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5 Reasons Your Wealth Isn’t Growing

Wealth is an elusive goal for many people. Everybody wants it, but for many, it’s impossible to reach. Every time they get a bit ahead, something always seems to come up, forcing them to live paycheck-to-paycheck.

What’s happening? Why can’t you gather enough wealth to know where next month’s rent payment is coming from?

1. You spend more than you earn. This is the mystical and magical Golden Rule of personal finance. Every system, every plan, every gimmick boils down to this. If you spend more than you earn, you are digging a hole that keeps getting harder to get out of. Don’t do it. The amount you earn needs to be bigger than the amount you spend.

2. You aren’t investing. If you invest $200 per month at 5% in your 20s, then stop and let interest do the rest,you’ll have as much after 30 years than if you started at 30 and continues to invest every month. Compound interest is very much your friend. The earlier you can start investing, the better.

3. You are investing in the wrong things. Some things are bad investments. Uncle Bob’s annual get-rich-quick scheme is going to be a bad idea every year. That’s not an investment, it’s pity. Another example is gold. Over the last year or so, that seems like a stupid thing to say, but it’s true long-term. Gold isn’t an investment, it’s an inflation hedge. Generally speaking, a given amount of gold represents the same amount of purchasing power all through time. To put it in simpler terms: 100 years ago, an ounce of gold could get you a nice suit and a good dinner. Today, that’s still true.

4. You aren’t saving. If you are spending less than you earn, what are you doing with the excess? Hopefully, you’re investing it, but keeping a stock of cash is a zero-risk savings account is a smart plan. It’s been said that when you don’t have an emergency fund, everything is an emergency. Have a cash reserve gives you the ability to not only deal with all of life’s little kicks to the crotch, but also lets you take advantage of the opportunities that may cross your path. A coworker needs to unload that big screen TV for 10% of what she bought it for? On it. Find a great deal on airfare to your dream destination? Bon voyage. Savings means security and opportunity.

5. You keep your debt. Debt is the biggest drain on wealth. Every penny you have to spend to service your debt(interest) is a penny you can’t save, invest, or otherwise enjoy. Carrying a balance is a fast way to immediately raise the price of everything you purchase, by 5%, 10%, or more. Debt and interest will hold you back financially like nothing else.

When you’ve been able to acquire a bit of wealth, you are better able to weather life’s bumps, dips, and face-flung poo. There’s nothing quite like the feeling of knowing that, no matter what happens, you aren’t going to struggle financially.

How to Cut Costs on Legal Fees

Finance

Occasionally, life goes truly pear-shaped and you’re forced to enter the legal system.

Even if you’re not embroiled in a tawdry, tabloid-fodder divorce, there are still legal issues that everyone needs to address, without exception.

The problem? Or rather, one of many, if you’re having legal problems?

Lawyers are expensive.

Before I go any further:

If you are having criminal court issues, get a lawyer. Get the best possible lawyer. Really. The cost does not compare to a lifetime in jail, or even 10 years. If you’re facing jail, get the best dang attorney you can find.
I am not only not an attorney, but I’ve never even played one on TV. I have driven past a law school a couple of times, but never stopped in. I do know several attorney, carry the business cards of a couple and have a couple on my speed dial, just in case. If any of them thought I was giving legal advice, I’d be in trouble. To reiterate: I am not an attorney. This is not legal advice.
Don’t do a prenuptual agreement at home. A prenup will almost always be found unenforceable if both parties don’t have an attorney.

Where was I? Ah, yes. Lawyers are expensive, but there are ways to mitigate that.

There a couple of things you can handle yourself.

Small claims court, also known as conciliation court. Typical cases in conciliation court include cases involving sums under $7500(varies by state) that involve unpaid debts or wages, claims by tenants to get a security deposit, claims by landlords for property damage, or claims about possession or ownership of property. Fees and procedures vary by state, but generally cost less than $100 to file. The procedures for your state can be found by googling “small claims court” and the name of your state.

Small worker’s compensation cases can be handled yourself, if they don’t involve a demotion or termination related to the injury.

Apartment and car leases are usually simple and straightforward. Read them carefully, but you probably won’t need a lawyer.

You can probably handle your own estate planning and will writing with some decent software. I love Quicken Willmaker. It walked me through a detailed will that takes care of my kids, and gave me advice on financing their futures in the horrible event that I am tragically killed before my wonderousness can fully permeate the world. It also contains forms for promissory notes, bills of sale, health care directives and more. If you have extensive property, I’d still seek an attorney’s advice, but I’d bring the Willmaker will with me to save some time and money.

Purchase agreements. A few years ago, I sold a truck to a friend and accepted payments. I made a promissory note and payment schedule. When he quit paying or calling me, that paperwork was enough to get the state to accept the repossession when I took the truck back.

A simple no-fault divorce is actually pretty painless, on the scale of divorce pain. Again, the procedures vary heavily by state.

Other resources for finding legal information free or cheap include www.legalzoom.com and www.nolo.com.

Have you had to do any of your own legal work? How did it work out?

Make Extra Money, Part 5: Domains and Hosting

Business, Finance

In this installment of the Make Extra Money series, I’m going to show you how to pick a domain and a host.

If you remember from the last installment, I’ve decided to promote The Master Wedding Planning Guide. Since then, I have bought the product and read enough to decide that’s it worth promoting. That is the secret to ethical internet product. Never promote a crap product. Now, when I bought the Guide, I used my own affiliate link, so the $37 product will have cost me about $13, once the commission check comes through. You can’t do that just to get a discount because Clickbank has measures in place to ensure that you are actually selling products.

Domain Name

The first thing we need is a domain name.

You can skip this if you want to host on blogger, but I wouldn’t do that, unless $10 is a major financial hardship. I dislike the idea of leaving everything in Google’s hands. Even if you use blogger for hosting(discussed later), pop for the domain name. That way, if you change your mind about hosting, you can move without losing everything.

Where should you go for your domain name? I use NameCheap and GoDaddy. I try to divide my domain names across each of the providers so all of my sites don’t look identical to Google. I may be paranoid, but it works for me.

Before you order, hit Google for a coupon code. Search for “namecheap coupon” or “godaddy coupon” and save some money. GoDaddy is offering $7.49 domains.

How do you pick a domain name?

I try to pick something that matches the product name, or the product’s site. In this case, the product’s site is http://www.masterweddingplanning.com and http://www.masterweddingplanning.net was available, so I grabbed it. I would have been happy with .com, .net, or .org. I won’t touch a .info domain. They are generally cheap, but they cost more to renew and people assume they are spam sites.

If the exact match domain isn’t available, I look for exact matches for the product. If that’s not available, I stick other words at the end that would be attractive to people looking to buy a product.

Acceptable domains would include:

http://www.masterweddingplanning.org
http://www.masterweddingplanningreview.com
http://www.masterweddingplanningguide.net
http://www.masterweddingplanningreviewed.org

Or nearly anything along those lines. Other good words to attach would be “revealed”, “exposed”, or something similar. Just put yourself in the shoes of a buyer. Would the domain name look like something that could help you decide whether or not to buy a product?

Hosting

Your host is where your website lives. Without a host, you can’t have a website.

When it comes to picking a host, you have some choices to make.

First, do you want to go free or paid? Free sounds great, and if money is tight, it’s not a bad choice, but it does limit your options.

If you’re going free, you’re going with Google’s Blogger. WordPress.com’s hosting eliminates your advertising options, as does almost every other free host. I do know of a couple of free WordPress hosts that will let you run ads and advertising campaigns, but the performance is horrible.

Another problem with using Google is that they can decide your site violates their Terms of Service and shut it down. It shouldn’t happen, but it’s not unheard of with affiliate marketing sites. If you go this route, plan to move to paid hosting when you start making money.

That leaves us with paid hosting.

There are a ton of hosts out there, but only three I have personal experience with.

I won’t use GoDaddy for hosting. I’ve never been happy with their technical support.

I have most of my domains on HostGator (c0upon code: HOSTINGBUDDY). I’m happy with them. Performance is good and the customer service is excellent. Their hosting packages start at $3.96 per month.

I also have a hosting account at HostTheName. I got that because, using coupon code “STARTUPWARRIOR”, hosting prices get down to $1 per month. At $36 for 3 years, I couldn’t turn it down. Initially performance was rocky, but they’ve upgraded and it’s good, now.

Once you’ve created your hosting account, you’ll need to go back to your domain name registrar and set the name servers. At NameCheap, after you log in, you’ll go to Domains > Manage Domains and click on the domain name. From there, click on “Domain Name Server Setup” on the left of the screen and enter the custom name server information listed on your hosting account.

When that’s done, go to your hosting account and add the domain. If you’re creating a new hosting account, this will be your main domain and the hosting company will ask you for the information during setup. If you’re adding this to an existing hosting account, log in, look for “Addon Domains” and follow the prompts.

At this point, you’ve chosen a product to promote and keywords/search terms to go with it. You’ve chosen and registered a domain name and you’ve set up a hosting account to hold your website. Next time, I’ll walk through setting up a WordPress site to make some money.

Any questions?

Pros and Cons of Cashback Credit Cards

Finance

English money — Image by Images_of_Money via Flickr

The news that the Bank of America is introducing a cashback credit card is of little surprise. The credit card industry is competitive and customers enjoy the thought of earning while they are spending!

There are both pros and cons of cashback credit cards however and they are not suitable for every circumstance. So, before committing to a card, consider the advantages and disadvantages.

Firstly, cashback cards can be financially profitable but this depends on whether you have the funds to make the repayments. If you are having difficulties with debt, these cards are probably not the most suitable.

The strategies for maximizing your benefits from cashback credit cards depend on making repayment deadlines. Prioritize cards that have a 0% APR introductory rate.

If you can make your repayments within this 0% interest rate, or on time each month, you will not incur any interest charges. It is important to be organized so that you always meet repayment dates.

Once the 0% APR has finished, cashback credit cards will often then revert to a high APR. If you cannot pay all your debt, these charges will mount up quickly.

If this is likely to happen to you, consider looking at alternative cards with a low but constant APR, so that you do not encounter such high charges while repaying your debt.

Cashback cards are not always the smartest move financially when it comes to outstanding debt. Although they may offer a 0% balance transfer, this is not always as simple as it sounds.

If you transfer an outstanding balance to a new card, even with a 0% APR introductory period, any repayments made will be charged against your newest purchases.

This means that it is more difficult to pay off the original balance transfer if you are also using the card to purchase new items and of course, it is very tempting to do so as you have the 0% APR available.

Be aware that if you do not pay the balance transfer amount by the end of the 0% period, you will then have to pay a much higher rate on this amount.

So you either need to be sure that you can pay off the balance transfer in full in addition to new purchases or consider using a separate card just for a balance transfer.

Although this may seem more work, it can potentially save you a great deal of money in interest charges. Remember any credit card is only worthwhile if it helps you manage your money.

Some cashback cards also have a minimum spend requirement and often this is paired with a specific time frame. Read all the criteria about the card before committing to it.

Otherwise, you could be charged for not reaching the minimum spend limit or not doing so within the required time frame. Consider these issues when choosing a card.

Cashback cards can be very useful and allow you to earn money while you are spending, but they need to be used with wisdom. Research your options to ensure you select the right card for you.

Post by MoneySupermarket.

Why I Hate Payday Loans

Finance

I hate payday loans and payday lenders.

The way a way a payday loan works is that you go into a payday lender and you sign a check for the amount you want to borrow, plus their fee. They give you money that you don’t have to pay back until payday. It’s generally a two-week loan.

Now, this two week loan comes with a fee, so if you want to borrow $100, they’ll charge you a $25 fee, plus a percent of the total loan, so for that $100 loan, you’ll have to pay back $128.28.

That’s only 28% of actual interest; that’s not terrible. However, if you prorate that to figure the APR, which is what everyone means when they say “I’ve got a 7% interest rate”, it comes out to 737%. That’s nuts.

They are a very bad financial plan.

Those loans may save you from an overdraft fee, but they’ll cost almost as much as an overdraft fee, and the way they are rigged–with high fees, due on payday–you’re more likely to need another one soon. They are structured to keep you from ever getting out from under the payday loan cycle.

For those reasons, I consider payday loan companies to be slimy. Look at any of their sites. Almost none are upfront about the total cost of the loan.

So I don’t take their ads. When an advertiser contacts me, my rate sheet says very clealy that I will not take payday loan ads. The reason for that is–in my mind–when I accept an advertiser, I am–in some form–endorsing that company, or at least, I am agreeing that they are a legitimate business and I am helping them conduct that business.

In all of the time I’ve been taking ads, I’ve made exactly one exception to that rule. On the front page of that advertiser’s website, they had the prorated APR in bright, bold red letters. It was still a really bad deal, but with that level of disclosure, I felt comfortable that nobody would click through and sign up without knowing what they were getting into. That was a payday lender with integrity, as oxymoronic as that sounds.

How devalued dollars can hit you in the pocket

Finance

The Bretton Woods Conference started the system now known as fixed rate exchange. After the 1944 conference, theUnited Statesattached dollars to gold with one ounce of

Billions of Dollars — Image by Mr Ush via Flickr

gold equal to $35.

The process changed in the 1970s, due to problems with inflation and currencies from other countries. The financial system of any country relates to the law of supply and demand.

As the demand for currency increases, the system undergoes appreciation. When the demand for currency drops, the system goes through depreciation. A country can devalue its currency based on lower demand.

For example, a country might equate 20 of its own currency for one American dollar. After the market fluctuates, the country devalues its money, making 40 of its currency equal to a single American dollar.

Devalued currency occurs in theUnited Statesduring periods of debt or recession. The government prints more money, which is worth less.

The country must have a way of covering its debts, such as with gold. If the country lacks adequate funds, the paper currency is essentially worthless.

A good example of this occurred during the American Civil War. The Confederates printed its own Confederate money. Once the war ended, the devalued money was worth nothing. Even today, the money only has a slight historical value.

American debt rises when the country goes through a recession or depression.Franceunderwent such a change when the country increased minimum wages and benefits for the working class.

The national debt continued rising and the country had no funds to pay back that debt. Fortunately, comparison sites like MoneySupermarket can help you find the best ways to save and make the most of your money when the value of American dollars drops.

Devalued dollars affect you because it reduces the amount of goods and services you can afford. Even simple things, such as buying car insurance or saving money takes more than it did before.

Devalued dollars increase inflation. As the country pumps out more money, stores and businesses increase prices.

You spend more money on the things you need every day, only to find yourself in debt once inflation ends. TheUnited Statesdevalued the dollar in the 1970s and again in 2001. During the 1970s, inflation hit gas stations particularly hard, leading to markups on gas prices and an overall gas shortage.

The 2001 inflation came with increased housing prices, car prices and food prices. Once the bottom fell out, millions of Americans found themselves further in debt. The devalued dollar affects you because it increases costs.

The value of gold, copper, silver and platinum rises, which in turns increases the prices of any items using those metals. Electronics, vehicles, construction and even jewelry prices increase.

Maximize your dollar amount now by saving money on travel expenses, home utilities and anything else you use on a daily basis. Reduce your overall costs before supply and demand causes a drop in the dollar value.

Anytime you use money, including paying student loan bills or insurance bills, you risk spending more than you should. As the dollar value drops, you will find yourself paying even more.

Brought to you by MoneySupermarket.

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