Finance - page 3

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...

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...

Walking away from Mortgage

Darryl Bachmeier Aug 18, 2020 Finance

If your mortgage is higher than the actual value of the house, what should you do? Should you wait for the house to increase in value or should you consider a strategic foreclosure? A mortgage loan that is more than the current value of the house is called an underwater mortgage. In this case the amount you owe will be greater than the actual price of the house. It is also referred to as negative equity of the homeowner. So what should you do in the case of an underwater mortgage? Determine whether you loan is underwater or not The first part of the process is to find out the difference between the house price and the loan amounts owed. For example if your total loan owed stands at $225,000 while the price of your house is $ 200,000 your loan would be considered an underwater mortgage. Once a loan...

Portfolio Diversification – the Whats, Whys, and Hows of it all!

Darryl Bachmeier Aug 16, 2020 Finance

Investors can minimize risk by spreading their efforts over different financial categories, such as investment vehicles and industries. By doing so, they also maximize ROI since the different areas won’t react to financial upheaval events in the same manner. Having said that, as an investor, you should know that diversification isn’t a guarantee against loss. It is, though, an important component that lets you reach long-ranged financial goals with minimal risk. So, now you know diversification, let us see what it does and how to make it work for you: Diversify to Reduce Uncertainty No financial market is without a certain level of uncertainty. So, for example, if all your investments are going to the stock market, crashes can cause you to lose them. That’s also true for other markets, including real estate, currency, etc. The main reason diversification functions is because all markets don’t usually crash at the same...

How to Fix Your Credit Score

Darryl Bachmeier Aug 14, 2020 Finance

You’ll see many articles touting quick ways to fixing your credit score. Don’t fall for them because most quick-fix efforts are likely to backfire! The process will take some patience, discipline, and time. Be responsible and manage rebuilding your credit over time. Begin by repairing your credit history, which will gradually up your credit score. Use the steps that follow as guidelines to do both: Checking and Disputing When you receive the credit report, check it for any incorrect information. We’d recommend signing up to receive the reports from all three agencies. If you do find errors or missing data, contact the agency in question and prepare to dispute them. Learn how to do that. Also, keep in mind that you won’t affect your FICO score or any credit reports by checking your own credit score. Tardiness can be Bad for your Credit Score The main thing that interests a...

Guide to tracking your expenses

Darryl Bachmeier Aug 12, 2020 Finance

Defining the term ‘Tracking your Expenses’ Tracking your expense means having a series of a systemic approach to manage the influx and outflux of your money strategically. Tracking your money allows you to track the exact single dollar that has been spent around into the categories that you have made according to your needs. Why Do You Need To Track Your Expenses? Tracking your expense is one of the main things you need to do as an adult. When you keep an eye on your expenditures, you allow yourself to be more responsible and make correct choices that can benefit you the most. Tracking your expense also allows you to make improvements and create more savings, hence making your life more organized. Advantages of Expense Tracking Here is a list of amazing reasons why you need to track your spending and expenditures: Creates Healthy Spending Habits Tracking where your money...

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