Financial Planning

Appreciating the Importance of Personal Finance

If you are reading articles on this website, you will probably agree (perhaps based on personal experience) that understanding how to assess and handle your finances can be very difficult. At the same time, very few of us ever receive training in basic financial skills as part of our formal education. The unfortunate consequence is a society composed of individuals who not only struggle with increasing debt but cannot provide their children with prudent fiscal advice, having never acquired such wisdom themselves. Regardless of your economic position or your long-term goals, a strong knowledge base of good financial behavior when combined with self-discipline can bring you not only stability but wealth. In order to achieve these objectives, it is essential to understand and practice the underlying principles of sound personal finance. Continue reading

Can Gambling Make You Wealthy?

The Solvency Shark recently overhead a conversation in which a woman recounted how she lost $1200 gambling in Biloxi (“which is a lot for me,” she said), and then made $1800 the next night. “So really, I won.”

This got the S.S. wondering: can you actually make money gambling in the long-term? Continue reading

Personal Finance Education Can Prevent Serious Money Mistakes

In times where the economy is constantly fluctuating and debts are at an all-time high, it is important for people to learn to manage their money. Some do not know where to turn to gain knowledge of how to spend wisely. Luckily, this day and age also comes with the Internet. Online sites allow you to take advantage of personal finance education to get you on your way to managing your money the right way. Continue reading

The Dangers of Paying Off Debt With a 401(k) Loan

If you are in debt, there are many aspects of paying off that debt with a 401(k) loan that are very alluring. For instance, you will likely receive a very low interest rate on your loan, around 4.25%, and a lower interest rate means a lower monthly payment. The fact that you can borrow any amount (less than a quarter of your balance or $50,000) as long as you have money in your account does not help dissuade many borrowers.  Despite these two facts, there are other factors that make this a poor choice to manage your debt. For instance, if you take out a 401(k) loan and decide to switch jobs (or are laid off), your employer will likely require you to repay the loan within sixty days. If you do not meet that deadline, the outstanding balance will be considered a distribution on which you will owe tax, and if you are under fifty-five a ten percent penalty will be tacked on as well. Additionally, some plans do not allow you to contribute to your 401(k) while a loan is outstanding, which results in two things. First, you will end up with a lower account balance at retirement, and second, since you will not been making contributions, your taxable income amount will increase, thus meaning you will pay more taxes. Continue reading

Life Insurance In Your 20’s?

Life insurance is interesting because unlike other insurance policies, such as homeowner’s or auto insurance, everyone is going to eventually pass away and cash in on their policy. Although this is true, many young adults do not see the benefits of purchasing a policy at such a young age. To be fair, the need for the benefits of the policy may be lower in earlier stages of life. There may be however, still benefits to investigating the purchase of a life insurance policy while still at a young age. Continue reading

Certificate Deposits Can Lock in Savings

Saving is something that the majority of Americans are not very good at these days. A lot of people talk the talk but do not seem to be able to walk the walk. This is very understandable in many cases because temptation can be found everywhere in society. The temptations out there such as, “deals” and dollar menus everywhere coupled with the fact that money is easier to access than ever before make saving money hard for many. Previously people had to carry cash and checks around; consequently, today someone can check out for a small purchase by just swiping a flex keychain over a magnetic strip. People are even banking on their phones now. One way to combat this excessive spending is to purchase a certificate deposit, or CD. Continue reading

Bin Laden Death Effect on the Stock Market

The stock market is about financials, corporations, the economy and our belief about future events. So what does that have to do with Osama Bin Laden? The answer lies in the effect of his cowardly act on September 11, 2001, but it also is reflected in how our fellow citizens reacted to move on from this act of war and show the world that the U.S. is open for business. Continue reading

Get Rich, But Not Quick

So you want to be the next Bill Gates, but don’t necessarily want to revolutionize the computer industry in the process? It is absolutely possible to accumulate wealth, and it is absolutely possible to become financially stable and then some. The only problem is that you have to work in order to achieve this kind of financial awesomeness. You may not have to change the computing lives of everyone in the world, but you will absolutely have to work hard to get there. At the backbone of accumulating wealth is being responsible with your money. Continue reading

The Importance of Personal Finances Using a Simple Approach

Until very recently, personal finances were a very simple thing: You worked.

Sometimes you worked for money, sometimes you worked for a product. If you needed something you couldn’t make, you bought it. If you needed to buy something you couldn’t afford, you got a loan through a bank. Continue reading