Archive for Finance

Overcoming The Rising Cost Of Healthcare, Childcare And Tuition

The rising cost of healthcare, childcare, and college tuition are among the biggest concerns for young people entering the workforce. Rising cost of basic needs have caused many to look outside themselves, searching for a solution.

Some expenses have to be paid before we even get to work for the day.  The baby has to be cared for, health care plan has to be funded, and we still have that debt from school hanging over your head.  The burden of these basic expenses can be a distraction from making progress toward your goals.The burden of basic expenses can be a distraction from moving forward Click To Tweet

Life Comes at Us Hard

As soon as we enter the workforce, we start to realize the amount of work it takes to earn money. There are expenses to commute to work. There are expenses for baby care. There are school loans to be paid. There are insurances and health care to pay for. All kinds of expenses that we pay for and we haven’t even made it to work! These are only a few of the seemingly endless expenses we encounter that try to separate us from the money.

Dreams fade fast in the light of reality. The dreams we had during adolescence seemed so real and achievable. There were no limits then. But when you realize how hard it is to earn and accumulate money, you forget all about those things you were going to achieve when you were younger. Read More →

7 Fundamental Footsteps To Finding Financial Freedom

Achieving Financial Freedom – providing for yourself and your own family is certainly not easy, but independence has its rewards. It astounds me every time I encounter someone who takes pleasure in being dependent on someone else or worse, the government.

As soon as I graduated high school, I left home to go into the Navy where I would start providing for myself.  In fact, I enlisted in the Navy in October of my senior year.   I love my folks, but being dependent on anyone, including my parents was just not something that had any appeal for me.

These days, it is common for adult children to continue living with parents indefinitely.  They may move away for a while, then boomerang back home to enjoy the life of dependence.

Financial Freedom begins by achieving a state of Self-Sufficiency, being free from dependence on another for your basic needs. Sometimes there are good reasons for returning home. It is good to have parents that can assist for a while, but not when there is no effort to return to an independent life.

Break Free From Dependence

Maybe you have found yourself at the point where I was many years ago.  After serving in the Navy for about ten years, I was not earning enough to support my growing family without some assistance from the government.

You can read the long story of how I got to that point and how I recovered in Who is Responsible to Provide Basic Needs of Americans? That post laid out the problem and referenced next steps. This post should be more of a challenge to take the next steps toward independence and gives you clear steps to that end.Whether you are dependent on the government or on your parents, it is time to plot a course for self-determination and self-reliance. Click To Tweet

Now, if being broke and dependent on the government or someone else describes your situation and you are ready to start on your path to financial freedom, this article is written for you.

Don’t give up hope.  There is a way out when it feels like there is no way out.  It might not be quick and it may even get darker before dawn. Read More →

Break Free from Living Paycheck to Paycheck

Are you tired of having month left at the end of your money?  When was the last time that you had money in your pocket on payday before the paycheck hit your account?  If it has been longer than you care to remember, it is time to make some changes that will break that pattern of living paycheck to paycheck.Tired of having month left at the end of your money? Click To Tweet

Disclaimers

Let me say right up front here that these techniques might not be the appropriate next step for all readers. you might be in a situation that needs a different approach at this point. Everyone is not in the same condition.

Each person has their own set of circumstances and there are times when you just cannot control the circumstances you are in.  I wrote about that period in my life in a blog post titled Who is Responsible to Provide Basic Needs of Americans?

“Living paycheck to paycheck” infers earning a paycheck and spending all of it. If this does not apply to you, take this post with a grain of salt. Maybe you are a student living on a stipend until you graduate and get a job. Read More →

Launching A Practical Get Out Of Debt Plan

The quote from Suze Orman that “Debt is bondage” is so true.  Debt not only holds you in bondage, it steals from you in the form of finance charges.

Do you find yourself avoiding answering the phone because you are tired of the bill collectors calling? I can remember being so broke that I had to spend extra money overnighting my house payment to the mortgage company. That was before the days of online bill payments. You have got it so much easier than ever before.

I have discussed debt and relayed my story about how I got into and out of nearly $100,000 of debt in earlier post Who is Responsible to Provide Basic Needs of Americans?

In today’s post, I want to help you create a plan of action and milestones. A good plan will lead you directly from where you are today to the point of complete freedom from debt. I will give you practical and actionable steps that you can follow to do what I did that got me out of debt.

Philosophy – The How and Why

Vale le Pena! Translation – It’s Worth It! Financial freedom is worth the sacrifice that it takes to get there. There will be some discomfort between where you are and where you want to be, but by enduring it you will reap the reward.Financial freedom is worth the sacrifice that it takes to get there Click To Tweet

When you are financially free, more of what you earn is yours to keep. You can buy and actually own more if you are not sharing a portion of your income with your creditors.

In the future, when you need to borrow money for big purchases like home or car, less money will go to finance charges allowing you to have nicer things.

Maybe you are in a place now where you are forfeiting too much of your hard earned income to finance charges. Perhaps you are not able to get the financing for a new car you want. Is your FICO score where you want it to be?

Pitfalls to Avoid

Setting the target unrealistically high

When you take account of how much you owe and how long it will take to get out of debt, the timetable of the goal could cause you to quit before you succeed. Read More →

Your Commitment In Advancing A Strong Economy

What does it mean to make the economy strong or weak?  In what way are you participating in making your country’s economy stronger?

Economic Fundamentals

The Economy is talked about as if it has a life of its own.  From the news reports, you might think that the economy controls people’s behavior rather than the other way around.  The truth is that actions and beliefs of the members of society control the economy.  Individuals earning and spending determines whether the economy is growing or declining.

Let’s bring that concept home.  As an adult member of society, you participate in the country’s economic health by earning and spending money.  In order to earn money, you exchange some product or service for money.  Ideally, you will gain more money in exchange for the goods or services than it cost you to produce them.  If you are an employee, your role is to contribute to your company’s endeavor of adding value to the goods or services that they sell.  This is your most basic participation in the economic system.

Then, you take the profits or earnings you made from the first exchange and exchange that for goods or services that you consume.  And the person you purchased from turns around and repeats the process.  That continuous movement of money defines the economy.

If the people of a society only purchase items they consume and don’t add value and resell something, then the economy grinds downward.  You’ve got to add value and bring in positive cash flow.

Positive and Negative Cash Flow

The concept of positive and negative cash flow is a fundamental business concept.  Cash flow is a financial term that refers to money coming in relative to money going out.  Basically, it’s a way of stating whether the company is making or losing money over a specified period of time.  Positive cash flow happens when more money comes into your business or individual accounts than the amount of money that goes out.  A negative cash flow condition exists when your outgo exceeds your income.  You can apply the concept to your own wallet and bank account.  Are you earning more than you spend or spending more than you earn?A portion of all I earn is mine to keep! - George Clason Click To Tweet Read More →

Why Young Americans Should Not Abandon Capitalism

Popular media paints a bleak picture of capitalism and touts the benefits of socialist values.  Those views tickle the ears, but do not hold up to scrutiny and critical thinking.  Don’t fall into the trap of going with what sounds good rather than what truly is good and beneficial.

Many benefits available to you and the American way of life are only possible in a capitalistic economic system.  I want you to take away a viewpoint that capitalism is a positive, compassionate system.  Seek out, read and become informed about the fundamentals of Capitalism.  Realize how the application of the principles will benefit you and then decide to engage the system to your benefit.

Paladin Pillar Article

This post is a pillar article for the Paladin blog.  An article by Sarah Kendzior in Foreign Policy magazine details many reasons that young Americans are believed to be giving up on capitalism.  While that article was a gut punch, it exposes many of the maladies of the past eight years or so that have caused young Americans to begin doubting our system.  They have begun to feel like our system might not be the best, despite not having personal exposure to a longstanding socialist economic system.  As you read the Paladin About page, you will find that this blog is all about promoting Capitalism.

One of the blessings that I have enjoyed in my life is the opportunity to travel the world and gain first-hand knowledge of political-economic systems different from my own.  This exposure has reinforced the belief that America has The Best Economic System at its core.  It is my belief that if the principles of capitalism were studied and employed by every American, many of the maladies mentioned in Kendzior’s article would have self-corrected.  The short sighted actions taken by thousands of Americans led people into traps that impacted us as a whole.  The root of these problems goes much farther back than when their impact was first observed.  A mix of actions by the government, financial institutions and industries has fed the problems.

To the Young American Launching into the Workforce

So, how does this apply to a young American who is starting out in the workforce?  Understanding how the system that you are entering works will help you understand your role and the opportunities that you can benefit from.  Of course, you can go out there and experience it first if you want to.  Better to study and learn from others how it is intended to work.  You will suffer fewer knocks if you know what you are getting into.  Words to the wise, it is up to you what you do with them. Read More →

A New Crystal Clear Vision Of The American Dream

There are many interpretations of the American Dream.  Historically, for most immigrants it has represented the freedom to seek employment to provide a better life for their own family.  People have come to America from all over the world and from all sorts of political and economic systems.  They chose America because our particular form of government and economic system is the best in the world for the individual who has the drive to succeed.

Interpretations of the American Dream

It is probably safe to say that every person defines the American dream differently.  There are a few aspects of the dream that segments of the population tend to have in common.  Family life, Home ownership, and employee vs business owner are at the center of attention for the dream of many. Read More →

Breakthrough As A Student Loan Debt Free College Graduate

Student loan debt is a common cause of financial distress for many college graduates.  There are some ways to lessen the weight of student loans both before getting into debt and after.

College graduates walk away from college with a diploma and a weight around their neck called student loan debt.  Students that leave school before graduation, only walk away with the debt.  Popular wisdom is that it will take years and years, maybe decades to finally pay off student loans.

One of the worst things about student loan debt is that students who are accruing them rarely have prior experience in dealing with debt. Students are almost victims of the system in that they are sort of put on automatic to getting into the debt.  The FAFSA data gets forwarded to lenders and all the student has to do to accept the loan is to sign for it.  The government encourages and enables the process.  There is not a step in the process where students are ingrained with the values of limiting the amount of debt they take on or any sort of urgency to break free from the bonds of debt.  “Debt is bondage” – Suze Orman

Debt is bondage! -Suze Orman Click To Tweet

Student Loan Debt Seems to Linger for a Lifetime

How Long Will it Take to Pay Your Student Loan Debt

Student Loan Debt Seem to Linger Forever

College graduates take for granite and accept that debt will be a part of their life for the next decade or more after graduation.  This does not have to be the case.  Someone needs to stand in the gap for the student and help them understand the down side that having this debt will bring to their life.  So many students are looking to others to make the debt go away after they acquired it.  The natural process that drew them in does not provide a roadmap to get them out.  Unfortunately, only the student is liable to meet the obligation.

Whatever phase of the student debt experience you find yourself, whether that is prior to getting into student debt, in school and increasing debt each semester, or a graduate looking for a way to get free from the weight of debt, I want to give you some hope and direction.

Sooner is better

Hopefully you are reading this before finding the noose of debt around your neck.  If that is the case, take heed and let this be words to the wise.

It might not be possible to get through your college education without any debt, but at least make an effort to keep it to a manageable level.  Only take out what you need to get through.  It is not wise to live lavishly on borrowed money.  You and only you will be paying back that debt.  Well, I take that back.  Possibly you and your future spouse will be paying that back.  Oh and add your kids to that list of who will be affected by the debt you take on during school if you let it get out of hand.  So, maybe you aren’t concerned about how it will affect you, but at least pay attention out of love for your future family.

Phases

Pre-loan phase

If you are at this stage, it is the perfect time to gain an operational understanding of the principles of debt.  There are a number of financial pitfalls waiting for you at college.  Hopefully your parents can give you guidance, but increasingly across the country people of all ages are struggling with debt and finances in general.

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9 Fundamentals of Sustainable Out-go and Reliable Income

If Your Out-go Exceeds Your Income, Your Upkeep Will Be Your Downfall!  This is a mantra that I have written about before.  In this post, I will go deeper into some fundamentals and practices that will help you maintain that critical balance.

As long as you continue to spend more than you earn, you will continually fall further and further behind. Eventually leading to a financial crash and burn.  This practice will lead you deeper and deeper in debt.  At some point you will eventually not be able to pay the interest on the debt you owe causing you to fall into bankruptcy.

Bankruptcy is a major personal setback and brings with it consequences that have a long lasting effect.  Credit becomes harder to acquire.  Its impact is felt by more than the individual who filed for bankruptcy.  Those debtors that did not get paid in the settlement now have to deal with the loss to their business as well.  The increase in bankruptcies and foreclosures took a toll on our nation’s economy over the past decade.  The trend had snowball effect that hurt us all.

How much have you spent on interest charges this year?  What does that add up to over your lifetime till now?  How much do you hate budgeting and how much would you be willing to pay to avoid making and living on a budget?

We’ll group the fundamentals into two groups; things to avoid and things to move toward.

  1. Avoid:
    1. Easy credit offers
    2. The trap of indebtedness
    3. Immediate Gratification
  2. Move toward:
    1. Improve financial literacy
    2. Desire to grow wealth rather than overspend
    3. Commit to a New Pattern of Saving before Spending
    4. Prioritize Spending – control your out-go
    5. Reduce Amount of Out-go to Finance Charges
    6. Improve Income Potential

Three Pitfalls to Avoid

Falling prey to offers from credit card companies, continued indebtedness and the desire for instant gratification are traps that threaten to sabotage our efforts toward achieving our desired outcome.  By identifying them and setting guards against them, you will have a safer road to achieving financial independence.

If Your Out-go Exceeds Your Income, Your Upkeep Will Be Your Downfall!

If Your Out-go Exceeds Your Income, Your Upkeep Will Be Your Downfall!

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Which is Better: Improving the Boss’ Bottom Line or Yours?

Of course, our personal bottom line is the reason we all go to work.  We try to bring value to our boss‘ bottom line in order to get rewarded, compensated and promoted.  Rather than putting forth all our energy providing for the boss’ bottom line, we have an option in America of  creating our own wealth independent of a boss.

Since America is built on the Free Enterprise system, we are free to choose whether to work for ourselves or be an employee of someone else.  There are advantages and disadvantages of each.  You may be better suited for one over the other.

Employee or Employer

Some people value the certainty that accompanies being an employee.  They have no desire to be the business owner, assuming the risk of the business’ bottom line making money and staying afloat. The employee is only responsible for his own performance.

Only a few value the challenge of making their own business succeed.  The perceived rewards of success include the opportunity to make a higher income, the freedom of self-direction, the feeling of significance of having his name on the business and owning the successful enterprise.

Who ever feels like they are being paid enough?  Could you make more money by working for yourself or as someone else’s employee?  Given a profitable idea and the resources and means to market it, you might be able to develop an income greater by having your own enterprise.  However without proper execution, the cost of doing business could wind up exceeding what you make.  When your outgo exceeds your income, this is known as a deficit.

Being A Business Owner is Not for Everyone

Not everyone is capable of running a business.  One benefit of being an employee of another is a much more predictable income and a much lower risk of not making money or worse, losing money.  Owning your own business requires that you have an internal drive.  It is analogous to moving off to college.  At college, no one wakes you up and ensures you go to class.  In high school, a truant officer will be dispatched to round you up in some cases.  When your own your own business, you are completely responsible for getting it done.  Self-motivation and self-direction are two required attributes to successfully run a business.  In a recent blog post, 5 Better Solutions Than A More Competitive Minimum Wage, I listed six ways to increase your bottom line.  Some of those are as an employee and some are in a business of your own.

Improve Your Bottom Line and Fulfillment Through Self-Employment

Which is better for you: working for someone else or working for yourself?  Which is better for you: working for someone else or working for yourself? Click To Tweet

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