4 Things the Financial Crisis Taught Me

What the Financial Crisis Taught Me

The great thing about life is that we get to learn from our mistakes. We can learn from the mistakes of others or learn from our own mistakes. Either way, there is a great deal to learn.

Millions of people around the country are beginning to look back and say, “…” Some people are wishing that they would have started a savings account, done better expense tracking or retirement account while they still had a job. Other people are wishing that they hadn’t put so much debt into their home. There is a great deal to learn from the recent financial crisis.

1. It’s not all about investing. Americans, in general, got out of the habit of savings and into the habit of making an investment instead. For almost three decades, we saw better returns coming from the stock than we did at the bank. Instead of putting a reasonable amount of money aside for a rainy day, people bought stocks instead. Financial freedom isn’t all about investing.

2. Less is more. When I was dancing, my teacher would always say, “Less is more girls.” She was trying to get us to realize that it took less force to land a triple pirouette. This adage can be used in the financial realm as well. When it comes to investing, less is more. Simplistic investment strategies will get you farther ahead than complex ones.

3. Believe that you may be wrong. Believe it or not, you aren’t right 100 percent of the time. Unfortunately, there are people that believe that they are right 150 percent of the time. This mentality is all wrong in the financial realm. The most important thing you can do to stay on top of your investments is to constantly reassess your position and admit that you may have been wrong at one time or another.

4. When it comes to market upswings or downturns, be cautious. If the market starts to slow down, don’t rush out and sell all of your stocks. If the market picks up a bit, don’t buy too much stock. Keep a realistic picture and goal in your mind at all times.

Dealing with financial matters and the stock market can be tricky. If everyone understood these principles the way they should, our country wouldn’t be in such a financial disaster. I guess its time to start getting smarter with my credit cards!

5 Financial Lessons from the Wealthy

Financial Lessons from the Wealthy

What defines someone as being wealth? Does it have to do with how much money they have in the bank? Does it have to do with the gross amount of their investments? When you hear the term “millionaire,” do you think it is something that can be easily achieved?

The fact of the matter is that most of us can become millionaires if we put our minds to it. The main reason why many of us aren’t millionaires is because we don’t handle our finances correctly. Take these financial lessons fro the wealthy into consideration if you want to become one of them.

1. More charitable donations. Wealthy people are able to give away more money than the average person. These charitable donations are tax-deductible. Instead of investing all of their money, they give it away. Not only are they paying their success forward, but they can deduct each of these charitable donations.

2. Own businesses. Millionaires are much more likely to own their own business than a non-millionaire. Twelve percent of American households own all or part of a privately held business. The key is own several businesses. Don’t have all of your life savings tied up in one company. Keep your options diversified.

3. Strategically borrow. Wealthy people know how to borrow. They borrow strategically. A recent study showed that the most wealthy 10 percent of the population are 50 percent less likely to have outstanding credit card debt. Figure out how to strategically borrow to become wealthy yourself.

4. Affordable cars. Millionaires and other wealthy individuals are less likely to invest their money in exotic cars. Instead, they put their investments into their home or other investments. Not every wealthy person lives an assuming lifestyle. Cars depreciate in value so they don’t pour their money into it.

5. Homeowners and investment property owners. Most wealthy people own their own home and/or an investment property as well. Homes are a great way to make your money grow. Because of this, wealthy people invest their money into it.

The average American does have the potential to become wealthy or even a millionaire. The key is to learn about money management. Follow these simple methods to becoming more financially savvy.

Your Personal Guide to Banking In Under 5 Minutes

Your Personal Guide to Banking…In Under 5 Minutes

Banks and other financial institutions make the majority of their profit from those small, little fees they charge you. These fees can really add up. By the end of the year, you’d be surprised to see how much you have ‘paid’ the bank. You can avoid these fees by following this personal guide to banking.

The most important thing to do is to choose the right bank. Most banks are insured by the Federal Deposit Insurance Corporation. Most credit unions are insured by the National Credit Union Association. Make sure that your money will be insured by either of these organizations before choosing a bank.

The next step is opening an account. A checking account is one of the most basic services to choose from. Many checking accounts are available for free without a minimum balance. Choose an account that has low fees. Here are some insider tips to opening the right account.
-Get a detailed description of every type of account. This description should include any monthly fees or penalties.
-Don’t let your account go into overdraft. Overdraft fees are larger than other fees. The fee for writing a non-sufficient-fund check is $30. Avoid one or more of these fees by not going into overdraft.
-Overdraft protection. Choose a bank and account that offers overdraft protection. You can get this service free-of-charge so don’t pay for it.
-Be an informed member or customer. Make sure you know when your deposits will be ready to avoid any overdraft situations. Be aware of any delays that might cause your deposit to take extra time to be available.

Be careful with your debit or credit card. Choose a card with little or no fees. Make sure you don’t incur fees when you use your card at an ATM that is owned by another bank. You’ll get charged by your bank and the other bank. Make sure you won’t get charged an additional fee if you use your card as a debit card.

It’s smart to add a savings account to your primary account. Choose a savings account that has the highest-interest rate. You’re financial institution will pay you for leaving your money in the savings account. You’ll want to make sure you take advantage of this dividend.

There are many things to know when choosing which financial institution to bank with. Choose the bank or credit union with the most convenient services which include: direct deposit, online banking, automatic bill pay, etc. It is also important to choose a bank that has the lowest fees. Here is some financial advice, don’t get caught paying your financial institution any more than you have to.

Citigroup The Giant: Is this a good thing or a bad thing?

Citigroup The Giant: Is this a good thing or a bad thing?

Citigroup’s chief Chuck Prince warned that things at his bank would get “complicated” if anything fell out of place within the economy. Well, things did fall out of place. So, what does that mean for Citigroup?

In past years, Citigroup fought against other huge bank corporations to be the biggest. How were they competing? Each was trying to see if it could get larger by offering more loans. These loans were issued to risky consumers. Risky consumers equal risky loans. Risky loans ended up attacking smaller banks. What has our economy been left with? Huge banking corporations that are way too big,

Citigroup has tried and failed to join up with smaller banks in effort to boost deposits and make both sides more financially sound. Citigroup hasn’t given up. Instead, it continues to seek for smaller banks to team up with. However, Citigroup has missed the boat. September was the perfect time to join alliances.

The list of ‘cheap’ banks has drastically dwindled. Citigroup is already the third-largest American bank. They want to be bigger and better. Buying several smaller banks won’t work as well as teaming up with a larger-small bank.

Citigroup faces three major challenges.
#1-Economists wonder whether the $25 billion infusion will be enough to get Citigroup out of its slump.
#2-Credit cards losses will continue as the weakened economy tried to rebuild. Credit cards provide 23 percent of Citigroup’s net income.
#3-Citigroup has over $70 billion in risky loans. This makes a shaky and troubled loan portfolio for the banking giant.

If Citigroup wants to stay afloat it needs to seek help from the government. Putting together last-minute acquisitions is not going to solve any of Citigroup’s problems. The bailout plan may be the only way for the company to start rebuilding its portfolio and its reputation.

Living On Credit

Living On Credit

It is no surprise that the majority of Americans have been living on credit for quite some time. Credit has been a vital resource for the U.S. economy for decades. Has the recent credit crisis caused Americans to think twice about the amount of credit they are living on? Absolutely.

In the past several months, American consumers have stopped buying as many frivolous items and miscellaneous products. Instead, these consumers have started buying more bread, milk and eggs. Isn’t it interesting that a country who depending so heavily on credit cards is now pushing them aside?

Credit cards have been and will continue to be an important part of the U.S. economy. Credit cards used to be used to buy discretionary products. These products include appliances, furniture, electronics, jewelry and more. Recently, credit cards have been used to buy necessities like gas and groceries.

Americans have even paid their credit card bills before they pay their mortgages, car loans, etc. The credit card market has become more important than the housing market. We know this to be true because Americans have placed credit cards at a higher priority than mortgages.

Americans have started to even neglect credit card payments. The total number of credit card delinquencies has increased dramatically in the past few months. It is getting harder and harder for American families to put food on the table. The first thing to ignore has been credit card payments.

Americans have been living on credit for years now. In the past, credit has been used for discretionary purposes. Now, credit is being used to buy necessities. However, the total amount of new credit that is being used has been decreased significantly. The recent credit crisis has caused people to think twice about incurring more debt. It certainly will be interesting to see the new phase in the American economy.

Using Credit To Stay Afloat

Using Credit To Stay Afloat

Recently, there has been a dangerous trend occurring in the United States. Credit counselors started noticing quite awhile ago that people began paying their credit card bills before or instead of paying their mortgages. These people refuse to stop using their credit cards. To these people, credit cards offer their only cash flow.

This dangerous trend has spread nationwide. The trend suggests that, for the most part, borrowers have given up on paying their mortgages. Instead, these people are focused on squeezing by with a little help from credit cards. A year ago, economists predicts that if the trend didn’t reverse itself, it would drag the entire economy down.

Where they right or were they right? The cost of living has gone up. The cost of credit and the availability of credit has gone down. Naturally, more people are living off of credit. Consumers are living off of credit cards more now than ever before. Instead of just using credit cards to pay for discretionary and luxury items, consumers are using plastic to pay for necessities.

America has gotten itself in a nasty cycle. Consumers can’t stop using credit cards because the price of everything has increased. However, it is the excessive use of credit cards that has gotten our economy where it is today.

People are using their credit cards more when they get laid-off or experience any other source of financial difficulty instead of cutting their spending. The current U.S. economy is acting like a peer-pressured teenager. People can’t afford their mortgages. So, what do they do? Ignore the mortgage payment and keep using their credit card to make it appear like everything is going fine. This is not good money management.

Credit cards have become a necessary evil in today’s society. Credit cards are being used to stay afloat financially. In order to get out of this financial crisis, Americans need to get back to the point where we were saving more and spending less.