Rain Online

It’s a tough thing to balance the check book these days. For anyone who has to survive on a pay check, the money seems to run out much faster than it seems to come in. For a long time, I thought I was the only one who didn’t know how to manage my money. I was always short of cash whenever the need for it arose. And so, I borrowed from friends, family and even the good old credit card whenever I needed some urgent cash. Believe me, it might have improved the quality of my life, but it sure put me under a whole lot of debt!

I was discussing this with a colleague the other day when he told me about something that changed my life. He told me that it was just for situations like this that the concept of advance cash loans were offered by companies. I knew that I should have looked at the employee manual with greater care. If I had, I would have found the advance cash loan tucked away amidst the employee benefits. But now that I knew about it, I sure wasn’t going to waste my time. So I swiftly put in my application and waited for my next pay check to reflect the advance cash loan from the company.

What I got instead was a call from the accountant. He sat me down and asked me a number of questions on why I needed the advance cash loan. I tried to come up with some excuses (you must understand that I wasn’t prepared to be grilled!) but they all sounded futile even to my ears. I had no real reason to ask for the advance cash loan except for the fact that it was possible to ask for and get it. When I confessed to the accountant that I needed the advance cash loan to pay off my credit card debts, he sighed, looked askance at me and gave me a talking to I’ll never forget.

First and foremost, he told me that an advance cash loan was meant for emergencies. He explained that not all of us have nearly as much savings as we would like to have and we all needed an advance cash loan now and then to help us with sudden and unexpected outflows. These could include a ceremony or death in the family, school expenses, sudden hospitalization expenses and the like. Advance cash loans were not there to be availed whenever required for a whim as they could negatively impact the regularity of the salary. He then told me about the case of one other employee (he never named him!) who had made a practice of seeking advance cash loans on his salary to such an extent that he actually would not be paid a salary for another three months because that much had already been advanced to him. So now, rather than having to make do with what he got, he would be putting in three months or more of hard work for money to pay off his advance cash loan! That shook me up and I resolved then and there that I would never seek an advance cash loan unless I really required it!

Originally posted 2005-10-18 07:18:27. Republished by Old Post Promoter

Credit Cards

My husband and I had to cut up all of our credit cards. The only remaining card is for a mechanic shop, to be used in case of emergency should any unforeseen repair be required for our vehicles. We even took the extra measure of getting the credit card in my name, to prevent any temptation on the part of my husband.

When we first got married, we got into some serious financial difficulties that we like to blame on our credit cards. Every credit card company and it’s brother was banging down our door begging us to apply. We were both young, with full-time jobs, just starting out in our life. We wanted our new apartment to be perfect with all the latest gadgets and accessories that are marketed specifically to the unsuspecting and newly married.

Before we knew it, our place was full of the greatest stuff, and the balances on our many credit cards were through the roof. We ended up having to get a loan to consolidate our payments and that was the end of credit card spending in our family.

I don’t know what it is. We’re both reasonably intelligent, but hand us a couple of credit cards and somehow we forget that this isn’t free money! We have to pay it back sooner or later. And credit comes with a heft price tag: interest.

We’ve now been married for twelve years. I’d like to think we’ve learned a thing or two over the years. We’ve toyed with the idea of getting a credit card for emergency purposes only. Strangely enough, this sort of idea generally strikes when we are running a little low on cash flow. Thankfully, so far, we’ve maintained our wits about us, and been able to resist the temptation of a little credit card spending. Based on our past experiences, I think this was a very wise choice!

Sometimes it’s hard to pass by a great sale when we don’t have the cash on hand, however, after learning a very difficult lesson early on, my husband and I are thankful that our addiction to credit cards was nipped in the bud. From time to time, we are asked for credit card information, especially when it comes to online purchases. If the item or service is really needed, we can usually find away around the need for a credit card. It can be somewhat inconvenient to live without a credit card in today’s world. In many cases, people are quite frankly shocked to find out we are credit card free. It almost doesn’t compute! But that’s okay. For our family the decision to cut up our credit cards likely saved us from major financial problems down the road and forced us to limit our impulse buying, saving us money in the end.

Originally posted 2007-06-15 11:08:27. Republished by Old Post Promoter

All of us know the benefits of using a credit card. They are convenient, a boon when you are strapped for cash, and make buying and selling products and services online a real easy affair. And some of us (I would go so far as to say most) know about the flip side of using a credit card. They can lull you into a false sense of well being, they can make you feel that you have access to more cash than you actually do and they can mire you in debt sooner than any other invention of man, with the probable exception of gambling. But believe it or not, if you look around, you will find some of the best credit card deals!

Typically, the best credit card deals come with new credit cards. For instance, when you sign up for a new credit card, you get a deal in the form of an annual fee waiver. Now while this may not sound like much, remember that annual fees for credit cards, especially if you have a bad credit history, can be really high. Some of the other best credit card deals include things like balance transfers. Now this is a real deal by any standard. This sort of credit card deal allows you to transfer balances from your existing credit cards to your new credit cards at a preferential rate of interest. In fact, one could so far as to say that most people who sign up for new credit cards, do so in order to make use of this best credit card deal of allowing balance transfers.

There are also other best credit card deals. Personally, I evaluate any credit card deal by the list of how many benefits it gives me. No annual fee and the ability to have a balance transfer are just two of the considerations. Other credit card deals according to me include freebies and coupons that I can use to buy goods and services, add on cards that are provided to me free of charge and even credit card deals that allow people like me, with a bad credit rating to get and use new credit cards. To my surprise, I find that there are a number of credit card deals that allow people with bad credit ratings or histories to get and use new credit cards. And you can be sure I ake use of those credit card deals to better my life!

Originally posted 2006-12-02 16:16:35. Republished by Old Post Promoter

Last week, we started a multi-part series about how to go from being a beginning investor to being “financially independent” in a steady and predictable way. Many, many people want to overly complicate this process so let’s briefly, let’s recap that discussion.

The bottom line steps that I suggested in the last article was:

1) Look for an opportunity that will return at least 150% in 2 yrs or less;

2) Be mentally and financially prepared if the investment does not work out;

3) Have VERY good reasons why you don’t think you will lose money…… You may not make as much as expected, but you would rather not lose money at this stage.

4) Be patient. This single result should not either make or break you but it is crucial to a longer term plan.

I gave an example where a hypothetical person had gone through this process and ended up with a profit of $43,000 (before taxes) and $36,000 of after tax profit. When this profit was combined with their original investment, they now had around $55,000 of operating capital for Step 2.

Before we get to Step 2, let’s take a step back. For a lot of people, if I told them that somebody made $43,000 on a quick investment, they would think these people had “struck it rich”. Kind of like winning the lottery, right? NO! In the grand scheme of things, this investment will do very little to impact their financial independence. That is, it will take discipline to now use these profits to go into the next investment, and then use those new profits to go into the 3rd investment, etc. So, in our opinion, this first investment was merely a stepping stone towards a much bigger objective.

In Step 2, most savvy investors will now realize they have just been given some extra monopoly money, or money that was not originally theirs, to work with. In the investment and trading world, this is referred to as the “market’s money”; i.e., money that you got from the market that you can then use to generate revenues above and beyond what was possible with your original investment. Quality traders can use this concept to produce huge % returns in a year while risking no more than 10% of their original portfolio.

So let’s say the investor now decides to repeat the process and buy two more preconstruction lots in a different development. In the two years since the first investment was made, suppose now that property has escalated. In addition, the investor finds a good deal on two lots and each is $250,000 to purchase.

Now, the investors visits their check list to see if this makes sense:

1) Look for an opportunity that will return at least 150% in 2 yrs or less — yes, they have reason to believe this will occur for their down payment amount;

2) Be mentally and financially prepared if the investment does not work out–yes, they don’t think it will happen but if they lose their entire 10% down payment, they are ok with this.

3) Have VERY good reasons why you don’t think you will lose money…… You may not make as much as expected but you would rather not lose money at this stage — They have done their due diligence and feel strongly about the investment.

4) Be patient. This single result should not either make or break you but it is crucial to a longer term plan– they are not swinging for the fences but rather patiently using the previous market’s money to increase their investment.

Well, like the other investment, suppose this one works out in their favor. In their two year holding period, the lots experienced a 35% increase in price. Not bad. They were hoping for more since they knew some places had that kind of increase in a few months but they are not complaining. After closing costs, the investor had about $55,000 invested and netted a total of $162,000 after expenses. Of course their silent partner, Uncle Sam, wanted their cut so now they are left with a $137,700 in profits and $192,700 in working capital. Not too bad after only 4 years.

Now let’s ask the question are they financially free? We’ll, I doubt it. The investor could probably now survive for 2-3 years on the nest egg but only if they did not reinvest it. However, if the family and friends find out about this gain, then they will think the investor is now “rich” and living like the Vanderbilts…… For anybody that has made it to Step 2, you know they are far from rich because now they want to invest to go to Step 3 and this will likely consume most of their money. Frequently you will find people in the $0.5 -$2Million dollar net worth in this category where they are doing great on paper but they don’t have any more “extra” money to spend than they did a few years ago. After Step 3-4 however, this can change dramatically.

Before we conclude this week’s article, let’s talk about a very common, and deadly mistake. In the language of Texas Hold’em poker, it is the All In mentality. Frequently, after a first success, people now feel bulletproof and decide they want this process to go faster. They leverage everything the have and take on as much risk as the banks will allow them. If things work out for them, they will explode their wealth with that step. However, if something slips up, they are in trouble.

Most people believe nothing like that can happen to them they are too smart. I mean everybody knows that real estate does not go down, Right? I know a gentlemen who is extremely smart, extremely business savvy, and grew his net worth to well over a BILLION dollars. Within a few years of that mark, he net worth was NEGATIVE and had to declare bankruptcy because of real estate. The process of building wealth in a controlled fashion over 6-10 years is so straightforward that I cannot see taking those kind of risks to make it happen in a much shorter time frame.

Chris Anderson is a leading authority on preconstruction real estate investing and has been referenced in many venues including the New York Times and USA Today. Get updated information about preconstruction projects at GetPreconstructionDeals.com.

Originally posted 2007-01-09 20:24:16. Republished by Old Post Promoter

Bad credit ratings are no fun at all. With a bad credit rating you are extremely limited in your financial options. Buying a new car, putting a down payment on a house, finding an apartment to rent, getting a new credit card, getting your first credit card, or getting a loan from a bank can all be activities you are basically barred from with a bad credit rating. Our society brands people with bad credit ratings with markings that banks, landlords, and businesses can see a mile away. What can you do to get out of this hole once you’ve fallen into it?

The first thing you have to do if you have a bad credit rating is to try and determine why. Many times a bad credit rating can be tracked to a single, or series of missed payments, or perhaps a forgotten bill. Missed payments have a tendency to wreak havoc on credit ratings. Most businesses won’t forget that you didn’t pay, and will contact a collection agency of some kind. Collection agencies are like the Mafia strongmen of the credit world, except instead of breaking your legs with a lead pipe, they smash the heck out of your credit rating until it’s barely recognizable. When they get done with you, you have such a bad credit rating that you’ll get rejected from things you didn’t even know you could get rejected from.

Although collection agencies normally attempt to contact you before wreaking their havoc, they don’t always succeed, especially if you’ve moved and changed your contact information. Some agencies will make a strong effort to reach you; others aren’t as forgiving. If you have a bad credit rating, you may have been an unknowing victim of one of these agencies. Or, maybe you are aware of it but just weren’t able to pay.

Either way, fixing a bad credit rating should start by clearing any old debts or forgotten bills. Once you’re free and clear, there are a number of things you can do to get on the road toward repairing your bad credit rating. If you already have credit cards, use them often and make good on your payments promptly. If you don’t have a credit card, apply for a secured card and likewise make your payments right away. If your credit rating is especially bad, or you are having trouble identifying why you have a bad credit rating, you may want to consider contacting a credit counseling service.

Originally posted 2006-12-16 16:22:05. Republished by Old Post Promoter