For a summary of this book please click on the link below, I encourage you to read through it and also if you can go out and buy this book and read it a couple of times, it can help people from all walks of life.
Here is the link to the summary:
Thursday, October 28, 2010
Personal Money Management
This post is about my favourite investment book called The Wealthy Barber. This books talks about different investment and saving strategies that can really help the average person recognize their potential to create and keep wealth. I highly encourage any person to go out and buy this book it talks about pretty much everything that you would want to know and that you would want to do to become more successful and to get the most out of the money that you are already making.
Investing in Treasury Bills
Treasury bills are one of the most secure types of investments that you can buy. These are fully guaranteed by the Canadian government and offer attractive interest rates. These investments usually have a minimum price of $5000 and last from 3 months to one year. The money that is invested is locked in for this period of time and is reimbursed plus interest at the end of the term. These can be sold at any time but just like bonds they do require an investment of money that is not accessible until they are sold or until they end of the investment. These investments can be bought through any large financial institution and are a great recommendation for anyone who has the capital.
If you have any questions about T-Bills feel free to comment and I will expand on the topic and answer them to the best of my ability.
How I Managed To Get Through College Without Debt
I put myself through college by working and with scholarships and managed to stay debt free. Before school started I took out a small loan for my first car, so I could get to school. I paid it off in just under a year. For me debt free has meant that I'm just careful with my money. I don't buy anything until I can pay in cash. But the thing is that I can still get almost everything I need right away. I'm never really stressed about my money. I'm glad that I don't have debt.
Money Saving Tips
Use Ebates for up to 25% cash back.
Combine your cable, internet and telephone service.
Slow down your internet service.
Improve your credit score.
Send away for and follow up on rebates.
Buy Your Next Cell Phone from Amazon.
Buy a refurbished Mac.
Convert to a gas water heater.
Request a reduction in the interest rate for your home equity line of credit.
Request a reduction in the interest rate on your credit cards.
Refinance you mortgage.
Get rid of Private Mortgage Insurance.
Get your books from the library.
Get DVDs from the library.
Get DVDs from Red Box.
Read magazines at the library or online.
Subscribe to magazines that are must reads.
Buy your car over the internet.
Request a discount on trash service.
Never pay checking account fees.
Get a rewards card.
Don’t pay interest on credit cards.
Take advantage of 0% credit card offers.
Replace incandescent bulbs with compact fluorescent light (CFLs) bulbs.
Drive your car longer.
Pay your life insurance annually.
Pay car insurance semi-annually.
Increase insurance deductibles.
Think before submitting an insurance claim.
Get rid of your home telephone.
Consider VOiP telephone service.
Shut vents in unused rooms.
Eliminate some cable service.
Agree to limit gift giving.
Get healthy.
Cancel the health club membership.
Pass on extended warranties.
Take your lunch to work one more day a week than you do now.
Buy low cost mutual funds.
Take advantage of employer 401(k) matches.
Use flexible spending accounts.
Get tires from Costco or other wholesale clubs.
Keep tires properly inflated.
Stop smoking.
Drink less alcohol.
Buy term life insurance.
Buy generic over-the-counter medicines.
Get organized and avoid missed payments.
Buy online when it saves you money.
Consider MythTV PVR in replace of TiVo type services.
Use Open Source software when possible.
Check the insulation in your home.
Buy energy efficient appliances.
Stay married.
For full explanation of these money saving tips follow this link to the full website:
Sunday, October 24, 2010
Investing in Stocks
There are two basic types of stocks that I will be talking about in this segment:
Preferred Stocks and Common Stocks
These are both bought and traded in the same way however they are different in a couple of fairly significant ways. First off preferred stock is a much less risky investment than common stocks. The reason for this is that they are guaranteed to be paid dividends from the company every year and second they are protected by being closer to the actual company, what this means is that if the company where to go under the holder of preferred stocks would be paid back what they could of their original investment. Basically they are one tear above the common shares meaning that they get their share of the pie before any money is paid out to common shares. This is an important safety feature for the investor because it gives them more reassurance in their investment as well as more security. Now going back to the start of the paragraph i would like to explain what dividends are, these are payments that stakeholders of a company receive from a company usually once per year. This money comes from the profit made by the company in the past year. The key difference between common stock and preferred stock is that companies are required to give these dividends to preferred stock holders and not to common stock holders. This essentially creates another level of income from the investment, which is always a positive. Both of these stocks are traded on stock exchanges around the world and money is usually made on these investment from buying the stock and allowing it to raise up. From there the investor can sell the stock at a higher price for a profit.
Stocks are the most volitile investment that you can make but they usually give the largest return, once again going back to the golden rule (the larger the risk the larger the return). As stated before the preferred stock is more protected and therefore the prices of these stocks fluctuate much less than common stock making their return smaller.
Hopefully this information is use full to everyone who is trying to get a better understanding of investing. If any readers have questions i encourage that you post a comment and i will get back to you as soon as possible.
Friday, October 22, 2010
Top Ten Money Saving Tips
Save Money Tip 1
- Spend Less. This is not over simplifying the best way to save money! It is essential if you are serious about being a long term money saver and being able to save money every day. Review what you spend and look at ways you can save money. Consider making telephone calls for instance only at off-peak times. Do you really need to have newspapers and magazines delivered? Can you do without those coffees you buy at break time everyday - would a flask of coffee taken to work save you money? What about using the public lending library instead of buying books or music CDs? Once you start looking for little ways to save money and spend less you will quickly become an expert and really save money. Save Money Tip One
- Establish a personal budget. This is essential for families and individuals and can be the fastest way to save money. You will instantly see your incomings and outgoings once you create your budget. You will not be able to save money unless you know how much money you have coming in, and how much money you have going out. Once you have prepared a budget of incoming money and outgoing money, you WILL be able to identify areas where you can save. It is MUCH more difficult to save money over a long period of time (the rest of your life?) without a budget. Save Money Tip Two
- Bulk is good. Think about shopping and buying in bulk. Save money grocery shopping by planning meals in advance and bulk-buying. You can also save money by cooking in bulk. This is a real way you can save money with little preparation and almost no extra outlay. Always purchase generics when you can. Prepared foods and convenience foods will always be much more expensive than the generic ingredients needed to make the food. Preparing food in bulk and in advance also gives you the opportunity to plan ahead and be more accurate in your budget. Save Money by buying in bulk whenever you can. One thing to be aware of when buying in bulk is to be sure that any product you buy will get used before it goes bad - you won't save money if you have to throw stuff away. Buying in bulk is not only a good way to save money it is also a good strategy for coping with and surviving emergencies. Save Money Tip Three
- Make sure a sale is a sale. By this I mean do your price research before you commit to making an expensive purchase in a retailers money-off sale. You have to be sure the sale really is a sale and not a creative marketing strategy of the store to encourage you to spend your money without thinking. Once you have researched the true price of a product (any product) you are in a good position to take advantage of a sale, special offer or discount and really save money. "Buy one get one free", "50% off", and "Huge Discount" will only help you save money if the actual price you pay is lower than you would pay somewhere else for exactly the same product. Save Money Tip Four
- Buy used. Sure, we all like to buy new. But there are huge money savings to be made in buying used. Typically cars lose one-third of their value in the first 24 months from new. Why not buy a car 24 months old? Other items such as clothes can be worth even less just the day after new. Look for ways to buy "as good as new" items and save money. Typical products you might consider buying used to save money include: cars, clothes, electrical goods, garden items... tools and sheds, household items... pots and pans, the list of used goods where you can save money is endless. Save Money Tip Five
- Don't carry excessive debt. Some debt in our lives may be essential. We may need a mortgage to purchase a home, we may need to use our credit card to make purchases until pay-day, but your aim to save money should be to have as little debt as possible. Credit Card deb is typically the most expensive debt we may carry. You will be able to save money every month if you make it an absolute rule to pay off your outstanding balance every month. If you can have the discipline to do this you will save money by effectively having no debt, and thus no interest charge on your credit card(s). Save Money Tip Six
- Save Money. No, I mean really save some money. Each week or each month get into the habit of putting an amount, however small into your savings. You could start by saving a very small fixed amount each time and then move to putting in larger amounts once you begin to save money from your other money saving strategies. You will find that by saving money on a regular basis you will quickly build up a store of reserve money and also feel motivated to save more. The hardest part is to take the first step and start saving money - so START TODAY and save some money NOW! If you find it impossible to save money once you have it, consider having money deducted from your paycheck direct each month. This can be a great way to save money rapidly as once it is set up you will not notice it is being collected and your savings will grow with no more effort from you. Save Money Tip Seven
- Shop Wisely. Consider markets, superstores, farmer's markets, local shops, marts and stores. Anywhere is worth checking out to see if you can save money. Farmer's Markets can be particularly good places to save money. Typically you are buying direct from the producer of the product so the savings are passed on to you. Use your bulk buying strategy here - farmer's markets often offer opportunities to save money by buying larger quantities of staples, for instance potatoes, rice or corn. Save money and shop wisely. Save Money Tip Eight
- Eat in rather than out. This is a huge area where you can save money. A cup of coffee taken out could easily cost you TWENTY times (or more) what it would cost you to make it at home. So think before you drink when you are out. Eating is the same. Fast food restaurants are counting on you eating food that you perhaps don't really need at that time but buy just because it is quick. Why not wait until you get home and have a more nutritious meal and save money at the same time. Save Money Tip Nine
- Use less. This money saving tip is a lesson we all need to learn. We live in a consumer society where waste is a huge problem. If we could all use and consume less there would be less waste, less power consumption, and the benefits for you are SAVING MONEY. Consider using less shampoo when you wash your hair, this may not mean washing your hair less effectively it means not flushing the excess shampoo and your money down the drain. What about saving on heating? Turn the thermostat down or put on extra clothes when you are cold. Turn off lights, the TV and the computer when they are not in use. Each little saving you make will build up and enable you to save money. Huge savings in energy can be made which will save you money and be good for our planet and the other people on it. Save Money Tip Ten
Wednesday, October 20, 2010
Investing in Bonds
Bonds are a great way to invest your money and make a small profit. These bonds are basically companies and the government asking the public for a loan. In return for these loans they give a small return usually somewhere around 5% over a certain period of time. Some bonds can be 1 year long while others can last up to five or more years. These bonds as stated before can be purchased through the government who usually give the least return, as well as companies. Usually a general rule of thumb is that the larger the company, or the more financially stable the company the lower the rate of return will be. The smaller or less secure companies will need to give a larger return because they are more risky. This ties into the general rule of investments which is the larger the risk the larger the return. So now that we have discovered what bonds are I would like to talk about where you can buy these bonds. Generally these bonds are traded on their own market, similar to the stock markets, Bond markets list many different bonds at certain rates and different dollar values. Bonds can also be bought directly through the government when they are offered. A great example of this would be Canadian Savings Bonds which I believe are currently available. Also throughout the duration of the bond the owner is paid what is called coupons, this is a annual or bi-annual payments that are given to the bond holder as payment for buying the bond. These coupons are the only money that you receive until the end of the bond which is when you are reimbursed the amount of your original capital. Another interesting thing about bonds is that you can actually trade these bonds once you own them. This allows investors to regain their investment and then some if they would like to make a profit without waiting the entire term of the bond or if they just need the money. The unfortunate thing about bonds is that they do have risk, if the company that you purchase a bond from goes under you can lose your investment. This once again refers to the golden rule the larger the risk the larger the return. Another downfall of bonds is that the money that is invested is locked in for the duration of the bond unless it is sold or traded.
Bonds are a great way to invest and save money if you are able to invest large amounts of money, and are also able to live without that money for a long period of time. Bonds are one of the more secure ways to invest and are good for people who do not want to take on too much risk.
Sunday, October 17, 2010
Saving money becomes a routine
Household budgeting tips
- Match your long distance company with your calling habits. If most of your calling is done in the evenings, get a plan that gives you unlimited evening and weekend calling.
- Turn off lights and anything electrical behind you.
- Cook with covered pots. It takes much less energy to cook if the pot is covered.
- Plan meals for the weeks / month ahead prior to going to the grocery store.
- Make a shopping list and stick to it.
- Buy store brand foods instead of national name brands.
- Use coupons.
- Shop on double or triple coupon days.
- Shop for groceries on a full stomach.
- When replacing light fixtures, consider compact fluorescent.
- Turn off the water while you brush your teeth.
- Check on prescription drugs to make sure using your health plan saves you money.
- Only wash full loads.
- Only have one extra set of sheets for each bed size in the house. This helps in terms of clutter also.
- Sell at a kids consignment shop and buy what looks good.
- If you have a son heading toward 13, don't buy ahead because they can virtually skip sizes.
- Learn to cook food that doesn't come in frozen trays.
- Water is not just for bathing, try some instead of that next Coke.
- Borrow books from the library (and whatever else they offer).
- Avail yourself of free community concerts.
- Volunteer to usher at your local performing arts center so you see the shows for free.
- Make frugal choices you can live with so you don't feel deprived.
- Learn the popular size of a product because it may be your best buy (often 18oz jars of peanut butter are loss leaders).
- If movies are part of your life, down scale to matinees or the $1.50 theaters.
Tips on Saving Money
- Ask yourself "Do I need it?" "Do I need it now?"
- Pre-allocate money so that you can take advantage of any savings offered by prompt payment. I save a significant amount on oil that way as well as property taxes.
- Pay your bills over the Internet - many of the banks provide for online banking. There is no postage, no cheque writing fee, and all transactions and their clearance dates are clearly listed on statements and user generated reports. Most banks software will also export and download files for use in your software.
Work tips
- Pretend the vending machines at the office don't exist, or never have change.
- Sometimes I think that my best investment ever was a Thermos bottle. Take your own coffee.
- Bring your lunch to work rather than eat out.
Car tips
- Car pool if possible.
- If you drive an older car, consider carrying only liability insurance if you can assume the risk of loss. Maintain your car.
- Get the cheapest price possible on auto insurance.
- Know your gas stations and fill up when you're near the cheap one.
- Use public transit. And then call your auto insurance agent.
- Plan your trips to save gas.
- Price shop. Buy used cars; the original owner pays for the new car's depreciation.
Friday, October 15, 2010
Deals of the week, payment madness strikes marketplace
Jeremy Cato
Globe and Mail Update Published on Friday, Oct. 15, 2010 1:04PM EDT Last updated on Friday, Oct. 15, 2010 2:46PM EDT
There it was in a big, bold headline on the Nissan Canada website: The Bottom Line Clearance Event. Nissan is promising up to $10,000 in “factory reductions” or 0.0 per cent financing for up to 84 months.
Now why anyone would want to get locked into a car payment for seven years is beyond me. SEVEN YEARS? Even if the interest rate is zero and the car performs flawlessly, by the time the loan is paid off you will be thoroughly sick of that Nissan.
Of course, the appeal of an 84-month term is obvious – a lower monthly payment. And Nissan is not the first and only auto maker to offer seven-year loans to Canadians. This type of deal is all about lowering the monthly payment.
But the savvy shopper never buys a monthly payment and auto makers are smart never to offer them. From the car company’s perspective, locking a customer into a seven-year payment plan pushes that customer out of the purchase cycle for seven years. Not a good idea for car companies bent on churning the fleet – sales-wise -- every three or four years.
For the consumer, long payment plans usually come with a massive price tag in interest costs. You really do not want to pay for a lower monthly payment.
Here’s the telling number: $10,971.36. That’s how much more you’ll pay for a 2010 Nissan Rogue with all-wheel drive if you opt for the 84-month payment plan over the 48-month term. So you’ll fork over the price of a brand new Nissan Versa subcompact in extra interest costs to buy a lower monthly payment.
And really, the payment isn’t that much lower. The 84-month payment shuffle makes the monthly payment $502,68, versus $651.12 for the 48-month loan. The key here is that Nissan is offering 0.0 per cent financing on the Rogue over 48 months, but on seven-year terms, the interest rate is 8.99 per cent.
Stretching the payment plan to match what you might say is the life of the car – simply to lower the monthly payment – is a waste of money. If saving money is key to your car-buying game plan, don’t buy the payment; buy the car.
Finally, take note that if you are a cash buyer, Nissan Canada has a $3,000 factory-to-dealer cash incentive on the table for Rogue buyers. Nissan has $3,000 on the 370Z sports car, too. Here are details for those two deals, plus two others we like.
As usual, Deals obtained most pricing information from www.carcostcanada.com, though for this week other sources were also used.
Thursday, October 14, 2010
Six habits that will make you broke
It's still a week until payday, but your chequing account is almost empty already. Where did all your money go? We all have our black holes, those money pits that seem to magically make our cash disappear. Here are six bad habits that will make you broke, and how to break them.
2. Carrying Lots of Cash
You know that paying with plastic is bad, but carrying lots of cash can be just as bad a habit. Cash can give you the feeling of having extra - fun money that's just sitting there.
Only carry enough cash for what you need, and leave the rest at home. Avoiding plastic is great, but budgeting is just as important when choosing to pay cash. If you like the green, try budgeting your cash with envelopes: one for groceries, one for entertainment, etc. (Paper or plastic? Find out in Should You Pay In Cash?)
3. Saving Your Info With Vendors
Those online shopping sites are so considerate to save your address and credit card information - some even have one-click ordering buttons, so you can buy something in just a second. It's very easy, but also very dangerous. Not only does this easy shopping make you broke if you're prone to impulse shopping, it also eliminates the feeling of spending money, since all you do is click.
Don't allow vendors to store your credit card information. Avoid signing up for e-mails and catalogs if those tempt you to shop when you really shouldn't. It can be great to know about a sale, but if you didn't need anything, it's just another temptation.
4. Clipping Unneeded Coupons
We all feel the pinch in this tougher economy, especially when buying groceries. Clipping coupons is downright trendy today - but is it really such a good habit? Sure, getting 50 cents off that package of cookies or that brand-name detergent is a discount, but you may be surprised to find that your grocery bill isn't really going down despite all your coupon clipping. The truth is that buying generic brands that are just as tasty is often cheaper; coupons can make us buy things we didn't plan for.
Start with a grocery list for the week, and then look at your clipped coupons. If you can use one, great, but try supermarket brands too for the best bottom line.
5. Shopping With Your Emotions
It was a rough week, or a good one, or you want to reward yourself for losing a few pounds, so you go shopping. You earned that new dress, that new gadget, that big pie - it was on sale, too. Letting your mood dictate your buying decisions is the quickest way to go broke.
Sober up before shopping. Do you need these items, and can you afford them? Be honest with yourself. Reward yourself by doing something that doesn't cost, like taking a nice bath, or spending time with your loved ones. (Did your emotions get the best of you? Don't miss Damage Control For A Busted Budget.)
6. Not Planning Ahead
It's Tuesday, you're tired, and have no idea what you'll make for dinner. A great night for takeout, right? Using data from the BLS, it's estimated that the average family of four spends over $4,000 on eating out - a very expensive habit that will make you broke in a hurry.
When you make your grocery list, make a menu for the week at the same time, so you always have ingredients for a meal. If your week is hectic, try cooking on Sunday and freezing meals for the week. Plan for lunches the same way; not only will you save money, you'll eat healthier by avoiding fatty restaurant food. (Check out 5 Ways To Get Healthy And Save Thousands A Year for more healthy tips!)
The Bottom Line
It takes some discipline to break these bad habits. With some planning, discipline and avoiding tempting situations, you can break these habits - and maybe even find you'll have a little extra cash at the end of the month.
1. Window Shopping
It can be fun to browse the aisles, and see what's out there. We all have our weak spots, like home goods, electronics or clothes - even if you don't like to go to the mall. You don't even have to leave the house to window shop anymore; those catalogs, the Internet and commercials advertising the latest sale can be just as tempting.
Window shopping is a bad financial habit that takes some discipline to break. Staying away from stores and not requesting catalogs or e-mail updates from your favourite stores is a good place to start. Before buying that latest item you pine for, ask yourself two questions: Do I need it? Can I pay cash for it? If your answer is no, walk away. (For easy tips on saving, don't miss 5 Ways To Trick Yourself Into Saving Money.)
You know that paying with plastic is bad, but carrying lots of cash can be just as bad a habit. Cash can give you the feeling of having extra - fun money that's just sitting there.
Only carry enough cash for what you need, and leave the rest at home. Avoiding plastic is great, but budgeting is just as important when choosing to pay cash. If you like the green, try budgeting your cash with envelopes: one for groceries, one for entertainment, etc. (Paper or plastic? Find out in Should You Pay In Cash?)
3. Saving Your Info With Vendors
Those online shopping sites are so considerate to save your address and credit card information - some even have one-click ordering buttons, so you can buy something in just a second. It's very easy, but also very dangerous. Not only does this easy shopping make you broke if you're prone to impulse shopping, it also eliminates the feeling of spending money, since all you do is click.
Don't allow vendors to store your credit card information. Avoid signing up for e-mails and catalogs if those tempt you to shop when you really shouldn't. It can be great to know about a sale, but if you didn't need anything, it's just another temptation.
4. Clipping Unneeded Coupons
We all feel the pinch in this tougher economy, especially when buying groceries. Clipping coupons is downright trendy today - but is it really such a good habit? Sure, getting 50 cents off that package of cookies or that brand-name detergent is a discount, but you may be surprised to find that your grocery bill isn't really going down despite all your coupon clipping. The truth is that buying generic brands that are just as tasty is often cheaper; coupons can make us buy things we didn't plan for.
Start with a grocery list for the week, and then look at your clipped coupons. If you can use one, great, but try supermarket brands too for the best bottom line.
5. Shopping With Your Emotions
It was a rough week, or a good one, or you want to reward yourself for losing a few pounds, so you go shopping. You earned that new dress, that new gadget, that big pie - it was on sale, too. Letting your mood dictate your buying decisions is the quickest way to go broke.
Sober up before shopping. Do you need these items, and can you afford them? Be honest with yourself. Reward yourself by doing something that doesn't cost, like taking a nice bath, or spending time with your loved ones. (Did your emotions get the best of you? Don't miss Damage Control For A Busted Budget.)
6. Not Planning Ahead
It's Tuesday, you're tired, and have no idea what you'll make for dinner. A great night for takeout, right? Using data from the BLS, it's estimated that the average family of four spends over $4,000 on eating out - a very expensive habit that will make you broke in a hurry.
When you make your grocery list, make a menu for the week at the same time, so you always have ingredients for a meal. If your week is hectic, try cooking on Sunday and freezing meals for the week. Plan for lunches the same way; not only will you save money, you'll eat healthier by avoiding fatty restaurant food. (Check out 5 Ways To Get Healthy And Save Thousands A Year for more healthy tips!)
The Bottom Line
It takes some discipline to break these bad habits. With some planning, discipline and avoiding tempting situations, you can break these habits - and maybe even find you'll have a little extra cash at the end of the month.
Save Money
Saving money and being more frugal is neither a science nor an art; rather it is somewhere in between and requires your commitment and hard work. Saving money takes time to develop, needs to be learnt, and brings benefits that will endure for the rest of your life.
Begin to save money today. Do not put it off. Saving money is within your control and can bring you huge benefits. You will reap the rewards of saving money for years to come. Whether you save money on travel, save money on insurance, or save money on heating bills, remember every little counts - start today and save money every day.Read on, be frugal and save money!
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