Money Fundamentals

Saving Money or Earning Money Where to Put your Priority?

April 30, 2012
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Saving Money or Earning Money Where to Put your Priority?

Many times this question arises in our mind that which is good, saving more money or, earning more money? First of all, this is not a competition between the two. In-fact to reach financial independence, you need to practice both efficiently. The problem comes when you are choosing one over the other (or, giving priority on one over the other) due to limited time at hand. Let’s see what are the main time-taking tasks involve in a typical saving money venture. Creating budget Tracking every penny Analyzing spending pattern to figure out cost saving opportunity Family education and encouragement Having a lot of manual labor to cut cost Its true there are certain money-saving activities that can be performed without spending much time, for example, buying a generic store brand instead of name brands does not take any extra time, but saves some money. Still, th overall money-saving exercise is in-deed time taking. Now let’s see what are the various tasks involved in earning more money which take time to accomplish. Gather skills, take training, educate yourself Involve in side income venture Take a second job Working perhaps longer hours at work for a raise/over-time. Clearly it’s often a  raise against

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Basics of Insurance: Why we Need Insurance?

April 18, 2012
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Basics of Insurance: Why we Need Insurance?

This post is inspired by a reddit discussion. The topic was on insurance, the basics of it. Do we give proper value to insurance in our life or we just go on routinely on insurance? When you earn a bonus at work, do you consider increasing the insurance amount to have more coverage. When you get a raise do you consider increasing your premium and cutting on the out-of-pocket expenses? What is insurance and why we need it, is rarely discussed on personal finance websites and blogs. Those who want to just know how much insurance they should have maybe disheartened, as this post is to guide decide that on your own. We will not talk about how much insurance you should have, we can’t do that as everybody is different and what works for me may not work for you. We would rather talk about and set a general guideline that can help us determine our insurance need on a high level. This post does no way suggest your specific insurance coverage amount. Let’s start with ‘what is insurance’. What is insurance Insurance is all about playing defense, where as an investment is an offense. You protect yourself and your

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Applying Karma in Personal Finance

March 7, 2012
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Applying Karma in Personal Finance

Warning: This is a philosophical post, not based on hard-facts. Many of you may disagree to most of the content, but it sure can induce thoughts in your mind. What is Karma The Sanskrit (an ancient Indian language) word karma means “actions” or “deeds.” As a religious term, Karma refers to intentional (usually moral) actions that affect one’s fortunes in this life and the next. For simplicity, we will only consider the causes and effects in this life time. Karma is a concept common to Hinduism, Buddhism and Jainism, For the purpose of this article we will consider the karma as its known in Hinduism. I apologize to religious people if I miss-state or misinterpret religious matters. The concept of Karma or “law of Karma” is the broader principle that all of life is governed by a system of cause and effect, action and reaction, in which our actions have corresponding effects on the future. In many ways its same as Newton’s third law ‘Every action has its equal and opposite reaction’. The similarities end there.  A Karma has far-reaching effects and causes than a simple solitary action. As Karma is about the set of actions, it can be good or it

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What is Personal Finance? The Basic Principles

November 16, 2011
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This is back to the basics, reminding things over and over helps the concepts get deep in to our minds. This is a self reminder as well to keep myself on track and remain debt free for as long as I can. Personal finance is a wide subject, it consist of behavior and practices to control spending to provide maximum and sustained value out of the money throughout the life. This practice should start when we start our career. Spend control and delay gratification at early stage are very much important if we want to live a happy and contented life in future. The day people understand the importance of managing personal money the journey towards financial freedom would start. I had previously written about 50 money rules that every one should follow this can be a good starting point. These were what my father taught me by his actions, more than spoken words, during my early days as school going student. To date those are the best lessons I learned on personal finance. According to Investopedia, the definition of personal finance “All financial decisions and activities of an individual, this could include budgeting, insurance, savings, investing, debt servicing, mortgages and more. Financial planning generally involves analyzing your current financial position

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Personal Finance Basic, Finding Balance Between Earning and Spending

October 24, 2011
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This is a guest post by Ashley from Everything Finance, a fellow yakezie blog. Everything Finance is a site about just that, everything related to finance. You can get information about investing, saving money, shopping, blogging, and making money online. If you like what you see here, make sure to stop by or better yet subscribe to their feed so you don’t miss a thing. With budgets becoming more strained as economic times become more stressful everyone from your neighbor down the street to your favorite corporation is doing one of 2 things and they are increasing earnings or cutting cost. Generally it is much easier to cut cost than it is to increase earning so many people automatically gravitate to that method, but the way to handle things is to find a balance between both of these methods. It is always a good time to increase your earnings, and I am sure that we all have some fat that we could trim to make our finances leaner and meaner to help us achieve our goals. Finding ways to earn more money It is not as hard as you may think to find ways to make more money and boost your income. There are multiple

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I Care About My Money, Do You?

October 10, 2011
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I Care About My Money, Do You?

This is a guest post from Ashley over at Learn Stock Market Basics. If you are interested in learning more about the stock market stop by and see what they have to offer. They are focused on helping you find the best investments for your situation. I like money. That’s no secret. I spend all day every day thinking about money, almost to the exclusion of anything else. I think, live, breathe, write, talk, eat money. And I live the principles I write about here. I return things if they don’t meet my expectations. I adhere to a fairly strict budget. I spend my money consciously and if an opportunity comes up to spend money that doesn’t fit into my goals I decline. Sometimes I get some slack for this. “All you care about is money.” I’ve heard it. Usually it’s because I’ve refused to give someone money. I said “No.” to someone and they are mad about it. They wanted to take advantage of me and I turned them away. The words “It’s not in my budget.” make some people very mad. Especially if they know you could but don’t want to. I’m not saying I can’t do something

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10 Pieces of Financial Advice For Young Adults

September 8, 2011
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As I mentioned on my About page, I received sound financial advice from my parents. I had a middle class upbringing but we never had too much money to spend. My parents didn’t use a budget; instead, they always tried to save a certain percentage of their salary. My dad lost his job in his 50′s and has lived on his savings ever since. Today, I see a lot of people clueless about their money. They blame the system or they blame the government. Any discussion on the economy and finances will invariably lead to statements that the President is at fault. We fail to notice what we did wrong as individuals. The sooner we figure it out, the better our future will be. One of the ‘sooner’ days will be when you start making your own decisions, in your late teens or early 20s. Earlier, I mentioned teaching kids about money and using garage sales to teach your kids about money, but those are only few basic lessons that parents could impart on their kids. What will a young adult possibly do when he/she has to start making independent financial decisions? You are out of college and saved money

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Taking Risk, Entrepreneurship Or Building A Safety Net

September 7, 2011
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It is no secret that I am a mega fan of Get Rich Slowly and I read the articles over there almost every day. One of their weekend articles was a story from a reader who won a $1M jackpot and how she went on to invest the money prudently. Tina (the winner’s wife) explained how they sought help from a financial planner, and how they ultimately invested the money in a way that paid off, per the planner’s recommendations. She must have hired a really good planner; I couldn’t find anything wrong with their decisions. Giving money to charity, raising their insurance safety net, buying a dream house (non-extravagant) and saving for retirement in an 80/20 stock to bond ratio. Just perfect! Then I thought, What? Wait a minute. Is this the only way to spend $1M? Money that appeared out of nowhere? Since my childhood, I have aspired to become an entrepreneur one day. I’m always looking for ways to start a venture. The only thing preventing me from doing so right now is some legal matters (you don’t need to know) and lack of startup capital. I don’t want to invest my savings in something that might

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Finance Is Simple, Keep It Simple, 50 simple Money Ideas

July 28, 2011
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This will be a different post in comparison to my other posts, the idea for today’s post is simplicity, so let this write-up be simple too. Your finance can be overwhelmingly complicated if you let it be complicated, otherwise, it will be as simple as eating your daily lunch if you are on top at it. Keep these simple fundamentals in mind starting from the day one of your working life. They are valid for every one, for people with debts and for people with billion dollars in bank. Simple Personal Finance Fundamentals Always spend less than what you earn. Practice simple living and consume less, get rid of clutter. Earn more and invest more. Pay-off credit cards in full every month. Use credit cards wisely. Spread your risk by diversifying your investments. Don’t let a single penny go out of your pocket due to negligence. Prepare a budget, and stay within. Use every stuff you buy, don’t buy things you don’t need. Pay all your bills on time. Always shuffle your investments, take out money from investments with lowest return and re invest in something else every year Be prepared to adopt forced hardship to avoid debt or to become

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It Is Difficult To Live Frugal But Not Hard

July 11, 2011
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It Is Difficult To Live Frugal But Not Hard

Few days back my car was serviced, after dropping it in, we headed for a festival we planned to attend. It was just a regular servicing with oil change and tire rotation and inspection. The guy from the service center called me an hour later to let me know that the wiper blades need replacement. It was nothing I didn’t know, it was long pending, I always wanted to do it myself. Don’t know what happen in that exact moment, I agreed that they should replace my blades. Problem here is, after reading on many blogs, and myself pitching for fixing your small problems with car or home yourself. I did agree for them to put a new wiper. When I returned to pickup my car in the evening, it was a hefty $25 charge on the invoice! Two years back when I did replace wipers on my own, it costed me $8 for the pair at Wal-Mart. How did I miss on this occasion? If I think, problem is broader, it is difficult to stay frugal. It is comparatively easy to stay frugal when you are living frugal to survive, than when you choose to be frugal to be rich. If

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