Live Debt Free

Pay off debt. Save. Give. Live your mission.

  • Blog
  • Contact Us
  • Credit Scores
  • Spending
  • Investing
  • Earn Money

Choose Index Funds as a Long Term Investment

01.09.2012 by Guest Author //

For young investors these days, there are a wealth of indicators out there that may dissuade them from almost every long-term investment vehicle available. We are told that Roth IRAs can be a bad investment. We see the stock market turning into a roller coaster that is no more predictable than the outcome of the European debt crisis. We hear that any collective savings fund, most notably Social Security, will be long dead and buried by the time we reach retirement. We realize that real estate may no longer be the most prudent investment. And we know that the growing popularity of CDs and Treasury bills translates into lower rate, even long-term.

So what to do? Where to invest? For those of us who are in our twenties and entering the working world under the cloud of economic recession, we certainly want to start putting our savings aside and investing in our future. But every investment vehicle has some glaring faults at the moment.

If we’re investing long-term we want to be thinking long-term, so perhaps a better question would be: which of these currently-unappealing options will recover well and provide the best combination of low-risk and high-return over the course of decades?

History tells us that the answer to this question is an investment in the stock market. Even though the market has been wildly unpredictable as of late, and even though it has gone through decade-long periods of stagnation in the past, the stock market has never failed to gain over time. As the world population continues to grow, developing countries continue to develop, and new industries and cultures rise to prominence, there is little doubt that the market – as an indicator of the overall economy – will show vibrancy over the next half century.

But it is important that your investment in the market is adequately diversified so as to reflect its role as an indicator of the global economy. Here is where index funds and ETFs come into play: rather than buying stocks you deem strong and profitable, switching between solar energy firms, tech stocks, and financials as the market dictates, your best long-term bet is to invest in the economic system as a whole. This means buying no-fee index funds that capture the full system – funds that track the S&P 500, for example, or funds that provide a snapshot of the London Stock Exchange.

Buying index funds allows you to invest for the long-haul without to constantly check your portfolio or worry that you won’t gain value over time. Doing so allows you, despite the current market conditions, to start saving for retirement at the most opportune time in your life – the present.

Categories // Investing Tags // index funds, Investing

Understanding and Improving Cash Flow

12.05.2011 by Guest Author //

One of the more powerful concepts to understand in the matter of personal finance is cash flow. Most of us can easily tell the difference between being confident & comfortable with our finances versus struggling with our finances.  Unfortunately, many people do not truly understand cash flow, nor do they grasp the crucial role it plays in regard to their own personal finances. When you understand the concept of cash flow and can then work to improve it… you give yourself tremendous flexibility which will undoubtedly bring to light many otherwise indiscernible opportunities.

What is cash flow?

Cash flow is basically your income minus your expenses. If your income is about the same as your expenses, you’re living paycheck-to-paycheck. If your income is higher, you’re financially okay. And if your income is lower, you’re accumulating debt. Very simple isn’t it?

And here is the beautiful part. Once you understand the basic components — income and expenses — you can begin to take concrete actions to improve your finances. And you can break down the problem even further by looking at reducing individual expenses and improving your income.

How to improve your cash flow

Reduce your expenses

The quickest way to improve your cash flow is by attacking your expenses; especially the recurring month-to-month type. The biggest bang for your buck is your mortgage, if you have one. Take a look at today’s best mortgage rates and see if it makes sense for you to refinance. Refinancing alone could free up several hundred dollars that you could use for other financial endeavors.

This process of expense reduction is even easier if you are already keeping a budget. If you don’t have one, you should start tracking your expenses and start work to create one. The key to success in expense reduction is doing all the little things that add up and trying to take one small step at a time. Don’t try to reduce your expenses by 50% — it will never happen. Challenge yourself to cut $50 a month or a $100 a month. Once you accomplish that, go for another $50, and so forth.

Increase your income

The other side of the equation is improving your income. This is harder than cutting your expenses, but there are things that you could do — even little things like moving your money to a high interest savings account helps you to earn more. Again, it’s all the little things that add up.

What about a other income ideas? You can basically break them down into a few categories:

  1. Earn more from your job — i.e., ask for a raise, get a promotion, work overtime, etc.
  2. Earn more outside your job. Here are a few additional income ideas for you to mull over.
  3. Make your money work harder — i.e., investing in the stock market, real estate investing, and other alternative investments, etc.

What to do with your free cash

So you’ve improved your cash flow, what should you do with the extra cash? Here are a few ideas:

  • Pay down your debt — e.g., credit card debt reduction, car loan, student loan, etc. As you do this, you’ll free up even more cash because you no longer have to pay all the finance charges and monthly payments.
  • Invest your money. Again, make your money work for you and continue to improve your cash flow.
  • Give. If you are in a position to give, charitable donation is also a great way to use your money.

I hope you enjoyed this article, and more importantly, I hope you walk away with a few ideas you can use to improve your finances.

Pinyo is the owner and primary author of Moolanomy Personal Finance blog. Moolanomy focuses on practical money management concepts, personal finance tips, and wealth building. If you like this article, please visit his blog. Lastly, you can leave financial question on Moolanomy Answers where Pinyo and other community members participate to provide you with answers.

Categories // Expenses, Giving, Investing, Money Management Tags // interest, Money Management, reduce, Reduce Expenses

[How To] Be Content With What You Have

10.05.2011 by Guest Author //

How To Be Content With What You HaveJust like Matt, I’m a personal finance blogger (albeit my blog is solely about credit cards, don’t worry though, it’s about using them responsibly). But whether it’s credit cards, budgeting, or investing, all financial bloggers have one thing in common… sharing information about making (or saving) more money. And there’s nothing wrong with that, the more financially savvy we are, the better!

I also think it’s important to take a breather every once in a while. Meaning, instead of being concerned with what we don’t have we need remind ourselves what we do have; because learning how to be content with what we have is a critical component of being successful with our finances. Given the housing market and other economic woes we’ve had over the last few months, now is a great time to dive into the contentment issue.

The $1.6 million bathtub

Part of human nature is the more we get, the more we want (a never-ending cycle of more, more, more). Yesterday on the radio they were talking about some new billionaire heiresses in LA (by way of the UK) who are apparently trying to outspend each other. I didn’t catch the details (nor do I care to hear them) but it goes something like this…

The 22 year-old daughter, Petra, bought the Spelling’s mansion for $85 million this summer. Her 27 year-old sister Tamara is now trying to outdo her. “The house we are looking at will make Petra’s house look like a guest house.” She also claims to have “dispatched” five minions on an expedition “up the Amazon” to find her the perfect crystal for a more expensive bathtub ($1.6 million for a friggin’ bathtub). There’s more of this outrageousness but you get the point.

Are you and I really any different?

So all of us can laugh our heads off at totally crazy rich people right? After all, we’re level headed and far more mature right? But think about it for a moment… are we really any different?

Yes, we’re different in that we’re probably not rich. We’re not spending billions, or even millions, but I guarantee that all of us have spent money to impress people. Put another way: at one time or another we have all spent money to paint ourselves in a certain light.

Here’s an example the men can relate to. In my childhood school it was all about having the latest and greatest pairs of shoes. I couldn’t compete with the rich kids who had new shoes every month or two, but at least once per year I managed to get my hands on a ridiculously overpriced pair of Nikes. In 8th grade I saved up enough to buy a pair that cost $130! Obviously there was no practical reason for this, it was just for image, just to impress.

Now let’s look at that from a different perspective. Almost half the worlds population lives on less than $2 per day. Around half of those people (about 1/5 of the global population) live on less than $1 per day. That means my $130 shoes were at least 130x their daily wage. How do you think they would feel hearing about my shoes, let alone the designer handbags, fancy cars, and over-sized houses that are the norm in our society? I’m guessing they would have many of the same feelings we do when we hear about those two sisters spending frivolously… don’t you agree?

It’s all about perspective!

Why we’re not content

The devil works in clever ways, distracting us with pretty and shiny things. Why? Because the more we pay attention to them, the less attention we pay to what’s really important in life… Jesus, His message, and our mission.

Of course, not everyone falls for the devil’s tricks to the same degree. There are those who have it bad, the total shopaholics. You know the type. The girl who maxes out a Macy’s credit card account buying the latest fashions. The guy who’s always at Best Buy, upgrading his TV (yet again) and buying other gizmos and gadgets he doesn’t need. Perhaps you can relate.

Not everyone has the same weakness, but you can bet we all have at least some worldly thing – or things – we covet, even if we have enough self control to not actually buy.

If you’re trying to find contentment in worldly things, let me assure you, it will never happen. As soon as you get what you want, you want something else. It’s the oldest trick in the book, but it’s the trick that keeps on getting us.

Contentment is a choice

So what’s the secret to being content with what you have? For the answer, turn to the Bible, not your bank account. A decade ago I would have thought advice like that was stupid and probably would’ve wanted to slap someone for saying it. But after reading the Bible cover to cover, I can honestly say that it is the answer. Pick one up, give it a try, you have nothing to lose.

If you would rather not, that’s your choice. But remember that keeping up with the Joneses is a fight you cannot win. If you think you can reach contentment on your own with $10M, $100M, or $1B perhaps you should consider stories like that of Michael Jackson. He used his wealth to heap possessions as numerous as the sands of the sea, yet was never content with the way he looked or the things he had.

Rather than reaching for more and more only to learn it won’t make you content, consider the billionaire sisters and rethink your position.

Matt’s note: Smart people learn from their mistakes. Really smart people learn from others mistakes.

“Not that I speak in respect of want: for I have learned, in whatsoever state I am, therewith to be content. I know both how to be abased, and I know how to abound: every where and in all things I am instructed both to be full and to be hungry, both to abound and to suffer need. I can do all things through Christ which strengtheneth me.” Philippians 4:11-13

At 18 a catastrophic auto accident left Mike with a mountain of medical bills that ended up on credit cards. He started Credit Card Forum in 2008 to help himself and others use credit cards more wisely. Thankfully, he is now debt free and only uses cards for benefits and rewards. Mike strongly advises against using cards if they will lead to overspending.

Categories // Money Management, Spirituality Tags // contentment, credit cards, jesus christ

  • « Previous Page
  • 1
  • 2
  • 3
  • 4
  • …
  • 12
  • Next Page »

Popular Posts

  • Understanding & Improving your Cash Flow
  • Credit Card Debt Reduction Handbook
  • Our Monthly Debt Reduction and Savings Statements
  • Pay off Credit Cards VS Build Emergency Fund Savings - Me VS Suze Orman
  • Credit Cards - Close 'em Shred 'em & Forget 'em!
  • More Reasons to Pay Off Credit Card Debt
  • Wise Use of Paid off Credit Cards? You Decide.
  • The Whole Armor of Personal Finance
  • One World Currency - New World Order
  • Debt Testimonials - Encouraging Success Stories!

Disclaimer

Content on Debt Free Adventure is for entertainment purposes only. Rates & offers from advertisers shown on this website may change without notice: please visit referenced sites for current information. Per FTC guidelines, this website may be compensated by companies mentioned through advertising, affiliate programs or otherwise. We respect your privacy. Privacy policy.

Copyright © 2021 · Modern Studio Pro on Genesis Framework · WordPress · Log in