How To Get Out Of A Financial Mess?

There are two methods I can recommend about getting out of a financial mess.

Defensive Strategies

The first one is defensive: Cut down what you are already spending on.

You can’t start a business being in a financial mess. Cash Flow is more important than revenue. And you need to have lots of cash flow coming from your pockets if you are going to succeed.

Here are some things you can cut down on
• Smoking – if you can’t quit, just cut down on a few sticks
• Alcohol – booze can drain your finances faster than a running tap
• Night outs – spend some nights at home thinking about making more money
• Gambling – if you plan to gamble, it is better to gamble in a business
• Vacation and Country Clubs – you won’t die without a few memberships
• Food – eat healthily and you can even think clearer
• Laziness – The biggest thing that will hold you back!

Most important of all, don’t buy anything that constitutes a liability. A liability is anything that takes money out of your pocket no matter what they are worth in the future. Think in terms of cash flow. What can I invest in today that will give me funds tomorrow?

Now let’s move on to offensive strategies.

Offensive Strategies

One of the best, low-cost ways to invest in your business skills is to join a Network Marketing company. There are many other options such as starting a traditional business or maybe even an Online Business.

But if you want to guarantee yourself something concrete where business skills are concern, my take is on Network Marketing.

Regardless of what you have heard about this industry or how much money people have lost there, the biggest reason why I would recommend everyone to invest in a network marketing company is because of what you can learn there, and not because of how much money you can make (although it would be fantastic if you can make a living out of it).

You see, network marketing companies are the one place where people will share their trade secrets FREELY. It is logical because in order for your upline to succeed, they will want you to succeed as well! Therefore, they will not hold back in teaching you the skills of a business person.

Furthermore, the relatively low cost of investing in a network marketing company will amaze you for what you can learn for the price you are paying (a few bottles of vitamins and a business kit for the experience of a lifetime!) They will patiently train you in the attitudes and business skills you need to succeed in this industry.

Basically, you can’t succeed in network marketing with an employee’s mindset. A network marketing company will train you in sales, communication, teamwork, leadership, positive thinking, self-improvement, time and money investment as well as the support of your upline as a personal coach and mentor. I dare say that even if you didn’t make a cent, but diligently went through their program, the skills you develop will last a lifetime.

You can also develop skills by attaching yourself to an insurance agency. The job may be challenging, but those companies will also teach you the same skills above and maybe even gain a few tips on financial planning as well.

How about an Internet business? If you have the aptitude for computers, Internet businesses offer a low cost, high-profit margin business that can earn a lot of money and tap into a worldwide market.

Other places you can learn about business skills can be found at financial planning courses, real estate investment courses, time management courses and lots more.

All these I have suggested will be the safest way you can start a new business. You are only spending a few hundred to a thousand dollars in start-up and education. A traditional business might be too risky for someone without any business experience.

You invest tens of thousands of dollars and you might struggle trying to break even. But once you have developed the skills above, you will have a higher chance of succeeding.

The most important thing of all besides a good learning attitude are the people you mix around with.

It has been said before; you are the sum of the five people you spend the most time with!

This is very hard to swallow but imagine if you start talking to your five beer drinking, poker buddies that you want to go out on your own and make a fortune, what would they tell you? They would laugh their socks off before tearing your ego into a million pieces!

At the heart of man lies jealousy. They don’t want to see the people around them succeed. If you succeed, it makes them look bad. They know in their hearts that they are going no where yet they embrace that lifestyle and pull you down with them. They will steal your dream, and rob you of your financial freedom if you are not careful!

The key point to remember is: Only mix with Positive thinking people!

Positive thinking is not wishful thinking. A wishful thinker is a dreamer who doesn’t take action. Positive thinking is backed by action and you will feel the energy of people who believe in you and support your dreams.

If you hang out with ducks, you will quack… but if you hang out with eagles, you will soar!

So start looking for people who will follow your vision or are willing to grow together with you.

Tips To Save Money During Recession - Tip#19 - 20

Tip# 19 - Recycle

Try to recycle your stuff that will save you money.

Have you ever received and kept a nice gift that you like from somebody but will never use? Rather than leave it in the store room or take it back to the store for an exchange, consider keeping it to give as a gift to someone that might use it.

Another way to recycle is looking around your home. There are always things right in your home that can be used to make nice gift baskets - things that you never use. For example, the next time you purchase shampoo where you buy one and get one free, keep one for yourself and set the other one aside for future gift giving. You will find hundreds of ideas and will not run out of what to buy as a gift. So, be creative and consider things you purchased by have never used.


Tip#20 - Shop Online

Many online businesses offer great bargains due to its lower cost structure. In some cases, some online businesses are offering free shipping. Since the internet is such a competitive market, you can usually find fantastic deals. In addition, many of your favorite businesses where you shop in person have websites that offer even greater savings. Bookstores such as Amazon.com do sell books up to 70% off the original price. Overstock.com is another online business that sells closeout items for fantastic bargains. eBay.com is offering some goods at very competitive auction price...

Tips To Save Money During Recession - Tip#17 - 18

Tip#17 - Sell The Stuff No Longer In Use

Go through all the stuff in your house especially the store room and gather all the items that you no longer use. These items can be small or large appliances, gardening tools, clothing, makeup, and kitchen wares, whatever you have at the store room that collecting years of dust. List them on eBay.com. Get back some money by selling these items no longer needed and put the money in your savings account not to be touched.


Tip#18 - Turn Your Hobby Into Money

Everybody has a skill - find yours and turn it into money. For example, if you have a skill for woodworking, start creating children's toys or curio cabinets to sell. Perhaps, you are computer savvy and could teach a class at your local community college. Find something that you enjoy and turn your hobby into money.

Building The Habit of Saving

The power of saving is only one of those things that you truly "get"after time passes by. And I'm not talking about compound interest.

I'm talking about the feeling you get when you know you have something tofall back on. The pride you feel when you see the tangible results of your self control and discipline.

The knowledge that you can get by on much less than you realized without sacrificing too much in terms of the quality of your life. And the fact that you are no longer a slave to money, but undoubtedly, the master to money.

Tips To Save Money During Recession - Tip#15 - 16

Tip#14 - Go for non-branded

When buying food, try some of the non-branded or generic items. Unless you or your guests are going for fine dining and must have the best of the best, they will not know if the green beans were generic or a top name brand. Once you add some butter, salt and pepper, no one will know the difference except you - $15 per can vs $6 per can! People do not realize that many generic brands are actually manufactured by name brand companies, just branded with a different name.

In fact, companies such as those that make snack food will have conveyor belts that run side-by-side - one for the name brand and one fore the generic brand. This is quite common and the only difference is the label and price.


Tip#15 - Take advantage of sales

As you shop, if you notice that a brand that you and family use on a regular and consistent basis is on sale for a great bargain, try to take advanrage of the sale. For a example, if you use a particular type of shampoo or tooth paste costing $8 bucks per bottle or tube, you found that these items are on sale for $4, go ahead and buy 2 bottles or tubes. You should only do this on items that you know they will be used.

Tips To Save Money During Recession - Tip#13 - 14

Tip#13 - Saving Attitude

Good money management is an acquired skill or habit. Human being is a creature of habit. As you go along to build your saving habit, you need to have a determining and positive attitude which is critical to keep you and family heading to the right direction. If you think you can not save, then, you probably can not. If you think you can, you can. Either way you are right.

So, be determined and stay positive to saving.


Tip#14 - Need vs Nice To Have

When going for shopping, make sure that the thing you want to spend on is a "need" and not a "nice to have" nor a "want". Sometimes, this can seem like a fine gray line between a "need" vs a "want". However, if you stick to the need list, you will eventually spend less and cut down a lot of things which is nice to have and not necessity.

Tips To Save Money During Recession - Tip#11 - 12

Tip#11 - Utilities Usage

Set up some rules in your home such as turning lights off when leaving the room, having only a parent adjust the air or heat, leaving the doors or windows open when letting either cold or hot air into the house. Utilities are expensive especially when oil and gas price surged to record high recently. A great money saver is to monitor how they are used in your home. Another great idea is the investment of buying an energy-efficient hot water heater. If you cannot affort one, lower the setting so you are not heating water so hot. The hotter the setting, the more energy is being used. This idea is applicable to air conditioners too...


Tip#12 - Check The Garbage

One mother had her teenage daughter clean her room. the daughter proudly did just that, filling 2 huge trash bags of things that she no longer wanted.

Out of curiosity, the mother peeked into one of the bags to see what were being thrown away. To her surprised, she found a new tube of suntan lotion, 2 sweaters in perfect condition, makeup, lotion, a picture frame, hair curlers, all are in good condition. The daughter did not realize that just because of these items were no longer needed, they might be to somebody else.

After talking to her daughter, the mother turned around and listed the items on eBay, selling the "junk" at $35 bucks.

Tips To Save Money During Recession - Tip#9 - 10

Tip#9 - Patience

Be patient when it comes to saving. This means that you need to accept that it will take time to save and good planning. Be patient and remember that just because you want something, do not rush to buy just to satisfy your urge. Instead, wait for sales in order to get the best price, which in turn will save you money

Tip#10 - Break Old Habits

Take time to observe and learn the various things that "trigger" your spending habits. When you are depressed, lonely, sad, anxious, excited, whatever it may be, do you spend more? For example, when you receive your pay check, do you have on overwhelming "need" to spend money. Perhaps, you notice that when you are bored, you head for the shops. Knowing what affects you will help you to discipline yourself to find other ways of comfort.

Tips To Save Money During Recession - Tip#6 - 8

Tip#6 - What Matters To You

Make a list of the 10 most important things in your life. Next, rank each of the item in accordance to its importance to you from 1 to 10. The purpose of this exercise is helping you to identify the most and least important things and the reason why you need to save. You need to find out the "What", only then the "How" can follow through.

Some of the examples of this important things that a person might want can be a new home, car, a special family trip, starting a business, or pay off your debts which is burdensome.

Tip#7 - Goal Setting

Next, break your goals into short-term, intermediate term and long-term. Being able to see your accomplishments is a great motivator for you to work hard at saving. If you set a short-term goal of saving for tickets to your favorite concert and reach that goal, you will be encouraged to keep saving for the intermediate and long-term goals.

Tip#8 - Written Plan

When a person goes into business, they work out a business plan which becomes the blueprint of their business. The same can apply to saving money. Work out a written plan that the entire family can get involved with and learn their role. When you start to spend too much, go back and look at your saving plan to identify where are you messing up and how can you and family fix it.

More saving tips for the written plan will be shared in the next posts...

Stay tune...

Tips To Save Money During Recession - Tip#4 & 5

Tip#4 Buy In Bulk

It is true that warehouse shopping can save a lot of money. Even if you have a small family, you can always split large quantities. The price of items in bulk is generally a greater bargain. If you are single, you can go for bulk purchasing and share with friends or family on bulk items.

Tip#5 Allowance

Do not forget to give yourself an allowance for things you enjoy. Even if on a tight budget, buy something that you enjoy, which could be as simple as buying a new shirt or grabbing lunch as your favorite cafe. If do not allow yourself this small "splurge", you could find yourself in the same position as if dieting. Total deprivation leads to overindulgence.

Tips To Save Money During Recession - Tip#2 & 3

Tip#2 - Budget

Everyone should create or have a budget. If you are not sure or just not good with money, many websites or businesses are offering free financial consulting to help you put a budget together. Knowing where you are spending your money is by far the best way to save. In most cases, people have no idea where their money is really going and once they see it on paper, ont only are they surprised but eager to change their spending habits.

Remember, human being is a creature of habits. Good spending habit is critical to wealth.

Tip#3 - Plan

Planning is another great way to save. Before you go to the grocery store, make a list and stick to the plan. If considering a vacation, plan everything accordingly. Not only it will help to save you from wasting unnecessary time looking around, it is a great way to save money by prebooking some of the hot offers online or taking up some of the real offers by budget airlines or hotels.

Heading out with no set direction will certainly lead you to impulsive spending.

Rat Racers, What's Your Financial Future?

Naturally, most if not all of us want and crave for something better. It is all part of us if we want a bigger car, a better house, buying good things for the family.

We keep hoping for more, however, we don't understand that in order to get what we don’t have, we must do something that we have never done before.

That simply means:
Doing the same thing over and over again YET expecting different results!

For those who stucked in the rat race, you can’t stay at the same job forever and hope that a miracle will happen and your boss will suddenly give you a raise. You will be lucky that there is no downsizing in your company especially when US is in recession and facing huge challenge from surge in oil price and inflation. Switching to another company will only provide a short term solution to a long term problem. That's not really doing something different because you are still stucked in the rat maze looking for your cheese.

Sure, you can take up a second or even third job, but do you have enough hours and stamina in a day to sustain it?

The bottom-line: Trading time for money isn’t wise financial sense in the long term. You keep on increasing the hours just to win the rat race, but in the end of the day, you are still a rat on the mill! It is just like, even though you win the race, YOU ARE STILL A RAT!

Increasing your wages only puts you in a higher tax bracket. Your salaries increase, so does your expenses on your house and car.

How can you invest in yourself when all the time you spend working for a company, working for the government paying taxes and working for the bank paying off your house and car?

What if you fall sick and can’t work tomorrow?

Will the government take care of your family?

I highly doubt so.

So, it is time to take care of your finances seriously.

Something for you to ponder and plan for your future...

Financial Freedom?

In View Of Inflation, How Can We Hedge And Protect Assets For The Future?

Just want to share a valid question (below) that we should ask ourselves due to the current economy challenges such as collapse of housing market, subprime mortgage, economy slow down/recession, unemployment rate increase, inflation mainly due to oil price surging, etc, that the American are facing now. If US economy is not able to recover quick enough, the prolong recession in addition to inflation will end up heading to stagflation that need much longer time to recover...

The economy in US might spillover to the rest of the world eventually... Just like the old saying 'if the United States sneezes, the rest of the world catches a cold'.

The sharing below is a blog post by Dr Brett Steenbarger (http://traderfeed.blogspot.com/) answering a question from his reader:

"It's difficult for me to balance what we know about the major theme of government fiscal irresponsibility with short to medium term trends. As you've mentioned, it's one thing to be a successful trader, producing income and another to be financially successful and responsible over the long term. A trader should be able to produce income but what of retirement and all those baby boomers that are going to pull their stock investments at the same time and start looking for income streams? With inflation including public monetization of bad bank loans (private debt) where can you go to get a hedge and protect assets for the future? "

"That's really the challenge of the investor, as opposed to the short-term trader: to, as best as possible, identify scenarios for the future, position oneself to profit from those (or at least to not lose money), and to be sufficiently hedged in the event one is wrong. Many times this will mean acting on scenarios that differ from what you see in the short-to-medium term, which--as Tim notes--can be difficult to balance.

A poor person is one who worries about how to pay the bills. A middle income person is one who worries about funding retirement. A wealthy person is one who worries about leaving enough for the next generation. More assets do not necessarily bring fewer worries, only different ones. When you don't have money, you are worried about making it; when you have excess capital, you're concerned about keeping it.

"Hope for the best, plan for the worst" is advice that has served me well as a short-term trader. By placing your stop-out level, you plan for the worst outcome and ensure you can survive it. Similarly, through diversification and hedges you can plan for the worst as an investor and balance your various risk exposures.

In the last year I've traveled in the U.S. from Miami, FL to Bellevue, WA and quite a few places in between. The common element has been cranes on the skyline. Building continues apace, even amidst indications of a housing oversupply. New luxury developments line the major Naperville street that passes our neighborhood; the houses are not moving, but more are being built.

In one area I visited recently, an entire condominium complex is going under. The developer could not sell enough units and thus could not raise sufficient association fees to properly maintain the development. This led to higher fees for existing tenants and cutbacks in services, including lighting in hallways. Caught in a death spiral, current residents find they cannot sell their properties for even bargain-basement prices: no one wants the liability of paying fees for a deteriorating facility.

Suppose the housing crises winds up much deeper and broader than expected. How would this affect the economy? How would this affect the income of municipalities and their ability to pay off debts? How would this impact banks holding mortgage debt--and how would that affect monetary policy at a Fed fearful of disintermediation?

It's not difficult to imagine a perfect storm for baby boomer retirees, in which interest rates kept low by an accommodative Fed restrain savings income, even as residential and stock market holdings are falling in value and employment opportunities (along with the economy) are contracting.For those concerned about retirement and estate planning, the issue is not so much the specific odds that this scenario will unfold, but rather how one would stay in the game *if* it unfolds.

For those distant from their financial goals, the temptation is to become aggressive and jump in to buy housing bargains, battered financial stocks, and juicy high-yield debt. I remember, too, when plenty of investors jumped in to buy bruised technology shares after their big drop early in 2000. They seemed like bargains when they were 25% off their highs...but wound up more like 75% off their highs over the next two years.

I believe Tim is asking the right question about finding hedges. The tricky part here is identifying whether the ultimate threat is inflation (and soaring interest rates and commodity prices) or deflation (and collapsing rates and financial asset values). For me personally, it's the prospect of a housing collapse, attendant bank crises, and an irresistible push toward quantitative easing at a Fed dominated by appointees from the next administration that leads me to seek protection from a possible perfect storm. As a result, locking in high quality yields and hedging against stock market and dollar weakness has been a dominant part of my increasingly fluid financial planning."

Thanks for your valuable sharing Dr Brett Steenbarger!
Feel free to dropby Brett's blog: http://traderfeed.blogspot.com/

Early Retirement Planning

Everyone wants to have a comfortable and enjoyable retirement, but without adequate planning it probably won't happen. People are living longer than ever, which is obviously good news, but that means retirement is becoming more expensive. Some people believe that they can count on Social Security (or EPF in Malaysia or CPF in Singapore) and don't need to plan on their own, but this is a dangerous strategy, as it will cover only a fraction of a typical retiree's expenses, and the long-term health of the Social Security system is very much in doubt. This post is sharing some tips that you need to know to make your golden years everything you want them to be.

The first step in retirement planning is estimating how much money you'll need. A popular rule-of-thumb claims that you will only need about 70% of your pre-retirement income to maintain your lifestyle in retirement. While you will probably save some money currently being spent on work-related items (such as formal clothes and commuting), other costs go up in retirement (health care, hobbies, etc). 70% may be a useful rule of thumb, but some people find 50% is plenty while others feel they need 100%. Some of the sites we link to provide more accurate estimates based on your specific circumstances.

The second step in retirement planning is figuring out where the money you're going to need will come from. Nowadays, people are living longer so retirees are spending 30 years or more in retirement. It is important to plan ahead if you want to maintain your standard of living during that time.

Visit the Social Security Administration site to get an estimate of how much you'll receive, and add to this any pension you'll be receiving from your employer, if any.

You may have found that you'll have plenty of money in retirement. Congratulations.

More likely, the amount was less than you would like, as it is for most people. But it's not too late to do something about it, and the sooner you act, the more you can improve the situation. Learn about the various retirement plans and see if any are right for you, and get started right away.

No matter how young or old you are, get started today. Due to the miracle of compounding, starting a little earlier makes a big difference. Consider the following (assuming a 10% annual return): Who do you think would have more money in 40 years, a person who contributes a fixed amount every year for the first 8 years and then does nothing for 32 years, or the person who does nothing for the first 8 years and then contributes that same amount every year for the next 32 years? Believe it or not, the first person would be ahead at the end. Get started today!

Determine your tolerance for risk to define the right mix of stocks and bonds for your portfolio. Experts mention a good starting point for people 20 years or more away from retirement to have a mix of 70% invested in stocks and 30% in bonds. Consider investing more aggressively if retirement is sufficiently far away. As mentioned before, the power of compounding can make a big difference; a slight increase in return can make a big difference in the long run. As retirement approaches, you can move gradually away from stocks and toward bonds, but you shouldn't have 100% bonds as soon as you retire, because you'll still have a lot of years ahead of you and should keep a mix of stocks and bonds.

Consider tightening your budget and relocating to an area with a lower cost of living.

Investing shouldn't stop when retirement starts. Even if you are already retired, you've probably got many years ahead of you; most people will have 15-20 years of retirement, and this number keeps increasing. Don't immediately shift all your money into fixed-income and money market investments. You should still be planning relatively long term, probably a mix of growth and income. We encourage you to check out the links above, but you should also consult a professional to discuss your unique situation.

If you don't meet your retirement goals, there are still some options. Determine the average rate of return on your investments before and after retirement. Stocks have a good track record for long-term growth, so invest a portion of your money in stocks that will grow your savings faster than inflation.

More info can be found here for Early Retirement Planning.

Getting In Control Of Your Financial

Getting control of your financial and money is about spending less than you earn and using the difference to fund savings and investments to get the miracle of compound interest working for you.

You should aim to spend less than you earn each and every month. If you already do this, you're well on your way to gaining control of your money - you just need to get the money you're not spending to start earning interest. Do this by paying yourself first: set up a direct debit into a savings account just after pay day and put that money to work right away so you don't get tempted to spend it elsewhere.

If you don't spend less than you earn, don't worry. Most of us need a little help getting control of our money. In fact, those of us who barely make it from one pay day to the next need to start with basics: budgeting.

Budgeting is neither as scary nor onerous as it sounds. To start, make a list of your regular bills and how much they cost you each month. This should give you a good idea of your main areas of expenditure. If you're not sure where your money's going, keep a spending diary: for one month, make a note of everything you spend, even if it's 40p for a chocolate bar. At the end of the month, total it all up to see how much you spend and where you spend it.

Once you know your outgoings, it's time to start cutting them. Often there's no need to cut back on the things you enjoy, but rather to get better value for money for the stuff you have to get anyway. If you're spending far in excess of your income, you will need to take more drastic steps, but for most of people, a trim should do it.

Start trimming your outgoings by reducing one major bill each month, prioritising the bills you pay on a regular basis, as with these, one phone call could lead to sustained savings. Most people can save hundreds of pounds, if not more, just by making a couple of switches. You shouldn't have to look too hard, either...

- One of the biggest expenses most of us have, after rent or a mortgage, is energy bills. You can usually get a better deal by switching energy providers - just shop around online.

-If you're a driver, you can probably save a packet on car insurance by switching to a cheaper provider - just compare online. Women drivers and drivers with clean records can stand to save the most here. Comparing online will also yield savings on journeys by rail and coach.

- Wanna have a break? However and wherever you're making tracks, you can save at least the price of a meal by shopping around before you buy. With dozens of online resources dedicated to finding the cheapest fare, accommodation, excursions, and breaks, there's just no excuse for paying too much for your holiday.

Last but not least, getting control and keeping control are different things, and there's no guarantee you won't fall off the straight and narrow at least once. When this happens, just take stock of why you fell - so you can learn from your tumble - and calmly and proudly climb back on the horse.

5 Steps to fix your financial woes

We all know that money is not everything and that happiness and contentment cannot be bought with cash. However, as a society becomes more materialistic, most people struggle to fill their lives with 'things' and brands.

However, when bills pile up and despair takes over, you realize that you are now trapped in your personal financial hell. The good news is, IT'S NOT TOO LATE!

Here is the 5 steps to fix your financial woes to escape from rat race:

1. Knowledge and awareness
Find out everything you can about your own cash inflow and outflow. If more money is going out than coming in, you need to do something about it immediately.

2. Have A Plan
Sometimes all it takes is to evaluate your spending habits. Say "no" to flashy things and sleazy salesmen. Count every cost you incur for a month and you will eventually discover where you should cut your expenses.

3. Self-discipline
Once you have a plan. STICK TO IT. Tell yourself that when your financial situation improves, your quality of life will follow suit. Once you're out of the quagmire of debt, everything looks better.

4. Education
Learn not just about money but about yourself. Are you spending because you're depressed or fearful? Getting in touch with yourself will solve many of your financial problems.

5. Action
Once you learn, act on it. Remain vigilant until your goal is achieved - that is financial security or being debt free.

Keeping track of your financial situation is about control.
Remember, that the benefits will be well worth the work.