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By Mark P. Cussen | Investopedia – Fri, 30Nov2012
If you are contemplating buying your first home, you must carefully evaluate your financial situation and understand what you would be getting into. Money is not the only operative factor in this equation either; there is much more to homeownership than mortgage payments, property taxes and the cost of furnishings. Homeownership is a life decision, and it will affect almost every aspect of your life in one way or another.
Buying and moving into a home is a vastly different proposition than moving into a rental house or apartment. If you discover that you don’t like your surroundings as a renter, then you will only have a lease agreement to contend with if you decide to move. Changing houses is obviously a much different proposition, as this requires you to go through the entire home sale and purchase process all over again. Most financial experts will also tell you that you will have to stay in your house for anywhere from two to six years in order to make up for all of the initial closing costs and other expenses that inevitably arise when you buy a home.
One of the biggest disadvantages of homeownership is that there is no landlord to call when something needs to be fixed. Keeping your home structurally and mechanically sound and maintaining an attractive property can cost you thousands of dollars above and beyond your normal upkeep expenses and also require a major commitment of time and effort. Some of the major maintenance projects that you may face include:
Repainting Your House
Your home will likely need a new coat of paint at some point, either inside or out. If you have this done professionally, you can usually expect to pay at least two thousand dollars, depending upon the size of your house and the amount of work that it will take to do the job. Doing this job yourself will be a major undertaking.
Replacing Your Roof
This is one project that you will not likely be able to do yourself. The average cost of a roof can easily range around $10,000 to $15,000, and the price depends upon the type of roof and type of shingles that are used.
Foundational erosion and collapse is every homeowner’s worst nightmare, and fixing this problem isn’t going to be cheap. Mud jacking can cost thousands of dollars if the problem is severe.
- Plumbing and electrical repairs
- Furnace and air conditioner repairs and replacements
- Treatments for termites and other pests
Your pocketbook is not the only thing that needs to be healthy before you buy a home. If you are married or in a domestic partnership, you need to evaluate the stability of your relationship before you commit to purchasing a home together. When two people who live in an apartment together divorce or break up, one of them simply moves out. When two people are listed on the title deed for a residence, getting one of them removed is much more complicated. When this happens, the person who stays must shoulder the entire cost of the home by him or herself (albeit with the help of child support or alimony in many cases). If you are having problems in your marriage or other relationship, then you need to seriously consider where the two of you will be in five or ten years. If you think that there’s a good chance that you will split up, then homeownership should be approached with caution.
If you have physical or mental limitations that may prevent you from being able to perform normal maintenance tasks on your home, then you need to have a clear idea of how you will accomplish these things before you sign on the dotted line. If your health is in decline, then buying a fixer-upper is probably not a good idea unless you can clearly afford to pay for all of the repairs and maintenance.
The Bottom Line
Buying a home requires a certain level of emotional and mental maturity. The ability to think ahead and foresee possible problems down the road is key before making the commitment, especially for first-home buyers.
As the virtual world becomes viral with more and more homes having access to the internet, it has now become a marketplace where people can earn dough in just a click of a mouse. Selling stuff on E-bay is passé. You just have to remember that you should avoid any get rich quick schemes as they are most likely scams. Just like making money offline, it takes hard work and consistency to make it online. For 2011 – 2012, there are new ways to learn on how you can make bucks and be the next online millionaire! so let’s see the 10 best ways to make money online.
10. Be the Next YouTube Sensation!
With so many artists being discovered daily online, why can’t it be you? All you have to do is record a song and make a video of yourself while singing. If you have the talent, your dream of instant superstardom is not farfetched. YouTube and other video-sharing sites have the world as its audience, and when you’re discovered, you can be on your way to Hollywood.
9. Make Money doing Gigs
Sites like Fiverr.com allow you to make money by doing almost anything! Just sign up for free and create gigs by offering mundane services such as singing a song, teaching a Spanish phrase, teaching how to use Facebook, etc. Each gig will cost you $5 and you will be amazed how easy it is to make money with things that you never imagine anyone paying for it.
8. Make and Sell your Own E-book
With the popularity of Kindle and other e-book readers, people are no longer turning to books as reference. If you have the flair for writing fiction and non-fiction books, you can earn more by selling your literary pieces online than having to go through the tedious task of being published. E-books are selling as much as $50 to $100 and they’re even made by unknown authors.
7. Be a Virtual Assistant
You will not believe the number of corporate executives who hires virtual assistants. Because they have a lot of things to do but not the time, they need someone to do stuff for them. These may include doing research, finding things, making reservations, doing time-consuming tasks and even making phone calls. You can do this by setting up a free blog or a website where you can offer your services.
6. Be Paid to Blog
Because of the rise of so many free blogging platforms, blogging has become more popular. While it was just an avenue for some to air their creative ideas, you can actually earn from it. You can do this by showing ads on your blogs using advertising programs like Google AdSense or by selling affiliate products, or video tutorials.
5. Be a Matchmaker
This is not the typical mail order bride or dating services. You can be a matchmaker by running your own virtual marketplace or your own employment agency. You can do this by collecting sites and matching distributors, suppliers and retailers, for example, an equipment manufacturer to smaller components supplier. You can also earn by matching job seekers and employers. You can refer your friends and if they get hired, you will earn a commission.
4. Be an Online Tutor
Online tutoring is becoming more and more in demand, especially for non-English speaking countries. If you have the passion for teaching, this can be one way to earn. Some online teachers even do this at home. You can just set aside a number of hours per week, which is anywhere from 2 hours up daily depending on the service you are going with.
3. Directory Submission
While there may be lots of websites or blogs available in the internet, they need traffic to make money. But sometimes, webmasters and bloggers are busy with the other aspects of their sites that they do not have the time to do this. You can offer your services to submit their site to directories for a fee. You can use forums like Digital Point to offer your service to webmasters.
2. Earn Money while Playing Games
The latest buzz among gaming enthusiasts is about the Chinese girl who became the first person to be a millionaire just by exchanging the virtual money she had earned by playing Second Life. Playing games like Farm Gold and Second Life offers virtual money which can be exchange for real cash. Now, that is every player’s dream.
1. Earn Money by Buying Virtual Plots
Virtual plots are URL addresses that you can buy and resell for profit, just like any real estate. You can do this by buying good domains, flip them and make some bucks. When you get a good site or a blog, work on it by putting relevant content, get it going, and then sell it. There are hundreds of websites being sold every day on sites like Flippa.com, while sites like GoDaddy.com sells unused domain names for under $10 each. You just have to remember that the best domain names are short, specific and easy to remember. There are website owners who made millions out of buying virtual plots and made them into established sites. This is good business because with just a small capital, you can earn huge profits!
By Greg McFarlane | Investopedia – Mon, 19Mar2012
The principle behind life insurance is simple, in theory. It’s also morbid, at least compared to other financial services. You pay small amounts at monthly intervals, and should you die, a beneficiary of your choice gets a sum of money approximating what you would have earned had you stayed alive.
That’s the stark truth right there, which a lot of life insurance customers fail to comprehend: the service is supposed to be nothing more than a replacement plan. The idea is that should your family suffer a crisis that transcends finances, at least their finances won’t be impacted too negatively. If you die, your spouse and kids won’t have to take on multiple jobs, beg for alms nor lose the house and car.
Hedging Your Bets
It’s important to remember that life insurance isn’t really “insurance” in the dictionary sense. When you buy life insurance, you’re not “insuring” anything. No matter how much money you give them, Ameriprise can’t keep you from dying. No, life insurance is more about hedging your bets than anything else. While you’d prefer to live, if fate has an alternate plan then you can spend money now to help your family avoid multiple catastrophes later.
But as a result of it being called insurance, there’s an overly conservative type of person who believes that if “coverage” of some kind is good, then more coverage must be better. Buying life insurance thus becomes a test of one’s capacity as a responsible adult and breadwinner. What kind of person doesn’t want to protect their loved ones? To that end, some people insure anything that moves – even (especially) their children.
Sounds great in principle, until you remember that kids don’t earn any money. Or at least not any money that’d be difficult to replace. Which reinforces the morbidity of life insurance: losing a child is such a colossal tragedy that if there’s any eventuality that needs to be prepared for, it’s that. Some parents argue that they couldn’t function after the death of a child, and thus a policy on said child helps them sleep at night. But if you claim you’re not going to be able to function anyway, why not keep the money you’d have otherwise spent on life insurance for someone who barely earns any income?
The same goes for older relatives. Both the healthy and infirm have a decreasing amount of time remaining, and the less healthy an older relative is, the smaller the death benefit you’ll receive for a policy of a similar premium size. Add retirees’ limited income (regardless of how substantial their net worth may be), and much of the time, senior insurance seems like an unwise move.
How Much You’ll Get
Stay alive, and a standard term life insurance plan has zero return. Start a 20-year term policy today, and if you don’t die by 2032, you’ll have received nothing. That’s not a bug of life insurance design, but a feature. After all, throughout the policy’s term you’re getting whatever peace of mind comes with knowing that your death won’t impoverish your family. Most policyholders understand this, and appreciate that life insurance isn’t intended to be an “investment” in the conventional sense.
Other insurance customers are uncomfortable at the idea of sending a long series of fixed payments to a financial services firm with the certainty that they’ll never see any potential for profit. Rather than accept life insurance for what it is – again, a replacement plan – these customers want some sort of return. Thus the industry devised whole life insurance and universal life insurance, two variants on term life insurance that each offer a cash value beyond the standard life insurance death benefit. You pay a little more each month than you would with a term policy (we’d call the little more a “premium” but it’d just confuse things), and the difference builds and can be redeemed at your convenience.
Purchasing policies more complex that a term life insurance policy could make economic sense if the cash value increases quickly enough. But investing and insuring are two different and usually incongruent goals. There are surer and more direct ways to invest, beyond enhancing one’s insurance policy with a form of annuity. A combination protection plan/investment plan is like a combination toothbrush/nail file, assuming such a thing exists. The hybrid probably isn’t going to perform either task as well as the disparate products it aims to replace.
The Bottom Line
This isn’t a jeremiad against life insurance in principle. If you’ve got sufficient income, a risky enough likelihood of staying alive (which a prudent insurer will take note of and charge a correspondingly higher premium for), and enough dependents with little earning power among them, a term policy isn’t necessarily a poor way to spend your money. Just remember that investing is deferring spending in hopes of a financial gain. Insuring is spending now in hopes of avoiding financial loss. In that respect, the two activities are almost opposites. An insurance policy that masquerades as an investment is rarely going to be your best option for accomplishing the conflicting goals of maximizing return while minimizing risk.
By Janine Eccleston | Investopedia – Thu, Nov 22, 2012 7:00 AM PHT
Many Americans create bucket lists of things they would like to do before they die. For some it includes travel, and for others it includes things such as giving back and donating their time. What many people don’t have is a financial bucket list or a list of financial goals and obligations they would like to achieve in their lifetime.
Here are some ideas for your financial bucket list:
Pay off All Your Debt
While some may consider this a lofty goal, for many it means peace of mind and less stress. Some psychologists say that individuals are suffering terribly because of their debts. According to a survey by AP-AOL, roughly 27% of individuals reporting high-debt stress said they had ulcers or some form of digestive tract problems and 44% said they suffered from migraine headaches. The total debt of consumers in the United States as of March 31, 2012 was $11.44 trillion. While this includes household debt and consumer debt it means that each American owes over $36,000, based on a population of approximately 314,686,000. This isn’t the type of burden you want to leave to your children or your estate. By paying off debt you can rest assured that you won’t be a burden to anyone.
Own Your Home
This ties in closely with point number one, and it can also be seen as achieving the America Dream. Owning a home is seen as an expression of personal freedom, as it has been ingrained into the American culture since the mid-1800s. Owning a home marks a milestone in one’s life, giving homeowners a sense of pride and accomplishment. A 2009 American Housing Survey (AHS) shows that only about 25% of homeowners have no mortgages, so crossing this off your financial bucket list should definitely give you a feeling of triumph.
Max out Your Retirement Fund
Whether you are growing your nest egg in a 401K or a Roth IRA, your goal should be to put as much money away for retirement as possible. UC Berkeley Center for Labor Research and Education found roughly 75% of 401(K)s are below $60,000. Ensuring that yours is maxed out will make retirement a lot less stressful. Each year the 401(K) is indexed against inflation and in 2012 the maximum contribution limit is $17,000. CBS News reported that only 5% of 401(K) owners max out their contribution limits in 2011.
Save for Your Child’s Academic Future
According to the College Cost Projector, tuition costs increase by almost twice the rate of inflation. 2011-2012 tuition costs averaged over $17,000 for students attending public schools and over $38,000 for students attending private schools, according to College Board.org. There is no doubt that saving for your child’s future should be on your financial bucket list. The College Cost calculator estimates that tuition increases are happening at about 5-8%, meaning the $17,000 it would cost for a child to attend post-secondary today may increase to around $40,000 in 18 years (based on a 5% tuition inflation rate).
Having an emergency fund is crucial to feeling a sense of safety. Many experts state you should have between three and six months of living expenses in your emergency fund so that you can combat unexpected medical expenses or home repairs without putting financial pressure on your family.
Give to Charity
Philanthropy plays a crucial role in American society. As citizens of a First World nation, many individuals feel the need to give to those less fortunate or to organizations they support. In 2010 alone, $300 billion was given to U.S. charities. With so many causes near and dear to their hearts, many people feel the need to make a large lump sum donation to a charity before they pass away.
The Bottom Line
Whether it is giving back to the community or saving for your children’s education, there are many things that can be on your financial bucket list. The idea is to create a list that secures your future time and leaves a legacy of what you believe in after you pass on.
Source: MensXP.com – Thu, Nov 22, 2012 8:30 PM PHT
We don’t want to be materialistic but we have to face the fact that we need money.
Someone rightly said that those who say money can’t buy you happiness, simply don’t know where to go shopping. It pays immensely to be wise about money. But are we? Read on, and moneywise, be wise!
1) Save, Save, Save
Cultivate this golden habit if you haven’t already. This habit is worth in gold and nothing but your savings would see you through your rough patch. Whatever be your income, start saving without any further delay.
2) Watch Your Spending
It indeed makes a hell lot of sense to listen to Warren E. Buffet, the second richest man in America, isn’t it? He very rightly said that keep a close watch on your spending. Buy things which you need and not because of peer pressure.
3) Borrow Only What You Can Repay
Living on credit cards and loans is too tempting an offer. However, both come with an element of risk. Credit cards and loans don’t make you rich, so weigh your pros and cons to save yourself from falling in the trap. So, look before you leap.
4) Don’t Rely On One Income
Make this your guiding philosophy. With uncertainty, job cuts and recession all around, it is foolish to depend on only one source of income. Invest and create a second/third source of income. That would do a whole world of good to you.
5) Split Bills, It’s Perfectly OK
Honestly, there is no shame in splitting bills no matter who is accompanying you. Don’t volunteer to pay all on your own since it would burn a big hole in your pocket in the long run, without you even realizing it.
6) Go For Health Policies/Insurance
No one has seen the future, right? With advancement in medical science, today even life-threatening diseases can be cured, but at a cost. It is always better to be covered by such policies. They would prove to be a boon in the case of medical exigencies.
7) Take Risk, But Calculated Risk
Life itself is risky; nobody comes out of it alive. But still it makes perfect practical sense not to test the depth of water with both feet. Better be safe, than sorry.
8) Discuss About Money With Family
Keep your family in the loop regarding your finances. That won’t lead to any unrealistic expectations on their part, thereby saving you from unnecessary hassles.
9) Think Big, Start Small
It’s all about the concept and the way you showcase it. While starting a business, think big but take small steps. Only when you are extra sure, take a giant leap forward.
10) Never, Ever Discuss Money Matters Publicly
Honesty is a rare commodity in today’s time. Money matters are best kept secret to save yourself from being duped. It’s your hard-earned money after all. Do all that it takes to multiply it and make yourself financially sound and secure.