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text 2017-12-02 14:53
5 Quick Steps to Improve Your Finances in 2018

 

Losing weight and improving one’s finances are almost always at the top of most people’s lists of New Year’s resolutions. It makes sense to look out for your physical and financial health so you can enjoy life to the fullest. Following through on your resolutions is usually the tough part — it takes changes in certain behaviors, discipline and time to experience and maintain the results. This is as true for financial planning as it is for losing weight.

 

If improving your finances is one of your New Year’s resolutions, here are five steps you can take starting Jan. 1:

 

Immediately Pay Down Holiday Bills and Credit Cards.

 

Many people splurge on holiday gifts, parties and travel in December, but the bills will come due in January. Resolve to pay down those debts quickly to avoid large interest charges on your credit cards.

 

Set a goal to pay off the total amount on one card within a few months, if not sooner. If you or your spouse expects a bonus check from your employer in early 2018, use at least some amount from this check to pay down debt. Finally, start by paying off the credit card with the smallest balance. Even though this card may not have the highest interest rate, paying off the total amount on one card will provide the motivation to keep paying off the others.

 

Build an Emergency Fund.

 

Everyone should have at least three to six months of their living expenses set aside in a cash savings account. This number should be higher when you are retired, such as one to three years of spending needs, and should be coordinated with your overall investment mix. In order to accomplish this goal when you are working, set up an automatic draft from your paycheck into a separate savings account. This account can be used for emergency car and household expenses and will help avoid piling up new credit card debt on top of the existing debt from the holidays.

 

I personally use an online bank for my savings account. Online financial institutions often pay higher interest rates on cash and CDs than traditional brick-and-mortar institutions. Here’s another tip: Consider using different banks for your savings account and your checking account. It’s a little less tempting to access your savings account when the spending impulse strikes if it’s not at the same place as your checking account.

 

Increase 401(k) Retirement Plan Contributions.

 

The amount each person can contribute to a 401(k) retirement plan is increasing by $500 in 2018, to $18,500 for individuals under age 50 and $24,500 for people 50 and older. Everyone who is working should resolve to save an extra $500 for retirement this coming year.

 

If you are getting a raise going into 2018, increase your 401(k) savings rate by the amount of your raise if you are not funding your 401(k) to the maximum already. This is a discipline I have followed since receiving my first paycheck at age 22 — I kept increasing my 401(k) savings rate each year until I was able to reach the savings limit, and I’ve never looked back.

 

Let’s say you are getting a $5,000 raise in 2018. If you save this amount annually over the next 10 years, and at an average annual investment return of 5%, your retirement savings can be over $60,000 higher. That could buy you a shiny new car in retirement.

 

Rebalance Existing 401(k) and Retirement Account Investments.

 

In addition to adding to your retirement account, review your existing investments in January to ensure a reasonable mix of stocks and bonds. With equity markets at all-time highs, the percentage of your funds in stocks may now be higher than you planned. Over time, an investment account that is overweight in stocks can grow substantially, but during a recession or stock market downturn your balance can suffer, too.

 

If retirement is right around the corner for you, it’s especially important to consider the amount of stocks or stock mutual funds you are comfortable owning. Finally, while you are logged into your retirement accounts, check to see that your beneficiary designations are correct and up to date.

 

Review Home and Car Insurance Policies.

 

Over the last five years, the consumer price index for auto insurance has gone up over 20%, compared with the overall CPI of 4.5% during this period. Many insurance companies raise auto and home insurance premiums each year, and even small increases can add up over time.

 

I recommend sitting down with your insurance agent every three years to make certain you are taking advantage of any discounts available, and that you have proper coverage, given changing asset values. Managing risks and protecting your assets is an important part of financial planning. Also, review the deductible amount on each of your auto and home policies. This move can significantly lower premiums now. If you have an adequate emergency fund built up, you should be able to cover a higher deductible in the event of a loss.

 

It’s time to make New Year’s resolutions stick. Look out for your personal and financial well-being this coming year. You’ll find that making small progress will empower you, and motivate you to reach your goals. And the following year you may just resolve to keep your 2018 resolutions going!

Source: donavangroup.blogspot.sg/2017/12/5-quick-steps-to-improve-your-finances.html
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text 2017-12-02 14:25
Five financial tips to get your year off to the right start

Writing down financial goals may not mean you’ll actually achieve them, but it increases your chances of doing so.

 

New Year’s resolutions don’t all have to be about giving up chocolate and alcohol

 

It’s only the second day of the New Year and you’re probably fed up with reading about resolutions. However, they don’t all have to be about giving up chocolate or alcohol, or rising before the sun to exercise.

 

These tips for 2018 don’t have to be done with any great urgency; rather, think about the following advice as something you can check in on over the year as your appetite for financial management ebbs and flows.

 

1: Decide on your goals

 

An obvious one, but how many of us have ever taken out life insurance, or embarked on a renovation without thinking of the wider impact of such a move?

 

Writing down your financial goals may not mean you’ll actually achieve them (sorry fans of The Secret) but it will probably increase your chances of doing so.

 

2: Get your mortgage into shape

 

If you already have a mortgage, there are three things you should be thinking about this year. The first is checking you’re on the right rate; after all, one thing we’ve learned from the tracker scandal is we can’t rely on the banks to get it right for us.

 

The second is to consider a switch to another product or competitor. With house prices continuing to rise, your loan-to-value (LTV) ratio will have fallen which should make you liable for a cheaper mortgage.

 

Thirdly, pay more than the minimum. While you could be doing something else with your money, for most of us, the peace of mind that comes with inching away at your mortgage is hard to beat. A little effort can, over time, produce substantial returns.

 

By overpaying each month you’ll reduce what you owe the bank and cut the term of your mortgage. It also means you’ll cut your interest bill. As you’ll be enhancing your LTV ratio, the bank may offer you a keener interest rate which will have another cost-reducing impact.

 

Consider someone on a €250,000 mortgage with 17 years left to go paying interest at a rate of 3.7 per cent. They are currently making repayments of €1,653 a month. If they increased their repayments by €100 each month it would knock 16 months off the mortgage term, saving them €7,302 (based on interest rates staying where they are).

 

If they bumped up payments to €200 a month, they would cut the term by 30 months and save themselves €13,454 in interest.

 

Bank of Ireland has a calculator which can help you work out your savings.

 

3: Review your pension

 

You may not do it this week or next week, but at some point this year take the time to read your annual pension benefit statement and figure out how your retirement is shaping up. You owe it to yourself.

 

And if you don’t have a pension, is it time to think about getting one?

 

If you have spare cash you can simply bump up your contributions. But if your pension is going nowhere, why reward your non-performing fund manager even more?

 

So how do you go about that?

 

You’ll need to figure out a couple of things. How much will you need in retirement? Will you have a mortgage? Will you get a full state pension of €12,300 or so a year? What if you don’t?

 

Armed with this information, you can see where you’re headed by examining the “statement of reasonable projections” in the pension documents that should be sent to you annually. This will show what income your current pot, plus future contributions, will generate.

 

If you’re falling short of your goal outlined in the first step, you may have time to rectify this. Typically, to get a pension worth half your salary, you’ll need to be saving at least 15 per cent (ideally 20 per cent) of your salary. Any employer contributions will count towards this, and making additional voluntary contributions (AVCs) will boost it.

 

Don’t ignore your pension fund’s performance. Is your manager returning as much as you’d expect given market conditions? If not, think about switching. If you’re in a group scheme and can’t, bring your concerns to the funds’ trustees.

 

Fees and charges are also a factor. Are they too high? If you’re losing too big a chunk on fees, it may be time to switch or renegotiate. After all, as figures from the Pensions Authority show, an annual management charge of 1 per cent depletes a fund worth €136,700 by 10 per cent, or €14,500, over 20 years.

 

4: Bump up your savings

 

Deposit rates may be on the floor (the best 1-year fixed rate is currently just 0.75 per cent from KBC Bank), but so too is inflation. This means it may make as much sense to save today as it did when these indicators were much higher.

 

You won’t regret upping the amount that goes into your savings each month, even if it’s a small bit such as the amount you’ll save this year thanks to Budget 2018 changes.

 

You could also consider investing in a stock market fund. Doing so on a monthly basis lowers the risks and could offer better returns; saving €200 in an account paying 2 per cent will give you €4,893 in a regular savings account, while a stock market fund returning 8 per cent a year will give you €5,186 after two years (assuming markets continue to rise).

 

Of course while headline inflation is stagnant, rental and house price inflation is rampant. This undoubtedly makes it more challenging to try and save. But, if you’re seriously considering trying to buy your first home, look at other factors which might help you seal the deal. Help to buy (5 per cent tax rebate on purchase price up to €20,000) can help you get your deposit on a new home purchase.

 

The rent a room scheme, which allows you earn €14,000 a year tax free by renting out rooms in your home, may convince a lender to take a chance on you. It could make you a more attractive candidate for a mortgage and will also make repaying it much cheaper.

 

Consider a three-bed home with a mortgage of €350,000. Monthly repayments at 3 per cent will be €1,500, or €18,000 a year. If you earn the maximum €14,000 allowable under the scheme, you will be left with a shortfall of just €333 (plus bills) each month. Certainly cheaper than renting in the current market.

 

5: Take control of your debt

 

As a nation, our outstanding consumer debt may be falling but figures from the Central Bank show we are the fourth most indebted in Europe. Average debt per household is €83,941.

 

While mortgages may account for most of this, expensive, short-term debt is also a factor. In August 2017, for example, more than one-third (36 per cent) of credit cards had balances of between 75 and 100 per cent of their limits.

 

If you have too much debt weighing on your credit card, try and make some inroads this year.

 

For example, if you have €2,000 sitting on your credit card at a rate of 20 per cent and you are repaying just 2 per cent a month (€40), it will take you nine years to clear your debt. And it will cost you an extra €2,336 in interest!

 

If you repay an extra €5 a month, you’ll cut the time to 6.6 years and your interest bill to €1,635. If you bring the monthly repayment up to €60, your cost of funds will drop to less than €1,000 and you’ll repay it in about four years.

Source: matzwils07.edublogs.org/2017/12/02/five-financial-tips-to-get-your-year-off-to-the-right-start
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review 2017-11-24 00:00
Receiving Prosperity: How to Attract Wealth, Success, and Love into Your Life
Receiving Prosperity: How to Attract Wealth, Success, and Love into Your Life - Louise L. Hay Well this isn't really an audio book, but a recorded live seminar. At the beginning some widely known facts about money and peoples attitude towards it is mentioned but the rest is simply the audience asking questions, sometimes silly ones because they already know the answer, or sharing their experience.
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review 2017-03-26 12:11
A Story of a Man and his Barrel
Diogenes: An Anecdotal Biography of the World's Greatest Cynic - George Pavlu

When I was up at my parent's house I saw this book sitting in my Dad's workshop, so being somewhat intrigued I borrowed it. The thing is that I like the concept of the cynic, and I also liked the concept of Diogenes, who in some way is a homeless beggar, but he is also a philosopher. However, after reading a few pages of this book I also came to realise that despite him being a homeless beggar, he is also an exhibitionist. In a way he argues against the conventions of society, and the imprisoning nature of wealth and luxury, but he also lives and behaves as if he is an animal, which a part of me feels undermines that part of us by which we call ourselves human.

 

The thing with Diogenes is that, as I mentioned, he was a homeless beggar, but not by circumstance but rather by choice. Here is a painting of him sitting in his barrel:

 

http://nibiryukov.narod.ru/nb_pinacoteca/nb_pinacoteca_painting/nb_pinacoteca_waterhouse_diogenes.jpg

 

 

The interesting thing is the idea of him being a cynic. In my mind we have the optimist, who sees the glass half full, the pessimist who sees it as being half empty, and the cynic, who basically makes the statement that no matter how much water you drink you are only going to be thirsty again so you might as well just throw the water back into the river and simply remain thirsty. Okay, maybe that is a bit of an extreme, but in some ways taking the mind of a cynic is actually quite beneficial as it enables us to see through the fabrication that is society.

 

 

The interesting thing is that despite the fact that he was poor, and lived in a barrel, he was still a famous philosopher. I suspect that it had something to do not so much with the fact he was poor – there were lots of poor people in Athens – but rather that he was an exhibitionist. Also, he had some pretty harsh things to say about society, but despite the fact that he did say some pretty harsh things he still ended up building up a bit of a following. However, like a lot of people who build up a following, while what he says may sound good in principle, when it comes to putting things into practice then people will suddenly turn around and go back to doing what they were always doing.

 

 

In a sense there seems to be some similarities between Christ and Diogenes, in that both of them not only walked out of a comfortable life to become itinerant preachers, but they also have a lot to say about wealth, greed, and conforming with society. However Diogenes, unlike Christ, had a much more naturalistic approach. In a sense Diogenes saw us as little more than sophisticated animals, and the fact that despite our perceived civilisation we still basically behaved like animals, we might as well cast off our trappings of civilisation and simply become animals.

 

 

This book contains a series of anecdotes, that is sayings that have come down to us about Diogenes. The thing is that while Diogenes did actually write some stuff, we don't have anything remaining, so all we have are these anecdotes, sayings that are attributed to Diogenes, but not necessarily having any real truth about them. In fact all that we seem to have is a story about this guy that lived in a barrel in Athens, that eschewed wealth and comfort, and simply went around challenging people and their lifestyles. For instance it is said that he walked into a rich man's house, and because you couldn't spit on any surface in the house, he chose instead to spit into the face of the rich man.

 

 

These itinerant beggars are actually quite fascinating because we don't seem to actually have people like that these days. Okay, we might just do, with people who seem to drift from house to house, taking food and looking for a place to sleep, and then moving onto the next house and the next house, without actually paying their way. I remember a time when I was young that this Vietnam Vet appeared at our door looking for somebody who was no longer living there, stayed with us for a couple of days making all these promises, heading off with one of our friends, and then disappearing. My friends all referred to him as a conman, but he never took anything from us – he simply spent a couple of nights at our house and then moved onto the next one.

 

 

However I wander through the city and see all these homeless people sitting on the street with signs asking for money, yet none of them seems to stand on the corner sprouting philosophy. You do get people doing that, normally waving an issue of Red Flag (which is a communist newsletter) around, but they all look reasonably well groomed, and they are definitely not dressed like a beggar. Mind you, while we all talk about how Diogenes eschewed a wealthy lifestyle, and money and possessions, we still notice that he begs, and even asks for money off of his pupils. This makes me wonder if he actually has fully done away with money, or possessions. The fact that he owns clothes, and even owns a barrel, goes to show that he does have some possessions.

 

Anyway, I will finish off with another picture, and this time one of him speaking to Alexander the Great. It was said (as is the case with everything about Diogenes' life) that when Alexander asked who his king was, Diogenes says that he had no king because he was a citizen of the world, that is cosmopolitan. As such, Alexander realised that it was not enough to simply conquer Greece, but that he had to conquer the world, which is what he did. The other thing was that it was suggested that Alexander either takes everything, and thus becomes king, or takes nothing, and thus becomes Diogenes. In the end it would have been better that there were two Diogenes than two Alexanders, because to have two Alexanders would have not only been insufferable, but would have split the world asunder.

 

http://www.rebresearch.com/blog/wp-content/uploads/2013/09/alexander-and-diogenes.jpg

Source: www.goodreads.com/review/show/1950948381
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text 2017-03-13 19:02
Nudge › Richard H. Thaler, Cass R. Sunstein $1,99
Nudge: Improving Decisions About Health, Wealth, and Happiness - Richard H. Thaler,Cass R. Sunstein

Nudge is about choices—how we make them and how we can make better ones. Drawing on decades of research in the fields of behavioral science and economics, authors Richard H. Thaler and Cass R. Sunstein offer a new perspective on preventing the countless mistakes we make—ill-advised personal investments, consumption of unhealthy foods, neglect of our natural resources—and show us how sensible “choice architecture” can successfully nudge people toward the best decisions. In the tradition of The Tipping Point and Freakonomics, Nudge is straightforward, informative, and entertaining—a must-read for anyone interested in our individual and collective well-being.

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