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Their Worst Financial Blunders That Still Haunt Them To This Day
eople Are Sharing Their Worst Financial Blunders That Still Haunt Them To This Day, And I Really, Really, Reeaaaally Feel Their Pain
BuzzFeed Mon, July 29, 2024
Reddit user Dira_Jo asked the community, "What do you consider the worst financial decision of your life?" People swiftly took to the comments to share the money mistakes that still haunt them years later. Here's what people revealed:
1."Not contributing the max amount into my 401k. I worked at that company for 27 years and could’ve retired long ago."—u/parrothead_69
2."Being a tobacco user. I've told all my friends younger than me, as well as my kids, never to start using tobacco or Nicotine products. I started at 18 and am almost 45 now. I've quit a few times for a while, but a ton of stress at work and other things brought me back.
People Are Sharing Their Worst Financial Blunders That Still Haunt Them To This Day, And I Really, Really, Reeaaaally Feel Their Pain
BuzzFeed Mon, July 29, 2024
Reddit user Dira_Jo asked the community, "What do you consider the worst financial decision of your life?" People swiftly took to the comments to share the money mistakes that still haunt them years later. Here's what people revealed:
1."Not contributing the max amount into my 401k. I worked at that company for 27 years and could’ve retired long ago."—u/parrothead_69
2."Being a tobacco user. I've told all my friends younger than me, as well as my kids, never to start using tobacco or Nicotine products. I started at 18 and am almost 45 now. I've quit a few times for a while, but a ton of stress at work and other things brought me back.
I've spent too much time and money both using, trying to quit, and dealing with ridiculous price increases and taxes that are supposed to help deter but really just squeeze more from us addicts."
"I have lived the rest of my life very responsibly, living within my means. I bought a home and then sold it once my family grew to purchase a bigger house while the market was still decent here and interest rates were low. I've invested the max in my 401k. I buy used vehicles and pay them off as soon as possible. The wasted money comes from something I know is bad for my health in the long term.
I have to admit, I have little control over it, although I keep trying. It sucks. So, any of you younger folks here, take it from me. It may seem fun, cool, or relaxing as a teen or young adult, but do yourself a favor for both your wallet and health and stay away from dipping, smoking, vaping, etc."—u/BigSarge79
3."Loaning money to friends. Or anything of financial value, for that matter. To this day, I will not loan so much as a penny without some kind of leverage against the person to pay me back. That saying about loaning people money is true. If you're going to loan money to somebody, you should do it assuming you won't get paid back. That has happened to me every single time. I will never loan money or things of monetary value ever again."—u/Busy_Ad2627
4."Letting my dental insurance lapse. I had the same plan for years, plan options changed, and I forgot to update to the new plan. I got my first cavities and root canals a few months later, and it cost thousands rather than hundreds."—u/AurelianoTampa
5."I was short on rent by $500 in 2013, so I sold 16 Bitcoins to cover the difference. Those coins are worth over a million dollars today."—u/Discokruse
6."My first trip to college. I racked up $56k in debt, and I dropped out. The cost of campus housing was more than the tuition, and the program was garbage. The school later lost its accreditation and went out of business. Students with federal loans had their balances discharged, but mine were private. I wish I had done some serious soul-searching at the time and thought longer about my goals and career path, but live and learn."—u/dackdeegan
7."My children. They're the best emotional decision ever, but the tiny accountant in my head reminds me every time I book a hotel or buy plane tickets for a holiday how much nicer of a holiday I could afford if we'd stopped at one. Don't even get me started on how much it costs to eat at a restaurant for a family of six, especially now my oldest thinks she's too grown up for the kids' menu."—u/Due-Criticism9
To Read More:
https://www.yahoo.com/finance/news/people-sharing-worst-financial-blunders-031602188.html
A Former Fed Official Finally Tells The Truth About Inflation…
A Former Fed Official Finally Tells The Truth About Inflation…
Notes From The Field By James Hickman / Simon Black 7-29-24
My sister used to be a reporter for Fox News based in south Florida and would regularly be assigned to cover NASA press conferences.
And she’s often told me about how reporters were terrified to ask any real questions. They’re not astrophysicists and don’t understand the first thing about rocket propulsion, and most of the journalists never bothered to learn even the basics of the topic.
So, the majority of the questions were very superficial; quite simply the reporters didn’t want to embarrass themselves.
This is how the media covers the Federal Reserve. Most reporters don’t have a clue about central banking, so, not wanting to look stupid, they just sit quietly and give the Fed a pass. There’s no real scrutiny.
A Former Fed Official Finally Tells The Truth About Inflation…
Notes From The Field By James Hickman / Simon Black 7-29-24
My sister used to be a reporter for Fox News based in south Florida and would regularly be assigned to cover NASA press conferences.
And she’s often told me about how reporters were terrified to ask any real questions. They’re not astrophysicists and don’t understand the first thing about rocket propulsion, and most of the journalists never bothered to learn even the basics of the topic.
So, the majority of the questions were very superficial; quite simply the reporters didn’t want to embarrass themselves.
This is how the media covers the Federal Reserve. Most reporters don’t have a clue about central banking, so, not wanting to look stupid, they just sit quietly and give the Fed a pass. There’s no real scrutiny.
At the same time, Fed officials are generally in lockstep with one another; it’s not like politics where the two sides constantly chastise one another. With the Fed, there is virtually no public dissent.
Even former Fed officials who have long left the bank maintain an almost mafioso code of silence.
The end result is that no one really criticizes the Fed. And because of this, the Fed has been able to cultivate a reputation that they’re in total control of the situation… even though their track record proves the opposite.
The Fed completely failed to predict inflation in 2020 after engaging in record money printing. Then they missed the warning signs in early 2021, then misdiagnosed inflation as “transitory” in late 2021, then still failed to act until early 2022.
Yet despite such failures, the Fed is still sticking to the narrative that they know what they’re doing. And with hardly anyone challenging them, it’s been easy to maintain a veneer of omnipotence.
But Kevin Warsh broke ranks this weekend. As a former Fed governor, he is the ultimate insider… and he penned an editorial published in the Wall Street Journal on Saturday blasting many of the Fed’s decisions.
Warsh describes how, when he joined the central bank in 2006, its entire balance sheet was just $800 billion. But in order to deal with the 2008 financial shock (yet another crisis that the Fed missed), they invented “quantitative easing”, or QE.
QE was just a fancy way to say they were conjuring massive amounts of money out of thin air. Informally we could say they were ‘printing money’, though almost all of the new money was created in digital rather than paper form. They click a few buttons, and, poof, new money.
Naturally the Fed promised to eventually unwind QE and drain all of that new money out of the financial system. But they never did.
On the contrary, the Fed embarked on THREE distinct rounds of QE between 2008 and 2013, increasing the balance sheet each time. In the end, the Fed’s balance sheet peaked at $4.5 TRILLION, more than 5x its size prior to the 2008 crisis.
And they kept it at that level for years. Even by 2020, the Fed balance sheet was still around $4 trillion in size.
So much for unwinding. And when the pandemic hit, the Fed quickly pulled out its QE playbook and embarked on a fourth round of money printing… exploding the balance sheet all the way to NINE TRILLION dollars.
Warsh eviscerates the Fed policymakers for failing to see such obvious consequences and explains that there is a very clear connection between the size of the Fed’s balance sheet, i.e. the amount of money it prints, and inflation.
“The monetary base is up 60% since the pandemic. Another measure of money, M2, is up 36% in the past four years. The inflation surge in the same period-- cumulatively about 22%-- shouldn’t have been a surprise.”
“The high priests of central bank dogma might consider it blasphemy,” he writes, but “less money printing, less inflation.” Duh.
He goes on to say, “The American people are still paying a high price for the central bank’s policy error,” and that if the Fed really wants to tame inflation, they’re going to have to slash their balance sheet, i.e. unwind most of the new money that they printed.
Fat chance.
In fact, Warsh points out that the Fed has already indicated they will NOT reduce the size of their balance sheet any longer. And Peter and I both believe the Fed will soon embark on even more QE.
Why? Because the federal government has a serious spending problem. Even the government’s own budget forecasts show an additional $22 trillion in deficit spending over the next decade.
And where will the bulk of that money come from? Most likely from the Fed. They’ll launch QE5, QE6, and beyond, to print the trillions and trillions of dollars that the US government will need to make ends meet in the coming decade.
Sure, it’s possible that the government gets real… that they cut spending, eliminate some entitlements, slash regulations, abandon idiotic green initiatives, and stop standing in the way of conventional energy.
But the window of opportunity is extremely narrow… and depends on the election this year. Plus, a lot of things will have to go right, and very little can go wrong.
So, it’s reasonable to anticipate more deficit spending, which means more Fed printing. And more inflation.
To your freedom, James Hickman Co-Founder, Schiff Sovereign LLC
Do I Have to Worry About Gift Tax?
If I Give My Child $30,000 Towards Their Wedding, Do I Have to Worry About Gift Tax?
Mark Henricks Sat, July 27, 2024 SmartAsset
Imagine your child is getting married and you want to help pay for their wedding. You’ve been saving for years and now have $30,000 set aside for their big day, which you plan to hand over in the form of a check.
However, before you pass along that much cash, it’s important to understand the potential tax implications of making a $30,000 gift. A gift that size could require you to pay the federal gift tax, which can reach up to 40%. The good news is you may avoid paying gift taxes altogether, but there are reporting requirements and other limitations to keep in mind. Consult a financial advisor to minimize your gift tax obligations.
Federal Gift Tax at a Glance
The federal gift tax applies when you transfer money or property to someone else without receiving something of equal value in return. Gift tax rates range from 18% to 40% based on the size of the gift.
If I Give My Child $30,000 Towards Their Wedding, Do I Have to Worry About Gift Tax?
Mark Henricks Sat, July 27, 2024 SmartAsset
Imagine your child is getting married and you want to help pay for their wedding. You’ve been saving for years and now have $30,000 set aside for their big day, which you plan to hand over in the form of a check.
However, before you pass along that much cash, it’s important to understand the potential tax implications of making a $30,000 gift. A gift that size could require you to pay the federal gift tax, which can reach up to 40%. The good news is you may avoid paying gift taxes altogether, but there are reporting requirements and other limitations to keep in mind. Consult a financial advisor to minimize your gift tax obligations.
Federal Gift Tax at a Glance
The federal gift tax applies when you transfer money or property to someone else without receiving something of equal value in return. Gift tax rates range from 18% to 40% based on the size of the gift.
However, not all gifts trigger this federal tax. The IRS allows you to give away up to $17,000 ($34,000 for married couples) per year to each individual without owing any taxes on the gift. This is called the annual exclusion, and in 2024 it will increase to $18,000 per person.
However, gifts that exceed this annual exclusion aren’t necessarily taxed either. Instead, they reduce the amount of money or property you can give away tax-free over the course of your lifetime. This lifetime limit is known as the basic exclusion amount or lifetime exemption and it’s adjusted each year for inflation.
The gift tax only applies when you exhaust your lifetime exemption. In 2023, a person can give away up to $12.92 million over the course of their lifetime without triggering the gift tax (this will increase to $13.61 million in 2024). For example, if someone were to give away $13 million, they would pay gift taxes on only $80,000. And if you need additional help planning for major gifts, consider matching with a financial advisor.
How the Gift Tax Could Affect a $30,000 Wedding Gift
If you want to give a child $30,000 to help pay for a wedding, there are a few different ways it could be structured.
As a gift solely from you to your child, a $30,000 wedding gift would avoid most tax liability on its own. The gift only exceeds the $17,000 annual exclusion for 2023 by $13,000, so that’s all that could potentially be taxable if you’re single.
If this is your first time exceeding the annual exclusion, there’s more good news. In that case, the $13,000 excess would simply reduce your $12.92 million lifetime exclusion by that amount. You would not actually have to pay any gift tax unless you exceed your remaining lifetime exclusion, though you still have to fill out Form 709.
Alternatively, you could gift both your child and their future spouse $15,000 each and avoid the annual exclusion threshold (remember, you can gift up to the annual exclusion amount per year per person).
To make sure you structure your gifts in your best interest, talk it over with a financial advisor.
How to Avoid Gift Tax on a $30,000 Wedding Gift
TO READ MORE:
https://www.yahoo.com/finance/news/worry-gift-tax-pay-30-122213443.html
7 Biggest Cash Withdrawal Mistakes
I’m a Bank Teller: 7 Biggest Cash Withdrawal Mistakes I See People Make Every Day
Madeline Duley Fri, July 26, 2024 GOBankingRates
If you have a bank account, you’re likely familiar with the process of withdrawing cash, depositing checks and handling bills. While these might seem like basic tasks, there are a few common mistakes that are easy to make when carrying out these seemingly simple financial transactions.
Find out from a bank teller if you’re making these seven common cash withdrawal mistakes — and learn how to avoid them.
Getting Bills Too Large
Although efficient and compact, large bills aren’t as versatile as you might think.
I’m a Bank Teller: 7 Biggest Cash Withdrawal Mistakes I See People Make Every Day
Madeline Duley Fri, July 26, 2024 GOBankingRates
If you have a bank account, you’re likely familiar with the process of withdrawing cash, depositing checks and handling bills. While these might seem like basic tasks, there are a few common mistakes that are easy to make when carrying out these seemingly simple financial transactions.
Find out from a bank teller if you’re making these seven common cash withdrawal mistakes — and learn how to avoid them.
Getting Bills Too Large
Although efficient and compact, large bills aren’t as versatile as you might think.
“One mistake I often see is taking out large bills to spend at local businesses, because most won’t accept them because businesses are worried about fraudulent bills,” said Haley West, head teller at Kohler Credit Union.
The usability and convenience of smaller bills are well worth the annoyance of carrying around a thicker stack of cash.
Requesting Brand New Bills
There’s nothing more appealing than fresh, crisp bills, especially when you’re giving cash as a gift. However, requesting brand-new bills might have frustrating consequences.
“A mistake members make is requesting brand new bills as they are sticky and members tend to come back thinking that we shorted them or they gave too much when they purchased because the bills were stuck together,” West said.
Neglecting To Balance Accounts
Life gets busy and it can be hard to stay on top of account balances. An easy mistake to make is withdrawing cash from an account with inadequate funds.
“A staggering 19% of all payments in 2020 were cash transactions,” said Oliver Brifman, business insurance and financial services expert at eMerchant Authority. “Yet, many customers withdraw without checking their balance, leading to overdraft fees. Always check your balance before a withdrawal to avoid the plunge into overdraft territory.”
Rushing
When you are in a rush or distracted, it’s easy to make mistakes.
“Based on my time as a bank teller, I learned firsthand how easily little mistakes can happen with cash transactions if you’re not careful,” said Steven Kibbel, former bank teller and now a Certified Financial Planner and financial advisor at Prop Firm App. “When people are rushed or distracted, they often make the mistake of miscounting bills, mixing up denominations or neglecting to double-check important details on checks.”
Save yourself the headache later by double-checking your accounts, counting your cash and remembering to breathe.
Forgetting ID
Surprisingly, the most common mistake people make when withdrawing cash is a very simple one: forgetting their ID.
https://www.yahoo.com/finance/news/m-bank-teller-7-biggest-160040491.html
Take The Cash Or Lifetime Annuity?
Take The Cash Or Lifetime Annuity?
If You Win The Lottery, Here's What Suze Orman Suggests You Do: Take The Cash Or Lifetime Annuity?
Ivy Grace Wed, July 24, 2024 Benzinga
Unfortunately, winning the lottery is just a dream for most people. While the odds may not technically be in your favor, it's fun to fantasize about what you'd do if you found yourself winning millions – or, in some cases, hundreds of millions.
Podcast host and finance expert Suze Orman has offered some advice for lottery winners over the years, emphasizing the importance of making informed decisions about managing sudden wealth. One of the most commonly debated and hardest decisions is choosing between a lump sum or a structured settlement.
In 2022, Speaking at the National Structured Settlements Trade Association’s annual conference, Orman covered the benefits of structured settlements for lottery winners. She explained, “If you win a lottery, it’s no different from getting a large inheritance. All that money’s gone within a few years. Why is that? Because they don’t know how to structure their finances to last forever."
Take The Cash Or Lifetime Annuity?
If You Win The Lottery, Here's What Suze Orman Suggests You Do: Take The Cash Or Lifetime Annuity?
Ivy Grace Wed, July 24, 2024 Benzinga
Unfortunately, winning the lottery is just a dream for most people. While the odds may not technically be in your favor, it's fun to fantasize about what you'd do if you found yourself winning millions – or, in some cases, hundreds of millions.
Podcast host and finance expert Suze Orman has offered some advice for lottery winners over the years, emphasizing the importance of making informed decisions about managing sudden wealth. One of the most commonly debated and hardest decisions is choosing between a lump sum or a structured settlement.
In 2022, Speaking at the National Structured Settlements Trade Association’s annual conference, Orman covered the benefits of structured settlements for lottery winners. She explained, “If you win a lottery, it’s no different from getting a large inheritance. All that money’s gone within a few years. Why is that? Because they don’t know how to structure their finances to last forever."
Orman understands that not everyone’s a financial whiz. While her advice changes depending on your money know-how, she suggests a structured settlement or annuity for those new to managing large amounts of money. This approach doles out your windfall in steady chunks, stopping winners from blowing it all in a blink – a common lottery winner woe.
Lottery winners don't have the best track record, statistically speaking. According to the Certified Financial Planner Board of Standards, nearly one-third of lottery winners eventually go bankrupt within three to five years.
For financial matters, Orman suggests taking a lump sum. In a 2019 CNBC article, she advised, “If you feel capable of investing it, if you feel capable of managing it, and you want to do that, take the lump sum.” That way, you’re in control of your own money.
If you're fortunate enough to win an exceptionally large jackpot in the hundreds of millions, Orman leans toward recommending an annuity in this case, too. This strategy aims to prevent the risk of spending the entire amount too quickly. Annuities often get a lot of backlash but can be the right choice in some situations.
TO READ MORE: https://www.yahoo.com/news/finance/news/win-lottery-heres-suze-orman-190013691.html
Here’s How Much Cash You Need Stashed If a National Emergency Happens
Here’s How Much Cash You Need Stashed If a National Emergency Happens
Jaime Catmull Wed, July 24, 2024 GOBankingRates
You’ve probably heard countless times that it’s important to have a rainy-day fund set up “just in case” something unexpected were to happen. But we’re now at a time when having an emergency fund is more vital than ever.
The coronavirus pandemic was a prime example of how something unexpected can have devastating effects on the economy at large and on an individual level, too. While we all hope the worst of it is over, here’s how to be prepared in case it’s not — plus how to set up a fund for unexpected future national emergencies.
Why You Need a National Emergency Fund
Part of being prepared for any contingency, big or small, is having a reserve of emergency cash at your disposal at all times. When you can’t rely on accessing your funds electronically, you’ll need some legal tender to buy food, gas or other necessities.
Here’s How Much Cash You Need Stashed If a National Emergency Happens
Jaime Catmull Wed, July 24, 2024 GOBankingRates
You’ve probably heard countless times that it’s important to have a rainy-day fund set up “just in case” something unexpected were to happen. But we’re now at a time when having an emergency fund is more vital than ever.
The coronavirus pandemic was a prime example of how something unexpected can have devastating effects on the economy at large and on an individual level, too. While we all hope the worst of it is over, here’s how to be prepared in case it’s not — plus how to set up a fund for unexpected future national emergencies.
Why You Need a National Emergency Fund
Part of being prepared for any contingency, big or small, is having a reserve of emergency cash at your disposal at all times. When you can’t rely on accessing your funds electronically, you’ll need some legal tender to buy food, gas or other necessities.
“Whether it’s Mother Nature or some other disaster out of your control, you always want to be prepared by having some emergency cash on hand,” said Annalee Leonard, an investment advisor representative and president of Mainstay Financial Group. “Banks and ATMs may not be up and running for days after a strong storm. I recommend my clients have three to five days’ worth of spending money, just in case.”
Retirement Planning: Whether you're planning for retirement, dealing with a significant life event or simply looking to make smarter financial decisions, a financial advisor can offer the expertise and guidance you need. Here are some compelling reasons why you should consider a financial advisor -- even if you're not wealthy.
How To Decide How Much To Save
To decide how much to save for an emergency fund, you’ll need to ask yourself a couple of questions:
How much will I need for an extreme catastrophic event?
How much can I afford to save?
“It’s wise to have a small amount of physical cash at home for the truest of emergencies when banks are not operating,” said financial tech writer and expert, Priyanka Prakash.
Aim To Save $2,000
“Individuals should be prepared to pay for essential or non-discretionary expenses out-of-pocket,” said Brett Tharp, CFP and advisory live training specialist at eMoney Advisor. “Temporary lodging or shelter, fuel, food, water and necessary medications fall into this category. This will differ for each person depending on their level of preparedness or perception of how likely a catastrophic event might be.”
To cover those costs, $2,000 is a good figure.
“The rule of thumb I advise my clients is to keep $1,000 to $2,000 in cash in case banking operations are shut down due to a national emergency or catastrophe,” said Gregory Brinkman, president of Brinkman Financial in Tulsa, Oklahoma.
There’s No ‘Magic Number’ for How Much To Save in Your Emergency Fund
Despite these suggestions and what some other experts might advise, though, there’s no magic amount you should have nestled away in your emergency fund. The answer for how much you should save for an emergency situation is that you should do what feels right to you. No matter the amount, an emergency fund is absolutely necessary — so make it a priority to build one.
So if you can only afford to set aside $1,000 for an emergency fund, that’s better than not saving at all.
The Cost of Covering Necessities
Take into account that in a national emergency, inflation will rise, demand for necessities will increase and price gouging will likely ensue. With all that in mind, in addition to your regular emergency savings, you should prepare to have enough to cover the following costs in a national emergency situation (dollar amounts are estimates):
TO READ MORE: https://www.yahoo.com/news/finance/news/much-cash-stashed-national-emergency-130023345.html
Wealthy Beginnings: How the Rich Raise Their Babies Differently
Wealthy Beginnings: How the Rich Raise Their Babies Differently
July 7, 2024 5 by Cindy Lamothe Edited by Ashleigh Ray
Raising babies takes a lot out of you — emotionally, physically and financially. Rich parents are often better equipped to handle the toll because of one simple thing: resources.
“Wealthy families do not automatically make better parents, but they do have access to more support and therefore more time than most,” said Christine Landis, a former CEO of a global fintech company, a parent of two children and the founder of Peacock Parent.
Having this additional time and support allows both parents to be less resentful, and more present with their kids (and each other). Keep reading to see just how the wealthy raise their babies differently
Wealthy Beginnings: How the Rich Raise Their Babies Differently
July 7, 2024 5 by Cindy Lamothe Edited by Ashleigh Ray
Raising babies takes a lot out of you — emotionally, physically and financially. Rich parents are often better equipped to handle the toll because of one simple thing: resources.
“Wealthy families do not automatically make better parents, but they do have access to more support and therefore more time than most,” said Christine Landis, a former CEO of a global fintech company, a parent of two children and the founder of Peacock Parent.
Having this additional time and support allows both parents to be less resentful, and more present with their kids (and each other). Keep reading to see just how the wealthy raise their babies differently
They Count on a Full Staff of Helpers
“Ask any parent, and they will tell you that time is the ultimate luxury in parenthood,” explained Landis. “And this is exactly what wealthy parents can buy more of — time — in the form of delegation and outsourcing in parenthood.”
For example, wealthy families typically have multiple nannies, family assistants and private chefs to help with the duties typically expected of parents.
According to Landis, “The nannies work early morning shifts on weekends to allow the parents to sleep in together — a true luxury in parenthood — help with school drop off and pick up schedules and help keep the kids away from screens with good old fashion entertainment — like reading the same book over and over again.”
Family assistants also help maintain the household supplies, make doctors’ appointments and complete school paperwork — all the things that have to get done, but not necessarily by the parent.
“The private chef comes 3 times per week and handles the entire meal planning for the family — not just the kids — and saves both parents time and energy from grocery shopping, unloading, prepping, cooking and cleaning up meals for everyone.”
They Hire a Night Nanny
One of the most distinctive practices among wealthy parents is hiring a night nanny. This practice allows parents to ensure that they get adequate rest while their newborn is cared for by a professional during the night.
Head of growth at GoSummer, Dennis Shirshikov called this benefit multifaceted because “… parents are able to maintain their productivity and mental health which is crucial for those managing businesses or high-stress careers.”
7 Major Differences Between Rich and Poor People
7 Major Differences Between Rich and Poor People, According To Money Expert Humphrey Yang
Adam Palasciano Tue, July 23, 2024 GOBankingRates
Of course, everyone wants to be rich. The idea of not having to worry about money seems like a dream for most. But, becoming rich takes lots of discipline and determination. The reality is that it’s easier to be poor.
In a recent YouTube video from financial guru Humphrey Yang, he outlined the seven major differences between rich and poor people that are important to understand.
If you want to become rich, you’ll need to understand the key differences between the rich and the poor.
7 Major Differences Between Rich and Poor People, According To Money Expert Humphrey Yang
Adam Palasciano Tue, July 23, 2024 GOBankingRates
Of course, everyone wants to be rich. The idea of not having to worry about money seems like a dream for most. But, becoming rich takes lots of discipline and determination. The reality is that it’s easier to be poor.
In a recent YouTube video from financial guru Humphrey Yang, he outlined the seven major differences between rich and poor people that are important to understand.
If you want to become rich, you’ll need to understand the key differences between the rich and the poor.
The Rich Are Subtle About Their Wealth
The rich are more focused on “stealth wealth”: they’re not trying to impress people with fancy cars, designer clothes and handbags, or expensive vacations. They’re modest and they’ve developed financial freedom and autonomy, rather than spending money on discretionary purchases.
When poor people come into money for the first time, they’re tempted to go out and spend money on things that they believe will give them some sort of status. This is exactly how not to become rich
The Rich Know It Takes Money To Make Money
The rich save and invest their money rather than spend it right away. They understand the idea of leveraging capital to scale their well. Poor people frequently tend to spend money rather than save money.
The reality is that the more you save, the easier it is for your money to work for you. Reaching a 6 figure portfolio is key to accelerating your financial growth.
The Rich Understand Delayed Gratification
The rich know that resisting impulsive purchases will lead to a big payoff later in life. Poor people tend to spend money on the things that bring them gratification now rather than save and invest that money for the future. Delayed gratification and stretching out your time horizon are both key to long-term wealth accumulation.
The Rich Invest in Assets
Rich people love to invest in assets. Poor people tend to just leave their money in a savings account rather than invest it. An asset is defined as a resource with an economic value that will provide a benefit to you at a later point in time. Assets can include real estate, stocks, index funds, retirement funds, etc. Typically, assets go up in value and some pay you just for owning the asset.
TO READ MORE:
https://www.yahoo.com/news/finance/news/7-major-differences-between-rich-195149153.html
When’s The Right Time To Turn Off The Tap?
Nearly half of young Americans rely on the bank of Mom and Dad to get by — When’s The Right Time To Turn Off The Tap?
Chris Clark Mon, July 22, 2024 Moneywise
A new report from Bank of America suggests Gen Zers are relying on financial help from Mom and Dad — a “parent trap” that raises big questions about financial independence and the long-term impacts on their parents’ financial health, particularly their retirement savings.
The study found that 46% of adult Gen Z-ers rely on financial help from their parents, ranging from covering everyday expenses to helping with significant financial commitments such as rent, mortgage payments and other debt repayments.
About one in four respondents to BoA’s study said housing expenses were a chief barrier to financial independence, and over half said they do not pay for their housing.
Nearly half of young Americans rely on the bank of Mom and Dad to get by — When’s The Right Time To Turn Off The Tap?
Chris Clark Mon, July 22, 2024 Moneywise
A new report from Bank of America suggests Gen Zers are relying on financial help from Mom and Dad — a “parent trap” that raises big questions about financial independence and the long-term impacts on their parents’ financial health, particularly their retirement savings.
The study found that 46% of adult Gen Z-ers rely on financial help from their parents, ranging from covering everyday expenses to helping with significant financial commitments such as rent, mortgage payments and other debt repayments.
About one in four respondents to BoA’s study said housing expenses were a chief barrier to financial independence, and over half said they do not pay for their housing.
Rising costs of living, inflation, student loan debt and economic instability have made it increasingly difficult for young adults to achieve financial independence. The COVID-19 pandemic exacerbated these issues, leading to job losses and reduced income that disproportionately affected younger workers.
The Bank of America study highlights a significant trend of young adults relying on their parents, but it’s essential for parents to recognize the long-term risks. By setting clear boundaries, providing financial education and gradually reducing support, parents can help their children become financially independent while safeguarding their own futures.
Risks to parents
While providing financial assistance to adult children can be a way for parents to show support and ensure their children’s well-being, it comes with significant risks, chiefly the impact on the parents’ own financial security and leaving their children unprepared to handle their own finances.
Financial expert Suze Orman warns that continuing to support adult children can severely compromise parents’ ability to retire comfortably. Orman argues parents often underestimate the long-term financial implications of this support, which can reduce their own savings when they need it the most.
Impact on retirement savings
Parents who use their retirement savings to support their adult children may find themselves in a precarious financial situation. Some parents are still supporting their children well into their 40s, delaying their own retirement and putting their financial future at risk. This prolonged financial support can lead to parents working longer than planned or significantly adjusting their retirement lifestyle to accommodate the shortfall in savings.
TO READ MORE: https://www.yahoo.com/news/finance/news/nearly-half-young-americans-rely-142500016.html
I’m Comfortably Middle Class: The Best Money Advice I Ever Took
I’m Comfortably Middle Class: The Best Money Advice I Ever Took
Andrew Lisa Sun, July 21, 2024 GOBankingRates
Financial publications love interviewing billionaires to learn about the money advice that propelled people like Bill Gates, Beyonce, Jeff Bezos and Warren Buffett to 10-, 11- and 12-figure success.
But how many people do you really know on the Forbes Richest list?
It might be more practical to learn about the advice that helped people with typical backgrounds and average salaries achieve stability and security in America’s ever-shrinking middle class.
GOBankingRates spoke with a business owner who went from financially faltering to fiscally fabulous in just a few years after building her money mindset around a simple yet transformative quartet of financial wisdom that she received when times were tough.
Times are not tough anymore.
I’m Comfortably Middle Class: The Best Money Advice I Ever Took
Andrew Lisa Sun, July 21, 2024 GOBankingRates
Financial publications love interviewing billionaires to learn about the money advice that propelled people like Bill Gates, Beyonce, Jeff Bezos and Warren Buffett to 10-, 11- and 12-figure success.
But how many people do you really know on the Forbes Richest list?
It might be more practical to learn about the advice that helped people with typical backgrounds and average salaries achieve stability and security in America’s ever-shrinking middle class.
GOBankingRates spoke with a business owner who went from financially faltering to fiscally fabulous in just a few years after building her money mindset around a simple yet transformative quartet of financial wisdom that she received when times were tough.
Times are not tough anymore.
Retirement Planning: Whether you're planning for retirement, dealing with a significant life event or simply looking to make smarter financial decisions, a financial advisor can offer the expertise and guidance you need. Here are some compelling reasons why you should consider a financial advisor -- even if you're not wealthy.
There Isn’t a Secret To Achieving Financial Security. There Are 4 Secrets.
Lisa Rehurek is the CEO and founder of The RFP Success Company, which specializes in consulting, training, and support services for medium-sized service-based companies bidding on state, local and education (SLED) requests for proposals (RFPs).
She is, by any reasonable standard, comfortably in the middle class — and she credits her financial security to a four-part piece of money guidance that she had the good sense to follow.
“The best financial advice I ever received as a middle-class person was to always live below my means, automate savings by putting 15% of every paycheck straight into investments and savings, understand needs from wants and cut back on frivolous spending to make money for bigger, more meaningful goals,” Rehurek told GOBankingRates.
When she received these pointers, she was in the best possible place to put them to good use — the bottom.
Sound Advice Turns a Halting Start Into a Trot. Then a Gallop.
TO READ MORE: https://www.yahoo.com/news/finance/news/m-comfortably-middle-class-best-200200410.html
Robert Kiyosaki: Why Saving Money Is the Wrong Way To Prepare for Retirement
Robert Kiyosaki: Why Saving Money Is the Wrong Way To Prepare for Retirement
Yaël Bizouati-Kennedy Sun, July 21, 2024 GOBankingRates
Robert Kiyosaki, the bestselling author of “Rich Dad Poor Dad,” has argued — against conventional wisdom — that “the historical advice to ‘save’ is no longer a sufficient way to prepare for retirement.”
According to the “Rich Dad” blog, you won’t be able to retire if you rely on saving money alone. Instead, Kiyosaki said adjusting your mindset is the key to preparing for retirement in the right way.
That, in addition to investing and creating steady cash flow, is his preferred method of staying financially secure during retirement.
Robert Kiyosaki: Why Saving Money Is the Wrong Way To Prepare for Retirement
Yaël Bizouati-Kennedy Sun, July 21, 2024 GOBankingRates
Robert Kiyosaki, the bestselling author of “Rich Dad Poor Dad,” has argued — against conventional wisdom — that “the historical advice to ‘save’ is no longer a sufficient way to prepare for retirement.”
According to the “Rich Dad” blog, you won’t be able to retire if you rely on saving money alone. Instead, Kiyosaki said adjusting your mindset is the key to preparing for retirement in the right way.
That, in addition to investing and creating steady cash flow, is his preferred method of staying financially secure during retirement.
Retirement Planning: Whether you're planning for retirement, dealing with a significant life event or simply looking to make smarter financial decisions, a financial advisor can offer the expertise and guidance you need. Here are some compelling reasons why you should consider a financial advisor -- even if you're not wealthy.
401(k)s Are the Problem
According to Kiyosaki, the biggest problem with the 401(k) is that it requires people with no financial education to be in charge of their retirement investing.
His blog read, “Because people had no financial education, a whole new industry was created — financial planning. The problem with financial planners is that they’re salespeople, not investors. They push the products of their employers, usually paper assets.”
How To Prepare for Retirement — the Right Way
According to Kiyosaki’s blog post, Americans need to shift their mindset. For instance, instead of saying, “I can’t afford that,” ask instead: “How can I afford that?”
To read more: https://www.yahoo.com/finance/news/robert-kiyosaki-why-saving-money-120024273.html
The Complications and Benefits of Sharing a Bank Account
Should married couples merge their finances?
Sean Kernan YAHOO CREATOR Updated June 18, 2024
Brian’s complaining went from a weekly affair, to a daily nuisance. We convened in a shared office gym each day. He was a well spoken and well paid engineer in his late 30s, and was having incrementally larger arguments with his wife over money.
It made no sense on paper. Both of them made more than $100K per year and lived in a low-cost area of Florida. Money should have been the last of their concerns. Yet every day in the gym, he’d groan, “She is constantly questioning every purchase.” Or, “I can’t even spend my own money without a fight.”
They’d succumbed to lifestyle inflation, which occurs when your spending rises alongside your income. They’d wracked up debt buying a bigger house and fancier cars. They’d also put their kids in a slightly-nicer private school that cost twice as much, which created resentment on Brian’s side.
And, as they’d added these costs, they’d also combined bank accounts. Because I was working as a budget manager for our company, and perhaps because we were friends, he thought I could help him navigate this domestic maze. But Brian’s problems appeared much deeper than just money. Sadly, he and his wife split just one year later.
Unsurprisingly, money and finances are a key factor in many divorces. Even with the best of intentions, a shared bank account can unleash a wave of problems that are hard to resolve. Yet combining accounts can be quite beneficial. So how do we navigate this predicament?
The Complications and Benefits of Sharing a Bank Account
Should married couples merge their finances?
Sean Kernan YAHOO CREATOR Updated June 18, 2024
Brian’s complaining went from a weekly affair, to a daily nuisance. We convened in a shared office gym each day. He was a well spoken and well paid engineer in his late 30s, and was having incrementally larger arguments with his wife over money.
It made no sense on paper. Both of them made more than $100K per year and lived in a low-cost area of Florida. Money should have been the last of their concerns. Yet every day in the gym, he’d groan, “She is constantly questioning every purchase.” Or, “I can’t even spend my own money without a fight.”
They’d succumbed to lifestyle inflation, which occurs when your spending rises alongside your income. They’d wracked up debt buying a bigger house and fancier cars. They’d also put their kids in a slightly-nicer private school that cost twice as much, which created resentment on Brian’s side.
And, as they’d added these costs, they’d also combined bank accounts. Because I was working as a budget manager for our company, and perhaps because we were friends, he thought I could help him navigate this domestic maze. But Brian’s problems appeared much deeper than just money. Sadly, he and his wife split just one year later.
Unsurprisingly, money and finances are a key factor in many divorces. Even with the best of intentions, a shared bank account can unleash a wave of problems that are hard to resolve. Yet combining accounts can be quite beneficial. So how do we navigate this predicament?
The give and take
In the 1970s and 80s, keeping separate accounts was seen as bad luck for a marriage. This legacy belief is less present today, but still harbors itself in more traditional circles. A study by Bank of America found that couples share accounts less and less in recent years. Young people are marrying later, after they’ve better established their careers. Additionally, in prior decades, women worked less and depended on husbands and needed account access.
Research shows that couples who share finances are happier — but, and it is a big but — it’s hard for researchers to know if they’re happier because they share an account, or if they share an account because they were already happy. The cited perk is that sharing promotes an “us” dynamic, a sense of unity that also promotes transparency.
I asked several married friends about their financial arrangement and each had surprisingly strong opinions. One looked at me incredulously and said, “People still share bank accounts? That is such a bad idea.” Another came in hot from the other side, saying, “We share an account. That’s pretty much how every marriage goes.” He was insistent, even though data shows that only 52–65% of couples in western nations use a joint-account.
An older female friend said that when she shared an account, her husband ran off and spent on things they never agreed to. When they separated, he effectively cleaned out her half, which left her in a financial pit. It took her years and a lawsuit to get her money back.
One option is a hybrid approach, where you have a shared expense account and separate personal accounts. This way you are tapping into the benefits of feeling like a team, while keeping yourself protected.
To read more: https://www.yahoo.com/lifestyle/story/the-complications-and-benefits-of-sharing-a-bank-account-204402760.html
The Best Strategy for Financial Freedom and Retiring Early
The Best Strategy for Financial Freedom and Retiring Early
Ghazal Ahmed Fri, July 19, 2024 Insider Monkey
This article takes a look at the best strategy for financial freedom and retiring early. Check out our complete list of 20 Strategies for Financial Freedom and Retire Early.
Here are the strategies for financial freedom and retiring early:
20. Run the numbers
According to T. Rowe Price, your likelihood of an early retirement starts with evaluating your current savings rate and spending levels. Using online retirement income calculators is a good start, allowing individuals to assess their likelihood of early retirement based on their current planning levels.
By accounting for factors such as current levels of saving, life expectancy, and expected retirement age, retirement calculators allow individuals to make informed goals about investing, saving, and spending habits.
19. Clearly Define Your Financial Goals
Once an individual has assessed where they currently stand, it’s time for them to clearly define their financial goals. Start by setting specific, measurable, achievable, relevant, and time-bound (SMART) goals. For instance, “I want to retire early” is a vague goal.
The Best Strategy for Financial Freedom and Retiring Early
Ghazal Ahmed Fri, July 19, 2024 Insider Monkey
This article takes a look at the best strategy for financial freedom and retiring early. Check out our complete list of 20 Strategies for Financial Freedom and Retire Early.
Here are the strategies for financial freedom and retiring early:
20. Run the numbers
According to T. Rowe Price, your likelihood of an early retirement starts with evaluating your current savings rate and spending levels. Using online retirement income calculators is a good start, allowing individuals to assess their likelihood of early retirement based on their current planning levels.
By accounting for factors such as current levels of saving, life expectancy, and expected retirement age, retirement calculators allow individuals to make informed goals about investing, saving, and spending habits.
19. Clearly Define Your Financial Goals
Once an individual has assessed where they currently stand, it’s time for them to clearly define their financial goals. Start by setting specific, measurable, achievable, relevant, and time-bound (SMART) goals. For instance, “I want to retire early” is a vague goal.
However, “I want to retire by the age of 50” is specific. SMART goals can help individuals formulate a targeted plan that includes timelines, money goals, and tangible benchmarks. The FIRE movement states that an individual needs to build up a net worth of 25 times their estimated annual expenses and spending to achieve financial independence.
18. Create a Detailed Plan
Creating a detailed plan outlining how one will go about achieving one’s goals will take them to the next step towards financial freedom and early retirement. From setting timelines to allocating resources, there is plenty to cover in this detailed plan.
Individuals should make sure to include a detailed budget that reduces unnecessary expenses and creates some savings after accounting for all necessary expenses. The FIRE movement prioritizes saving and investing 50 to 70% of income, if not more.
17. Financial Education
Financial education has a huge impact on the quality of retirement and the decisions that one makes towards it. Therefore, one strategy for financial freedom and early retirement is being financially literate.
According to data from the 2022 TIAA Institute P-Fin Index, retirees with high financial literacy were “more likely to plan and save for retirement” than those who were not. Having longevity knowledge is another prerequisite as appropriate decision-making related to retirement is contingent upon understanding how long a retirement can last.
16. Minimize Debt
Building up savings is important, but so is clearing off debt. This is because debt interests may far outstrip the interest on savings that you may earn. Charles Schwab recommends prioritizing debts instead of trying to pay them all at once. Credit card debts should be a first priority, with a primary focus on high-interest debt. One may make minimum payments on the rest, if possible.
Be careful of loan consolidation offers as many of them have upfront fees and hidden costs. Also, minimizing debt and saving for retirement can be done together. The way is to save enough in your retirement account to leverage the entire employer match, pay off high-interest debt, create emergency funds, and then save some more for retirement.
15. Pay Off Mortgage
To read more:
https://www.insidermonkey.com/blog/20-strategies-for-financial-freedom-and-retire-early-1324604/