A full-time income on part-time hours revisited part two: Motivations for joining the business

“When my job told me that I’d have to go back to school to get another degree in order to get a promotion, I didn’t want to do that!”

This is part two of my series entitled, A full-time income on part-time hours revisited. Part one of this series introduced Multi-Level Network Marketing businesses (MLMs). Part two will discuss the motivations of people who join these types of businesses.

“Bruce, I want to ask your opinion about a business informational meeting I recently attended. This group helps people get out of their financial debt, but they also aggressively recruit more people into their business,” I said in a discussion with talk show host Bruce Williams in 2007. “It sounds like I could make a lot of money if I join. It also sounds like pretty hefty commitment time-wise, one that I’m not sure that I can fulfill in tandem with my scientific research.”

“What you just described sounds like a Multi-Level Network Marketing company,” Bruce casually commented in his burly, grandfatherly voice. Bruce Williams’ talk show covered a range of topics including politics, current events, economics (personal finance and business), as well as life’s daily issues. “Look guy, I don’t know what it is that they’re selling, but I think you’ll be better off focusing your time and attention to launching your career in science!”

Everyone’s motivation for going into to business is to make money. Unfortunately, not everyone can cook, invent a social media site that will change the world, create a new operating system, or buy a McDonald’s franchise, coincidentally the one franchise often referenced in the Rich Dad Poor Dad books and in Network Marketing informational meetings. It’s not uncommon at a meeting to hear, “McDonald’s may not make the best hamburger, but they are the model franchise,” or something similar. Many also state that, “McDonald’s isn’t in the business of fast food, they’re in the business of real estate,” or something to that effect.

Likewise, Multi-Level Network Marking businesses offer the opportunity to start a business with only a little money down (usually $100-$500), and the potential to make more money than one could ever make on their job through generation of ‘passive residual incomes’. At least that’s how they’re sold. In terms of making money in your sleep which passive income empowers you to do, who wouldn’t want to do that? By the way, business models that are already set up and only require you to buy into them are called ‘turnkey businesses’. Michael E. Gerber has written several books about this, the most popular is entitled, The E-Myth.

The thought of making passive residual incomes is very enticing for people who understand what it is and represents. Robert Kiyosaki’s Rich Dad Poor Dad books were my first introduction to this powerful concept, and I recommend at least reading his first two books. The second is entitled, Cashflow Quadrant. Robert’s books also introduced me to the idea of making money ‘exponentially’ instead of ‘linearly’.

Whatever your venture is, the more passive income you can earn, the closer you come to financial freedom. This is the perfect segue into the time factor. What also gets people’s mouths salivating is the potential to not have to punch a clock, go to an office, and answer to a supervisor. These businesses are also seen as ways of circumventing battling for promotions every year and having to work your way up the corporate ladder as they say. As Robert Kiyosaki says in his books, and as many people have personally experienced, promotions often don’t result in significantly more income for various reasons.

Personally, people have multiple reasons for joining. Some people who have held traditional jobs and careers, eventually sour on a life of having to “climb the corporate ladder” as described above. Some sour on having to be chosen for promotions which often results in more responsibility but not necessarily significantly more take home pay. Others have reached middle age and don’t see themselves being able to retire on what they’ve saved or haven’t saved.

“When my job told me that I’d have to go back to school to get another degree in order to get a promotion, I didn’t want to do that. This business is allowing me to make larger sums of income than my job could ever offer and save for my retirement,” the speaker at a meeting said. Finally, others don’t like the idea of having to go back to school to get more degrees in order to qualify for promotions in their respective organization.

And those are just educated people. Some people haven’t gone very far school-wise for any number of reasons and don’t have the potential to ascend in any job long-term. These businesses thus represent a fast track to wealth which can bypass a traditional education.

“My mother who is deaf and some of her friends weren’t very educated and they saw the business as one of the only ways they could make good money,” a friend shared with me. Her mother got involved in a home-based business that sold water purifiers and they had to go door to door to sell them.

In general, these businesses are ways for people to:

• Achieve financial independence
• Have more control over their lives
• Bypass the traditional paradigm of working for someone else to make money – trading money for time every day

While the benefits of joining like this type of enterprise seem to be limitless, what happens when you pay your entrance fee and sign on the dotted line? And when one does join, what are the actual rigors and expectations? These questions will be addressed in part three of this series.

Thank you for reading this blog post. If you enjoyed this piece, you might also enjoy:

Are you getting your Matching Contribution? A discussion on saving for retirement
A look at the Law of Compounding Interest and why you should care
Your Net Worth, your Gross Salary, and what they mean
Is there power in budgeting your money?
I still don’t have a car in 2018: A story about playing financial chess
We should’ve bought Facebook and Bitcoin stock: An investing story

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Why You Should Manage Your Money Ethically

A key focus of my blog is Financial Literacy/Money. Something that’s rarely associated with money management is ethics. Do the two go together? Who decides what ethical money management is? The following contributed post is entitled, Why You Should Manage Your Money Ethically.

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Image Credit: Pixabay CC0 Licence

Ethical money management is a pretty niche topic but it’s something we should be talking about more. How we spend and how we manage our money has a big impact, not just on our own fates, but those around us. Indeed, the American dream is just that: a dream that is unlikely to become a reality for more than a lucky few.

When the world’s 26 richest people have roughly the same amount of wealth between them as the poorest 3.8 billion, there is a serious problem and the inequality is growing every day. But, while you might like to think that this has nothing to do with you, the reality is that everyone has spending power and your ethical practice matters just as much as a billionaire’s.

Taxes and Compliance

Paying your taxes comes first and foremost in ethical money management. Tax can be incredibly controversial and while some people believe in lower taxes and greater individual spending, others prefer a higher tax rate with more community services and assets.

You must also make sure that you comply with any relevant laws. Most compliance applies to business owners but some laws apply to individuals too. For example, you should declare any interests overseas through the Offshore Voluntary Disclosure Program OVDP. Whether you believe in high or low taxes and whether or not you agree with the law, this is a basic requirement for ethical money management.

Considerate Shopping

Ethics and shopping are often difficult to navigate together. As shoppers drive down prices, the conditions of manufacturing workers diminish, unsustainable practices aren’t challenged and, ultimately, everyone is worse off as products don’t last as long as they should. But considerate shopping is easier than you might think if you are willing to put some time into research.

Considerate shopping often comes down to the difference between frugal and cheap. Someone frugal will do their research, buy good quality, fair trade and sustainable products but might wait until the sales. Someone cheap doesn’t care how something was made or whether it is good quality – they are just interested in saving money no matter what.

Ethical Investments

Ethical investments require a bit of research too though you can find funds that are dedicated to ethical investments alone. Choosing ethical investments can be difficult, though. Some unsavoury companies have been known to present themselves as ethical and then be anything but. However, this shouldn’t put you off trying to uphold your values.

The best way to get started is to research the areas you are most interested in. For example, if you are particularly interested in the environment, you should look for investment opportunities that align with your beliefs. Remember: you’re not going to find a perfect opportunity so you will need to think carefully about what is most important to you.

Ethical money management is perfectly possible as long as you are willing to do some research and think carefully about where you put your money. Ethics are never clear cut, so see this as a chance to grow, not a one-off.

Finding Better Ways To Use Your Money

A key focus of my blog is Financial Literacy/Money. According to talk show host and writer Dave Ramsey, wise money management is 20% head knowledge and 80% behavior. While the smaller percentage of the two, the 20% is critical though. The following contributed post is entitled, Finding Better Ways To Use Your Money.

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Money management isn’t a talent that comes naturally to everyone. If you feel that you don’t live life in a fiscally responsible manner, however, then there are things you can do about that. It’s never too late to make an improvement to your personal finances. It all comes down to spending and saving your money in a well-balanced way, at the end of the day. You don’t want to save everything – certain expenses are unavoidable, anyway. But you also don’t want to waste your earnings. It’s time to find better ways to use your money, and here are some helpful suggestions.

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Reduce unnecessary expenditures.
The best way to use your money is to cut back on wasteful expenses so you have more available income for the important costs in life. For starters, if you know you’re prone to splurging as the result of certain spending triggers such as feeling bored or stressed out, then it’s important to master the art of self-restraint. You might even want to take out a small sum of money for “non-essential expenditures” on a monthly basis. That way, if you do want to treat yourself to luxuries, you’ll be limited in terms of what you can buy. This will train you to be disciplined, but it’ll also prevent you from being too destructive if a shopping urge overcomes you. You just need to be a conscious consumer.

It might even be a smart idea to keep a small amount of cash on you and leave your credit cards at home when you go shopping. Of course, luxury expenditures are a small part of the problem, but you can reduce unnecessary basic expenditures, too. You need to keep your home heated, for example, but you could reduce your energy bills by insulating your windows with thicker glazing and getting draft excluders for doors. If you want to start finding better ways to use your money, then you need to start by noticing examples of wasteful spending in your life and making the necessary changes.

Make good investments.
As mentioned in the introduction, you don’t want to simply save everything you own. Whilst you should protect your earnings, leaving them in your bank account to collect dust won’t help you in the long-term. You need to start investing some of your money so you can increase your wealth. Your salary might cover your present-day costs, but what about the future? Building up a portfolio of strong investments will help you to make money for your retirement or your children when they go to college or move out and get their own homes. You could consider investing in the property market. You might even want to get real estate training so you can figure out how the industry works. You can make a lot of money from selling or leasing properties. It’s a worthwhile investment opportunity.

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Start paying yourself first.
Thinking about the future is the best way to ensure you use your money wisely. That’s why you need to start paying yourself first. Earlier, we talked about practicing discipline and reducing your monthly spending. Well, one of the easiest ways to achieve this is to remove temptation. In other words, put a portion of your paycheck into your savings on a regular basis. In fact, you should do it on your payday. That way, you don’t have to worry about overcoming the urge to dip into your bank account and take out money for non-essential purchases; you’ll already have moved that money. Start paying yourself first, and you’ll be much wealthier in the long run.

If You Don’t Own Something Your Wealthy Isn’t Real

Two of the focuses of my blog are Financial Literacy/Money and Business/Entrepreneurship. Understanding the difference between assets and liabilities is critical to understanding and building wealth. Likewise, simply having a job and working for ‘earned income’ versus acquiring money-generating assets is the difference between solely being an employee and one day becoming financially independent. The following contributed post is entitled, If You Don’t Own Something Your Wealthy Isn’t Real.

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We are all beholden to the economy of the nation we live in. The nation’s economy is beholden to the global economy. And round and round we go, in this daisy chain of ours. Everything is affected by everything else. Now, your biggest concern is your personal wealth; as it should be. The secret to protecting your wealth is to try and make it insular from everything else. In other words, you want to have a wealth that isn’t affected by the outside world. But, as aforementioned everything is tied to everything else. Whether you’re shopping for clothes, buying groceries or applying for a mortgage, before the price is levelled at your feet it has to go through the market. The market determines what that price will be. So two things we can conclude. There’s no way for your wealth to not be affected by the global economy and the market is how price is determined; in other words your wealth is given it’s true value. The giants that tower over everything else are assets. If you’re not holding something, owning something and backing up your monetary wealth by an asset, it’s not real.

What is an asset?

Firstly an asset is a complex entity to describe. However, for the sake of simplifying things, think of assets as something other than cold hard cash. Yet there are some people who will include their cash in ‘personal assets’. Number one, the most common asset is your home or rather property that you own. Land and structures on them home are all part and parcel of the same asset. A business is also considered an asset. A car or some kind of vehicle such as a boat is also considered an asset. Investment holdings such as stocks, insurance policies, mutual funds etc, are all considered assets. Warehouse storages, garages and equipment are all assets too.

There seems to be one running theme doesn’t there? An asset usually has the ability to convert it’s sale into cash or rather, it produces more wealth. Property prices rise year-on-year, thus you have an appreciating asset. A negative or loss-making asset has become an oxymoron as the whole point of having assets is for your wealth to increase just by ownership of said asset. Cars are a use to someone. It gets people to work, is enjoyable to drive and might be personally valuable to a collector. Stocks are a piece of the pie. A business that grows pays out to its stockholders so again, you have an asset that accumulates wealth for you.

Assets are a ‘hard wall’

Assets are usually a tangible entity. You can touch a property, you can live in the property. It provides you with a value or betterment to your life. Even if that enjoyment is subjective to the person, it still holds that value to be true. Capital assets are purely bank accounts or rather your cash wealth. Cash wealth on it’s own isn’t so confidence-inspiring. Look at it this way, if a wind came to blow your money away, how would you stop it? The simple answer is, you would protect your money with a wall and keep your capital inside. That’s exactly what assets are for. They give your capital asset worth and back it up. Nations do this for their currencies. Why should someone believe your currency is worth something, after all it’s just paper. Well, gold and other precious metals have been used to back up currencies and provide them with a solid wall of protection.

Look up the ‘Gold Standard’. For the majority of the time human beings have had complex, large and global economies, gold has been the number one material that has backed up FIAT currency. People are reassured that the paper they have in their pocket has a value which if they exchanged would allow them to buy food, water, property and live a comfortable life. This is because a precious metal is vouching for it. Assets have the exact same power for your cash wealth. If you were to go to a bank and ask for a loan, if you didn’t have a property, car, or some kind of asset, the chances of being turned away would be high. Assets give you a solid foundation of trust and support personally and for your capital.

The age old asset

Since time immemorial there has been one thing we all recognize as an asset. Jewelry is valuable to us in many different ways. It’s easy to understand why it’s valuable too, even as children we already know to look after a piece of jewelry that we have been given or perhaps found. Silver, gold, platinum, rubies, emeralds, diamonds etc, are all the most sought after kinds of jewelry. Precious metals and precious stones, have an innate shine or gleam to them. These materials have taken millions and millions, sometimes billions of years to form. Since this process takes so long, they are inherently valuable to us because they are things we cannot make.

If you have gold chains, diamond rings, ruby encrusted goblets, silver necklace charms or whatever the case may be, you need to protect these assets with some kind of insurance policy. For knowledge on what kinds of jewelry insurance you should get, look at Morison Insurance Brokers and ready their article carefully. They list all the valid reasons why you would need this kind of insurance policy and for what kind of jewelry. Jewelry is such a versatile asset, that almost any kind of financial institution will accept it as collateral holding. It’s not uncommon for bank loans to be given to people with low capital but who have very valuable jewelry assets.

They age like wine

Assets are the number one priority for people who are looking to retire without relying on a state pension. It’s clear to see that owning a couple properties and renting them out would net you a constant stream of capital flowing in. The properties will need to be kept to a high standard so they retain their value for longer, but that’s easily done. Properties are quite easy to understand and maintain. There are lots of services such as roofing, plumbing, landscaping and interior designers that can repair and update your properties to keep with the times. In this sense, assets have the ability to age like fine wine if you know how to take care of them. As the saying goes, if you take care of it, it will take care of you.

Assets like rare cars also have much the same appeal in terms of longevity. One of the original Ford GT40 cars was sold for $10+ million and a Ferrari GTO for even higher. Classic cars are not just interesting to hold as an asset, but they never seem to run out of buyers. No matter how many generations have moved on since the first day they rolled out of the factories, they are still enthusiastically bought for millions of dollars. There will always be a wealthy class of people that want a rare toy in their garage. That’s why having assets is so important, because the value they return to you is always set to increase year after year.

Create your own buffer zone

If none of the previous reasons have convinced you why you need to be owning assets, here is one last attempt. This one should win you over. When an economic crash ensues, capital all across the world gets slaughtered. Stocks and bonds plummet, currency values drop substantially and any hard cash is worth much, much less than it was just yesterday. Essentially, if all your wealth is in some kind of money hedge or just a lump sum in a bank, then your wealth will be cut down dramatically when an economic crash happens. Recessions all hit the cash flow in the market the same way. Consumer confidence drops, people pull their money out of investments and they go into hibernation to wait out the storm.

Now you may be thinking that assets will also have to fall in price because people aren’t spending as much. However, assets retain a lot more of their value even when there is a recession. This is because at the end of the day, someone will have enough money to buy or utilize your asset for their needs. Crucially, that need or desire is still there no matter what is going on in the economy. People who were saving up to buy a house don’t suddenly stop wanting a house because they lost a lot of money. No, the desire is still there so you have an inherent value in assets even in hard times. In a sense, assets create a buffer zone between you and the recession, they allow you to have more authority in the eyes of banks and governments.

Do not put all your wealth under your mattress so to speak. Put your wealth in asset acquiring. Own property such as a house, land, automobiles, boats and jewelry. When you have hard tangible wealth, your paper wealth is automatically boosted in so many ways.

How to Save Money when Running your Small Business

Two of the focuses of my blog are Financial Literacy/Money and Business/Entrepreneurship. When running a small business as with all businesses, the control of cashflow is critical. Doing so will ensure that your business continues to thrive. The following contributed post is entitled, How to Save Money when Running your Small Business.

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Running a small business can be both difficult and time-consuming. If you’re not careful then you may find that expenses slowly creep up on you, and this can cause you major problems in the future. If you want to avoid all of this, here are a few things that you can do to stay on top.

Lower the Cost of your Office Space

In some instances, it may be possible for you to take advantage of a decreased rental rate in your area. If this is not possible or if you don’t qualify for this type of benefit, then you may be able to renegotiate with your current landlord so you can get some better lease terms. If you don’t need to run your business from a commercial premises, then you may want to think about operating it from home. This will significantly lower the cost of your rent and it will also help you to lower the cost of your gas and energy usage too. In addition to saving on bills, you’ll also save on your business tax and even your utilities. This can go a long way and it can also make it way easier for you to keep an eye on the outgoings that you have.


Reduce Staffing Costs

If your business has slow periods, it may be worth trying to reduce your staffing costs. Nowadays older employees are more than happy to take some unpaid time off so they can go on vacation or even see their family. If you want to get the best result out of your team chats then see if anyone would like to volunteer. You may be pleasantly surprised at the outcome and in some instances, you may be able to save a small fortune too. Another thing that you can do is to try and hire family members wherever possible. They will be much more flexible when it comes to payment and they may even be willing to give you some additional support when it comes to the finer details of your company too.

Always Barter

Bartering has been around for thousands of years, and it is a great way for you to get the edge on your competition . If you want to help yourself here, you need to try and talk with your vendors to see if they can give you a lower rate on any products you need. They may be willing to set up a contract, or even bulk discounts. If your current vendor is not willing to do this, there are other options available. For example, you can easily go to someone else and then revisit the original vendor with a counter-offer. Sometimes this is more than enough for them to loosen their pricing structure, and you may even end up getting a way better deal as a result.

Vehicle Expenses

If you are running a service or even a contract business that requires the use of a vehicle then you probably know how expensive it can be. Fuel and servicing costs for bigger vehicles or even crew can be astronomical. One way for you to reduce the costs of operating a fleet would be for you to buy used vehicles. It doesn’t even matter if the vehicles require a good level of repair either because it’s still way cheaper than you buying a new truck brand-new. If you still feel as though the expenses you’re paying are far too much, then it may be worth trying to reduce your fuel consumption. Diesel and hybrid vehicles can be more expensive for you to purchase but they can really pay off and they may even save you a small fortune in terms of maintenance too.

Cut down on Supply Costs

When it comes to supply costs, you have to make sure that you budget. As a business owner, you need to ensure that you constantly monitor supplies and that you also check for occasional discounts too. Don’t be afraid to look around and make yourself popular with suppliers. This can be done by paying your bills promptly and also displaying loyalty.

Cut Down on Advertisement Costs

A lot of businesses often spend 5% of the revenue that they get on advertising. This figure may be higher for service businesses, or those who are just starting out. With more and more customers shopping online when compared to ever before, it’s safe to say that you need to at least have a website or even a Facebook page. Having SEO and even television advertising is great and it can help your exposure, but they can also be expensive and they can put a real hole in your budget. One way for you to get around this would be for you to try and advertise organically through Facebook and Twitter. It doesn’t cost you anything to do this, and when you combine it with a weekly newsletter you will soon find that it’s easier than ever for you to gain a lot of traction with your customers.

Cut down on Insurance

Your annual insurance bill will probably cost you a small fortune every year. If you don’t have enough insurance however then this could be enough to bring your business to its knees, and this is something that you do need to make yourself aware of. If you want to help yourself, you need to annually review the insurance that you have. If you don’t feel as though you need one part of your policy anymore, get rid of it as this will save you a huge amount of money. If you have a larger business with a ton of insured assets, then it may be worth doing an asset review too. This will help you to make sure that you are not insuring assets that you no longer have.

Make the Most out of Your Time

If you are a business owner then you’ll know how important time management can be. Business owners should always be prioritising and they should also be using their time accordingly. If you don’t, this could have a huge impact on your bottom line and you may even find that your company suffers as a result. If business is slow then now is the time for you to invest more money into advertising. If your business is taking off and really getting sales then it may be a good idea for you to invest more in things like software or even additional ways for you to manage your workload. Either way, the way that you manage your time will make a huge difference to your business income and it will also help you to save on expenses too.

Watch your Energy Bills

If you have a ton of energy bills coming out, then something needs to be done. You need to make sure that you always turn off lights when they are not in use, and it also helps to keep an eye on standby technology. This will be eating away at your energy usage and it will also stop your business from being efficient too. If you want to do something about this, consider installing a motion sensor light in your offices or have a power strip that shuts everything off when you leave the premises. This will stop you from forgetting about those little things and it will also help you to be more green in general. Another thing that you can do if you work in the industrial sector is invest in slimline water tanks. When you do, you will be able to collect rainwater rather than using it from the business supply.


Tax Bills

Minimising your tax bill is one of the best ways for you to save a lot of money over the year. You need to get in the habit of writing down exactly how much your business spends on things and you also need to make sure that you detail them properly too. Saving receipts and recording mileage is also essential, as this can all be claimed back at a later date. If you have family members who work in the same business as you then treat them as employees, and file for any expenses that they incur too. There’s nothing wrong with this, but it will help you to pay the right amount of tax when the end of the year comes along.

Utilise the Cloud

For a lot of businesses, cloud computing is a fantastic way for you to reduce the expense of your business. It can also help you to operate more efficiently too. When you invest in cloud computing, you don’t need to worry about maintaining your servers on-site and you also don’t have to worry about ongoing software upgrades either. You will have access to all of the applications you need with the flexibility of the cloud. If you want to get some additional support here, then consider chatting with the cloud providers in your area to see if they can talk you through the solutions they have.

Mindful Ways to Challenge Your Consumerist Habits

A key focus of my blog is Financial Literacy/Money. A major part of winning with money is controlling and understanding your spending. Just controlling your habits as a consumer can effectively give you a raise. The following contributed post is entitled, Mindful Ways to Challenge Your Consumerist Habits.

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The world has turned us all into consumers at heart thanks to the wealth of money poured into promotional campaigns and marketing. It’s difficult to enter a conversation without some kind of brand being mentioned and no matter what common sense tells us, it’s hard to break free from the clutches of big-name companies that rip us off with their expensive purchases.

So in this post, we’re going to look at a couple of mindful ways to challenge your consumerist habits.


Understand what makes you purchase things on impulse

Everyone has their own weaknesses when it comes to shopping. Some people just love certain colors, others always seem to buy excess clothes and some people just can’t resist a good deal. Once you understand what triggers your impulse purchases, you’ll have a much easier time combating them since you’re more mindful and can avoid those unnecessary purchases. You might even be affected by specific emotions, such as having a tendency to make large purchases when you’re feeling down or depressed. Once you recognize the patterns and find ways to deal with your triggers, you’ll save yourself a lot of money and regret from impulse buys.

Look at the hidden costs of each purchase you make

Every purchase you make comes with hidden costs that need to be considered in the long term. For instance, buying a new television might seem like a cool idea, but there are other costs involved outside of just the unit itself. For example, you might feel tempted to upgrade your subscription TV service for better quality, you might end up paying higher electricity costs and it might even tempt you to buy more DVD and BluRay films just to use your TV on a regular basis. This is just one example of how a seemingly innocent purchase can spiral out of control and make you spend a lot more than you would’ve first imagined.

Stop following what your friends and family members do

Just because your friends and family members are buying expensive Apple smartphones or going for Microsoft-only laptops and computers, it doesn’t mean that you need to follow with them. Your life is unique and so are your choices, so don’t let other people affect your purchase decisions. Instead, you should consider doing your own research such as looking at websites like ReviewNerds to make your own purchase decisions. Don’t just follow trends–look at what the purchase is for, understand what makes a good product or service and then make your own choice based on that information.

Do an inventory of your belongings to see how much you’re really spending

One of the best ways to realize just how much money you’re spending is to inventory all of your belongings. Look at your electronics and hobby-related items to get a better idea of just how much you’re actually spending on a regular basis. Once you realize that you’re spending far too much money on things and leaving them stored away never to be seen again, you’ll start to be more careful about your purchases.

Best ways to save money through efficient heating and cooling

The first principle of my blog is Financial Literacy/Money. A major component of everyone’s personal finances is their utilities. Depending on where you live, keeping your dwelling at the appropriate and comfortable temperature can be costly. It’s important to know how to control this cost. The following contributed post is entitled, Best ways to save money through efficient heating and cooling.

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Alex Perz

When you think about saving money, heating and cooling for your home would probably be the last things in your mind. It’s really hard to save money if you have your AC running during hot, humid days, or your heater going on cold, winter months.

But what if there’s a way for you to save money, even when you’re not depriving your home of heating and cooling?

The key to substantial savings is to keep your heating and cooling systems efficient, so even with prolonged use, there won’t be any wasted energy, and you’ll only get the right amount of coolness or warmth that you need.

If you’re really keen on saving every cent possible for your home’s heating and air conditioning, start by ensuring that your hardware is up to the task, and that it’s not wasting energy due to dirt build up or presence of leaks. Regularly checking the system that you have will save you a lot of money from repairs in the near future. Keeping them in top condition saves you more by ensuring that they don’t deteriorate with every use, thus the need for new units.

Here are some of the areas you need to consider if you want to see substantial savings.

Right-sizing the heating and cooling systems for your home.

This is easily one of the most overlooked factors when buying a new HVAC unit for your home. Instead of thinking about the size of your home, you were easily swayed by the price, as well as the big savings when compared to competitors. The right size will save you a considerable amount, especially if you’re using them regularly. You can also have an energy audit or calculation from your local dealer. With that, you’ll know exactly what you need for efficient cooling and heating.

Bigger is not better when it comes to heating and cooling systems.

As mentioned earlier, getting the wrong sized heating and cooling equipment would be wasteful and inefficient. They’ll cost a lot more to operate and maintain, so aside from the initial purchase price, you’ll also be dealing with the maintenance cost. Getting a unit that’s too small for your space drives up the utility cost as it will struggle to heat or cool your home. Overexerting to produce the necessary heating and cooling can also be taxing to the hardware, thus effectively reducing its durability.

Regular cleaning and maintenance is a must.

Now that you have the right size heating and cooling units installed, you’ll slowly begin to reap the benefits of what you’ve sown. You can also focus your savings efforts on properly maintaining your hardware. For example, by regularly cleaning the vents and filters of your HVAC, you’re able to prolong its life and keep it working optimally. Always follow your manufacturer’s maintenance schedule, so that you’ll have it cleaned and maintained accordingly. The vents and piping of your HVAC unit are always clean and ready for anything. Any obstruction or dust build up in these can cause the efficiency of your hardware to drop.

Important considerations when buying a condominium unit revisited part two

This is a continuation of my series entitled, Important considerations when buying a condominium unit. Part one ended with a discussion of the nuances and caveats of buying into condominium communities. This second part will talk about what can happen when condominium owners must finance common projects within their complex in emergency situations.

To start this discussion, I want to introduce a key financial term, the “Residential Assessment”. Residential assessments are basically lump sums of money every owner must pay which is typically the condominium fee. In some instances, based upon the community’s by laws and constitution, a residential assessment can also be mandated from every owner should a project need to be done affecting the entire complex under ‘emergency’ circumstances.

This was painfully revealed to me when the first of many assessments in my condominium community was due in the Fall of 2010, just after purchasing my unit. Clues that something was up were there before closing though. When visiting my prospective unit for the first time, and when going through the inspection process, a large project was underway requiring the excavation of the land around the foundation of my soon to be dwelling. As a first-time home buyer, it didn’t occur to me to press the seller about what was happening – ultimately a good thing for her.

The question did come up though. She simply said, “Oh it’s just some foundational work.” She didn’t say however that the entire building was sliding and shifting on its clay foundation, and that the entire project would result in an $8,500 assessment for me, my entire Obama Tax Credit. Needless to say, having to cough up $8,500 unexpectedly was a bitter feeling.

Truthfully, the information about this project may have been in the “Condo Docs” or condominium documents. They were a binder of documents (at least 300 pages) provided prior closing. Another piece of advice; take the time to flip through any information given to you about your property prior to purchasing it, especially if it’s in condominium community. In the real estate world, this is part of what’s called doing your ‘due diligence’. Why didn’t I take the time to read the documents? I’ll chalk it up to ignorance and being a novice to the home buying process.

In any case, having the $8,500 Obama tax Credit was a blessing as it saved me from having to take out a loan. In addition to the $8,500 assessment, there was a $1,600 assessment preceding it due to delinquent condominium fees from other owners throughout the complex. This all occurred just after the bursting of the 2008 housing bubble and the subsequent recession, so there were quite a few folks in the community who either lost their jobs, ran out of money, didn’t have enough money on hand, or both. Either way, the rest of us owners had to pick up the slack.

Since those first two assessments, there was another $8,500 assessment to help replace the old underground piping of our complex which seemed to break every winter like clockwork. The board of directors created a payment plan so that the payments could be spread out over three years. The installments would be paid with interest, while those who could make the payment at all once, would be charged no interest. Years later there was yet another $8,500 assessment to cover updates to our HVAC system. If this all sounds like a lot of money, it was.

So, what are the takeaway messages from this? Aside from the points Dave Ramsey made in part one of the series, they are as follows:

• No matter what type of real estate you decide to buy (a detached home, a townhouse or a condominium unit), budget so that you’re as debt-free as possible and so that you have extra money on hand (Dave Ramsey’s Emergency Fund of 3-6 months of expenses for example);
• When you buy into a condominium community, every owner’s destiny and finances are intermingled;
• Before you buy and piece of real estate, ask as many questions as you can of the seller, especially the obvious ones and;
• This last bullet comes from one of Suze Orman’s books. Before you buy into a condominium community, go as far as to hunt down the board of directors and ask questions. Try to figure the history of the community, its overall financial health and any additional issues it may be facing going forward.

Part three will conclude this series and discuss a key part of a condominium community; its board of directors, and the ongoing challenges my community is facing. Thank you for taking the time out to read this blog post. You might also enjoy:

Are you getting your Matching Contribution? A discussion on saving for retirement
A look at the Law of Compounding Interest and why you should care
Your Net Worth, your Gross Salary, and what they mean
Is the power in budgeting your money?
I still don’t have a car in 2018: A story about playing financial chess
We should’ve bought Facebook and Bitcoin stock: An investing story

If you’ve found value here and think it would benefit others, please share it and or leave comments. To receive all the most up to date content from the Big Words Blog Site, subscribe using the box in the right-hand column in this post and throughout the site, or add the link to my RSS feed to your feedreader. Please visit my YouTube channel entitled, Big Discussions76. Lastly follow me on Twitter at @BWArePowerful, on the Big Words Blog Site Facebook page, and on Instagram at @anwaryusef76. While my main areas of focus are Education, STEM, and Financial Literacy, there other blogs/sites I endorse which found on that particular page of my site.

The Difference Between Investing And Saving

A key focus of my blog is Financial Literacy/Money. A key aspect of this subject area is understanding the difference Investing and Saving. Bother are very important terms which complement the other. Understanding the two can change lives. The following contributed post is entitled, The Difference Between Investing And Saving.

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Investing and saving are two fantastic options for anyone looking to be smart with their money. At a base level, they both serve the same purpose; you want to put money aside, with the aim of having more in the future.

But, some fundamental differences show both options have their own pros and cons.


Investing is far more complex

It’s easy for anyone to open a savings account and start saving money. You don’t need much financial know-how at all, just a brief consultation with a financial advisor at your bank will give you everything you need to know. Essentially, you open an account, put as much money as you want in there, and the interest rate sees it grow year by year.

With investing, you have something far more complex. There are loads of different ways to invest, and each option also contains more choices as well. Take the stock market; you have loads of different things to invest in, from futures to options – and everything in between. Then, you have to look at things like option historical data, previous sales, current market trends, and so on. It’s so incredibly complex, making it hard for the average person to get involved. Typically, you need to take in a lot of knowledge to get to grips with stock market investing. Bear in mind, this is just one example, you also have property investment, forex – the list goes on and on. Saving is simple, but investing is definitely very complicated.


Saving returns are restricted by interest rates

When you put money in a savings account, it will increase in value over time. This is due to interest rates, but the catch is that interest rates are usually horrible. In essence, this means you don’t get outstanding returns, and you have to keep your account open for many years before you see anything substantial.

So, saving returns are restricted by interest rates, but investment returns aren’t. Your return on investment varies depending on the market conditions. In some cases, you can earn colossal returns after just a few months – it depends on the investment. If you were to compare savings and investments with regards to their returns, then savings definitely come out second best.


Investing carries more risk

The flip side of this is that investing carries more risks. With a savings account, you haven’t really got any risks at all. The money sits there collecting interest, and you don’t have to worry about anything.

With investing, there are so many variables. A market crash can make your investment plummet in value – or the company you’ve invested shares in could close down. If you invest in property and the property market experiences a dip, then you’re in trouble. The point is that you may get better returns, but you’re taking a bigger risk.

Ultimately, either option is an effective way of using your money. They’re both far better than reckless spending! The best way to summarize the differences is that investing is riskier, more complicated, but can grant higher rewards. Generally speaking, it’s a smart idea to try both ideas if you want to do more with your money.

Setting Your Sights And Savings On The Future

A key focus of my blog is Financial Literacy/Money. One of most basic financial intelligences is learning how to save money. While it isn’t the most flashy money habit, building a substantial savings can keep you out of trouble and open up doors that otherwise wouldn’t be open. The following contributed post is entitled, Setting Your Sights And Savings On The Future.

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Image by skeeze from Pixabay

When it comes to saving for the future there are the obvious things that you’re probably already thinking about, your kids’ college funds, your retirement, unemployment, and medical emergencies are the ones at the top of most people’s list, but there are others too. While you might have fall back options such as access to settlement loans, or inheritance, it’s not ideal to rely on just these. It is better to save and not to overwhelm or panic you, but some of these could make you money, so it’s worth having a look:

Home and Car Repairs
Okay, saving for repairs won’t make you money it will certainly save it in the long run as repairing things is usually cheaper than buying new. If Your fridge breaks without warning and needs to be replaced or the transmission falls out of your car, it’s good to have at least $2,000 at your disposal so you can address the situation as soon as possible. Also, home or car repairs can have a knock-on effect on other parts of your life, for example, if you can’t get to work because you can’t afford car repairs, that situation could just get worse.

Investment Properties
Rather than just saving for scenarios where you will never see the money again, here’s the bit where you can save and make money. If you have managed to clear your debts, don’t have many other expenses, and yourself in a position to save to invest, then this is a great position to be in. Saving for an investment property, in particular, can provide additional income by renting it out on a short- or long-term basis. This is usually a smart decision if you can afford it because of the positive financial implications down the road.

Entrepreneurial Endeavors
You could also be saving to become your own boss, if that’s something you aspire to be and depending on what type of business you want to pursue will dictate how much you’ll need to save. For example, an online business or consultancy which you can work from home with low overheads can be inexpensive to start up, but if you wanted to open a restaurant, then that will need some serious savings.

While you should definitely be saving for emergencies, medical bills, home, and car repairs, and other necessities, there comes a time when you need to treat yourself too. You don’t need to treat yourself every chance you get, but you could choose one big item to save for throughout the year. Perhaps a cruise or a new car? Whatever it is, making a conscious decision to save for it so you can enjoy some of life’s little luxuries.

Caring for Elderly Parents
It’s not a nice thing to think about, but it is inevitable that your parents will get to an age where they might need assisted living, and it’s good to be prepared financially for this. It’s becoming increasingly common now since people are living longer in general and because many older people have much less to live on these days due to the high cost of living.