Archive for the ‘Wealth Building’ Category
Emergency Fund: How Much Do You Really Need?
Posted June 23, 2009 by Bernz
Keeping an emergency fund available for unforeseen crises is a financial planning tip that is widely quoted. Any number of situations could come up where you may need to dip into this short term savings fund, such as loss of job (a more likely occurrence with the current economic situation), emergency medical expenses, or home repairs.
But how big does this emergency fund really need to be? Some financial planners suggest three months salary is a good general rule. If you would ask Suze Orman, (yes I do watch her show especially the “Can You Afford It” segment) she will say 6-8 months or even one year if you can afford is more advantageous. However, the right answer for you will depend on your circumstances and the risks that you are trying to cover. Some of the risks that people put aside savings for can be covered less expensively with insurance.
Take home repair for example. If your air conditioner or furnace were to quit for good, the expense of buying a new one might damage your current cash flow. (more…)
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Tags: emergency fund, Saving Money
Posted in Financial Education, Financial Goals, Frugality, Investing in Real Estate, Retirement Planning, Saving Money, Wealth Building | 2 Comments »
Financial Literacy- Does It Still Work?
Posted March 30, 2009 by Bernz
Financial literacy means being savvy with your cash flows and understanding your financial transactions in order to make better decisions that will protect and increase your wealth. Many feel that financial literacy is no longer useful or relevant in the face of our current economic meltdown. They feel that, no matter what consumers know or do, they will be hurt in this recession.
However, financial literacy is more important than ever. Understanding your financial position and how to navigate through tough economic times will give you a leg up in ensuring your financial security.
The people who will survive and thrive in today’s economy are those who have a handle on their personal finances. They know what they own and what they owe and they know where the cash is coming from and going. Every dollar that comes in has a name- meaning they know exactly where it is going.
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Tags: budgeting, financial education, financial situation, Frugality, personal emergency funds, personal finance, Saving Money
Posted in 401k, Debt, Estate Planning, Financial Education, Financial Goals, IRA, Index Funds, Investing Basics, Investing Strategies, Investing in Real Estate, Life Insurance, Loans, Mutual Funds, Retirement Planning, Roth IRA, Saving Money, Saving for College, Simple IRA, Stock Market Investing, Tax Reduction, Traditional IRA, Wealth Building | No Comments »
Is Now a Good Time to Start a Small Business?
Posted March 18, 2009 by Bernz
Have you ever had a dream of owning your own business and not having to work for a boss anymore? That is the dream of many employees who wish to have more control over their lives and their finances. With the unprecedented current level of employee layoffs, more people than ever are considering following that dream rather than trying to apply for a new job. Is now really the best time to do that?
Perhaps it’s time for a reality check. Starting a business is often considered to be one method of building wealth. The fact is, however, that 80% of small businesses fail in the first five years, and almost 80% of the ones that survive fail within ten years. Those that make it through the first decade have a solid financial and entrepreneurial foundation that is strong enough to see the business through the tough times. But what if you’re trying to start a business during tough times? It is possible and there is help available.
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Tags: business opportunity, entrepreneur, making money, small business
Posted in Career, Financial Goals, Investing Basics, Investing Strategies, Loans, Misc, Retirement Planning, Wealth Building | No Comments »
Banking on American Banks: Why US Financial Institutions Will Survive the Crisis
Posted March 16, 2009 by Bernz
So far this year, the news has been pretty frightening. Banks have been taking huge bottom line hits on their assets. Some banks have teetered on the edge of financial collapse before receiving a $700 million life line from the federal government. Specters of the Great Depression dominated financial markets and, for the first time in two generations, people started wondering if their money was safe in some of the largest banks in the country.
To understand the banking crisis and why US banks will survive it, you have to understand the sub-prime mortgage fiasco. Most of us know that sub-prime mortgages were home loans made to those who couldn’t qualify for conventional bank mortgage financing, making them high risk. Most of these loans contained a low-interest teaser rate to attract new borrowers, but, buried deep in the fine print of the contract, lurked a much higher rate after the first few months. As the rates went up, so did defaults and the mortgage assets weren’t worth as much to banks. What made the situation worse is that banks and other financial institutions bundled these loans up into packages called mortgage-backed securities and sold them to various investors. Many of these investors were not aware of the risk of the underlying loans. Those securities that sat on banks’ balance sheets rotted away until no one was sure what their true value was, if any. As their assets deteriorated, banks ran into a liquidity crises where their current assets were in danger of not being sufficient to meet their current liabilities. That’s when the federal government stepped in with their bailout.
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Tags: bank bad loans, bank loans, bank rates, banking, banking crisis, cd, mortgage financing, savings account, Stock Market Investing, sub prime, sub prime mortgage
Posted in Financial Education, Investing Basics, Loans, Misc, Saving Money, Stock Market Investing, Wealth Building | 1 Comment »
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