Thursday, December 1, 2016

How Budgeting Can Change Your Life

For many, the word “budgeting” has such a negative connotation to it. When people speak about a budget, it typically means that they barely have enough income to cover their expenses and they need to watch their every penny. Often times they are restricted, have barely any fun (because their budget doesn’t allow them to), and lead a life that just seems awful to the average outsider.

After having budgeted myself, I look at the word in a much different light. To me, budgets are wealth builders, life changers, and often help people truly understand their spending as well as what makes them happy. After all, you cannot truly own your life unless you are the master of your money.

The First Steps – Creating Your First Budget

Often times, creating your very first budget turns out to be laughable. All you have to do is look through your bank account over the last two or three months and write down what you think you will spend in the month to follow. The obvious expenses are things like your mortgage payment, food, insurance, utilities, gas, and clothing. And then there are others that you might not think of immediately, but are also part of your regular monthly expenses.

After you lay out your budget (or spending plan, as some people call it) of that first month, simply live your life normally and see where the numbers line up at the end of the month. More than likely, you will spend about 33% more than what you expected. So, if you thought you would only spend $2,000, then you most likely spent close to $2,700. This is completely common, so don’t worry about it and move onto the next step.

The Second Step – Altering Your Expenses and Your Spending

At this point, you need to do two things: you need to take a serious look at your expenses and decide if they are reasonable, and you also need to review your spending habits to see if anything is out of control. So first, if you see that you are spending $150 a month on your cell phone, this is not reasonable. You can probably find a much cheaper rate with another provider. Second, your spending habits might have you dishing out $500 each month on clothes. This is certainly not necessary, and you might decide to alter your spending to reduce this amount.

Step Three – Use Your Budget to Get Wealthy

After a few months of reviewing your budget and making alterations, you should be in a place where you are earning much more than you spend, which is causing your savings to skyrocket. Keep this up and you will have a great opportunity for future wealth. For you see, prior to your budgeting, you had absolutely no money to invest in your future and were destined to grow old, poor, and unhappy.

Now, you have cash that can be invested in the many opportunities that will present themselves to you in your life. Perhaps you will invest your money in the stock market, the real estate market, or maybe you will venture out on your own in your first business venture. Whatever the case may be, you now have the power to build great wealth.

Are you ready to use a budget to grow wealthy?

Thursday, November 24, 2016

The Best Way to Invest For Your Retirement

From my perspective, there are three types of people in this world. First, there are those that invest very simply and carefully, typically choosing investments that have steady long-term growth and have very low fees. Second, there are those that are studying the market each and every day. They often buy and sell shares of stock in order to avoid risk in the short term, which will in turn allow them to grow wealth for the long term. Finally, there are those that have always thought of investing, but have just never pulled the trigger. Either they do not have the funds to invest (by nature or by poor spending choices), or they just assume that they have plenty of time to invest later when they reach their 40’s and 50’s.

So what mentality is best? How should you be investing your money? I’m glad you asked. Let’s dig in.

The Obvious Wrong Choice

If you invest absolutely no money into the market, then your obvious return will also be nothing. Chances are, if you are going to wait until you are 40 or 50 years old to invest, then you have simply missed the boat. Sure, you could amass a couple hundred thousand dollars (which still will likely not allow you to retire) by dumping large amounts of money into the market, but if you would have started small when you were in your 20’s, the same amount invested could have grown to a value of over a million dollars. Postponing your investment is the obvious wrong choice.

Trading Frequently in the Market

I have a friend that often brags about a certain stock of his that has soared in the recent weeks. In total, he claims to have beaten the market considerably last year (which I later found out to mean a 22% gain), but he either did not check the yearly earnings of the major indexes, or he had such an arrogance about him that he was just blind to his lack of earnings. My investments sat in a few different index funds and earned 29% over that same period of time (and required none of my attention).

His story is quite similar to the majority of active traders. By jumping in and out of the market not only are they increasing their risk by trading in the short term, but they are increasing their expenses due to reoccurring transaction fees. 99% of these traders perform at a rate below the average market growth.

Get Rich Slowly
The absolute best way to invest for your retirement is to get rich slowly. Invest early, avoid senseless fees, and stay consistent. Over time, your money will grow at a greater and greater rate (thanks to compounded earnings). In addition to this, be sure to take advantage of company matches and bonus programs that will contribute additional funds to your 401(k). By continually adding to your pot of retirement funds and letting those

earnings grow year after year, your small contribution of $150 a month for 45 years will likely turn into $1.4 million dollars! Invest early and carefully and it will pay enormously.

Are you ready to start investing?

Monday, November 21, 2016

4 Tips to Save Your Business Money

When it comes to running a business, nothing is more important than the bottom line. Knowing how to reduce expenses can mean the difference between generating profit and operating at a loss. Don’t know where to start when it comes to money-saving tactics? Consider the following tips:

Green Technology
Going green isn’t just good for the planet – your business’s turnover may also benefit. Whether they’re motivated by genuine concern for the environment or a financial incentive, more organisations than ever are moving towards green technology. Making the transition to more environmentally friendly processes might involve some expenses at first. However, the money you’re likely to save in the long run will often make any initial costs worthwhile.

Trying to micromanage every aspect of your business can be exhausting and expensive. By outsourcing a service or two, you’ll have more energy to ensure continual productivity, rather than getting distracted by smaller tasks.

For instance, if your business provides clients with printed materials, save time and money by using a professional printing company like The Print Group. Apart from freeing up valuable resources, working with a printing service will allow you to offer clients a more professional looking product.

Inexpensive Advertising
These days, you don’t need a huge marketing budget to get the word out about your business. If you can’t afford traditional forms of advertising such as print or TV ads, there are plenty of cheaper options out there. Rather than paying tons of cash for publicity, you can create a corporate Facebook page, hand out flyers, or sponsor local sports teams. By making the most of low-cost marketing opportunities, your business’s reputation will gradually grow. You can find a lot of market tips here.

Buy Second-Hand
Unless you need brand new equipment for safety reasons, buying second-hand is one of the easiest ways to cut down on business-related costs. Whether you find what you need in second-hand stores, newspaper classifieds or on eBay, used office furniture and computers often cost half of what they would if they were brand new.

These are just some of the ways you can save your business money. By giving these tips a try and identifying as many opportunities as you can to reduce costs, you’ll be amazed at how much money you save.

Thursday, November 17, 2016

Invest in Your 401k, Roth IRA, and HAS

Investing can sometimes be confusing can’t it? Heck, even the title of this post can have some people scrambling to get out of dodge. The majority of people do not understand investment terms and would rather not take the initial step toward investing because they simply don’t know what to do, and they don’t want to make any big mistakes. I know it can be quite intimidating, but by knowing the simple facts, you can do quite well with your investments. 

First Invest in Your Company-Matched 401k 
Does your company match your 401k contributions? I believe that many companies still do, and if this is the case for you, then you should invest up to the amount that is matched. In other words, if your company will match 100% of your contributions up to 3%, this means that if you put 3% of your paycheck into your 401k, then you company will put the exact same amount into your 401k as well. This is an amazing benefit and should be maximized. 
So what funds should you choose for your investment? For the beginner, I keep this very simple. First, look at the historical returns of each fund. If they have consistently earned 10% or more in each year over the last 10+ years, then they are doing quite well – choose them to put a portion of your funds. Second, choose only those funds that have a low expense percent (preferably under 0.3%). By choosing funds with low expenses, you will ensure that you will keep more of your money in the long-run. Finally, be sure to divide your money among five or more different funds to stay diversified. 

Second, Invest in Your HSA Fund 
You might think that you should next invest your money into a Roth IRA, but it actually makes more sense to put your funds into an HSA fund. For those of you that have not heard of this term, it is actually a health savings account for individuals that are on a high-deductible insurance plan. Since this fund will roll your money over each year, is completely tax free, and allows you to invest within it, it is actually a much better deal than investing in your Roth IRA. Put the maximum amount into your HSA account each year and let the funds grow. Either you will use this money on medical expenses and pay no tax, or you can remove it without penalty after the age of 65. 

Third, Invest in Your Roth IRA 
A Roth IRA is an excellent investment, don’t get me wrong. It just so happens that a company-matched 401k and an HSA fund will earn you more in the long run (due to the contributions and lower taxes). But, if you put in enough money to get the full match from your employer and to max out your HSA account, then you should begin investing in a Roth IRA. 

The Roth IRA is an amazing investment option because of its tax advantages. Your contributions will be made with after-tax money before they are put into the fund, but the beautiful part is that this money will never be taxed again, even when you take it out of the fund at your retirement. So, you simply pay the tax early, allow your investment to grow for years and years, and then you never pay the tax on that stack of money when you take it out. It is a wonderful thing and should be taken advantage of. 

So what do you think? Are you ready to invest? 

Wednesday, November 16, 2016

Save money with Groupon Goods #Sponsored

This is a sponsored post. All opinions are mine.

Are you aspiring to save money? One aspect of becoming 'rich' is know when and how to save money. I have shared numerous ways I have made and saved money which has enabled me to have a lifestyle I love. One thing I have done for years is shopped with Groupon Goods.

For gifts, things for the home, jewellery and other bits and pieces I have needed, I have checked out sites such as Groupon Goods to see what they have and how much I can save. In order to save money, I have a few rules:

1.) Never pay full price 
This is a rule I follow so much that I overheard a conversation with my kids about it. My older daughter said to her little sister "Never pay full price. Wait for it to go on sale, everything always goes on sale!" Her sister is of the opinion she'll be rich and doesn't care what she pays. I have my work cut out teaching her.

2.) Shop around
It is incredibly easy to compare prices online and shop around without needing to spend hours in stores now. Type in what you are looking for, search on sites like Groupon Goods and look for either sales or coupons for the items you want.

3.) Don't buy stuff you don't need! 
One thing that is easy to do with sales and greatly reduced items is to buy things you don't need. Keep your budget in mind and what you actually need. If you spend $100 on something you didn't need, even if it was 75% off, you have spent $100 that didn't need to be spent!

How do you save money?