bookmark_borderMoney and Inflation

Inflation is crafty in his theft. He doesn’t take all the power of your money at once; he bleeds it slowly and steadily, counting on a general naiveté of money, banking, and financial markets to prevent the call for his head. Inflation hides his theft in a snowstorm of official-looking reports and statistics.

Inflation is egalitarian in his theft. Whether a man has 10 dollars or 10 million dollars, he’ll take six cents out of each dollar this year. He taxes each man in direct proportion to the amount of money he holds.

In distributing that money, however, inflation is the lowest type of thief. He takes the 60 cents from the poor man and the 600,000 dollars from the rich man and gives it all to the rich man less a few pennies for administrative expenses. Even when the rich man pays the wages of the poor man, inflation has again stolen a little of its value by the time poor man gets his hands on it.

Who is inflation and where did he come from? In times gone by, inflation was born on a printing press and in the counting houses of kings. Today, with just a stroke of a pen and the clicking of a computer keyboard in a central bank he springs to life.

In simplest terms, inflation is too much money chasing too few goods. In more technical terms, inflation is the result of a total money supply that has become undocked from the total goods and services produced. He owes his entire existence to money masters who have convinced themselves that the process of moving money from hand to hand and around the world is too messy to happen without their meddling.

Who are these money masters? They are lonely, twisted practitioners of the dismal science of economics, confident in their ability to succeed in a task which is beyond the capability of any group of men. With religious fervor they hold tight to their beliefs despite thousands of years of failure, and each quarter proudly proclaim, “this time, we got it right.”

But, it is only by chance that they actually make a correct decision. You see, to truly succeed, they must divine what every man, woman, child, business, corporation, investor, fund, speculator, government, nation, group, and natural force will do today, tomorrow, next week, and on into the future. By its very definition this is an impossible task, but prognostication is only part of the job.

Once the money masters compile their assumptions about assumptions, they must attempt to guide their ship down a narrow channel bounded on one side by confidence in the money they create and destroy, and on the other side by investments they have made in the infamously ravenous governments of the world. Any errors in navigation will take months to detect and years to correct.

If the money masters of the central bank create money faster than the rate of growth of domestic production, prices for goods and services will rise and that money will flow to other nations to buy their less expensive goods. Deluged with a surplus of that currency, foreign monetary exchanges discount it, which inflates the prices of foreign goods in terms of that currency.

The impossible task of predicting how many computers will be sold, how many houses will be built, and how fruitful the farmer’s field will be is further complicated by a government that spends more than it takes in. If the government issues more bonds than the money masters predicted, the central bank has to purchase those excess bonds to protect its previous investments. The supposedly omniscient money masters have to create more money than they intended to pay for them.

If the poor man gets a raise next year, he may, again, be able to afford the goods he could earlier this year. If not, his standard of living is continually decreased. Meanwhile, the government spends the newly-created money with wealthier corporations and individuals, giving them the benefit of using the money before prices become inflated.

bookmark_borderEffective Money Management

Master your inner thoughts and spoken words

Your inner thoughts are the start of everything that you create. What you focus on expands. Negative, fear based thoughts will manifest themselves into reality if you allow them to grow in your mind. You must focus on the things that you want so that it expands and manifests in your life. Your words are also important as negative words such as “I can’t afford it” or “I will never be rich” will send out the wrong message. The universe only responds to thoughts and words of abundance. From this moment forward stop yourself the second you think or say a negative word and immediately replace it with something positive. You must believe that you can be rich and live a life of abundance. If you have the mental capacity to read this article then it is your duty to get rich so that you can help those that are less fortunate than yourself.

Create a spending plan

A spending plan specifies exactly how you will spend and save your money. I prefer not to call it budgeting as this implies constraint and scarcity of choices. A spending plan on the other hand suggests mastery and control of your finances. It is vital to track every cent that you spend. The idea is to create a list of spending priorities that is aligned to what is most important to you. There is one thing that is non-negotiable. You may not spend more than your earnings and at least 10% of your income must be saved so that you can build capital for investment. You should have a short-term plan that covers the period of a month and a long-term plan that is for a year. This is because certain expenses like home improvements may need longer planning periods. Long term home improvements can also be managed by taking out a loan and paying a fixed monthly amount that fits in with your plan.

Simplify your lifestyle

You can save and live a life with lesser stress if you just simplify. An expensive car and dining out at popular restaurants is not a necessity. Don’t drink coffee at Starbucks or spend money on fancy branded clothing. Once you are earning your desired working income then you can treat yourself to luxuries but if you are struggling to save then really think hard about your lifestyle and spending habits.

Pay off your bad debt

Credit card debt is bad if you pay just the minimum amount every month. If you have a large credit card bill then do your best to pay if off quickly.This is because the high interest will keep you in debt for many years to come and will result in you paying more than the original amount. Sometimes it is necessary to take out a loan to take care of an emergency or a home improvement project. This is not avoidable but get the best interest rate possible and pay more than the required monthly amount so that the loan is disposed off quickly.

Create a balance sheet and income statement

This might sound like a scary proposition and you may think that these financial reports are just for businesses. This is not true, every person needs these drawn up so that they know what their net worth is. A person may be earning a really good income but can still have a very low net worth. Net worth is the total of all your assets such as cash, investments, properties and cars minus your liabilities such as loans. A person can have many assets but may still be in big trouble if they can’t pay back their liabilities. The ideal situation is to have assets that you own completely and liabilities that are not more than 40% of the value of your assets.

Financial Goals

If you have no financial goals then you have nothing to aim for. There is no point in saying you want to get rich. You have to specify the exact amount and the exact date you want it. What is the ideal working income that you want? Write down the exact amount then double it to take into account taxes. What is the exact amount of money that you wish to have in your bank account in five years time? What would you like your net worth to be in five years time? Write down all these figures and look at them everyday before you go to sleep and again when you awaken in the morning. This gives your subconscious mind something to aim for and manifest into your life.

Learn to invest

The interest your money earns in banks or financial institutions will never make you rich. It is important to earn more than 20% interest every year on your money. Financial institutions will never be able to do this for an individual. It is up to each person to learn the skills to invest in the stock market and residential property market. This is a long-term commitment which requires diligent study and application. You must read the books, attend the seminars and listen to a good mentor so that you can acquire the required knowledge. Once you have the knowledge then massive action and discipline is needed to execute the investment strategies. The work is hard but it will be worth it if you can retire early and not have to worry about whether you can afford the lifestyle you want.

bookmark_borderMyth of Saving Money

“How can my savings be losing value? I put them in a bank, and they are earning interest every year!” Well, this is true, but when inflation is taken account of, they are actually losing money. Inflation is easy to understand if you look back 50 years. Back in the 1960’s, you may have been able to buy a house with just a few thousand pounds – but what can you do nowadays with that much? Not an awful lot, because of inflation. The cost of everything has increased. Let’s say the rate of inflation is 10% each year, but your bank pays 8% interest on the money. If you had invested that few thousand, it would be earning interest, but since the cost of everything was increasing too, the actual value of that money in the bank – what it could buy you – was decreasing at the rate of 2% per year (10% inflation, minus 8% interest). Therefore, simply leaving money in the bank is not really helping yourself financially, at all.

As of today, the inflation rate in the UK is about 4-5%, while even the best basic savings account earn about 2% interest, with most earning only around 0.5%. It should be painfully obvious to you that if you are only earning 2% interest on your savings when the cost of things is increasing at twice that rate, you are losing out.

No, of course not. Not all of them anyway. However, if you wish to build equity and wealth – that is, to become richer – then simply putting money in a bank will not do it. Even if you work hard all your life, you could only ever hope to break even. This is the myth of saving. However, savings should always be kept around as a backup – the key is to diversify your money. If you had all of your savings in the bank, and the bank collapsed – as was the case with the recent collapse of the bank of Scotland and loss of millions of pounds – then all your money will be gone. If you split your saving up between 10 different banks, you would be covering your bases, but still only earning a basic rate of interest. The best thing to do is keep some in savings, keep some in one form of investment, and some in another etc.

The key to building worth is to invest in something that earns a higher rate of return than inflation. If inflation is 4.5%, you need to earn at least a guaranteed 5% to make that money work for you, and to build your wealth.

“But investing is risky, isn’t it?” Yes, and.. no. The rate of return that you can get from your money will depend entirely upon the risks that you take with it. If you are willing to risk the money on something that has a high chance of losing value, you may get a rate of return of 15%, or you may actually get a negative return of -5%. If you just want a safe 5% investment, there’s very little chance it won’t give that in return. You choose the level of risk you are willing to take, and you reap the rewards. Either way, you need to invest instead of simply saving.

bookmark_borderExchange Investing Money

The currencies exchange rate is the gain, and in exchange investing money slightest movement in the currency can fetch these companies thousands and thousands of dollars as they invest in bulk.

Forex trading is somewhat different than equity trading, and even individuals can attempt it, but exchange investing money is mostly tried by HNI (High net worth individuals) as it requires one to deposit a heavy sum. In the same D-mat account one needs to deposit extra and your account will be opened for exchange investing money.

There is a simple rule: Exchange of currencies from one hand to another at an ongoing price during the market hours. Exchange investing money is all about investing money in foreign currencies. One makes a profit by selling the currency at a higher price than the buying price. The economy of the country, its GDP, inflation everything counts in the rise of its currency. If US dollar slides because of any reason it is likely that the foreign currency will gain ground.

Exchange investing money is a highly liquid investing and one gets to trade 24 hrs a day. So now it is pretty much clear that money used to invest in money is called Forex or foreign exchange. One can determine currency moves through charts and graphs as well. Make sure to read about currency frauds and scams before venturing into this field.

The bottom line: exchange investing money is a very lucrative field, but only when you focus all your energy there. If you don’t know what you’re doing, this can be devastating to your portfolio.

If you do plan on investing with this field, take your time, learn the ropes, and make sure you know what you’re doing before getting in here. Once you are financially educated, you can start investing, and watch yourself get rich from exchange investing money.

bookmark_borderMoney Resolution

The reality is that many people do not have enough money left over after paying their regular bills to comfortably attain many of the objectives and acquisitions that they desire. It may be almost impossible for you to live out your lofty dreams, solely on the proceeds of a regular paycheck.

Therefore, a critical part of your game plan to have a better financial year is to look at options to increase your earning ability. Without additional sources of income, you will be challenged in your quest to manage your budget, avoid burdensome debt, and save towards building your wealth.

Although they know that they need to improve their cash inflows, a lot of people find it difficult to come up with practical ideas to make more money. Others are afraid of doing something outside of their nine-to-five jobs. Let’s look at some simple ways in which you can generate extra cash.

Imagine how hard it would be to win a soccer match without knowing where the goal was located! Similarly, if you want to score on the financial field, you need to be clear about your money targets. So, your first step is to determine exactly how much more money you need to earn.

A detailed budget worksheet can help you to calculate the extra amount of cash that will be required to cover all your monthly requirements and save for additional demands. To make this process easier, you can download a ready-made budget form or app online.

List both your actual and desired costs in your budget. After adding up all your projected costs for a month and subtracting this figure from your income, you will arrive at a shortfall amount. If you were able to earn this much more each month, then you would be able to live your desired lifestyle.

Once you know by how much you need to increase your earnings, your next step is to convert this figure into a smaller amount that may seem more likely to be attained. When faced with a large deficit, you may get ‘brain freeze’ rendering you incapable of thinking of ways to earn extra money.

For example, if your budget reveals that you need another $900 per month to accomplish your objectives, break down this target amount into $225 per week or $30 every day. It will be easier for you to think of earning options if you focus on the smaller requirement than the big sum.

The next step is to convert the required dollar amount into the number of units that you have to sell to attain your target. To earn $30 per day, you may need to have five customers who provide you with $6 profit; or you could sell ten items, each supplying you with a profit of $3.

When trying to find realistic methods of making money, it is critical to be aware of the number of units you need to sell or customers to be serviced, and the profit you need to attain. Consider your options to ensure that you can reasonably earn your target in the time that you may have available.

bookmark_borderMoney Market Accounts

  • Window Shop- Banks are always trying to outdo each other for new business, interest rates and terms will vary from bank to bank, as will the bonuses that they will offer. Look at as many offers as you can and pick the best. Credit Unions are also worth looking into, and quite often they offer the best rates.
  • Invest Big- While interest rates for money market accounts are higher than saving accounts, these are still considered conservative investments, if you want to earn a lot of interest, you need to invest a lot of money. Banks and institutions that offer the accounts, usually require large minimum deposits.
  • Link your money market account to your checking account- Maybe not a great idea for your money making account, but this is a good safeguard against accidental overdrafts. Banks do charge huge overdraft fees.
  • Avoid withdrawals- The whole point of a money market account is to earn interest; if you withdraw frequently, it sort of defeats the purpose. Banks also typically limit the number of withdrawals you can make to about six per month. Should you exceed that, there will be stiff penalties charged.
  • Monitor your earnings- While it’s best to leave the money alone, it is also a good idea to keep an eye of how much it is earning, and whether or not you are getting the yields you expected.

bookmark_borderFind Mass Money That Could Be Yours

In the search bar write “mass money” or “unclaimed property” and the state you live in at present. A search box will appear on the screen. Fill in your name, spell it as it appears on official documents, ID cards, passports, driving license etc. and your address.

Follow the directions on the screen to submit your claim. Fill in all the required information.

Attach all the necessary documents in order to prove you are the rightful owner of what is being claimed and send. This can be done online or you can have all the papers printed and send the forms by mail to the specified address.

It is advisable to repeat STEP 1 and STEP 2 for every state you have ever lived in or stayed temporarily. You can even go back and extend your search for a deceased member of your family. The progress of your claim can be followed up, as it may take about a couple of months for completion. The documents which are usually required are: proof of address, a copy of birth or marriage certificate, utility bills, tax records or other legal papers, depending on the case.

There is usually no cost but if there is one you do not need to pay until you are notified that you are the rightful owner of the claim. Furthermore, it is important to remember to collect the money within the stated time. Otherwise, it may end up unclaimed again and you will have to repeat the whole procedure.

bookmark_borderMoney Transfer Threatens

Money laundering

Sometimes scams are initiated with an email or a phone call, or even an advertisement in the newspaper, offering commission for work with minimal risk. All that is required from the prospect is a laptop, an internet connection and a few hours every week. It might be pitched like an opportunity to work from home or flexible working.

You will be asked to either deposit money to receive initial working kit or receive a hefty payment into your bank account, then redistribute the money overseas (laundering). Whilst the fraudsters may convince you that money is being used for legitimate purposes such as trading shares abroad, or helping a charity distribute funds – you need to be vigilant. Or you could find yourself unwittingly funding criminals or converting someone’s black money into legitimate funds. Further, once you are lured into this by commission, scammers may also try to access your bank account, using the details you have given them.

Don’t respond to such advertisements or give your bank details to strangers. Ever.

Gift card/phishing

This scam usually happens during the holiday season. Consumers receive special promotion or gift card emails that look like it comes directly from an authorised retailer. Unfortunately, the links to the special promotion lead to a replica of the real website. The fake site swarms with malware, virus and phishing worms of all kinds that invade your gadgets to retrieve your financial credentials.

Look out for a small security lock icon at the bottom of your browser or next to the HTTPS in the browser bar when accessing any profiles, user accounts or online forms that ask you for financial information.

Online shopping

There are many fake companies online that sell drugs without legitimate prescriptions, or weight loss products. If an offer seems too cheap/good to be true, it will most definitely be a fraud. So no matter what the seller says, never share your credit card details for payment. Don’t take chances on your health and wealth by sending money to a stranger without proper validation and research.

Be vigilant, check reviews and avoid payments by any means. In fact COD might be better than giving your credit card details on their website.

bookmark_borderSaving Money For Children

Here are some easy tips to help you begin saving money for your children’s futures.

  • Open a children’s savings account as soon as possible. Most of the high street banks and building societies offer these and at the time of writing offer interest rates as high as 5% gross with instant access. This means any money you do save isn’t sat around doing nothing, it’s earning more money!
  • When a child’s birthday or Christmas comes around, ask friends and family to donate money rather than buy gifts. Of course, this doesn’t have to mean your child gets no gifts only money. Maybe you could ask half of your friends and family to donate and the other half to buy gifts? Or maybe you could ask them all to donate and you purchase gifts on their behalf, saving a portion of the money to be added to your child’s bank account? This may sound a little cruel, but in the long run your child will benefit and really, how many toys do they need?
  • Get your child a piggy bank. Adding your spare coppers and small change to a piggy bank will make very little difference to your perception of how much money you have and can really add up very quickly. Having a fun novelty piggy bank can encourage your child to start adding any pocket money or small change they are given too. When it comes to cashing your piggy bank funds up and paying them into their bank account, please, please don’t be lazy. Don’t use one of the automatic counting machines available at most supermarkets these days. They may be convenient but they make a profit by taking a percentage of the money you pay in, usually around the 10% mark, which really is astronomical. Do you really want to be paying 10 pence in every pound you save just to save you having to count? Grab some money bags from your bank and do it the old fashioned way.

bookmark_borderWays To Manage Your Loans

Unless you have opted for an inheritance loan company and have taken loan in advance (against the inheritance you are going to be blessed with, in a few days), managing the debts can be quite difficult. But worry not – here are some of the tips I would like to give you to balance your life, even with all those debts on your head:

  • Don’t panic: The first, and the most important thing, that you need to remember is not to be panicked at all. No matter what happens or how bad the times turn, remember that things can be better, if you plan them in proper ways. Keep a backup plan ready for every single step you take, with respect to the debts you have on your shoulders.
  • Don’t spend all the money at once: Just because you are going to get the inheritance in a few days does not mean you can spend all the debt you have taken. First of all, you haven’t received the inheritance yet and the money that you have taken in advance is nothing more than a debt at the moment. Therefore, be careful before spending all the money that you have borrowed.
  • Save first to have sufficient funds to return the money: Instead of spending first, save first to have sufficient money to return in future. Your savings should be so strong that you can repay the debts, even if you don’t get the inherited amount in your hands.
  • Make sure you WOULD get the inheritance: There are certain ways in which you can find out about the truth behind the will of your deceased parents. Make sure you are going to get the inheritance, before you spend the money completely. What if you don’t get it and you have to return the debt on your own?
  • Remember to spend wisely: Instead of spending money without thinking, make a plan. Find out the reason behind why you took the loan. Spend money according to the plan, instead of spending it without a thought.