Finance – Controlling Debt, Making It Work For You.

Hello friends, it’s been awhile since I make a post entry. Today I’m going to share something about ‘Debt’ which might caught your attentions. Debt is something which referring thing as ‘owed’ when referencing assets and meant of using purchasing power in the present before a summation has been earned.

Well said and done – this is common knowledge that almost everyone are in debt now day’s. It’s like something that can’t be avoided even by the rich one – Honestly!! Even the wealth and noble people can’t avoid the temptation of having ‘some’ debt.

Before moving forward with all  this debt things, let me share a few basic things:

1. World population are loaded with credit-card debt.
Base on statistic – Average American household with at least one credit cad has nearly $10,700 in one (according to CardWeb.com) not to mention other countries.

2. Some debt are good.
Borrowing for home or collage usually makes good sense – just make sure you don’t borrow more that what in need and shop around for the best rates (money management).

3. Some debt are bad. 
Credit card is one of the most bad debt it might be (If you misuse it. Stop using it for things that consume quickly.

4. Get a handle on our spending
Always write down what we spend monthly (except you someone in the level of millionaire or above – which mean you don’t need to read this). Cut back thing’s that in need and save the extra or use it to reduce more debt quickly.

5. Pay off your highest-rate debts first.
The key to getting out of debt efficiently is first to pay down the balances of loans or credit cards that charge the most interest while paying at least the minimum due on all your other debt. Once the high-interest debt is paid down, tackle the next highest, and so on.

6. Don’t fall into the minimum trap.
Always try to make it fix but higher than the minimum rate, especially when paying credit card debt. It will take you years to pay off your balance, and potentially you’ll end up spending thousands of dollars more than the original amount you charged.

7. Expect the unexpected.
Standby for the unexpected – Build a cash cushion worth three months to six months of living expenses in case of an emergency. If you don’t have an emergency fund, a broken furnace or damaged car can seriously upset your finances.

8. Don’t be so quick to pay down your mortgage.
Don’t pour all your cash into paying off a mortgage if you have other debt. Mortgages tend to have lower interest rates than other debt, and you may deduct the interest you pay on the first $1 million of a mortgage loan. (If your mortgage has a high rate and you want to lower your monthly payments, consider refinancing.)

9. Get help as soon as you need it.
If you have more debt than you can manage, get help before your debt breaks your back. There are reputable debt counseling agencies that may be able to consolidate your debt and assist you in better managing your finances. But there are also a lot of disreputable agencies out there.

The beauties of ugly side of Debt.

Sometimes it makes sense to borrow, especially when we know where the road’s end. It’s almost impossible to live debt-free!!

Expert said that, it is crucial to make sure our monthly long-term debt payment should not exceed 36% of our gross monthly income (which one metric mortgage bankers consider when accessing the creditworthiness of potential borrower…

Avoiding debt at any cost means nothing if by force it might depleting our reserve cash for emergencies. The challenge is learning how to judge which debt makes sense and which does not and then wisely managing the money you do borrow.

Good debt includes anything you need but can’t afford to pay for up front without wiping out cash reserves or liquidating all your investments. In cases where debt makes sense, only take loans for which you can afford the monthly payments.

Bad debt includes debt you’ve taken on for things you don’t need and can’t afford. The worst form of debt is credit-card debt, since it usually carries the highest interest rates.

Sometimes the decision to borrow doesn’t hinge on how much cash you have but on whether there are ways to make your money work harder for you. If interest rates are low, compare what you’ll spend in interest on a loan versus what your money could earn if it were invested. If you think you can get a higher return from investing your cash than what you’ll pay in interest on a loan, borrowing a small amount at a low rate may make sense.

Great example of Good Debt.

Debt is not that bad or evil when we know what to do and emphasize it on crucial need.  In fact, there are instances where leveraging things toward it optimum power will help in improving a better overall financial position. I’ll focus on three things – Home, school and car.

1. Home loan/ buying a house.
Debt of a home loan is something. Talking about paying a new home in cash is slim – rather impossible for most people. Carefully consider how much you can afford to put down and how much loan you can carry. The more you put down, the less you’ll owe and the less you’ll pay in interest over time.

Although it may seem logical to plunk down every available dime to cut your interest payments, it’s not always the best move. You need to consider other issues, such as your need for cash reserves and what your investments are earning.

Never put your cash into a home if you running with other debt. Mortgages tend to have lower interest rates than other debt, and you may deduct the interest you pay on the first $1 million of a mortgage loan. (If your mortgage has a high rate, you can always refinance later if rates fall. Use our calculator to determine how much you might save.)

2. Paying for college. 
Things about paying for your children’s education are best when implementing their study – their own loan (which in Malaysia, we have PTPTN) rather than us (parent – if you are!!) liquidating or borrowing against our retirement fund. That’s because our kids have plenty of financial sources to draw on for college, but no one is going to give us a scholarship for our retirement.

It’s also unwise to borrow against your home to cover tuition. If you run into financial difficulties down the road, you risk losing the house.

Your best bet is to save what you can for your kids’ educations without compromising your own financial health. Then let your kids borrow what you can’t provide, especially if they are eligible for a government-backed loans, which are based on need. Such loans have guaranteed low rates; no interest payments are due until after graduation; and interest paid is tax-deductible under certain circumstances.

3. Financing cars
Financing a car is something easy when you know what to do – how long you plan to keep it!! Remember since car’s value plummets as soon as you drive it on the road. It also depends on how much cash you have on hand.

If you can pay for the car outright, it makes sense to do so if you plan to keep the car until it dies or for longer than the term of a high-interest car loan or pricey lease. It’s also smart to use cash if that money is unlikely to earn more invested than what you would pay in loan interest.

Most people, however, can’t afford to put down 100 percent. So the goal is to put down as much as possible without jeopardizing your other financial goals and emergency fund. Typically, you won’t be able to get a car loan without putting down at least 10 percent. A loan makes most sense if you want to buy a new car and plan to keep driving it long after your loan payments have stopped. And be sure you can pay it off while you still have the car since it’s painful to pay for something that has been consigned to the junkyard.

Leasing a car might be your best bet if the following applies: you want a new car every three or four years; you want to avoid a down payment of 10 percent to 20 percent; you don’t drive more than the 15,000 miles a year allowed in most leases; and you keep your vehicle in good condition so that you avoid end-of-lease penalties.

Whatever route you choose, shop for the best deals. Remember, it’s in the car dealer’s best interest to finance at the highest rate possible, so look at what you’ll pay overall, not just the monthly amount. If you tell your car dealer you can spend $400 a month, you could end up with a new car for $400 a month based on an uncompetitive interest rate.

Managing our debt

Make sure that we stick with this simple step – Not our bill in charge!!

Outside our fixed monthly bills, we probably don’t have precise idea on what do our spend went to.  If we want to get our debt under control, start by figuring out our spending patterns and identifying unnecessary expenses.

Make our preparation of one moth observation. For one month, write down every cent you spend. Tally the expenses on the list and compare the sum to your monthly income.

Next, make a list of all your debt obligations and the interest you’re charged for each.

Once you’ve done all that, you’re ready to start lightening your debt load.

The basics of debt reduction are simple: Cut down on your variable spending and put the extra money toward your debt payments. Once you determine the maximum amount you can pay off each month, pay down the debt with the highest interest rate first – that usually means your credit-card balance – while paying at least the minimum monthly amount due on all other revolving bills.

Once the debt with the highest rate is wiped out, put your money toward paying the debt with the next-highest rate. One exception: If you have a credit card with a low teaser rate that will go up after a fixed amount of time, strive to eliminate that balance before the low rate expires.

You might also consider moving some of your high-interest credit-card balances to a card with a lower interest rate. But read the fine print on any invitation to transfer balances. Sometimes such low-interest-rate offers are only in effect for short periods of time, after which the rate skyrockets. What’s more, consolidating your debt on one card may lower your credit score if your debt-to-available-credit ratio worsens.

For many people, reining in discretionary spending for a few months goes a long way toward tackling debt. But if that’s not enough, try to reduce your fixed expenses. Take steps to lower your household bills; refinance your mortgage to get a lower interest rate; or, if you have a good payment history, ask your credit- card company to lower the interest rate you’re charged.

p/s: My simple advise – always know where, when and how our financial term stand. Then, make analysis of what crucial toward better saving and investment versus debt. Seek for help and guide from certified advisor. Wish everyone better debt management in the future Daaaaaa

Education – What Goes Around, Comes Around.

Hello everyone, hope that you have a great day and let we share any happiness toward better life and relationships. Today I’m going to share a great article that touch my heart, and hopes that yours too. People have long forget what the true meaning of ‘giving away’ – let hope that we’ll remember it again. Have a great time reading. Love you all Daa…

What goes around, comes around.

One day a man saw an old lady, stranded on the side of the road, but even in the dim light of day, he could see she needed help. So he pulled up in front of her Mercedes and got out. His Pontiac was still sputtering when he approached her.

Even with the smile on his face, she was worried. No one had stopped to help for the last hour or so. Was he going to hurt her? He didn’t look safe; he looked poor and hungry.

He could see that she was frightened, standing out there in the cold. He knew how she felt. It was that chill which only fear can put in you.

He said, I’m here to help you, ma’am. Why don’t you wait in the car where it’s warm? By the way, my name is Bryan Anderson.’

Well, all she had was a flat tire, but for an old lady, that was bad enough. Bryan crawled under the car looking for a place to put the jack, skinning his knuckles a time or two. Soon he was able to change the tire. But he had to get dirty and his hands hurt.

As he was tightening up the lug nuts, she rolled down the window and began to talk to him. She told him that she was from St. Louis and was only just passing through. She couldn’t thank him enough for coming to her aid.

Bryan just smiled as he closed her trunk. The lady asked how much she owed him. Any amount would have been all right with her. She already imagined all the awful things that could have happened had he not stopped.

Bryan never thought twice about being paid.

This was not a job to him. This was helping someone in need, and God knows there were plenty, who had given him a hand in the past. He had lived his whole life that way, and it never occurred to him to act any other way.

He told her that if she really wanted to pay him back, the next time she saw someone who needed help, she could give that person the assistance they needed, and Bryan added, ‘And think of me.’

He waited until she started her car and drove off. It had been a cold and depressing day, but he felt good as he headed for home, disappearing into the twilight.

A few miles down the road the lady saw a small cafe. She went in to grab a bite to eat, and take the chill off before she made the last leg of her trip home. It was a dingy looking restaurant. Outside were two old gas pumps. The whole scene was unfamiliar to her. The waitress came over and brought a clean towel to wipe her wet hair. She had a sweet smile, one that even being on her feet the whole day couldn’t erase. The lady noticed the waitress was nearly eight months pregnant, but she never let the strain and aches change her attitude. The old lady wondered how someone who had so little could be so giving to a stranger. Then she remembered Bryan .

After the lady finished her meal, she paid with a hundred dollar bill. The waitress quickly went to get change for her hundred dollar bill, but the old lady had slipped right out the door. She was gone by the time the waitress came back. The waitress wondered where the lady could be. Then she noticed something written on the napkin.

There were tears in her eyes when she read what the lady wrote: ‘You don’t owe me anything. I have been there too. Somebody once helped me out, the way I’m helping you. If you really want to pay me back, here is what you do: Do not let this chain of love end with you.’

Under the napkin were four more $100 bills.

Well, there were tables to clear, sugar bowls to fill, and people to serve, but the waitress made it through another day. That night when she got home from work and climbed into bed, she was thinking about the money and what the lady had written. How could the lady have known how much she and her husband needed it? With the baby due next month, it was going to be hard….

She knew how worried her husband was, and as he lay sleeping next to her, she gave him a soft kiss and whispered soft and low, ‘Everything’s going to be all right.. I love you, Bryan Anderson.’

There is an old saying ‘What goes around comes around.’ Today I sent you this story, and I’m asking you to pass it on. Let this light shine.

Good friends are like stars….You don’t always see them, but you know they are always there.

WHAT GOES AROUND COMES AROUND – I love and appreciate every single of you!!

Health – Seven Most Dangerous : After Eating A Meal

I know that having fully loads with food make people go crazy over a good diet which sometimes they to get all over it.

It just that I want to remind everyone out there (including myself), never ever do participate with this seven deeds below for your own sake.

Trust me, you might reconsider before doing it.

Don’t smoke – Experiment from experts proves that smoking a cigarette after meal is comparable to smoking 10 cigarettes (chances of   cancer is higher).

Don’t eat fruits immediately – Immediately eating fruits after meals will cause stomach to be bloated with air. Therefore take fruit 1-2 hr after meal or 1hr before meal.

Don’t drink tea – Because tea leaves contain a high content of acid. This substance will cause the Protein content in the food we consume to be hardened thus difficult to digest.

Don’t loosen your belt – Loosening the belt after a meal will easily cause the intestine to be twisted & blocked.

Don’t bathe – Bathing will cause the increase of blood flow to the hands, legs & body thus the amount of blood around the stomach will therefore decrease.  This will weaken the digestive system in our stomach.

Don’t walk about – People always say that after a meal walk a hundred steps and you will live till 99. In actual fact this is not true.. Walking will cause the digestive system to be unable to absorb the nutrition from the food we intake.

Don’t sleep immediately – The food we intake will not be able to digest properly. Thus will lead to gastric & infection in our intestine.

Eat well, sleep well and do please watch over your meal behavior to make a better living :). Daa

Life Style – Less Rice Healthier Life.

We are what we eat – sound familiar isn’t?

Within today’s article I’m going to talk about the true nature of rice. This going to be short cause such fact definitely will make lot of us trill. Not to mention how we consume it each and every single day.

Human body was never meant to consume rice and yet this medieval act were done in such a need which I can put it as rice addiction. It’s been a great hurdle to change people who eat rice daily into less or zero habit. Our stomach don’t have enzymes to digest raw rice which in the same case of wheat and corn – they have to be cook first before we are able to consume it.

We are never meant to eat rice ( In my case, here in Malaysia – rice is one of the traditional food which needed in order of getting pure instant energy from it substance, carbohydrate.) So, what I really try to cope up with this articles is not to stop taking it eternity, but reduce it to the safest possible intake.

In some pat of Asia (including Malaysia), rice form up to 85%of the plate. Even if we take rice, always keep it to minimum. Remember, it’s only for our tongue not the body.Where actually, rice and other grains like wheat and corn are actually worse than sugar. Which there are many reasons:

Rice Becomes sugar – vast amount of it!!
This a fact where no nutritionist can deny; rice chemically no different from sugar itself. One bowl of cooked rice give the same calories equal of 10 teaspoons of sugar.This does not matter whether its white, brown or herbal. It is digested into sugar as quickly as half and hour which by then circulating into our vain. Further more, its nature of low in the rainbow of anti-oxidants give nothing to help our digesting system.

Things without the anti-oxidant rainbow which can be found in food which react as nutrient supply with a whole host of other proper assimilation and digestion such as fruit, are useless.

Rice has no fibre.
The fibre of kangkong fills up you long before your blood sugar spikes. This is because the fibre bulks and fills up our stomach. Since white rice has no fibre, we end eating lots of dense calorie food before we get filled up. Brown rice has more fibre but with the same amount of sugar – it just seem the same!!

Rice is tasteless-sugar sweet.
There is only so much that you can consumes rice at one sitting, which sometimes people can eat 2-3 bowl of it. How many sugar you can eat in exchange for 1bowl = 10 teaspoon sugar. Can you just imagine it – eating up till 20 – 30 teaspoon of sugar in one sitting, yikes.

Rice effect on our water consume level.
The more rice we eat, the less water we consume which there is no mechanism to prevent the overeating of rice. Rice, wheat and corn come hidden in our daily food menu. As rice is tasteless, it tend to end up in other foods mixing that substitute rice such flour, noodle and bread. We tend to eat the hidden form which still get digested into sugar.

It is still difficult to digest even after cook.
Can’t eat raw rice? Try eating half cooked rice. Contrary to popular belief, rice is very difficult to digest. Label under ‘Heavy Stuff’ sure giving problem to whom having problems with digestion. They who had problem might want to try skipping rice for several day, and will be amazed at how the problem fades like passed by wind.

Rice prevents the absorption of several vitamins and minerals.
Rice which taken in bulk will reduce the absorption system of vital nutrient like zinc, iron and vitamins B. If you are rice addict, going rice-less is not something easy as talking, but by reducing it using below techniques might help a bit

  • Eat less rice – reduce consume rate by half.
  • Have rice-less meal once awhile. (fishes are much more preferable)
  • Avoid salt shaker or ketchup. (it tent to make you want to consumes more rice)
  • Eat your dessert first. ( the fibre rich fruits will ‘bulk up’ thus makes you eat less rice instead of fruits)

To make our health much more better than current state, what being state above are things that should be known by ‘many’. This is not something as being sarcastic of trying to prove any industries. It is just for the mean of human health.

It’s your life. Decide what you wan t to eat! But eat less rice!

Finance – Learn The Basic Of Financial Investing.

Today I’m going to summarize on learning the basic of making an investment which relates with our finance status and profile. Investment is something crucial intact with finance management toward gaining our financial freedom or even making slightly more convenient money or income.

Before we go deep about financial investment, its better to know some of basic thing about it:

  1.  Risky investment (if it work) usually paid handsomely  than the safe one.
  2. Over long term, stock have historically outperformed all other investment, while hazardous if term with short time.
  3. Focus on earning determiner when talking about investment.
  4. Inflation may be the biggest threat to your long-term investment.
  5. A diversified portfolio is less risky rather than one that concentrated on single or few investment.

Such thing as the good, bad and ugly do exist when we talk about financial investment. People are being delusive by other (especially their agent) when it comes to what the reality of being involve directly toward finance investment perspectives.

Everything are sure extreme fact that need us to make further precocious act before making any decisions by jump into fund without getting sufficient info. Which state as below.

“The 1990s enjoyed the biggest bull market in U.S. history. During the decade the Dow more than quadrupled.

While stocks, as represented by the S&P 500, have not always performed so extraordinarily – compounding at a dazzling 15.3 percent annual rate for that time period – they have usually been the best performing asset class over time.

Since 1926, stocks have returned an annual average of 9.6 percent through 2008 — and that included the most recent horrendous bear market. Over the same period, government bonds returned 5.9 percent, and “cash,” the term used to describe Treasury bills and other short-term investments, has returned just 3.7 percent. (This according to the folks at Ibbotson Associates in Chicago.) In other words, if you’re investing for the long-term, stocks are the place to be.

But if you’re looking to invest money you may need in a year or two, the stock market can be downright dangerous. Look no further than the Dow’s 554-point drop – a 7.2 percent loss – on Oct. 27, 1997, and the 508-point drop on Oct. 19, 1987 – a harrowing 22.6 percent loss – to see what a difference a day can make.

Then there are those bloody bear markets, like 1973-74, when the Dow fell 45 percent. In 2008, the total stock market lost 37 percent.

To cite a severe example, if you had bought the stocks in the Dow Jones industrial average at their peak in early 1966, you wouldn’t have made any significant profit until mid-1983 – more than 17 years later. Even that was better than if you’d bought in the pre-crash peak of 1929. After that, it took until 1954 for the market to regain all it lost in the Depression. As for the market woes of the early 2000s, it would take more than five years using an historical average rate of return, for the Dow to return to its glory-day levels from its October 2002 low.

Bonds, of course, are another story. While they won’t give your portfolio the kind of kick that stocks will, nor are they likely to give it the same kind of thrashing. In 1994, the worst single year for bonds in recent history, intermediate-term government bonds (that is, Treasury securities with maturities of 7 to 10 years) fell just 1.8 percent. In the good year that immediately followed, they bounced back an impressive 14.4 percent. From 2000 through 2002, bonds outperformed stocks every year – a historic “three-peat” that hadn’t been seen in the modern investment era that began in 1929.

The 1990s enjoyed the biggest bull market in U.S. history. During the decade the Dow more than quadrupled.

While stocks, as represented by the S&P 500, have not always performed so extraordinarily – compounding at a dazzling 15.3 percent annual rate for that time period – they have usually been the best performing asset class over time.

Since 1926, stocks have returned an annual average of 9.6 percent through 2008 — and that included the most recent horrendous bear market. Over the same period, government bonds returned 5.9 percent, and “cash,” the term used to describe Treasury bills and other short-term investments, has returned just 3.7 percent. (This according to the folks at Ibbotson Associates in Chicago.) In other words, if you’re investing for the long-term, stocks are the place to be.

But if you’re looking to invest money you may need in a year or two, the stock market can be downright dangerous. Look no further than the Dow’s 554-point drop – a 7.2 percent loss – on Oct. 27, 1997, and the 508-point drop on Oct. 19, 1987 – a harrowing 22.6 percent loss – to see what a difference a day can make.

Then there are those bloody bear markets, like 1973-74, when the Dow fell 45 percent. In 2008, the total stock market lost 37 percent.

To cite a severe example, if you had bought the stocks in the Dow Jones industrial average at their peak in early 1966, you wouldn’t have made any significant profit until mid-1983 – more than 17 years later. Even that was better than if you’d bought in the pre-crash peak of 1929. After that, it took until 1954 for the market to regain all it lost in the Depression. As for the market woes of the early 2000s, it would take more than five years using an historical average rate of return, for the Dow to return to its glory-day levels from its October 2002 low.

Bonds, of course, are another story. While they won’t give your portfolio the kind of kick that stocks will, nor are they likely to give it the same kind of thrashing. In 1994, the worst single year for bonds in recent history, intermediate-term government bonds (that is, Treasury securities with maturities of 7 to 10 years) fell just 1.8 percent. In the good year that immediately followed, they bounced back an impressive 14.4 percent. From 2000 through 2002, bonds outperformed stocks every year – a historic “three-peat” that hadn’t been seen in the modern investment era that began in 1929.” – Online source.

Next, is to know what kind of investment platform are much more suitable with or margin and capital strength. Either to choose stock market, bonds, Mutual funds (which consists more than one fund serve by the mutual company) and currencies trading (Forex) which will be discuss as sole topic later on in the future.

Finally, the menace within financial investment which hidden behind the peril of evil aspects. Lot of peoples do assume that  market crash is the treat to investor, but the truth always tell that from among worse enemy is none other than inflation itself.

Let’s say the market takes a 30 percent dive over the next year. Every time you check your stocks or stock mutual funds, you’re going to feel the pain. Likewise, if interest rates rise, your bonds won’t let you forget it.

Nowhere on your bank or brokerage statement, however, are you likely to get a report on what inflation is doing to the real value of your holdings. If your money is stowed in a “safe” investment, like a low-yielding savings or money market account, you’ll never see how inflation is gobbling up virtually all of your return.

Here are some points to bear in mind:

– At an average annual growth rate of 9.6 percent a year, stocks will double your money about in a little more than seven years. Factor in inflation, which has historically run at about 3.1 percent annually, and it will take more than 10 years to double your actual buying power.

– Likewise, bonds, which have historically grown at roughly 5.9 percent annually, will double your money every 12 years. After inflation, however, it will take 26 years.

– If your money is in cash, you’ll have to wait 23 years for the nominal value of your account to double, assuming the cash earns the historical 3.1 percent annual return. But even your grandchildren won’t see the real value of your money double.

That’s why, whenever you add up your gains or losses for a given period of time, you have to add in the effects of inflation to understand how much further ahead or behind you really are.

p/s: financial investment are well said and done when you have a great agent and decent provider company which sometimes cause extra money, but hey – Why bother the extra ad up if we can make money or adding up income handsomely. That all from me for now, Daaaa