Jim Rogers, successful hedge fund manager, investor and author of incredibly interesting books is so certain that real estate prices are going to drop in certain “bubble” markets that he’s putting his $15 million Manhattan home for sale. Its not that he needs the money, but he’s probably a value investor. And like many value investors, he can’t bear not taking advantage of selling obviously over-inflated assets. Warren Buffett, probably the most famous value investor on earth, also believed that his Laguna Hills house was over-priced and sold it a while ago.
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Posted in Finance on Mar 6th, 2007 5 Comments »
- Make more than you need.
If your needs are higher than your salary, work harder or get another job. May be you can go back to school to retrain for a higher paying job.
- Spend less than you earn.
And save or invest the rest.
- Eat home cooked meals at work as often as you can.
Its cheaper and healthier than eating out.
- Understand how taxes work.
And make sure you take advantage of all the possible deductions that you’re entitled to.
- Get out of debt.
And stay out of debt. Once you’ve paid off your credit cards, don’t rack up bills you can’t pay off when you get your statment. I still use my credit cards because I get 3% cash back for eating out, 2% cash back on travel and 1% on everything else.
- Invest your savings.
Make sure you’re putting your money in a savings account that earns you interest every month.
- Save for retirement.
A hundred bucks a month may not seem like a lot, but after 40 years it can provide for a comfortable retirement. Savings in retirement plans are also tax deductible.
- Clean up your credit.
People with bad credit pay more interest. On big ticket items like cars and houses the difference can add up to hundreds of thousands of dollars over your lifetime.
- Make sure you understand your mortgage terms and get the best possible rates and terms.
Buying a house will be the biggest expense you’ll ever make. On average, people change houses every 7 years which means you’ll be buying a couple of houses in your lifetime. If you do not know how mortgages work, I guarantee you will be taken advantage of atleast once and end up paying thousands more than you need to.
- Learn as much as you can about finance.
No one will take care of your money like you will.
There are no secret sauces to becoming wealthy. It takes dedication, sacrifice and effort to pull yourself out of debt and towards riches. The sooner you start, the quicker you’ll be on your way to creating wealth!
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Posted in Finance, Investing on Mar 1st, 2007 5 Comments »
Most of us have received checks in the mail from our credit card companies. Often these carry very low fees and 0% interest rates, sometime for as long as a year.
Some people have figured out a way to use this to their advantage. They borrow the money at a low rate and invest it at a higher rate, thus engaging in ‘arbitrage’.
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Posted in Credit, Finance on Mar 1st, 2007 2 Comments »
A lot of people get checks in the mail from their credit card companies. They often advertise 0% APR or some low teaser rate. What many people don’t realize is that the fine print is where the credit card companies get you.
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Posted in Credit, Finance on Feb 28th, 2007 5 Comments »
For many people the ability to borrow $500 to fix the car or $200 to cover an emergency can be useful and is often highly appreciated. If your credit is bad (and even if its not) banks can be difficult and time consuming to deal with. The easiest and quickest solution is to get a pay-day loan.
And now you no longer need to go to one in person. Just do a search online and you’ll see thousands of online pay-day loan sites. However, you need to be aware of the draw-backs to using these online sites.
Often, since they’re outside your state, they won’t follow your state regulations. In case of a dispute, this can be a problem.
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Posted in Finance on Feb 28th, 2007 No Comments »
Saving money and earning interest on it is the cornerstone to financial success. Unfortunately, if you save too much and earn a lot of interest the IRS will want to take its cut. Making sure you take advantage of the tax-advantaged saving strategies will make sure you achieve your financial goals quicker.
A tax-deferred annuity is one such strategy. In such an annuity, premiums can be made in one lump sum or over several years and can provide a regular stream of income. The income grows tax-free until the withdrawals start, thus allowing a long period of tax-free growth.
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Posted in Finance on Feb 28th, 2007 2 Comments »
Refinancing an existing mortgage costs money. In act, it costs a lot of money. There really shouldn’t be any reason to refinance unless the new rate is 2% lower than the old rate, or you’re switching out of an adjusted rate mortgage (also called an ARM) into a fixed rate product at the same rate.
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Posted in Finance on Feb 28th, 2007 No Comments »
Everyone wants to be rich and financially independent. Unfortunately, for most of us life is one big cycle of working and spending and not being able to get off the treadmill of debt. The famous rate race! So what are the roadblocks that prevent hard-working people from achieving their financial goals?
1. Financial Illiteracy
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Posted in Finance on Feb 28th, 2007 1 Comment »
Most of us rejoice when we receive our paycheck. The first thing you probably do is go to the shopping mall to buy that latest gadget or pick out those nice pair of shoes you eyed in last week’s issue of Vogue. Then after paying your rent/mortgage, utilities, cell phone, groceries, car and other miscellaneous expenses, there just doesn’t seem to be much left over. If there’s anything remaining, you’re probably thinking about that other toy you have on your list. In the remote chance there’s still anything left over, the idea of investing is amusing at best. Sounds familiar?
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Posted in Finance on Feb 28th, 2007 1 Comment »
It’s always a good idea to keep at least 6 months worth of living expenses in reserve for unexpected events. If you lose your job, or become temporarily incapacitated and can’t work, these reserves will carry you through the tough times and keep you afloat.
The first step is to figure out how much money you spend every month. Rent (or mortgage), utilities, credit card payments, car loan payments, insurance, food and entertainment should be included. Build up an emergency fund for at least 6 months. If you don’t have any emergency cash on hand, that should be your first priority. Get a second part-time job if you have to. You may have to cut down on expenditures such as entertainment, retirement savings and even debt repayment until this vital step is accomplished.
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