I read an interesting article from the SMH (author Lesley Parker) about steps you should take first before selling your unwanted gold jewelleries in order to obtain the best price for yourself.
"1. Make your own estimate of the value of the gold jewellery you're thinking of selling
2. Obtain at least three quotes.
3. Check that the buyer has a second hand dealer's licence and calibrated scales
4. Consider whether you'd get more selling jewellery intact rather than as "scrap" metal
... consumers should expect about 80 per cent of the spot price for gold per gram according to its carat value..."
Step one is the most complicated because it requires you to weigh and value your own jewellery yourself. First, the confusion of gold terminologies need to be cleared up:
Troy ounce = 31.1 grams and is the unit used for measuring gold
Avoirdupois ounce = 28.4 grams is the standard ounce that we typically use
24 carats = pure gold
22 carats = 916 = 91.6% pure gold (22/24=91.6%)
18-carats = 750 = 75% pure gold (18/24=75%)
14-carats = 585 = 58.5% pure gold (14/24=58.5%)
9-carats = 375 = 37.5% pure gold (9/24=37.5%)
Parker writes that using grams will simplify things and you can ask the buyer (second hand dealer) to to put their offer to you as a price per gram.
i) Separate your gold jewelleries into piles of the same purity and weigh those piles separately
ii) The amount of gold you actually have is achieved by multiplying the weight of the piles by the purity. Eg 300g of 9-carat gold jewellery would melt down to 112.5g in pure gold (300g x 0.375 purity).
iii) Now you can roughly estimate the value by multiplying the pure gold weight by the prevailing gold price. Using the example from above: 112.5g x $40/gram = $4,500 for the pure "gold" in your jelleweries.
Although gold prices are usually listed in troy ounces, Parker wrote that you can find the price per gram (instead of troy ounce) in Australian dollars at goldprice.org/gold-price-per-gram.html which would be useful if you're not great at converting grams into troy ounces.
Using the example from above, 112.5g is 3.62 troy ounces (ie 112.5/31.1).
Gold buyers usually do not want the stones and if they do, ask for an additional quote for the stone that is separate from the quote for the gold. If you're in Australia, then you can check the jaa.com.au guide for Jewellers Association of Australia for additional information.
If you're interested in buying gold as an investment then you can buy gold coins or bullions from www.perthmint.com.au or buy gold investments through the ASX.
Monday, March 22, 2010
Sunday, March 21, 2010
Understanding Credit Card Charges
If you buy $2000 worth on your credit card and don't pay that $2000 off by the due date, then you will be charged interest on the entire balance - even if you made a partial repayment of $1999.
If you pay the bill late, then most credit card companies will charge interest back to the purchase date (back dating interest).
If your bill is overdue, then most will cancel your interest free days until the overdue balance is paid completely.
Some credit card companies will charge interest on the entire balance even if you've paid a portion of your bill (even the new transactions that hasn't been billed to the statement yet). So until you pay your credit card statement in it's entirety, you will be charged interest even on the portion that you have partly paid off. And lose the interest free days on all the new transactions until the entire statement balance is paid off. This is entirely unfair but this is how they operate.
Balance transfer deals involves transferring your debt from one credit card provider to a new one who might be offering six months interest free deal. When the special period ends (in this example, it's six months) and there is a transfer balance remaining, the interest will be charged on that balance as if it was a cash advance. Cash advance rates are usually much higher than transaction rates.
If you find that you have overlooked the bill and paid it 1-2 days late (or even up to 1 week late) by accident and you have a good payment history, phone your card provider to explain and request them (very politely of course) to reverse the late fees and interest charges as a courtesy to you. They will usually reverse it for you if you have a good reason or you have a good payment history. It is usually left to the discretion of the staff member that is working which is why it pays to be polite when calling them to reverse any charges and fees.
If that doesn't motivate you to pay off the credit card statement in full, then you shouldn't be using a credit card. Not when it's costing you 10-28% extra in terms of interest charges.
If you pay the bill late, then most credit card companies will charge interest back to the purchase date (back dating interest).
If your bill is overdue, then most will cancel your interest free days until the overdue balance is paid completely.
Some credit card companies will charge interest on the entire balance even if you've paid a portion of your bill (even the new transactions that hasn't been billed to the statement yet). So until you pay your credit card statement in it's entirety, you will be charged interest even on the portion that you have partly paid off. And lose the interest free days on all the new transactions until the entire statement balance is paid off. This is entirely unfair but this is how they operate.
Balance transfer deals involves transferring your debt from one credit card provider to a new one who might be offering six months interest free deal. When the special period ends (in this example, it's six months) and there is a transfer balance remaining, the interest will be charged on that balance as if it was a cash advance. Cash advance rates are usually much higher than transaction rates.
If you find that you have overlooked the bill and paid it 1-2 days late (or even up to 1 week late) by accident and you have a good payment history, phone your card provider to explain and request them (very politely of course) to reverse the late fees and interest charges as a courtesy to you. They will usually reverse it for you if you have a good reason or you have a good payment history. It is usually left to the discretion of the staff member that is working which is why it pays to be polite when calling them to reverse any charges and fees.
If that doesn't motivate you to pay off the credit card statement in full, then you shouldn't be using a credit card. Not when it's costing you 10-28% extra in terms of interest charges.
Monday, January 11, 2010
2010 New Year Resolutions
How hard is it to compile a list of 100 goals??
A few years ago, if I asked any friends whether they had resolutions for the new year or not, they had plenty. Lately, I've noticed that we don't seem to form that many resolutions as previously. Now if we have any resolutions, they are harder and more complex to achieve, and they even stretch over the years rather than being achievable in one year alone.
Perhaps we are consolidating. Paying off mortgages. Building relationships. Maintaining friendships. Working and paying off bills. Some are planning to have kids while others have the panicky look in their eyes whenever the thought of having babies arises. Some are still hunting for their first property or home.
Some have realised that their financial mistakes in their early 20s have led to no savings and a tedious day to day existence of working to pay bills and get by.
It really feels like I've just left school yesterday. As if the decade had not happened. But looking back, a lot has happened and I'm anticipating a lot more. I hope that's the story with everybody.
What are your resolutions? I realised how anal I was when 2010 arrived and I was itching to find a quiet moment alone to form my 2010 resolutions...flipped my notebook open and realised that I had already compiled my 2010 resolutions back in early December 2009! New Years Eve & New Years Day is really one of the best times to form memorable resolutions so if you haven't done so, try it now.
I have a few of my own which I always break up into categories:
FINANCIAL
* Build a larger stock portfolio
* Pay off P#1
* Build a property investment portfolio
* Contribute extra into superannuation for retirement (which is decades away)
* Pay off more of my student loan (aka HECS...something that I've been reluctant to do since the interest on the loan is indexed to inflation)
* Build up trading capital
* Start trading in stocks (again), CFDs, Options and open myself up to international markets as well
* Save up for my own side projects
PERSONAL
* Spend more time with friends & family
* Keep up with correspondence - calls, emails, social stuff
* Write more - creative writing (novels, poetry, articles), journaling, blogging (on finance and craft work)
* Save up for trips to England, Europe, China, Thailand, Cambodia, Vietnam, South America, Egypt and Tasmania
* Focus more on career and entrepreneurial ideas
* State of mind- happiness, relaxation, read more, allocate time for creative pursuits
* Throw more things out, hoard less
* Learn more- accounting, finance, personal finance, IT & web development, entrepreneurialship
* Be more environmentally conscious - buy things with less packaging, use grey water, less plastic, drive less and consume less
HEALTH
* Eat healthier (less junk food and snacks)
* Exercise more
* Increase fitness
As for coming up with 100 goals...that's something to think about!
A few years ago, if I asked any friends whether they had resolutions for the new year or not, they had plenty. Lately, I've noticed that we don't seem to form that many resolutions as previously. Now if we have any resolutions, they are harder and more complex to achieve, and they even stretch over the years rather than being achievable in one year alone.
Perhaps we are consolidating. Paying off mortgages. Building relationships. Maintaining friendships. Working and paying off bills. Some are planning to have kids while others have the panicky look in their eyes whenever the thought of having babies arises. Some are still hunting for their first property or home.
Some have realised that their financial mistakes in their early 20s have led to no savings and a tedious day to day existence of working to pay bills and get by.
It really feels like I've just left school yesterday. As if the decade had not happened. But looking back, a lot has happened and I'm anticipating a lot more. I hope that's the story with everybody.
What are your resolutions? I realised how anal I was when 2010 arrived and I was itching to find a quiet moment alone to form my 2010 resolutions...flipped my notebook open and realised that I had already compiled my 2010 resolutions back in early December 2009! New Years Eve & New Years Day is really one of the best times to form memorable resolutions so if you haven't done so, try it now.
I have a few of my own which I always break up into categories:
FINANCIAL
* Build a larger stock portfolio
* Pay off P#1
* Build a property investment portfolio
* Contribute extra into superannuation for retirement (which is decades away)
* Pay off more of my student loan (aka HECS...something that I've been reluctant to do since the interest on the loan is indexed to inflation)
* Build up trading capital
* Start trading in stocks (again), CFDs, Options and open myself up to international markets as well
* Save up for my own side projects
PERSONAL
* Spend more time with friends & family
* Keep up with correspondence - calls, emails, social stuff
* Write more - creative writing (novels, poetry, articles), journaling, blogging (on finance and craft work)
* Save up for trips to England, Europe, China, Thailand, Cambodia, Vietnam, South America, Egypt and Tasmania
* Focus more on career and entrepreneurial ideas
* State of mind- happiness, relaxation, read more, allocate time for creative pursuits
* Throw more things out, hoard less
* Learn more- accounting, finance, personal finance, IT & web development, entrepreneurialship
* Be more environmentally conscious - buy things with less packaging, use grey water, less plastic, drive less and consume less
HEALTH
* Eat healthier (less junk food and snacks)
* Exercise more
* Increase fitness
As for coming up with 100 goals...that's something to think about!
Monday, November 16, 2009
Poor health can send you broke
Everyone knows someone who has been or is currently sick. If it's just a passing flu or virus, that's not a huge problem. However, if it's something terminal or something that will affect you for the rest of your life, such as cancer or disabilities, then it will drain your finance and could send you broke.
Personally, I've been blessed and fortunate that I have been born with relatively good health. A recent injury whilst snowboarding and over a year worth of stomach pains gave me a taste of what I was missing out on medically and financially.
First health problem of the year:
The snowboarding injury to the shoulder (compacted/compressed shoulder joint) required a visit to the Physiotherapist and several weekly visits thereafter.
Initial consultation $69
Each visit thereafter $57
Total cost of physio $ 426
Total cost out of pocket $228.50
I finally had the opportunity to use my private health insurance (besides the obligatory trip to the dentist for a checkup), so that meant I was out of pocket for $228.50
Bearing in mind that private health insurance fees are now about $1100 per annum and rising.
Second health problem of the year and still ongoing:
Stomach pains and aches. This health problem is a pain in the arse and ongoing. It's random...meaning the pain onsets at random moments...after I eat and not necessarily all the time. It's irregular and can happen whenever which is highly annoying because it's hard to pinpoint whether it's a gastro, allergy or organ problem.
So a trip to the doctor for blood tests - covered by Medicare
A trip for an ultrasound $50
Out of pocket $25
Unfortunately the stomach problems are still ongoing and still need additional tests with specialist doctors to find out what the problem is.
So far, medical bills out of pocket are $1353.50 and that's not counting the cost of travelling, time wasted in medical waiting rooms, and the actual cost itself in lost working days or hours.
Colds, Flu and Viruses
A trip to the doctor is typically covered by Medicare. A box of prescription medicine is typically $30-$38 for a packet. If you don't get paid for sick days that you take off, then the total cost of being sick each day may range from $100-$200 for each day and more. I find that if I'm stuck out and about somewhere, and it starts raining - it's much cheaper to just buy an umbrella for $7 or $30 rather than rushing around in the rain and increasing the probability of getting sick.
Broken Bones and Terminal Illnesses
Now we're talking big bucks. Huge bills. Specialist and hospital bills. Out of pocket costs are typically a few thousand dollars and I've heard of bills up to $35,000 for injuries involving ambulances, hospitals and no private health insurance. Even worse, having no travel insurance and injuring yourself badly overseas. Repatriation costs are several thousands of dollars and you could be left stuck, in that country that you've injured yourself in, with no way home.
Getting sick isn't cheap. Being continuously sick will end up costing you a lot. That's why it's important to eat healthy and exercise regularly. Something that we have to try to do more often.
Personally, I've been blessed and fortunate that I have been born with relatively good health. A recent injury whilst snowboarding and over a year worth of stomach pains gave me a taste of what I was missing out on medically and financially.
First health problem of the year:
The snowboarding injury to the shoulder (compacted/compressed shoulder joint) required a visit to the Physiotherapist and several weekly visits thereafter.
Initial consultation $69
Each visit thereafter $57
Total cost of physio $ 426
Total cost out of pocket $228.50
I finally had the opportunity to use my private health insurance (besides the obligatory trip to the dentist for a checkup), so that meant I was out of pocket for $228.50
Bearing in mind that private health insurance fees are now about $1100 per annum and rising.
Second health problem of the year and still ongoing:
Stomach pains and aches. This health problem is a pain in the arse and ongoing. It's random...meaning the pain onsets at random moments...after I eat and not necessarily all the time. It's irregular and can happen whenever which is highly annoying because it's hard to pinpoint whether it's a gastro, allergy or organ problem.
So a trip to the doctor for blood tests - covered by Medicare
A trip for an ultrasound $50
Out of pocket $25
Unfortunately the stomach problems are still ongoing and still need additional tests with specialist doctors to find out what the problem is.
So far, medical bills out of pocket are $1353.50 and that's not counting the cost of travelling, time wasted in medical waiting rooms, and the actual cost itself in lost working days or hours.
Colds, Flu and Viruses
A trip to the doctor is typically covered by Medicare. A box of prescription medicine is typically $30-$38 for a packet. If you don't get paid for sick days that you take off, then the total cost of being sick each day may range from $100-$200 for each day and more. I find that if I'm stuck out and about somewhere, and it starts raining - it's much cheaper to just buy an umbrella for $7 or $30 rather than rushing around in the rain and increasing the probability of getting sick.
Broken Bones and Terminal Illnesses
Now we're talking big bucks. Huge bills. Specialist and hospital bills. Out of pocket costs are typically a few thousand dollars and I've heard of bills up to $35,000 for injuries involving ambulances, hospitals and no private health insurance. Even worse, having no travel insurance and injuring yourself badly overseas. Repatriation costs are several thousands of dollars and you could be left stuck, in that country that you've injured yourself in, with no way home.
Getting sick isn't cheap. Being continuously sick will end up costing you a lot. That's why it's important to eat healthy and exercise regularly. Something that we have to try to do more often.
Sunday, November 15, 2009
Managing Cash Flow for Yourself, Business or Company
Cashflow is one of the most important concept for individuals and for businesses. If you're asset rich, but liquidity poor, then being unable to pay your bills or invoices could lead to a creditor taking you to court and this may force you declare bankruptcy if you haven't got the money to pay the creditor.
An interesting excerpt from Dun & Bradstreet Australia outlines how you can improve your cash position:
I agree with all of the above, having utilised them in practice. The point about re-arranging your annual payments to pay by small regular, frequent instalments...that one I'm not quite a proponent of. If you can get discounts for paying the entire sum upfront annually, then this may be a more attractive option if your cash flow is reasonably liquid.
If you are struggling in terms of your own personal cash flow, then you need to review your budget and cut back unecessary expenses where possible. Contact creditors straight away to see what options they provide for clients experiencing hardships. Firstly by pre-empting the difficulty ahead, some creditors will be more lenient and offer you different payment terms, some will be informed and thus, not bill you for late fees and debt chasing fees.
For businesses, it's important to delay making early payment on accounts payable. For accounts receivable, it's important to follow up as soon as clients miss the payment date. The older the account, the less collectable it becomes.
An interesting excerpt from Dun & Bradstreet Australia outlines how you can improve your cash position:
* Develop a cash flow projection and ensure you monitor and update it regularly
* Minimise bad debts through an established credit-assessment procedure
* Establish an accounts-payable policyat the outset of every credit
relationship
* Establish a deposit policy for work in progress
* Monitor
your customers' use of credit and adjust their credit limits accordingly
*
Closely manage your invoice process and collections practices
* Re-arrange
annual payments such as insurance so you pay small instalments frequently. This
will help smooth out lumps in your cash flow cycle
* Select an appropriate
source of funding for your requirements and pay the debt before the interest
kicks in
* Use short-term cash surpluses wisely. Don't keep them in accounts
that don't pay interest
I agree with all of the above, having utilised them in practice. The point about re-arranging your annual payments to pay by small regular, frequent instalments...that one I'm not quite a proponent of. If you can get discounts for paying the entire sum upfront annually, then this may be a more attractive option if your cash flow is reasonably liquid.
If you are struggling in terms of your own personal cash flow, then you need to review your budget and cut back unecessary expenses where possible. Contact creditors straight away to see what options they provide for clients experiencing hardships. Firstly by pre-empting the difficulty ahead, some creditors will be more lenient and offer you different payment terms, some will be informed and thus, not bill you for late fees and debt chasing fees.
For businesses, it's important to delay making early payment on accounts payable. For accounts receivable, it's important to follow up as soon as clients miss the payment date. The older the account, the less collectable it becomes.
Resourceful Websites for Business, Money, Finance and Random Things.
Excellent resource links for entrepreneurs and business people:
START UP SUPPORT
Australian Retailers Association (www.retail.org.au)
Business Enterprise Centres (www.beca.org.au)
Business Entry Point (www.business.gov.au)
Department of Innovation (www.innovation.gov.au)
E-business (www.e-businessguide.gov.au)
NSW Small Business (www.smallbiz.nsw.gov.au)
SMExcellence (www.smexcellence.com.au)
NSW Department of State and Regional Development: offering inventors and small business innovators support to plan and commercialise their innovations. Original concepts, new or improved device, product, material, business process or service falls witin the definition of innovation may be eligible for assistance at NSW Innovation Advisory Centres.
Hunter Innovation Advisory Centre at Newcastle
LEGAL
Law Society of NSW (www.lawsociety.com.au)
LEADR (www.leadr.com.au)
Legal Issues Guide for Small Business (http://sblegal.industry.gov.au)
FORMS & LICENCES
Australian Business Register (www.abr.gov.au)
Business Licence Information Service (http://bli.net.au)
GovForms (http://govforms.business.gov.au)
GOVERNMENT
Austrade (www.austrade.gov.au)
Australian Competition and Consumer Commission (www.accc.gov.au)
Australian Copyright Council (www.copyright.org.au)
Australian Government Workplace Ombudsman (www.wo.gov.au)
Australian Securities and Investment Commission (www.asic.gov.au)
Australian Taxation Office (www.ato.gov.au)
Australian Workplace (www.workplace.gov.au)
Department of Employment and Workplace Relations (www.dewr.gov.au)
Department of Immigration and Citizenship (www.immi.gov.au)
Human Rights And Equal Opportunity Commission (www.humanrights.gov.au)
IP Australia (www.ipaustralia.gov.au)
NSW Office of Fair Trading (www.fairtrading.nsw.gov.au)
NSW Office of Industrial Relations (www.industrialrelations.nsw.gov.au) (http://www.industrialrelations.nsw.gov.au/awards/controller.jsp?awardCode=135)
Office of the Privacy Commissioner (www.privacy.gov.au)
WorkCover (www.workcover.nsw.gov.au)
Workplace Authority (www.workplaceauthority.gov.au)
Workplace Ombudsman (www.wo.gov.au)
Importing websites:
(www.syndication.business.gov.au/Business+Entry+Point/Business+Topics/Importing+exporting/)
(www.customs.gov.au)
(www.austrade.gov.au/overseas/layout/)
MENTORING
National Mentoring Association of Australia (www.dsf.org.au/mentor)
Australian Mentoring Institute (www.australianmentoringinstitute.org)
FAVOURITE WEBSITES FOR RANDOM STUFF
Government grants (www.ausindustry.gov.au)
Investing/Buying Gold (www.perthmint.com.au/gold)
A news gathering website (http://wotnews.com.au)
Property Investing (www.somersoft.com/forums/)
Property Management for Apartments (www.strataman.com.au)
Property Finance & Advanced Calculators (www.yourmortgage.com.au)
Property Newsletters (www.masteringwealth.com.au/newsletters/)
Mortgage Site (www.amrinteractive.com.au)
Business News (www.associatedcontent.com)
Business Articles (www.bestmanagementarticles.com)
Business Articles (www.businessday.com.au/business/money/)
Forums and money articles from one of the largest US site (http://moneycentral.msn.com)
Sales Articles (www.top10salesarticles.com/)
Personal Finance Blog (www.moneyandme.com.au)
Small Business Articles (http://smallbusiness.smh.com.au/starting/index.html)
#1 Internet Marketing Forum (www.warriorforum.com)
Affiliate Marketing Forum (www.wickedfire.com/)
START UP SUPPORT
Australian Retailers Association (www.retail.org.au)
Business Enterprise Centres (www.beca.org.au)
Business Entry Point (www.business.gov.au)
Department of Innovation (www.innovation.gov.au)
E-business (www.e-businessguide.gov.au)
NSW Small Business (www.smallbiz.nsw.gov.au)
SMExcellence (www.smexcellence.com.au)
NSW Department of State and Regional Development: offering inventors and small business innovators support to plan and commercialise their innovations. Original concepts, new or improved device, product, material, business process or service falls witin the definition of innovation may be eligible for assistance at NSW Innovation Advisory Centres.
Hunter Innovation Advisory Centre at Newcastle
LEGAL
Law Society of NSW (www.lawsociety.com.au)
LEADR (www.leadr.com.au)
Legal Issues Guide for Small Business (http://sblegal.industry.gov.au)
FORMS & LICENCES
Australian Business Register (www.abr.gov.au)
Business Licence Information Service (http://bli.net.au)
GovForms (http://govforms.business.gov.au)
GOVERNMENT
Austrade (www.austrade.gov.au)
Australian Competition and Consumer Commission (www.accc.gov.au)
Australian Copyright Council (www.copyright.org.au)
Australian Government Workplace Ombudsman (www.wo.gov.au)
Australian Securities and Investment Commission (www.asic.gov.au)
Australian Taxation Office (www.ato.gov.au)
Australian Workplace (www.workplace.gov.au)
Department of Employment and Workplace Relations (www.dewr.gov.au)
Department of Immigration and Citizenship (www.immi.gov.au)
Human Rights And Equal Opportunity Commission (www.humanrights.gov.au)
IP Australia (www.ipaustralia.gov.au)
NSW Office of Fair Trading (www.fairtrading.nsw.gov.au)
NSW Office of Industrial Relations (www.industrialrelations.nsw.gov.au) (http://www.industrialrelations.nsw.gov.au/awards/controller.jsp?awardCode=135)
Office of the Privacy Commissioner (www.privacy.gov.au)
WorkCover (www.workcover.nsw.gov.au)
Workplace Authority (www.workplaceauthority.gov.au)
Workplace Ombudsman (www.wo.gov.au)
Importing websites:
(www.syndication.business.gov.au/Business+Entry+Point/Business+Topics/Importing+exporting/)
(www.customs.gov.au)
(www.austrade.gov.au/overseas/layout/)
MENTORING
National Mentoring Association of Australia (www.dsf.org.au/mentor)
Australian Mentoring Institute (www.australianmentoringinstitute.org)
FAVOURITE WEBSITES FOR RANDOM STUFF
Government grants (www.ausindustry.gov.au)
Investing/Buying Gold (www.perthmint.com.au/gold)
A news gathering website (http://wotnews.com.au)
Property Investing (www.somersoft.com/forums/)
Property Management for Apartments (www.strataman.com.au)
Property Finance & Advanced Calculators (www.yourmortgage.com.au)
Property Newsletters (www.masteringwealth.com.au/newsletters/)
Mortgage Site (www.amrinteractive.com.au)
Business News (www.associatedcontent.com)
Business Articles (www.bestmanagementarticles.com)
Business Articles (www.businessday.com.au/business/money/)
Forums and money articles from one of the largest US site (http://moneycentral.msn.com)
Sales Articles (www.top10salesarticles.com/)
Personal Finance Blog (www.moneyandme.com.au)
Small Business Articles (http://smallbusiness.smh.com.au/starting/index.html)
#1 Internet Marketing Forum (www.warriorforum.com)
Affiliate Marketing Forum (www.wickedfire.com/)
CASH BACK HOME LOANS (get rebates on upfront/annual/trailing mortgage commissions)
Peach Home Loans & YourShare. Average upfront commissions are typically 0.6% and average trail commissions are 0.2%
DESIGN INSPIRATION: WEBSITES
Design Sponge Online (www.designspongeonline.com)
Apartment Therapy (www.apartmenttherapy.com)
Remodelista (www.remodelista.com)
James Merrell (www.jamesmerrell.co.uk)
Design Squish (www.blog.designsquish.com)
Decorno (www.decorno.blogspot.com)
Fine Little Day (http://finelittleday.blogspot.com)
Ikeahacker (http://ikeahacker.blogspot.com)
Loving Living Small (http://lovinglivingsmall.blogspot.com)
The Design Files (http://www.thedesignfiles.net)
Unhappy Hipsters (www.unhappyhipsters.com)
This Is Naive (www.thisisnaive.com)
Monday, October 26, 2009
Picking low hanging fruits first
A fruit tree or a tomato plant will ripen at the bottom first before the fruits at the top starts to ripen later. If you waited till the fruit at the top ripened, the lower ones will be picked by others to be enjoyed now and you've missed out.
This is just like investing. If you wait and wait for the right moment to invest or the right thing to invest in, you'll have missed the low hanging fruit in the wait for the fruits up high. Other investors will have pounced on the opportunity while you dither over your decision.
Sometimes, the waiting game pays off. That is, the fruit ripens, is perfect, clean and beautiful. Sometimes, the waiting game is a loss because that fruit that you were waiting for... the birds and the worms got to it first, or the weather wasn't ideal and the fruit rotted and fell off.
What's the solution?
You pick that low hanging fruit. And then you pick the fruit up the top when it ripens.
That's an analogy for investing.
You invest in those blue chip stocks with your funds, and when you learn and save up additional funds for investing further, you can dabble your extra funds with investments that are pie-in-the-sky type if you desire. Or you can plonk some funds into exploration firms or small capitalised firms. Those deemed to be riskier prospects.
The low hanging fruit, that is, the blue chips such as Coca Cola, Caterpillar, the banks (CBA, WBC, NAB), the mining royalties (BHP, RIO) and the retailers (David Jones, Woolworths, Wesfarmers) are examples of low hanging fruit. They're already ripe for the picking. They will provide you with a meal via their juicy dividends year after year unless they collapse.
The high hanging fruit such as the small capitalised firms and the exploration firms... they may eventually one day, ripen and provide you with something tasty such as dividends and massive capital gains, or on the other hand, there is also the possibility that they could rot before they ripen, becoming as sour as a lemon and cause you to cringe about how you could be so gullible, so naive, so silly and so crazy as to buy into a sucker stock.
Those elusively high hanging fruits are just that...a gamble. Leaving you hoping that with the perfect weather, they will all ripen up successfully. It's akin to you hoping, that with the right economic and trading conditions, those small caps and those explorations stocks, will also deliver something worthwhile.
If you pursue those high hanging fruits, don't forget to cover your bases so that you won't ever starve - pick some of those low hanging fruits first. Then you can make your move, buy some promising stocks that may or may not deliver.
Friday, October 23, 2009
Extreme Frugality Sucks
Being too frugal will make you miserable.
I've been reading hundreds of blogs lately. It's like my new addiction. I've noticed a few recurring themes now when it concerns financial blogs. The blogs with massive subscribers are either a) Informative, interesting and useful or b) Not so informative, but the blogger's story and background is dramatic and harrowing ... such as "This blog is about my journey in paying off my $159,000 debt."
The blogs that I choose to subscribe to would be the informative and interesting one. Is it really beneficial to read about someone who racked up over $100,000 in stupid credit card debt and heavy bouts of consumption binge? Sure, it's gripping and interesting, but you are really wasting your time unless you're in the same situation and trying to pay off the same silly consumption debt.
I have never had any consumption debt. Have never wanted to follow the crowd and buy a gazillion number of shoes and Louis Vuitton handbags. The sheer crowd of females in the city carrying LV bags proudly... there are so many of them that it's almost like an Louis Vuitton Brown Bag Army Brigade. I love good quality bags or shoes and pretty things just like any typical female but I just will not buy an LV Bag that will lump me into that category.
I have one credit card. If I need larger credit, I contact the bank to have the limit increased. It's so pointless to parade around with 5 or 15 credit cards. I have some investment debt. A positive net worth. A bit of student debt left to pay off which I don't choose to pay off with a lump sum payment because it's indexed to inflation and I can earn a better return elsewhere.
I hesitate at taking or reading financial advice from anyone and any blogger who has racked up consumption debt.
Would you consult an acoholic about how to quit drinking when they are still drinking heavily?
In order to progress and develop your skills in finance and investing, you need to take a good look inside yourself. You need to focus more on earning passive income than trying to learn how to be super frugal.
The bloggers with massive consumer debt, they will blog about selling things on ebay, craigslist, how to save money here and there and how to be so frugal that you live your life miserably. If you have debt, then yes, it's probably a good guidance for you.
But if you have savings and a positive net worth, your time is better spent reading websites and blogs where the bloggers have a positive net worth as well. That way you can learn more about how to invest, the type of assets you can invest in, how to calculate returns, the terminology and the financial geek speak etc.
But things like, never eating out, always cooking your own food from scratch, spending all your weekends cutting out coupons to save $3 or $5, growing your own vegetables, driving all over town to find discounts and bargains, signing up for 15 credit cards that have 0% introductory interest just so you can arbitrage and place it into a bank account and earn 3-4% interest and all those time consuming activities.
Is your time more valuable if you used it on productive matters such as starting your own business, improving your professional skills and working on increasing your income via a better paying job or improving your investing skills so that you can grow your passive income?
Extreme frugality is not the road to riches. It's the road to feeling miserable and cantankerous. Spend in moderation and focus on reading materials that will improve your business, professional or investment skills and you will discover what I've discovered... the bliss of earning income passively from investments and multiple income streams.
I've been reading hundreds of blogs lately. It's like my new addiction. I've noticed a few recurring themes now when it concerns financial blogs. The blogs with massive subscribers are either a) Informative, interesting and useful or b) Not so informative, but the blogger's story and background is dramatic and harrowing ... such as "This blog is about my journey in paying off my $159,000 debt."
The blogs that I choose to subscribe to would be the informative and interesting one. Is it really beneficial to read about someone who racked up over $100,000 in stupid credit card debt and heavy bouts of consumption binge? Sure, it's gripping and interesting, but you are really wasting your time unless you're in the same situation and trying to pay off the same silly consumption debt.
I have never had any consumption debt. Have never wanted to follow the crowd and buy a gazillion number of shoes and Louis Vuitton handbags. The sheer crowd of females in the city carrying LV bags proudly... there are so many of them that it's almost like an Louis Vuitton Brown Bag Army Brigade. I love good quality bags or shoes and pretty things just like any typical female but I just will not buy an LV Bag that will lump me into that category.
I have one credit card. If I need larger credit, I contact the bank to have the limit increased. It's so pointless to parade around with 5 or 15 credit cards. I have some investment debt. A positive net worth. A bit of student debt left to pay off which I don't choose to pay off with a lump sum payment because it's indexed to inflation and I can earn a better return elsewhere.
I hesitate at taking or reading financial advice from anyone and any blogger who has racked up consumption debt.
Would you consult an acoholic about how to quit drinking when they are still drinking heavily?
In order to progress and develop your skills in finance and investing, you need to take a good look inside yourself. You need to focus more on earning passive income than trying to learn how to be super frugal.
The bloggers with massive consumer debt, they will blog about selling things on ebay, craigslist, how to save money here and there and how to be so frugal that you live your life miserably. If you have debt, then yes, it's probably a good guidance for you.
But if you have savings and a positive net worth, your time is better spent reading websites and blogs where the bloggers have a positive net worth as well. That way you can learn more about how to invest, the type of assets you can invest in, how to calculate returns, the terminology and the financial geek speak etc.
But things like, never eating out, always cooking your own food from scratch, spending all your weekends cutting out coupons to save $3 or $5, growing your own vegetables, driving all over town to find discounts and bargains, signing up for 15 credit cards that have 0% introductory interest just so you can arbitrage and place it into a bank account and earn 3-4% interest and all those time consuming activities.
Is your time more valuable if you used it on productive matters such as starting your own business, improving your professional skills and working on increasing your income via a better paying job or improving your investing skills so that you can grow your passive income?
Extreme frugality is not the road to riches. It's the road to feeling miserable and cantankerous. Spend in moderation and focus on reading materials that will improve your business, professional or investment skills and you will discover what I've discovered... the bliss of earning income passively from investments and multiple income streams.
Thursday, October 22, 2009
Understanding loans and their features
Loans can have a fixed or variable rate of interest, be secured or unsecured, negotiable interest rates and payment terms. There are many different types of loan available.
Fixed or Variable Interest
1) Fixed Interest – Interest is fixed for the duration of the loan, from the time it’s taken out to the day you pay it off.
2) Variable Interest- The rate changes either up or down depending on the market rate (which varies depending on the loan type eg: LIBOR, Bond, Central Bank rates).
Secured or Unsecured
1) Secured – Then lender can sell whatever asset you’ve secured the loan against if you default and can’t pay the loan. Assets typically used as security are houses, cars, stock portfolios and personal possessions. Loans that are usually secured are car loans, mortgages, mortgage line of credit accounts
2) Unsecured- The lender has no recourse. You’ve got not asset with the lender as a collateral. If you default on the loan, the lender considers you a bad debt and will most likely pass you along to the debt collection agency as a last resort. This loan is riskier for lenders so they usually charge a higher interest rate because of this increased risk. Examples of unsecured loans are credit cards, store cards, personal loans and personal lines of credit
The different type of loans available are:
Car Loans
Car loans are usually secured against your vehicle. They may insist on car insurance as well. You should shop around for the best financing deal first before going shopping for a car because car yards will always have their own financing but this may not be the best deal around.
Car loans are usually for a fixed amount of money, organised upfront with a fixed interest rate, repayment amount and period. Example: $10,000 car loan at 10% interest, repayable by monthly instalments for the duration of 4 years.
Credit Cards
If you can’t pay off a credit card every month before the interest free period ends, then don’t use a credit card. If you don’t listen to this wise and sagacious advice, then it will ultimately be your downfall. You only need one or at the most two credit cards ever at any period of time.
These beasts come in various structures with interest free period ranging from 0 days or 55 days to 6 months typically. Read the fine print! Understand what you are signing up for. Don’t be fooled into thinking that it’s worth spending on the credit card because you get reward points or frequent flyer points. Wow, you’ve gone and spent $3,500 so that you can collect 3500 points, the equivalent of $25-$30 in rewards – if you can't pay that $3,500 off before incurring interest charges then it's a bargain with the devil.
If you can’t pay them off by the interest free period, you will be paying through the roof with rates ranging from 11% to a more typical rate such as 18% and 28% per annum interest. Usually the banks will have a 'minimum payment' amount of around $25 or $30. The problem with paying only the minimum amount is that you will end up paying interest on the balance owing and it will take you 25-40 years to pay off the credit card at the minimum amount that they request you to pay.
I will re-iterate myself because credit cards have been at the root of marital breakdowns, stress, tears and bankruptcies – if you can’t pay them off by the interest free period, don’t use them. Otherwise, you are best off looking at other financing options such as lines of credits or personal loans which charge lower rates of interest.
Debt Consolidation Loans
Debt consolidation is a process whereby you take out a new loan (or increase an existing loan) in order to close off several smaller, separate loans. This can be done by organising a new personal loan, refinancing your mortgage and rolling those debts into your mortgage or withdrawing equity out to pay off your multiple loans.
Why do people consolidate their debts? They consolidate in order to close off the loans with a higher interest rates onto a new loan with a lower interest rate. Credit card debts may be incurring interest at anything between 9% - 38% and by consolidating and refinancing, you replace the debt with a new debt with a lower rate such as 9%. It's also sometimes done to simplify repayments, instead of multiple payments to multiple loans, you make just one single payment for that new consolidated loan.
Margin Loans
Loans that are taken out usually to buy stocks and invest in portfolios. It can also be utilised when trading CFDs. The margin loan is usually secured by your stock portfolio and they will have different loan to valuation ratios (LVR) depending on what stock you buy. The average LVR could be up to a maximum of 70-80%, this varies depending on the lending institution but the higher the LVR, the more you expose yourself to margin calls.
I'll be writing a separate article regarding margin loans due to it's complexity and how it operates.
Mortgage Loans
Mortgage loans are used to buy residential and commercial properties. It's usually for an established amount (eg $380,000) with either a variable or fixed interest rate. Your loan contract will determine the period of the loan (eg: 25 years, 30 years or 40 years) and the monthly repayment amount, which may vary depending on the interest rate charged.
I will be writing articles about how to pay your mortgage off faster, amortisation schedules and techniques to pay your mortgage off faster.
Mortgage offset and redraw facilities
A mortgage offset account works by offsetting your mortgage balance by the amount in your offset account. The interest that is charged is on the net balance amount between these two accounts. To illustrate, assume Sally's mortgage on the 1st of March is $380,000. If Sally has $100,000 in her offset account, then the bank will charge Sally interest on only $280,000.
Lending institutions will usually not approve your loan without a deposit however, they may lend anything from a maximum of 80% to 105% of the property's value depending on your income and repayment abilities. The smaller your deposit and the greater your LVR, you may have to pay lenders mortgage insurance on your loan.
A redraw facility may be a component of your mortgage, depending on whether your mortgage loan has this facility or not (check your mortgage contract). With a redraw facility, if you make any extra repayments then you can withdraw the extra repayment anytime you wish.
Again, this is a complex area and I will write a full article dedicated to mortgage loans. If you don't understand the complexity of a mortgage loan then you will not know what features of the mortgage that you will need. Also, do you really want to be spending the next 30 years of your life paying off your mortgage? Understanding the finer points will allow you to establish the appropriate loan for your circumstance and be flexible enough to cater for your repayment ability.
Overdraft
An overdraft is usually an extension of your normal account, allowing you to have a negative balance. Businesses commonly have overdraft enabled on their account to cater for cash flow imbalances throughout the year. Some individual accounts has overdraft facilities enabled, but be sure to check if you are being penalised for the usage of this facility everytime your account drops below a $0 balance.
Payday Loans
Payday loans are the biggest rort ever. This has got to be the very last resort! The moment you start using payday loans, you are probably closer to insolvency and bankruptcy than you realise. If I could say which loan to avoid at all cost, it would be this one.
Personal Loans
These loans are either secured or unsecured. If the loan is secured, the rate will usually be lower than credit card rates and loans that are unsecured. They usually have a fixed interest rate and a set amount established at the beginning of the loan. The loan will have a payment schedule with fixed repayments, normally monthly, until the loan is paid off. You cannot vary a personal loan without creating a brand new personal loan.
Commonly used for buying cars, consolidating various loans, purchasing white goods, renovation, holidays and multitude of things. Normally classified as a bad debt and not used for investing but for aiding personal spending.
Revolving Line of Credit / Line of Credit Accounts
Similar to an oversized credit card, except they are usually secured. There is an established limit such as $100,000 and you can spend from the line of credit as much and as often as you wish until you have spent your limit – which is $100,000 in this example.
Monthly payments are based only on the component that you’ve used and may vary from a certain percentage to interest only. So if you have a $100,000 line of credit (LOC) and you’ve spent $50,000 on renovation, then you will usually have to pay the interest or minimum percentage on only that $50,000 that you’ve spent. Don’t fool yourself though. You will have to pay that $50,000 principal debt eventually, so be wise and spend only what you can afford.
Store card loans and credit
This basically covers vendor financing. It's where a retail store will offer you their store credit card (eg David Jones or Macy etc). Depending on the terms and conditions, these credit varies markedly. Some whitegood stores selling furniture, for example, may offer a 'buy now, interest free for 2 years' type of deal. If you don't pay the balance off before the interest becomes applicable then they commonly back date the interest charge to the very first date that you bought the goods.
It can be a very expensive lesson to learn. Be wise and if you can't afford to pay for it today, then don't buy it.
Student Loans
These differ from country to country. I’ll only be covering Australian student loans. In Australia they’re called HELP or FSS debts. Which is Higher Education Loan Programme debts.
I'll be writing about HELP debts in depth in a separate article due to it's complexity regarding the discounts that are applicable depending on how you pay the HELP debt.
There are so many type of loans out there. Basically everything and anything could be financed nowadays by the stores or by the shops. The terms and conditions of each loan differs and repayment structures also differ. If you don't understand the loan, don't borrow until you've done your due diligence and understand what you are signing up for.
Fixed or Variable Interest
1) Fixed Interest – Interest is fixed for the duration of the loan, from the time it’s taken out to the day you pay it off.
2) Variable Interest- The rate changes either up or down depending on the market rate (which varies depending on the loan type eg: LIBOR, Bond, Central Bank rates).
Secured or Unsecured
1) Secured – Then lender can sell whatever asset you’ve secured the loan against if you default and can’t pay the loan. Assets typically used as security are houses, cars, stock portfolios and personal possessions. Loans that are usually secured are car loans, mortgages, mortgage line of credit accounts
2) Unsecured- The lender has no recourse. You’ve got not asset with the lender as a collateral. If you default on the loan, the lender considers you a bad debt and will most likely pass you along to the debt collection agency as a last resort. This loan is riskier for lenders so they usually charge a higher interest rate because of this increased risk. Examples of unsecured loans are credit cards, store cards, personal loans and personal lines of credit
The different type of loans available are:
Car Loans
Car loans are usually secured against your vehicle. They may insist on car insurance as well. You should shop around for the best financing deal first before going shopping for a car because car yards will always have their own financing but this may not be the best deal around.
Car loans are usually for a fixed amount of money, organised upfront with a fixed interest rate, repayment amount and period. Example: $10,000 car loan at 10% interest, repayable by monthly instalments for the duration of 4 years.
Credit Cards
If you can’t pay off a credit card every month before the interest free period ends, then don’t use a credit card. If you don’t listen to this wise and sagacious advice, then it will ultimately be your downfall. You only need one or at the most two credit cards ever at any period of time.
These beasts come in various structures with interest free period ranging from 0 days or 55 days to 6 months typically. Read the fine print! Understand what you are signing up for. Don’t be fooled into thinking that it’s worth spending on the credit card because you get reward points or frequent flyer points. Wow, you’ve gone and spent $3,500 so that you can collect 3500 points, the equivalent of $25-$30 in rewards – if you can't pay that $3,500 off before incurring interest charges then it's a bargain with the devil.
If you can’t pay them off by the interest free period, you will be paying through the roof with rates ranging from 11% to a more typical rate such as 18% and 28% per annum interest. Usually the banks will have a 'minimum payment' amount of around $25 or $30. The problem with paying only the minimum amount is that you will end up paying interest on the balance owing and it will take you 25-40 years to pay off the credit card at the minimum amount that they request you to pay.
I will re-iterate myself because credit cards have been at the root of marital breakdowns, stress, tears and bankruptcies – if you can’t pay them off by the interest free period, don’t use them. Otherwise, you are best off looking at other financing options such as lines of credits or personal loans which charge lower rates of interest.
Debt Consolidation Loans
Debt consolidation is a process whereby you take out a new loan (or increase an existing loan) in order to close off several smaller, separate loans. This can be done by organising a new personal loan, refinancing your mortgage and rolling those debts into your mortgage or withdrawing equity out to pay off your multiple loans.
Why do people consolidate their debts? They consolidate in order to close off the loans with a higher interest rates onto a new loan with a lower interest rate. Credit card debts may be incurring interest at anything between 9% - 38% and by consolidating and refinancing, you replace the debt with a new debt with a lower rate such as 9%. It's also sometimes done to simplify repayments, instead of multiple payments to multiple loans, you make just one single payment for that new consolidated loan.
Margin Loans
Loans that are taken out usually to buy stocks and invest in portfolios. It can also be utilised when trading CFDs. The margin loan is usually secured by your stock portfolio and they will have different loan to valuation ratios (LVR) depending on what stock you buy. The average LVR could be up to a maximum of 70-80%, this varies depending on the lending institution but the higher the LVR, the more you expose yourself to margin calls.
I'll be writing a separate article regarding margin loans due to it's complexity and how it operates.
Mortgage Loans
Mortgage loans are used to buy residential and commercial properties. It's usually for an established amount (eg $380,000) with either a variable or fixed interest rate. Your loan contract will determine the period of the loan (eg: 25 years, 30 years or 40 years) and the monthly repayment amount, which may vary depending on the interest rate charged.
I will be writing articles about how to pay your mortgage off faster, amortisation schedules and techniques to pay your mortgage off faster.
Mortgage offset and redraw facilities
A mortgage offset account works by offsetting your mortgage balance by the amount in your offset account. The interest that is charged is on the net balance amount between these two accounts. To illustrate, assume Sally's mortgage on the 1st of March is $380,000. If Sally has $100,000 in her offset account, then the bank will charge Sally interest on only $280,000.
Lending institutions will usually not approve your loan without a deposit however, they may lend anything from a maximum of 80% to 105% of the property's value depending on your income and repayment abilities. The smaller your deposit and the greater your LVR, you may have to pay lenders mortgage insurance on your loan.
A redraw facility may be a component of your mortgage, depending on whether your mortgage loan has this facility or not (check your mortgage contract). With a redraw facility, if you make any extra repayments then you can withdraw the extra repayment anytime you wish.
Again, this is a complex area and I will write a full article dedicated to mortgage loans. If you don't understand the complexity of a mortgage loan then you will not know what features of the mortgage that you will need. Also, do you really want to be spending the next 30 years of your life paying off your mortgage? Understanding the finer points will allow you to establish the appropriate loan for your circumstance and be flexible enough to cater for your repayment ability.
Overdraft
An overdraft is usually an extension of your normal account, allowing you to have a negative balance. Businesses commonly have overdraft enabled on their account to cater for cash flow imbalances throughout the year. Some individual accounts has overdraft facilities enabled, but be sure to check if you are being penalised for the usage of this facility everytime your account drops below a $0 balance.
Payday Loans
Payday loans are the biggest rort ever. This has got to be the very last resort! The moment you start using payday loans, you are probably closer to insolvency and bankruptcy than you realise. If I could say which loan to avoid at all cost, it would be this one.
Personal Loans
These loans are either secured or unsecured. If the loan is secured, the rate will usually be lower than credit card rates and loans that are unsecured. They usually have a fixed interest rate and a set amount established at the beginning of the loan. The loan will have a payment schedule with fixed repayments, normally monthly, until the loan is paid off. You cannot vary a personal loan without creating a brand new personal loan.
Commonly used for buying cars, consolidating various loans, purchasing white goods, renovation, holidays and multitude of things. Normally classified as a bad debt and not used for investing but for aiding personal spending.
Revolving Line of Credit / Line of Credit Accounts
Similar to an oversized credit card, except they are usually secured. There is an established limit such as $100,000 and you can spend from the line of credit as much and as often as you wish until you have spent your limit – which is $100,000 in this example.
Monthly payments are based only on the component that you’ve used and may vary from a certain percentage to interest only. So if you have a $100,000 line of credit (LOC) and you’ve spent $50,000 on renovation, then you will usually have to pay the interest or minimum percentage on only that $50,000 that you’ve spent. Don’t fool yourself though. You will have to pay that $50,000 principal debt eventually, so be wise and spend only what you can afford.
Store card loans and credit
This basically covers vendor financing. It's where a retail store will offer you their store credit card (eg David Jones or Macy etc). Depending on the terms and conditions, these credit varies markedly. Some whitegood stores selling furniture, for example, may offer a 'buy now, interest free for 2 years' type of deal. If you don't pay the balance off before the interest becomes applicable then they commonly back date the interest charge to the very first date that you bought the goods.
It can be a very expensive lesson to learn. Be wise and if you can't afford to pay for it today, then don't buy it.
Student Loans
These differ from country to country. I’ll only be covering Australian student loans. In Australia they’re called HELP or FSS debts. Which is Higher Education Loan Programme debts.
I'll be writing about HELP debts in depth in a separate article due to it's complexity regarding the discounts that are applicable depending on how you pay the HELP debt.
There are so many type of loans out there. Basically everything and anything could be financed nowadays by the stores or by the shops. The terms and conditions of each loan differs and repayment structures also differ. If you don't understand the loan, don't borrow until you've done your due diligence and understand what you are signing up for.
Tuesday, October 13, 2009
"Get a life...get out and pay rent."
X: "She's living at home, with her parents."
Y: "Geez, she needs to go get a life! Get out and pay rent. I mean, we pay rent and bills..."
X: "She's got a life. She doesn't need to pay rent in order to get a life."
Summary:
Z (subject of X & Y's conversation): Three properties, share portfolio, well travelled, goes out a lot, plays sport and yes...has not found her Prince Charming and is still living at home, helping the parents with the family business on weekends
Y: Renting, mother of two, no assets
Y seems to think that if one hasn't got a boyfriend, girlfriend, husband, wife or babies and kids, then they haven't got a life. Y also thinks that if you still live at home with your parents, then you haven't got a life.
Not sure where she got her preconceived ideas from but it's rather narrow. Firstly, living at home does preclude person from having a life. Secondly, not all twenty or thirty somethings who live at home are irresponsible. I don't know where the concept of kids having to move out of home when they finish school was first derived but in some cultures (particularly Asian and European cultures), kids live at home until they find a partner to marry. And if they never find the partner, then they live at home and look after the parents when the parents get older.
They don't put their parents into nursing homes.
You could argue that twenty and thirty somethings who still live at home are pathetic, consuming their parents retirement funds and worse, but let's not lump everyone into the same category. Is there any point in forcing kids out of the family home, into renting some crappy place, spending all their income on rent and bills? If they can stay in the family home, help do chores around the house, save up for buying their own place or to invest... is that being irresponsible or having no life?
I can understand that living with your parents could mean playing havoc with your sex life but if that's what's important to you, then move out.
Economy of scales - it works with households too. It's cheaper to live as a family or with flat mates rather than by yourself. Even better for the environment. Simply because when you have dinner, instead of just you, one light and your dinner...compare this to a family having dinner under one light... electricity bill can really be effectively split between multiple heads.
A family of four watching one TV versus a family of 4 with two kids who moved out with 3 TVs switched on between the three homes. Conserving both money and energy. Better for your pocket and better for the environment. Actually, I really don't care if anyone lives at home with their parents or move out, I just personally prefer it if people lived in some type of shared or communal households so that there's less drain on our environment.
Pros of living at home with parents:
* Split bills, no bills or less bills to pay
* No rent (no 'dead money'), or if you pay board, the boarding cost is cheaper than rent
* Better for the environment
* Develop closer relationship to family
* Can save money on sharing and splitting utility bills (landline, internet, electricity, gas)
* Can build a house deposit or savings a lot quicker due to lower expenses
Cons of living at home with parents:
* Can't have partners and friends staying overnight or visiting too frequently
* No partying and wild drinking at home
* Possible lack of personal development and maturity (eg: if your parents do all your laundry, cooking and cleaning)
* Possible lack of financial skills (eg: budgeting for household bills, saving for expenses)
Pros of living alone:
* Freedom to do as one wishes with friends and partners visiting or staying over
* Er... I can't come up with any more pro's really...simply because I don't like living by myself
Cons of living alone:
* You pay all bills by yourself, whether that be mortgage (which is not too bad), rent (definitely bad), electricity, gas, water, phone line, internet, property insurance
* No-one to talk to when you get home
* Cook all your meals by yourself all the time
Anyway, it's a bit rash to presume that just because someone is living at home, then they haven't got a life, aren't mature or aren't responsible. I don't think a person is mature and has a 'life', simply because they've moved out, are paying rent and struggling financially.
Financial and personal maturity/success is achieved when you can support yourself independently in any situation without struggling from day to day and having to fall back on credit cards and debt. As for having a life...anyone can have a life, whether they live at home or not.
Y: "Geez, she needs to go get a life! Get out and pay rent. I mean, we pay rent and bills..."
X: "She's got a life. She doesn't need to pay rent in order to get a life."
Summary:
Z (subject of X & Y's conversation): Three properties, share portfolio, well travelled, goes out a lot, plays sport and yes...has not found her Prince Charming and is still living at home, helping the parents with the family business on weekends
Y: Renting, mother of two, no assets
Y seems to think that if one hasn't got a boyfriend, girlfriend, husband, wife or babies and kids, then they haven't got a life. Y also thinks that if you still live at home with your parents, then you haven't got a life.
Not sure where she got her preconceived ideas from but it's rather narrow. Firstly, living at home does preclude person from having a life. Secondly, not all twenty or thirty somethings who live at home are irresponsible. I don't know where the concept of kids having to move out of home when they finish school was first derived but in some cultures (particularly Asian and European cultures), kids live at home until they find a partner to marry. And if they never find the partner, then they live at home and look after the parents when the parents get older.
They don't put their parents into nursing homes.
You could argue that twenty and thirty somethings who still live at home are pathetic, consuming their parents retirement funds and worse, but let's not lump everyone into the same category. Is there any point in forcing kids out of the family home, into renting some crappy place, spending all their income on rent and bills? If they can stay in the family home, help do chores around the house, save up for buying their own place or to invest... is that being irresponsible or having no life?
I can understand that living with your parents could mean playing havoc with your sex life but if that's what's important to you, then move out.
Economy of scales - it works with households too. It's cheaper to live as a family or with flat mates rather than by yourself. Even better for the environment. Simply because when you have dinner, instead of just you, one light and your dinner...compare this to a family having dinner under one light... electricity bill can really be effectively split between multiple heads.
A family of four watching one TV versus a family of 4 with two kids who moved out with 3 TVs switched on between the three homes. Conserving both money and energy. Better for your pocket and better for the environment. Actually, I really don't care if anyone lives at home with their parents or move out, I just personally prefer it if people lived in some type of shared or communal households so that there's less drain on our environment.
Pros of living at home with parents:
* Split bills, no bills or less bills to pay
* No rent (no 'dead money'), or if you pay board, the boarding cost is cheaper than rent
* Better for the environment
* Develop closer relationship to family
* Can save money on sharing and splitting utility bills (landline, internet, electricity, gas)
* Can build a house deposit or savings a lot quicker due to lower expenses
Cons of living at home with parents:
* Can't have partners and friends staying overnight or visiting too frequently
* No partying and wild drinking at home
* Possible lack of personal development and maturity (eg: if your parents do all your laundry, cooking and cleaning)
* Possible lack of financial skills (eg: budgeting for household bills, saving for expenses)
Pros of living alone:
* Freedom to do as one wishes with friends and partners visiting or staying over
* Er... I can't come up with any more pro's really...simply because I don't like living by myself
Cons of living alone:
* You pay all bills by yourself, whether that be mortgage (which is not too bad), rent (definitely bad), electricity, gas, water, phone line, internet, property insurance
* No-one to talk to when you get home
* Cook all your meals by yourself all the time
Anyway, it's a bit rash to presume that just because someone is living at home, then they haven't got a life, aren't mature or aren't responsible. I don't think a person is mature and has a 'life', simply because they've moved out, are paying rent and struggling financially.
Financial and personal maturity/success is achieved when you can support yourself independently in any situation without struggling from day to day and having to fall back on credit cards and debt. As for having a life...anyone can have a life, whether they live at home or not.
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