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Should You Sell Your ‘Overbought’ Stocks?

Should You Sell Your ‘Overbought’ Stocks?

Technical analysts will tell you that an RSI over 70 suggests an index or security is ‘overbought’. An RSI under 30 suggests an index is ‘oversold’.
The post Should You Sell Your ‘Overbought’ Stocks? appeared first on The Daily Reckoning Australia.

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To Raise or Not to Raise? The Fed’s Dilemma

The Fed has been keeping rates low since 2009. They are currently at 0.5%. There is not much room left to cut interest rates.
The post To Raise or Not to Raise? The Fed’s Dilemma appeared first on The Daily Reckoning Australia.

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How Does It All End?

‘How does this all end?’ It’s a regular subject for guesswork here at the Diary. To see what’s coming, you have to look back on what’s come before.
The post How Does It All End? appeared first on The Daily Reckoning Australia.

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Gold and Dollars Both Have a Future — But Gold’s Future is Brighter

Both gold and paper dollars have history, but gold has far more of it. Both gold and dollars have a future, too. But, and this is the important part, gold is likely to have more of that too.
The post Gold and Dollars Both Have a Future — But Gold’s Future is Brighter appeared first on The Daily Reckoning Australia.

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Red Bricks and Blue Chips… But No Gold

The Perth Mint is selling gold, as are many other bullion dealers across the country. But I find it hard to believe it’s making its way into the personal wealth of Aussie households.
The post Red Bricks and Blue Chips… But No Gold appeared first on The Daily Reckoning Australia.

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Will the European Economy Share the British Bulldog’s Ill Fate?

Will the European Economy Share the British Bulldog’s Ill Fate?

The European economy has not been doing well since the global financial crisis in 2008. It seems like the economy has not recovered from that large shock.
The post Will the European Economy Share the British Bulldog’s Ill Fate? appeared first on The Daily Reckoning Australia.

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The Law That Lets The Aussie Government Come After Your Gold

There’s no imminent danger of the pollies in Canberra dusting off the good ‘ole banking act from six decades ago. But it’s important to remember, that yep, these laws are in place.
The post The Law That Lets The Aussie Government Come After Your Gold appeared first on The Daily Reckoning Australia.

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An Interview with Jim Rickards on Australian Gold

The Reserve Bank of Australia has a relatively tiny inventory of gold. What is the disparity between Australian gold in the ground and officials reserves?
The post An Interview with Jim Rickards on Australian Gold appeared first on The Daily Reckoning Australia.

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The Upgrade Your Smartphone Is Craving

Now, with new apps and attachments, your smartphone camera is becoming a tool for everyone from architects to high-tech manufacturers.
The post The Upgrade Your Smartphone Is Craving appeared first on The Daily Reckoning Australia.

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Rickards: ‘You Won’t Believe What My Swiss Gold Contact Just Told Me…’

When this trigger is pulled and the gold panic starts, it’ll run out of control very quickly. Gold prices will soar to heights no one thought possible.
The post Rickards: ‘You Won’t Believe What My Swiss Gold Contact Just Told Me…’ appeared first on The Daily Reckoning Australia.

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Personal Finance, Budgeting and Planning Part 1: Managing your Financial Life


Personal Finance, Budgeting and Planning Part 1: Managing your Financial Life

Financial empowerment starts with a solid foundation, based on knowledge, choice, and action. David Michaels talks about the basics of taking control of and managing your financial life.

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One Life-Changing Class You Never Took: Alexa von Tobel at TEDxWallStreet

 

One Life-Changing Class, You Never Took: Alexa von Tobel at TED x Wall Street

So thank you so much for having me. I’m Alexa von Tobel and I’m incredibly passionate about personal finance. I wanted to start talking to you all today about my favorite television show,
which would, of course, be, The Biggest Loser. I love The Biggest Loser and I’m sure many of you watch it here. I love to watch it while I’m on the elliptical machine. Everything from the crazy donut binges to the dramatic weigh-ins, it’s incredibly entertaining.
Though when I watch it I often step back and I think: “What a great television show.” America is struggling with obesity and this is a show that brings that to the forefront. Six million people view it every Tuesday night and I often pause and think, “God I really wish something like this existed for personal finance.”
I really wish that there could be a show like The Biggest Loser for person finance but unfortunately, money is still so taboo. In America right now, the average person makes approximately 6 to 10 money decisions every single day. Those decisions can range from simple things like whether or not to buy a cup of coffee? to bigger things like What should I do with my 401K?
I think what’s important about that is those decisions are completely unguided. Right now personal finance isn’t taught in high schools, colleges, or graduate programs across the United States.
People typically learn about personal finance by talking to their parents, who unfortunately were also never formally educated about personal finance. The take away there is most people simply learn through trial and error. Money is such an important thing it effects us all and most people simply learn about it through trial and error.
So from there, it’s easy to understand that money right now is the number one thing that young people really stress about. Worse 76% of the country feels completely out of control when it comes to money. Pause for a second, four of your closest friends, three of them right now feel out of control when it comes to their personal finances.
Seventy-five percent of this room feels out of control when it comes to their personal finances. Unfortunately, we’re not doing anything to change this. Right now 84% of college graduates said that they need more help when it comes to personal finance but they’re not getting it, and as a result of all of this, 61% of the country is living paycheck to paycheck.
More than 50% of our country is not quite sure how they’re going to pay their bills next month. That is staggering. Think about the stress that puts on individuals. So I often ask myself: How on earth did we get here? How do we end up where this thing that is so critical to every single person in this room? It’s something that we’ve never learned. I want to take the 1.8 million college graduating seniors from this year and I want to walk you through exactly what ultimately happens. I want to introduce you to someone who will represent the absolute norm and we’re going to find out how they ended up on such a ride.
So meet Jessica. She’s 22 years old, she studied English. She’s going to graduate from college this year with $25,000 in student debt, and $4,000 in credit card debt, and she’s going to end up, if she is lucky and I repeat lucky, with a job right out of college, where she’ll make $35,000. That means that her monthly take home pay will be approximate $2,300. I’m going to walk you through 5 decisions that Jessica’s going to make, some that she’s aware were bad decisions, some that she’s not, and it helps you better understand how she ended up in a situation that most of America are in.
So first she’s not going to have a budget. Jessica thinks about her life now and says: “I barely get any money that I’m making. Why am I creating a detailed budget? I’ll be lucky if I can just pay my bills.” She doesn’t know that good financial planning recommends that 50% of her money that she takes home goes towards essentials, 30% towards life style, and 20% towards the future. That’s really key, 20% towards her future savings. Jessica’s going to move after college to a big city. First she’s going to do what every other college graduate does, get an apartment. Then she’s going to spend $1,200 on rent. In the beginning, a simple decision such as getting her apartment is going to throw even the chance of her having a balanced budget completely out of whack, but also put her in jeopardy for years to come as she won’t have that 20% going towards her future.
Next Jessica already has lots of debt. She thinks to herself: “Everyone in America is in debt. Why do I have to worry so much?” Instead of aggressively paying it down she only going to pay her minimum payments. Worse she’s going to miss a few of those payments. She doesn’t even understand what a credit score is. Nor does she understand why it’s so critical to her financial future. After that, she’s not going to think about emergency savings, and the reason is she can barely think about how she pays her bills.
She thinks: “What do I need emergency savings for?” What she doesn’t know is if she loses her job tomorrow or has any type of an emergency, she’s completely vulnerable and she’s going to rely on credit card debt to keep her head above water. Her fourth big mistake is she’s not going to negotiate her salary.
She is so thankful that she got a job that she’s not going to negotiate her salary. She’s going to wait for her boss to tell her when she gets one. So a few years later she’s still making just $35,000.
The final major mistake that Jessica’s going to make is she’s not going to think about retirement in her 20’s. The reason she’s not is retirement is 43 years away. Why on earth would she think about it? She says. Because of that, she doesn’t take advantage of her employer 401k match program, and she doesn’t open a Roth IRA. Now I want to fast forward 15 years.
Applying those exact same behavioral traits, not learning much more about personal finance, making a few more mistakes, Jessica’s going to get married and she’s going to have 2 children.
Fifteen years later, applying the national APR of 15%, Jessica’s going to be closer to $20,000 in debt. As her life grew, the credit card was her answer. Her interest rate has of course gone up. From there, she still has about $10,000 of her student loans. So a decision she made 2 decades ago is still haunting her every single month. Additionally, her credit score has gone from 622 to something more in the 500’s, and that’s because she’s amassed more debt and she’s missed more payments.
She started thinking about retirement, but she currently has less than $10,000 in her future retirement savings. Which actually is about 54% of America right now. Beyond that, she doesn’t set up a 529 plan for her children because she has no other dollars to think about. So I want to pause for a second and I want to think about the national impact. I just walked you through Jessica’s story and I want us to pause and I want us to multiply that by a thousand by a million, and by tens of millions.
Jessica’s story is the story of tens of millions of Americans living in our country today. You understand that and we pause and really think about it. It helps you better understand why we currently are a country where we have $2.5 trillion, yes trillion dollars in consumer debt. We’re in a position where the American dream of home ownership is not a reality as 25% of applications are denied immediately. Where 31% of Americans today have no retirement savings and therefore the American dream of pausing when you’re 65 when your bones are starting to get brittle and being able to retire, they’re not going to have that as a reality, and finally and maybe even worse, money is the number one cause of fights in marriages.
And married couples who fight are 30% more likely to end up in divorce. So this gives you an idea of where we are today. But this doesn’t give you a sense of the domino effect. Jessica and her husband they have two beautiful kids. Those kids will go off to college with the exact same credit card debt and student loan debt that Jessica had. But worse, they’re probably going to have to help Jessica with retirement. That domino is going to fall down for generations to come and as you can see Jessica has flipped a domino and the downward financial spiral that will continue for many generations. So what if we could rewind?
What if I told you that I really believe that there’s a solution to all of this? I really believe that we can go back to the tens of millions –We can ultimately go back to Jessica and there’s a simple solution. We can take her before she enters the world before all of our college seniors do, and we can basically stop and teach them 5 principles. We can help them avoid making these mistakes,
let them understand why a budget is so critical, learn the principle of living beneath their means; help them better understand that debt is not an answer and in fact it is absolutely so important to aggresively pay it down as it is designed to defeat you; help them understand that an emergency savings account is so critical – if anything happens, you want to be able to sleep at night and that’s why it’s there; help them understand that they have to negotiate their salaries along the way that their voice will always be the loudest; and finally that retirement is something you have to think about in your 20’s.
I saw this graph many, many years ago. It’s a simple principle, it’s compounding interest. An individual who starts contributing to retirement in her 20’s versus her 40’s and they both contribute the same dollars. This is a really powerful graph and a really important thing, and I just always wonder what if we can make this go viral? So I want to go back to the educated Jessica.
Let’s say we did actually teach her all of these empowered facts. Years later she’d be in a position where she could open the coffee shop she’d always dreamed of. She and her husband now own a home because they knew about credit score. They knew not to miss their bills and they knew to keep it in the 700’s. They’re looking forward to their retirement. They took advantage of all those things in their 20’s and compounding interest worked its magic, and probably best yet, her children have 529 plans.
They’ll go off to college and they’ll be in a significantly better place than Jessica was decades ago. This is the empowered Jessica. So I wish it weren’t true but it is, money is such a lifeline. If you love someone you can travel around the world to see them, and if you’re sick, as I know this week you’re going to want to pay the best dollars that money can buy to get the best doctors. The money will affect us every single day of our lives until the day that we die, and I wish it weren’t true, but it’s a fact.
I look forward to a future where we can pause, we can take all of the people before they enter the world and teach them these basic financial principles. That we can empower them so that they can end up living really powerful financial lives. That they can feel great about money and from there it ultimately is going to have a fantastic impact on our balance sheets and as our nation as a whole.
But most importantly it’s going dwindle down for many generations to come. When I think about the money I think it’s not important to be rich. It’s not about being rich. It’s about being able to live your richest life. I want that for me. I want that for Jessica. I want that for the hundreds of millions of Americans who deserve just that.

 

Reckless RBA Inflates Sydney’s Resurgent Property Bubble

Reckless RBA Inflates Sydney’s Resurgent Property Bubble

Sydney’s property market is surging again after new figures revealed auction rates have crept above 80% in recent weeks. In an all too familiar tale,
The post Reckless RBA Inflates Sydney’s Resurgent Property Bubble appeared first on The Daily Reckoning Australia.

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Sorry Dems… Hillary Is No Better Than Donald

Hillary on one side; Donald on the other. The myth of the ‘competent professional’ meets the myth of the ‘strong leader’.
The post Sorry Dems… Hillary Is No Better Than Donald appeared first on The Daily Reckoning Australia.

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Gold: The Ultimate Insurance in 2017

Since 2000, gold has greatly outperformed every other asset you can think of. So in that sense, gold performs an important insurance function.
The post Gold: The Ultimate Insurance in 2017 appeared first on The Daily Reckoning Australia.

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Jim Rickards’ Case against Gold

The second argument raised against gold is that it cannot support the growth of world trade and commerce because it doesn’t grow fast enough.
The post Jim Rickards’ Case against Gold appeared first on The Daily Reckoning Australia.

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The Devil You Know…or the One You Don’t?

Madame Clinton is clearly the devil-you-know. You can see the horns and tail for yourself. But what kind of devilish imp is Donald Trump?
The post The Devil You Know…or the One You Don’t? appeared first on The Daily Reckoning Australia.

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