Blog - page 6

Is reverse mortgage a good idea for you?

Darryl Bachmeier Sep 8, 2020 Finance
Managing your finances during old age can be a tedious job. This gets even tougher if you don’t have enough retirement savings, or in case there are unforeseen expenditures such as on healthcare. If you’re a senior citizen who is a homeowner and is looking to raise some cash to supplement your income, or to pay off some major financial dues, then perhaps you can look into the option of a reverse mortgage. But what is a reverse mortgage and is it a good idea for you? Let’s figure it out. What is a reverse mortgage and how does it work? A reverse mortgage is a special type of loan available to individuals who are 62 years or old, and it allows them to borrow against the value of their home equity. The payments can be received through monthly payments or lump sum, and you do not have to make...

Compound Returns

Darryl Bachmeier Sep 6, 2020 Finance
Compound return is sometimes associated with the term annual average return. The term compound return refers to the annual rate of return earned on the original amount of an investment in a time-period. The calculation is not always accurate but it is better than calculating average returns. Not the actual rate of return. You will understand the meaning of this in the example we will provide shortly. Before that lets take a deeper look into the definition of compound return. What is compound return? Compound return is the rate of return earned on a capital over a period of time. It is expressed in percentage. If a capital investment reports to have 5% compound return annually for five years, that means the outcome of that investment will be exactly the amount it would earn if the investment had 5% annual interest rate from the beginning. Compound return results will give...

How to avoid lifestyle inflation

Darryl Bachmeier Sep 4, 2020 Finance
Lifestyle inflation means that we will spend more when we earn more. For example, you got a raise and now you can spend more money per month. Eventually, this brings us to severe problems such as having no money until you receive a paycheck or being in severe debt. Today, we will teach you how to avoid it. There are several tips you can use. Understand lifestyle inflation The first tip is the most obvious one. You need to understand lifestyle inflation and to consider it as a bad thing. Despite a raise or more money you are making at the moment, you can live worse than before the raise. In other terms, consider a raise or more money you are making in general as something that can make your money better or worse. This isn’t money for fun things that should be spent as soon as possible. Calculate how...

What is Debt Snowball? Learn how the Debt Snowball method works

Darryl Bachmeier Sep 2, 2020 Finance
Even with a credit snowball plan for you to focus on, you may wonder if you can ever pay off your debt. If your unsecured consumer loans - such as credit cards and personal loans - take more than five years to pay off, consider your options for debt relief. Different decisions about actual or fictional numbers apply to the credit snowball system for solving credit problems. Mathematics says that if you use source numbers, the credit snowball system will take longer. It will also cost more than other debt-relief options, such as a debt consolidation loan or debt management plan. What is a credit snowball system? A credit snowball system is a five-step approach to debt reduction popularized by nationally integrated radio talk show host Dave Ramsay, which is a key to speed - not math - debt removal. Start by listing all the credit card debts according to...

What is Leverage Investment

Darryl Bachmeier Aug 26, 2020 Finance
If you are a student of accounting and financing, then you may have heard the term leverage and leverage investment. What do they mean? What benefits they may offer and what shortcomings do they have? Are there any variations of leverage investment? Let’s find out. What is leverage investment? Leverage is a common investment strategy in which someone uses debt in place of assets or equity to finance a project/ investment. In simplified language, you as an investor need money to fund a project. You borrowed money and used that borrowed money for funding the project rather than using your own money. This act of using borrowed money on an investment is called leverage investment. Why do investors use leverage investment? Leverage investment is associated with debt. No one likes to keep debts on their shoulders. Then why do investors use leverage investments instead of their own assets/ equity on...

Dealing with Rude People

Darryl Bachmeier Aug 24, 2020 Social
We all face the legitimate role of difficult people in our lives. Some crawl over us when we order daily coffee at Starbucks; others sit with us at work every day. Still, others we may be in a close relationship with. No matter who it is, it is important to consider ways to deal with our reactions to them properly. Giving these people an attitude in return is easy, especially since we do not think we will ever see them again. However, by stopping, thinking, and responding correctly, you can feel much nicer to communicate. Below are some tips and tricks you can apply while dealing with those who are far from friendly: Be quiet at all times Suppose you are easily active or have a habit of complaining about minor hiccups such as a non-cooperating Outlook calendar or a faulty printer. In that case, you may be an easy...

Fixed vs Variable Expenses

Darryl Bachmeier Aug 22, 2020 Finance
Our lives are full of uncertainties in every aspect, but learning how to make the right decisions today may give us some control over our future. When it comes to money matters, it takes discipline to make it work for you. Investing and budgeting are just some of the financial skills you should develop to thrive better in life. There are many ways we can achieve financial literacy. And it starts with a conscious decision to have friendlier ties with money. Gone are the days when working hard equates to better pay; we now have to work smart. That includes being conscious of where we will spend our money or rather invest it instead. And with consumerism getting us to a pit of endless spending, we have to take a stand. We have to make money work for us, and not us working for money. What is Financial Management? Getting...