Depreciating Assets Can Hurt Your Finances

Everyone has them— depreciating assets. What are they? Assets that lose value over time rather than gaining value. It isn’t possible, it seems, to avoid purchasing a car, major appliances and electronics. They are financial realities. However, the trick is to purchase what you need rather than what you want and to be aware up front what depreciation rates assets can have. There are some assets you probably could do without if you took into consideration how fast they depreciate. If you can’t do without them, take special care in acquiring them.

Common Depreciating Assets

Timeshares: Many people purchase them without realizing the money holes they can become. Unlike the majority of standard real estate, most timeshares lose 50 percent of their value immediately upon their purchase from a resort. Additional depreciation, up to 90 percent, occurs over the next few years.

Boats: There is a reason why boat owners often lament that the two happiest days of their lives were the day they bought their first boat and the day they sold that same piece of property. The dream of boat ownership is quickly absorbed in the reality of the expense such ownership entails. Boat rental may seem an expensive alternative, but it is usually far less expensive than to own your own. Your own boat is usually a depreciating asset you could do without.

Recreational vehicles: Just like cares and boats, RVs love a large percentage of their retail value the minute you depart from the dealer’s parking lot and they continue to lose value as they age. Few people use RVs as much as they expect to when they plunk down the purchase price. Add the costs of gas and the space rental many people have to pay for the RVs when they are not in use and ownership doesn’t make much sense.

Luxury cars: There is not much chance of avoiding a car purchase forever, but keep in mind that it is a depreciating asset. To get the most out of your purchase, focus on what you really need, not what suits your ego or what will keep you in the running with the Joneses. A used car in good condition has already seen much of the initial depreciation priced out. The corollary is someone who wants to have the benefit of gold’s stability and buys jewelry instead. You can’t have it both ways.

Electronic Gadgets: They not only depreciate, they do it quickly. Owning the latest and, purportedly the greatest in computers or electronic gadgets may be popular, but it also is the least cost-effective option. The latest models always come with a premium price. Last year’s model is usually just as effective for most people. And last year’s models will be heavily discounted as soon as the new model appears on the horizon. Make sure your purchase checks out with your wealth building plans.

The prospect of any large purchase should trigger the question: “Do I really need this?” If the answer is “Yes.” proceed wisely. Opt for the product that fulfills your actual needs at the best possible value. Depreciating assets eventually affect your finances, so avoid them when possible and consider devaluation as one of the factors to evaluate as you make your purchasing decisions.

30 Personal Finance Tips To Use Now

Personal finance tips can come in handy when you are trying to improve your financial situation.  Economic struggles in the past several years have really turned some people’s lives upside down.

In March, 2010, the number of long-term unemployed people (those without a job for over 27 weeks) was a staggering 6.5 million. There were 15 million unemployed people. That’s a lot of people struggling to make ends meet any way they can.

To help you through this tough economic time, make sure that you help yourself by doing some of these practical things.

Protect yourself

• 1. Get a credit report every year so that you can make sure your credit is in good standing.
• 2. Scan everything in your wallet. In case of theft, you’ll have all your account numbers and contact information available.
• 3. Stop overdraft fees by going online and hooking up your checking account with a savings account.
• 4. Sign up for an alert that warns you when your account reaches whatever amount you choose.
• 5. Keep well organized financial documents for tax purposes
• 6. Diversify your sources of income.

Setting Goals

• 7. Decide what you want to do with your money.
• 8. Cover the necessities first
• 9. Use free websites for tracking goal setting
• 10. Choose some new starting points to hope for the best but plan for the worst.

Savings Strategies

• 11. Start saving at an early age.
• 12. Save money on a weekly basis and leave it alone for a while.
• 13. Order free information for your vacation planning.
• 14. For older folks, estimate your retirement benefits online at www.ssa.gov where you can put in your social security number and estimate your retirement benefits.

Debt Management

• 15. Use your tax refund to pay off high interest credit card debt.
• 16. Go to the websites where you have credit card accounts and sign up for an alert to remind you 10 days prior to the due date.
• 17. Request a reduction in your credit card interest rates.
• 18. Be grateful that your debt is not as big as the country’s debt.

Daily Living

• 19. Take an oath of financial honesty, with yourself and with others.
• 20. Use your local library instead of purchasing books.
• 21. Eat at home. Avoid restaurants to limit calories and cash expenses.
• 22. Reassess your possessions and see what you can live without.
• 23. Tell a friend what you are saving for and ask for emotional support.
• 24. Practice self-monitoring. Track spending using software like quicken or see if your online banking has a budgeting feature and track it for free.
• 25. Beware of advertising campaigns to entice you to spend more on house-hold goods. Proctor & Gamble, will increase advertising expenses by 20% in 2010.
• 26. Shop at cheaper stores. You can get Egyptian cotton sheets at discount stores.
• 27. Recognize buying mistakes and vow not to make them again.
• 28. Give away things you don’t need to make room for your new life.
• 29. If you are suffering from depression about your finances, discuss it with your doctor.
• 30. Learn to live with less – do you really need everything you have stashed away?

Your net worth to the world is usually determined by what remains after your bad habits are subtracted from your good ones.

The Pursuit of Happiness Through Difficult Financial Times

In the pursuit of happiness, many of us believe that having lots of money will make us happy. According to Jean Chatzky, the author of the book “The Difference,” this is not always true because once you have money, more money won’t buy more happiness. The happier you are, the more money will come in.

Some of us have been through bad financial situations. With bills piling up, creditors calling, and the household income barely enough, life still goes on.  You can make the best of it or just plain give up and lose hope. Financial problems can  be  very stressful  for anyone but there is always room to make a change in your attitude. In such difficult times, what are the critical factors that can make a difference in your life? Jean Chatzky tells us all about the main traits that you have to be successful.

Happiness and optimism are two of the keys in making more money because these two traits help you solve problems and come up with great ideas. Even if you fail the first time, being optimistic will help you try again, and again.

Having resilience means you can overcome anything and that includes financial problems. These people never denied that their finances were suffering. They were able to concentrate on how to take control of the things that they could change and let go of the things that they could not.

Having passion to lift yourself up from your financial struggles is another key element to financial success. Loving what you do is very important and when you love what you do for a job then you are on the road to financial stability.

Social capital is acquired by seeking out advice from people who can help you get to the next level of income. Value the relationships you have and reach out to people that you can help and those who can help you. Take time nurturing these relationships.

Wealthy people have the funds to spend lots of money but most of them are not foolish spenders at all. In fact, they save money on a regular basis. This is a fundamental goal for anyone wanting to improve their personal finances.

We usually have hunches about what might happen next. These intuitions will help you make decisions about spending and investing your money. Most wealthy people have developed  good intuition and this gives  them a big advantage. Learn to listen to your intuition when you are making financial decisions.

Taking calculated risks in the market is a good way to make money whether in good times or in bad. Those that lost thousands in their investments are slowly beginning to see those dollars come back. Let your money work hard for you.

Being grateful for your particular situation is key to being able to move on and learn from the past. People who get rich and stay rich, express their gratitude by contributing to organizations and communities that they care about.

Use these principals of gratitude, passion, resilience and optimism to change your attitudes, set realistic goals and return to your path of financial prosperity.

Success is not the key to happiness. Happiness is the key to success. If you love what you are doing, you will be successful. ~Albert Schweitzer

Personal Finance Give Up-Itis

Personal Finance Plans

Have you given up trying to succeed with your financial plan? Have you gone through personal finance disasters? Do you suffer from give up-itis?

You may be wondering what give up-itis is. To explain that, let me share with you a story from Donald O. Clifton’s book, “How Full Is Your Bucket?”

U.S. Army chief psychiatrist, Major  (Dr.) William E. Mayer,  did a study of the lives of soldiers who were held as prisoners in the Korean War. He studied 1,000 cases of soldiers who suffered extreme psychological depravement as POWs.  These people didn’t suffer physically as in being tortured, but they were systematically deprived of the normal benefits one can receive from friendship and support.  They caught a deadly disease:  extreme hopelessness.

The methods used to cause this hopelessness were conniving and deceitful. The death rate in the POW camps there rose to 38%, the largest in military history. Half of those soldiers died because they had given up.

To break down the spirits of the soldiers, they were offered small rewards for ratting out their fellow inmates. Nothing happened to the inmates as a result of the news, but alienation soon crept into the camp. The North Koreans in charge held mandatory group meetings where the prisoners were forced to tell of all of the bad things they had done and any instances of good that could have been done, but failed to be done.  Without emotional support, the prisoners soon began to give up.  Some would go into their huts, sit in a corner, pull a blanket over their heads and were dead within two days.

You may have suffered from a recent financial loss of some kind, perhaps a loss of a spouse, a job or your personal health.  If you can learn from the hopelessness the soldiers  suffered as prisoners of war, you can start getting your financial life back on the right track.

Don’t give up and pull the covers over your head preparing to die. Seek out friendships that are emotionally supportive. Support other people in their struggles with life and you will fill that emotional bucket you need to avoid give up-itis.

With emotional support, you will be able to face things in your personal financial life that you never thought you could face.

Five Personal Finance Tips

1. Be honest with yourself about what has happened to you. Find out where you are right now with your money.
2. Re-examine your living expenses and what you actually need to survive. Is there any place that you can cut back on spending? Where can you most effectively decrease spending?
3. Evaluate your income as it is now and make plans to increase it. There are many ways you might be able to earn extra income to help you through. Odd jobs and piece work types of jobs are plentiful.
4. Start tracking your expenditures if you don’t already do so. Tracking what you do is the best way to help you pinpoint the problem areas that you may be causing.
5. Set goals that you would like to reach and tell a friend about them. Emotional support from friends is really invaluable to you.

What is your plan to improve your financial situation?

Learn the lessons that your money can teach you

Are you struggling to make ends meet? Is the personal financial advice that you hear from experts making you depressed?

Suze Orman has a television show that offers you personal finance advice. People are invited to call in and ask her the proverbial question, “Can I afford to buy this item?”

Some things that people want to buy seem to make perfect sense.  They may however, be outrageous to Suze.  She’s definitely on the conservative side of spending. You need to have a gazillion dollars saved to be able to afford to purchase an item under ten thousand dollars.

Powerful, forceful, decisive and intimidating, Suze will tell you the good or bad news about whether you should make a purchase or not.  She always says, “Show me your money!” You will be asked to list your current income, your savings, your retirement savings and the amount of debt you have accumulated.

After watching a few hours of this show, you may look at your own situation and feel like a total failure and that you’ll never measure up to the standards you “should” meet. You may have been through a job loss, a divorce or a medical catastrophe and not have the assets you see other people having.

The ironic thing about this show is that a few experiences in Suze Orman’s past may actually make you feel better.  Recently on Oprah’s website, Suze revealed that as a young woman, she had been lured into the rich lifestyle and the feeling she needed to own things to impress other people. She frankly admitted, “I, Suze Orman, took money out of my 401(k) to pay for that pricey Cartier watch. And when I ran through all my money, I started using the bank’s. I eventually had more than $60,000 in credit card debt.” So she has been in trouble financially and knows what kind of misery it brings.

Dave Ramsey, popular author, radio show host and personal finance advisor had a similar brush with disaster. By the time he was 26 years old, he had a net worth of $1 million dollars. That sounds wonderful, doesn’t it?  However, he ran into some problems with borrowing money.  Soon, one of his creditors demanded that he pay his short-term notes totaling $1.2 million. On top of that he had only 90 days to do this. He was sued, foreclosed on and with a wife and baby added to the mix, the Ramsey’s were finally bankrupt.

It is just this type of experience that led him to develop his expertise on financial advice. He sought out every type of financial advice out there. He read everything he could get his hands on. Now he has helped thousands of people to achieve financial security.  He took to heart the admonitions of F. Scott Fitzgerald, considered to be one of the twentieth century’s greatest writers.

“One should … be able to see things as hopeless and yet be determined to make them otherwise.”

If you are struggling financially, become determined to make things different.  You can learn your money lessons by paying careful attention to getting out of debt, building an emergency fund, and living on a reasonable budget.

5 Tips To Prevent Identity Theft

In 2003 over 14 million Americans were victimized by scammers. A few years later, identity theft has turned into a much bigger problem. Yes compared to 2003, today, more and more people are being victimized by others who steal people’s identities for a living.

Private individuals and business are all vulnerable to identity theft. In fact these scammers have gathered about $4 billion from stealing personal information alone.

How do you prevent yourself from being a victim of identity theft? Here are a few tips:

Tip 1: Never Share Information

Do not share your personal information such as your address, your full name, your age and your birth date with people you do not know. Do not share your credit card number or your PIN to other people as well. Whatever mode of communication these scammers use, whether it’s through messenger, email or over the phone, please do not believe them. Most of the time, they are not telling you the truth.

Tip 2: Think

If you suddenly won an online lottery you never really participated in, then you probably are being contacted by scammers. Most of the time, these people try to get your vital information by telling you that you need to provide credit card details or bank details so they can send you the money you won.

Tip 3: Beware of Nigerians

This is not a case of discrimination. If you think Nigerians can’t dupe you because they’re in Nigeria, think again. Nigerians have been singled out as scammers. They are usually the ones who send you messages that you won the lottery and by the time they have your information, they’d be using your credit card to make purchases online, get your money or use it for other scams. Their English is not very good and their syntax is rather different. Try to be more observant every time you receive an email or an instant message.

Tip 4: Beware of Phone Calls

Identity theft can happen on a regular phone call but most of the time Nigerian scammers use the relay service to call your home. The relay service is a US based phone call service for deaf people, it is provided for them by the government so that they are able to make regular phone calls through an interpreter. However, some Nigerian scammers have hacked the security of the service and use the interpreters to make calls to houses in the US.

They usually pretend that they are deaf and want to buy a puppy or whatever merchandise. They get your number through online ads. Even if the interpreter knows that she is facilitating a scam call, interpreters are not allowed to meddle with the calls due to FTC policies. So if you get a phone call from a supposed “deaf” person who asks you for your vital information, do not entertain the call. They will call you back but remember that the interpreter or the operator is not involved in this.

Tip 5: Shred, Shred, Shred

Shred certain items such as credit card bills you’ve already paid for. People can get your vital information from your trash or vital information in your computer. People may call the bank and pretend to be you and may even get to transfer money from your account to theirs.

Personal Finance Blog Recommendations

This is just a short post today to recommend some places to read about helping you with your personal finances. Enjoy reading.

• How to be debt free – How to be debt free is a question I get asked often via email. The process of getting of out debt is easy…but actually doing it is hard.
• Educate yourself on personal finance and money A survey done in 2006 by Entrepreneur magazine revealed that “70% of Americans say they are good or excellent at managing their finances.” Did that statistic shock you? It did me. Statistics from a 2006 government survey show …
• Weekend Personal Finance Links – Giving Congrats Edition – I opened up this month’s Money Magazine and found a surprise. On page 68, there’s a mention to two of my favorite blogs: Get Rich Slowly and Consumerism Commentary. If you’ve been reading this site for some time, it should be no surprise …
• My picks for emerging influential blogs – I’m honored to be included in such great company! I couldn’t agree more with your selections, and would include you in tha group as well. Wow Thank you! I’m really moved that you would nominate me. I never quite thought of my blog as influential.
• Personal Finance Blogs: What I Read, Link to, and Why – Here is a little background about my blog – why I write, what I read, what I link to and why: How I Got Started Reading Personal Finance Blogs: I have always had an interest in money and personal finance issues, but it wasn’t until …
• 10 Personal Finance Blogs You NEED To Subscribe To – Knowledge is power, so part of my plan to take charge of my finances is to read up on personal finance. You could read some personal finance books; unfortunately most of them suck. That’s why I get most of my personal finance info and …

Here Are 5 Dream Killing Stumbling Blocks to Avoid at All Costs

Is anybody out there – especially in this day and age – not looking to create a more fulfilling, abundant life for themselves? To ask this question in a different way, are you completely happy with the direction your life is headed or is there room for improvement?

I’m going to assume you said that there is room for improvement. I know I’m not going too far out on a limb making this assumption. After all, who doesn’t want to get the most from life? We all only have one shot at being on this big, blue marble called Earth so why not make our time here all it can be?

Getting more from life is the result of applying learned skills. It doesn’t happen by chance and you better not leave it up to luck. Oh yeah, and hoping things get better for you will not make it happen either.

In large part, learning how to get more from life will come about in one of two ways. The first way is in learning how to do something and the second is in learning what not to do. Think about it, learning what to do will help you develop a plan for success while learning what not to do will help you to avoid the stumbling blocks you’ll encounter along the way.

With that in mind, let’s take a look at 5 common dream killing mistakes you’d want to avoid at all costs.

Dream Killer #1
Don’t hold back – Whether or not you’re attacking an area beyond your current scope of expertise, dive in head first. By not shrinking away from the new task at hand you will find areas of strength you didn’t realize you had. You can then allow yourself to carry these new strengths with you into your future endeavors.

Dream Killer #2
No Excuses – You and you alone can propel yourself on to live a life of prosperity or you’re the one to hold yourself back to live a life of mediocrity. Which direction you choose to go will be determined by whether or not you make excuses. You see, you can make things happen for yourself or you can make excuses but you’ll never be able to do both.

Dream Killer #3
Do not fear the unknown – Everybody has a unique gift to share with the world. Through treading unknown waters you’ll be giving yourself permission to discover your own unique gift. When that gift is found, and applied on a daily basis, a fulfilled and successful life naturally follows.

Dream Killer #4
Do not blend in with the crowd – Success is derived from distinction. If you can find a way to separate yourself from the pack you will be able to service others in a way nobody else can. Once successful, competitors will start to follow you but your positioning will keep you a few steps ahead.

Dream Killer #5
Accept That You Are Not Perfect – The heck with perfection, it does not exist. Unless you are an Olympic athlete there is no reason to expect a perfect outcome every time you attempt something. As long as you get into the game of life and put yourself out there unabashedly you’ll find that the world really is your oyster.

Yes, there is no doubt about it, in life you can achieve great success by developing yourself a roadmap to follow. That roadmap can stem from being aware of what kinds of mistakes you’ll need to avoid along the way.

Get the book FREE: This article is based on the book “A PLUM IN THE SYRUP: 17 Observations, Suggestions And Truths You Can Adopt To Live A More Fulfilled Life.” In his book, author Daniel Herzner delivers practical advice which anybody can use to live more successfully. To get a free copy of this empowering, 101 page book please visit: http://www.APlumInTheSyrup.com/

By Daniel Herzner
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