Jun 27

Personal Debts: Getting Out Of The Debt Trap

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Do you live a lifestyle where charging basic necessities like groceries is unavoidable? If you do, things need to change! Being caught in the debt trap can be quite stressful and can even wreck havoc on your physical health and well being. Yet, you dont really have to spend your days worrying about how you are going to pay that mountain of personal debts that you have accumulated over the months. If you want to get out the debt trap, you need to sacrifice some of the things in life and invest in the future. To help you get out the debt trap, here are some pointers for you.

Get rid of some of your cards

If you have accumulated a mountain of personal debts in your credit cards, do not add more to it. Unless it is an emergency, do not use your credit cards. Dont believe those people that you cannot live without your credit cards. People in the past did not have credit cards and they lived longer and had lesser stress. If most of your credit cards are already near their credit limits, look for a company that will allow you to consolidate your credit card debts for a lesser interest rate and longer payment periods. Once the balance of your credit cards have been consolidated to one account, cancel some of your credit cards. Its better for you to live with two or three credits cards than having more than five of those plastic things.

Live frugally

If you have been drinking coffee that cost you 2, you will need to give up that coffee. Start brewing your own office instead of buying those expensive cups of coffee from Starbucks. Fine, your brew coffee will definitely not taste as delicious as those expensive brews but if you really want to get out of the debt trap, you just have to make few sacrifices. If you really like expensive coffee, you can treat yourself to a couple of cups per week and nothing more.

Aside from brewing your own coffee, it would be best to start bringing your own lunch to work and cook your own dinner instead of eating out. According to studies, you can save as much as 100 a month if you bring your lunch and you can save as much as 200 if you take your time to cook your own dinner. Now, if you do not know how to cook, this is the right time for you to start learning. Cooking can be a lot of fun and before you know it, you will have so much fun in the kitchen that you would not really want to go out and eat as much as you used to.

If you combine all your savings from your coffee, lunch and dinner, you can already a considerable amount of money saved. You can use your savings to start paying off your debts. If you continue to live frugally, in no time, you will be relatively debt free.

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Apr 15

9 Steps To Get Out Of Debt – Part 9

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9 Steps To Get Out Of Debt – Part 9

Step 9 – Investing

This is the last article in our series on how to get and stay out of debt. So far you have learned the impact of debt, how to analyze your debt, reduce your interest rates, free up some extra income, pay off your debt, avoid falling back into debt, and insure yourself against unforeseen circumstances. This final article will show you how to invest financially into your future.

So far, businesses have been making money off of you by lending you their money, now is your chance to turn this relationship around and make a profit off of them by lending them money. Welcome to the world of investing. There are many things people invest for, but by far the most popular is retirement.

Well start with the bad news, figuring out how much you are going to need for retirement. First, youll want to estimate how much you are going to need, or want in order to get by when you are retired. Granted, your expenses will most likely be lower because your home and other most other major expenses will hopefully be paid for by this season of life. I cant give you a simple guide to tell you exactly how much you will need in this article, so I will leave it to you to estimate.

Now that you have this number, multiply it by fifteen, this is the amount you need to save. The reason for this is so you can live off the interest only, which will allow you to support yourself for the remainder of your life. This will also allow you leave an inheritance for your children. This will probably seem like an unachievable number, but dont abandon hope yet; it isnt as difficult as it first seems.

The reason this isnt as difficult as it first seems is because of the magic of compounding interest. If you were to start investing $100 each month at the age of 20 at 10% return per year, by the time you are 65 you will have approximately $780,000. However, its very important to start as soon as possible. If you start at the age of 30 investing the same amount each month, youll only have $294,000. Youre not out of hope though, youll just have to invest more. If you start at the age of 30, youll need to invest approximately $260 a month to have the same $780,000 at the age of 65. As you get older the amount youll need to invest goes up significantly, but typically so does your income.

Where to invest your money is something you should really talk over with a financial advisor. Ill provide some very basic tips, though. First off, never put all of your money into a single investment no matter how good you think it is. Nothing is guaranteed, and many people have lost everything by investing in a single company. You should always diversify. I would suggest five different investments, minimum.

Typically the higher paying investments are often the riskier investments, also referred to as aggressive. If you are close to retirement, you should avoid these and go with something much safer. If you have several decades until retirement, you can afford to ride out the ups and downs in the market and will usually come out ahead by investing in more aggressive stocks, early on. As you get closer to your retirement age, you should gradually start moving your money into more stable investments.

I hope you have enjoyed this article series and it has helped you to get your finances in order. If this article series has helped you, please pass it on to your friends and family so it can help them as well. For more advice, consider finding a personal financial advisor.

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Nov 24

Who Are Venture Capitalists?

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Venture Capitalists are wealthy private investors who can help finance your business either it being a business in trouble financially or a new business venture.

There is usually a five year lock up on Venture Capital investments, this means the Venture Capitalist or the business they are helping to fund cannot get out of the deal until the five years is up, sometimes this may be longer depending on the agreed business plan. They also charge management fees and incentive fees as well as taking a good sized share of your business. Unlike Business Angels, Venture Capitalists like to have a director or management role within the company to discuss the running of the business as well as keeping a close eye on their investment making sure the business succeeds. But there are a few Venture Capitalists who like to give the company the finance they require then take a back seat and let the company who know the trade etc. and let them run the business on a day to day basis.

Finding the right Venture Capitalist for you may be a scary prospect but there many Venture Capitalist firms now available which have Venture Capitalists waiting to invest in a new and upcoming business with good prospects. Making a proposition to a Venture Capitalist can be a scary thought, you need to remember they will want to know exactly what your plans are for coming years, the market you will be promoting your product, service in as well who your target audience are for this as well as how much it will cost to make if necessary and the cost you will sell it for, showing the profit you will make on each product, item or service. One thing to remember is that Venture Capitalists dont care about the dreams you have about this venture, all they want is a good return on their investment in your business.

Before going to see a possible Venture Capitalist the best thing to do is to get advice from other business people in the same area you want to go into to get their advice on your product and or service and their honest opinion of the idea.

You will need a well detailed business plan when you meet up with the Venture Capitalist and if you are turned away by them dont give up keep trying, if show people youre serious about your venture and wont fall at the first hurdle your more likely to win people over with their own weaknesses.

Some points to consider are:

Put all your thoughts on your new venture on paper, brainstorm everything

Research your proposed market or industry

Get someone to argue against you to see if you have a water tight solution

If you have little knowledge on a certain area ask for help from people who know

Create a budget, showing every detail you can think of

Read thoroughly your business plan to ensure theres no errors

Know who your competitors are

Present yourself well the more presentable you are the more likely you are to be respected by the Venture Capitalist make a good impression

Make sure you know your speech, your business plan back to front so you come across confident as you only have one chance

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