October 15, 2010
9 Life Lessons From Warren Buffet
Rule Number 2 : Do not forget Rule Number 1
(set goals and make sure people focus on them)
To Your Success!
Azhar Laher
Thornhill Wealth Forum
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October 8, 2010
Pretending To Be Rich or Wanting to be Rich
Many, many people choose to appear rich. This usually means buying a house you can't really afford, cars you can't really afford, and all sorts of electronic devices and jewelry and other items that you can't really afford. Outwardly, you appear to have lots of money, but you're actually sinking in a giant pile of debt, barely able to keep your head above water.
In this case, the appearance of affluence doesn't equal financial independence. Instead, it equals a huge amount of financial dependence. People in such situations depend on their employer for steady employment. They depend on their continued good health. They depend on minimizing major unexpected events.That's far from financial independence. But from the outside, it does look good.
On the other hand, one can choose to be rich. From my perspective, being rich means being as financially independent as possible - almost no life events can impact your situation - and being surrounded by the things you care the most about.
Yes, this has one disadvantage over appearing rich: you don't get lots of shiny things whenever you want them. But it comes with tons of additional advantages.
You're not tied to your job for purposes of compensation. If you hate your job, quit and find something you don't hate. The money isn't the constraint.
You're not buried in bills. Each month, you don't have to pay much at all out in required bills.
You don't have tons of different things that need constant care and maintenance. You're not cleaning a 6,000 square foot house. You're not caring for five different cars. You're not keeping up an immaculately landscaped yard. Sure, if you're passionate about one of these, you can chase it - but if you don't care, there's no need to have them or maintain them at all.
You don't have "friends" that constantly judge you based on the stuff you have.
You don't worry about having enough money when you retire.
In the end, it comes back to one simple question: do you want to appear rich, or do you want to be rich?
To Your Success!
Azhar Laher
Thornhill Wealth Forum
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October 1, 2010
7 Ideas To Eliminate Rampant Credit Card Debt
Here's an seven step plan for getting rampant credit card debt under control.
1. Hide Your Credit Cards
The first step is to hide your credit cards in a place where you could access them in an absolute emergency, but that they'd be very difficult to find. Put them in a little box way in the back up in the attic. Freeze them in a big chunk of ice. Hide them in the back of the cupboard at your mother's house. Make sure it's somewhere where you cannot easily access them.
Then, go to every online account where you use a credit card regularly and delete your credit card numbers there. Amazon. PayPal. World of Warcraft. All of them. Make sure that you're not forgetting anything. If you absolutely must retain a service, use a debit card number instead of a credit card number.
Why do this? Your credit card balances need to go down, not up, and the biggest step in doing that is to break yourself of the habit of using them without a connection to the real money you're spending. That means going back to using cash, checks, and debit cards - if you don't actually have the money, you're not spending it.
2. Figure Out What You Owe
The next step is to dig out the most recent statements for all of your credit card bills and determine exactly how much you owe and what the interest rates on each of the bills is. This information should be easily found on your most recent statement, but if you're having difficulty finding the information, call up your credit card provider (the number on the back of the card) and get that information.
You should be making a list of all of these: credit card name/type, current balance, and interest rate. This way, later on, when you develop a plan, you can use this master list to figure out which credit card to pay first.
3. Request To Lower Your Rates
Now that you have all of your information at hand, go through them and try to get some of your rates reduced. For each card, call the phone number on the back and directly ask for a rate reduction. If you get a response that does not give you what you want, ask to speak to a supervisor.
Some tactics:
4. Zero Percent Balance Transfer Offers
Once you've squeezed down the interest rates on your cards, see if there are any balance transfer offers available to you, either on your current cards or possibly on a new one (zero percent transfers are the best, but long-term ones that are lower than what you're currently paying are solid, too).
The first place to look is with your current cards. Identify any balance transfer offers available with these and note the interest rates and the term. The longer the term, the better.
Then, start transferring! Transfer your highest remaining card balances first and keep moving down the list until your interest rates are as low as possible.
You should note that quite often doing balance transfers will result in a card having some of the balance at a certain percentage and the rest at another percentage. Since you often can't control which portion of the debt you're paying, I usually recommend figuring out the average interest rate for that card. So, let's say you have $10,000 total on that card, with $7,000 at 3.9% and $3,000 at 18.9%. Just take $7,000 x 3.9 and add it to $3,000 x 18.9 to give you 84,000, then divide that by the overall bill total, $10,000, to give you 8.4%. This is the interest rate you should consider that card to have - it's not perfect, but it's a good thumbnail sketch.
5. Make friends with eBay and Kijiji
The next step is to liquidate some of your unnecessary assets and use the proceeds to pay off your highest interest debts. We all have stuff laying around that we don't really need - DVDs, video games, CDs, baseball cards, books. Take a frank look at all of your possessions and ask yourself honestly which ones you actually are using regularly and which ones are gathering dust. Then dig out those items and get some value for them. Some recommendations:
One way to ensure that you stick to the plan is to set up automatic payments through your credit card company and your bank.
Here's one clever tactic. Set things up so that the credit card companies execute minimum payments automatically from your checking account. Then, set up with your bank a large extra payment each month to the credit card that you're focusing on paying off. This way, you know your minimum payments are always correctly covered, plus you're making a significant extra payment each month on one of your cards, too.
With everything being automatic, you don't have to worry about anything other than making sure there's plenty in your account to cover the transfers, and you can do that by learning how to be frugal with your spending. This plan also ensures no late fees or other unnecessary extra charges that you might accrue.
7. Don't Stop
It might be tempting to stop this plan and go back to your old ways once the credit cards are under control.
Don't. Reverting to your old habits will just cause this nightmare scenario to come back.
Instead, once your cards are paid off, start saving that money for your bigger dreams. Set up an automatic transfer with your bank into a savings account or an investing account each week so that you're automatically saving. Eventually, that money can be used to buy a car or help you cover the down payment for a house - a much better outcome than a continuing spiral of credit card debt!
To Your Success!
Azhar Laher
Thornhill Wealth Forum
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9 Life Lessons From Warren Buffet
- He bought his first share at age 11 and he now regrets he started too late. (things were very cheap, encourage your children to invest)
- He bought a small farm at age 14 with savings from delivering newspapers (one could have bought many things with little savings…encourage your kids to start some kind of business)
- He still lives in the same small 3 bedroom house in mid-town Omaha, that he bought after he got married 50 years ago. He says he has everything he needs from that house. (don’t buy more than you “really need” and encourage your children to do and think the same)
- He drives his own car everywhere and does not have a driver or security peple around him. (You are what you are)
- He never travels by private jet, although he owns the largest private jet company. (Always think how you can achieve things economically)
- His company, Berkshire Hathaway, owns 63 companies. He writes only one letter each year to the CEO’s of these companies, giving them their goals for the year. He never holds meetings or calls them on a regular basis. (Assign the right people to the right jobs)
- He has given his CEO’s only two rules:
Rule Number 2 : Do not forget Rule Number 1
(set goals and make sure people focus on them)
- He does not socialize with the high society crowd. His past time when he gets home is to make himself some popcorn and watch television. (Don’t try to show off, just be yourself and do what you enjoy doing)
- His advice to young people”
- Stay away from credit cards
- Live your life as simple as you are
- Don’t do what others say, just listen to them, but do what you feel is right
- Don’t waste your money on unnecessary things
- The happiest people do not necessarily have the best things, they simply appreciate the things they have.
To Your Success!
Azhar Laher
Thornhill Wealth Forum
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October 8, 2010
Pretending To Be Rich or Wanting to be Rich
Many, many people choose to appear rich. This usually means buying a house you can't really afford, cars you can't really afford, and all sorts of electronic devices and jewelry and other items that you can't really afford. Outwardly, you appear to have lots of money, but you're actually sinking in a giant pile of debt, barely able to keep your head above water.
In this case, the appearance of affluence doesn't equal financial independence. Instead, it equals a huge amount of financial dependence. People in such situations depend on their employer for steady employment. They depend on their continued good health. They depend on minimizing major unexpected events.That's far from financial independence. But from the outside, it does look good.
On the other hand, one can choose to be rich. From my perspective, being rich means being as financially independent as possible - almost no life events can impact your situation - and being surrounded by the things you care the most about.
Yes, this has one disadvantage over appearing rich: you don't get lots of shiny things whenever you want them. But it comes with tons of additional advantages.
You're not tied to your job for purposes of compensation. If you hate your job, quit and find something you don't hate. The money isn't the constraint.
You're not buried in bills. Each month, you don't have to pay much at all out in required bills.
You don't have tons of different things that need constant care and maintenance. You're not cleaning a 6,000 square foot house. You're not caring for five different cars. You're not keeping up an immaculately landscaped yard. Sure, if you're passionate about one of these, you can chase it - but if you don't care, there's no need to have them or maintain them at all.
You don't have "friends" that constantly judge you based on the stuff you have.
You don't worry about having enough money when you retire.
In the end, it comes back to one simple question: do you want to appear rich, or do you want to be rich?
To Your Success!
Azhar Laher
Thornhill Wealth Forum
--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
October 1, 2010
7 Ideas To Eliminate Rampant Credit Card Debt
Here's an seven step plan for getting rampant credit card debt under control.
1. Hide Your Credit Cards
The first step is to hide your credit cards in a place where you could access them in an absolute emergency, but that they'd be very difficult to find. Put them in a little box way in the back up in the attic. Freeze them in a big chunk of ice. Hide them in the back of the cupboard at your mother's house. Make sure it's somewhere where you cannot easily access them.
Then, go to every online account where you use a credit card regularly and delete your credit card numbers there. Amazon. PayPal. World of Warcraft. All of them. Make sure that you're not forgetting anything. If you absolutely must retain a service, use a debit card number instead of a credit card number.
Why do this? Your credit card balances need to go down, not up, and the biggest step in doing that is to break yourself of the habit of using them without a connection to the real money you're spending. That means going back to using cash, checks, and debit cards - if you don't actually have the money, you're not spending it.
2. Figure Out What You Owe
The next step is to dig out the most recent statements for all of your credit card bills and determine exactly how much you owe and what the interest rates on each of the bills is. This information should be easily found on your most recent statement, but if you're having difficulty finding the information, call up your credit card provider (the number on the back of the card) and get that information.
You should be making a list of all of these: credit card name/type, current balance, and interest rate. This way, later on, when you develop a plan, you can use this master list to figure out which credit card to pay first.
3. Request To Lower Your Rates
Now that you have all of your information at hand, go through them and try to get some of your rates reduced. For each card, call the phone number on the back and directly ask for a rate reduction. If you get a response that does not give you what you want, ask to speak to a supervisor.
Some tactics:
- Be polite, even if you don't get what you want. Yelling won't solve anything at all and will likely reduce your chances of getting what you want.
- State that you're looking at transferring that balance elsewhere. This gives you at least some degree of leverage in the conversation.
- Be realistic in your expectations. A 3% reduction IS a great success. If you have a $5,000 balance, 3% is a savings of $150 a year.
4. Zero Percent Balance Transfer Offers
Once you've squeezed down the interest rates on your cards, see if there are any balance transfer offers available to you, either on your current cards or possibly on a new one (zero percent transfers are the best, but long-term ones that are lower than what you're currently paying are solid, too).
The first place to look is with your current cards. Identify any balance transfer offers available with these and note the interest rates and the term. The longer the term, the better.
Then, start transferring! Transfer your highest remaining card balances first and keep moving down the list until your interest rates are as low as possible.
You should note that quite often doing balance transfers will result in a card having some of the balance at a certain percentage and the rest at another percentage. Since you often can't control which portion of the debt you're paying, I usually recommend figuring out the average interest rate for that card. So, let's say you have $10,000 total on that card, with $7,000 at 3.9% and $3,000 at 18.9%. Just take $7,000 x 3.9 and add it to $3,000 x 18.9 to give you 84,000, then divide that by the overall bill total, $10,000, to give you 8.4%. This is the interest rate you should consider that card to have - it's not perfect, but it's a good thumbnail sketch.
5. Make friends with eBay and Kijiji
The next step is to liquidate some of your unnecessary assets and use the proceeds to pay off your highest interest debts. We all have stuff laying around that we don't really need - DVDs, video games, CDs, baseball cards, books. Take a frank look at all of your possessions and ask yourself honestly which ones you actually are using regularly and which ones are gathering dust. Then dig out those items and get some value for them. Some recommendations:
- Sell items that have significant individual value online, such as CD or DVD box sets, high-value individual trading cards, and so on. Those items will recover the value of the time you put into selling them online - most ordinary items won't.
- Take the rest of your unwanted items and attempt to sell them through appropriate dealers. Look to used media shops and collectibles dealers for places to unload the remainder of your items.
- If there's anything left, make a detailed list of it, take it to Goodwill, and get a receipt. This will help with taxes next year and you can use that tax rebate to help with your debt situation.
One way to ensure that you stick to the plan is to set up automatic payments through your credit card company and your bank.
Here's one clever tactic. Set things up so that the credit card companies execute minimum payments automatically from your checking account. Then, set up with your bank a large extra payment each month to the credit card that you're focusing on paying off. This way, you know your minimum payments are always correctly covered, plus you're making a significant extra payment each month on one of your cards, too.
With everything being automatic, you don't have to worry about anything other than making sure there's plenty in your account to cover the transfers, and you can do that by learning how to be frugal with your spending. This plan also ensures no late fees or other unnecessary extra charges that you might accrue.
7. Don't Stop
It might be tempting to stop this plan and go back to your old ways once the credit cards are under control.
Don't. Reverting to your old habits will just cause this nightmare scenario to come back.
Instead, once your cards are paid off, start saving that money for your bigger dreams. Set up an automatic transfer with your bank into a savings account or an investing account each week so that you're automatically saving. Eventually, that money can be used to buy a car or help you cover the down payment for a house - a much better outcome than a continuing spiral of credit card debt!
To Your Success!
Azhar Laher
Thornhill Wealth Forum
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