Finance - page 2

How YOLO are You in Risk Tolerance?

Darryl Bachmeier Sep 20, 2020 Finance

You might have heard of YOLO (You Only Live Once) or that mantra of people who are making the most out of their lives. Living in this principle prompts you to do extreme challenges and take risks to attain ultimate happiness and satisfaction in life. Despite most people who regard this as a trend or “too illogical” to do, it can make us think about our risk tolerance. Generally, risk tolerance is our ability to take in uncertainties in life. This entails our level of patience in a waiting game and in making decisions. During waiting, we constantly evaluate as to whether to hold on or let go of something that will impact the way we achieve our long-term goals. The term risk tolerance is mostly associated with investing. It is the measure of how strong can you hold on to an investment for potentially greater gains. Your decision lies...

Why procrastination costs you money

Darryl Bachmeier Sep 14, 2020 Finance

Procrastination is when we delay things that MUST be completed. Yes, some things must wait. For example, you must wait for cooperation, information, permission and etc. However, some things must not be postponed. Procrastination costs you money, more than you think. It is important to understand this issue and to use techniques that will prevent you from wasting your money. Most common reasons when procrastination cost you money There are thousands of examples out there that can tell you why procrastination cost you money. The best thing is to know that every time you postpone something, it can cost you money! We have compiled a list of the most common reasons when and why this happens. You will pay for penalties This can be a very severe reason. You may have forgotten to complete a card payment or to renew your driving license tags. You will have to pay a...

Bank of Mom and Dad

Darryl Bachmeier Sep 12, 2020 Finance

The bank of mom and dad. It’s like divine manna, instant ATM, unlimited loans with minimal to no interest charges. Sounds like an amazing thing, right? Yes if you are the child, but not if you are mom and dad. Wait, aren’t parents responsible for their children? Well sadly, nowadays, many children are growing up more entitled because they were “cradled” by mom and dad longer than what’s healthy. May it be out of love or out of pity, being unable to set the right boundaries in the bank of mom and dad is a recipe for bigger challenges coming. Self-reliance used to be a golden nugget that we learn out of need. However, growing up knowing that there’s always someone you can count on defeats it. And ironically, it’s your parents who forgot to teach you about it. All because the bank of mom and dad became open 24/7....

Coast Through Life with Confidence Through an Emergency Fund

Darryl Bachmeier Sep 10, 2020 Finance

Save up for the rainy day, they say. But now that there are more things we can spend on, it is increasingly challenging to put away those savings in lieu of present comfort. We now have more bills to pay. Our children are more exposed to luxuries than ever before. And it is harder to keep up with this fast-paced world. However, now is also the time that we need to be more prepared for emergencies. As it can easily deplete our resources if we don’t have a buffer for these uncertainties. To those who are overwhelmed by the 3 to 6 months’ emergency fund rule, taking baby steps is the key. The more challenging it is to build it, the better you are at putting value into your efforts. It takes time to see the value of something, and it makes us use it wiser. What is an Emergency...

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...

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