Institute (EBRI) only 42 percent of Americans have calculated just how much they will need upon retirement. This could mean under saving for retirement, leading to a low retirement savings just when they need it most.

The best thing to do is calculate ahead how much you will need in the future, and don’t forget to include inflation.

Not caring about retirement can lead to some shocking consequences that can be difficult to remedy because of the lack of opportunities that are presented to one once he gets older. To offset the possible risks, the best thing to do is plan early, save early, and spend less.

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Top 10 Finance Quotes from Donald Trump

By BankAim · Comments (0)
Monday, April 18th, 2011

We all know Donald Trump. Aside from his striking hair, he’s only one of the most prominent business magnates in America. After getting himself in $900 million in personal debt, and in about $3.5 billion in business debt back in 1991, in about five years, Trump was able get himself out of debt and back to billions.

Right now, Donald Trump’s net worth is a serious $2.5 billion and is certainly growing every year. Here are Donald Trump’s top ten quotes on personal finance, giving us a little insight of what makes him succeed.

1. When I started out in business, I spent a great deal of time researching every detail that might be pertinent to the deal I was interested in making. I still do the same today. People often comment on how quickly I operate, but the reason I can move quickly is that I’ve done the background work first, which no one usually sees. I prepare myself thoroughly, and then when it is time to move ahead, I am ready to sprint.

2. If you really want to succeed, you’ll have to go for it every day like I do. The big time isn’t for slackers. Keep up your mental stamina and remain curious. I think that bored people are unintelligent people.

3. Experience taught me a few things. One is to listen to your gut, no matter how good something sounds on paper. The second is that you’re generally better off sticking with what you know. And the third is that sometimes your best investments are the ones you don’t make.

4. I like thinking big. If you’re going to be thinking anything, you might as well think big.

5. Every day, you’ll have opportunities to take chances and to work outside your safety net. Sure, it’s a lot easier to stay in your comfort zone.. in my case, business suits and real estate.. but sometimes you have to take risks. When the risks pay off, that’s when you reap the biggest rewards.

6. In business, I’ve discovered that my purpose is to do my best to my utmost ability every day. That’s my standard. I learned early in my life that I had high standards.

7. Take the pains required to become what you want to become, or you might end up becoming something you’d rather not be. That is also a daily discipline and worth considering.

8. Confidence can get you where you want to go, and getting there is a daily process. It’s so much easier when you feel good about yourself, your abilities and talents.

9. Be focused. Put everything you’ve got into what you do every day.

10. What matters is where you want to go. Focus in the right direction!

Whatever Trump is doing is getting him far, and based on what he’s saying, it takes a combination of discipline, focus, guts and intuition to get where you want to go.

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