Monthly Archives: May 2008

Top 11 Personal Finance Myths

11. Being rich is bad — look at the nasty rich people out there – Nasty rich people are fun for the press to skewer, but there are generous and thoughtful rich people, too. Some people get rich by exploiting other people and clawing or cheating their way to the top; others made their money by having a good idea, persisting, working hard and being lucky. Money does not define your character.

10. If I were rich, I’d be happy, OR Rich people are miserable, and I would be too – There are happy and miserable people at all levels of the socio-economic spectrum. Most people in Australia have the minimal level of material support necessary to not fear for their survival each day. If you are among those people, your happiness is much more dependent on your own patterns of thinking and assumptions about yourself, other people and the world than anything else.

9. I can’t build investment wealth, because I don’t earn enough to save anything – Saving is really difficult in a culture that rewards spending, but it is definitely possible. The easiest way is to have the percentage you want to save “disappear” before you have it in hand. If your company has a retirement plan, invest in it. It is easy to adapt to a 2% withholding from your paycheck, and the savings add up quickly.

8. My boss has a huge house and a fancy car; she’s obviously wealthy – No, she obviously has stuff. Wealth is money that makes money; savings accounts, investment properties, stocks and bonds, etc. Chris Rock jokes that Shaquille O’Neal isn’t wealthy, he’s rich, because he gets money and spends it without investing. The guy who pays him and says, “There ya go, Shaq; buy yourself a bouncin’ new car;” HE’s wealthy!

7. The best investment is my house
– Surprisingly, not necessarily. Houses are expensive — besides the mortgage, you pay taxes and you make repairs. Sometimes, renting is a better deal financially. Furthermore, a house is not an investment in the true sense of the word. It doesn’t make money for you.

6. You have to make ($X) to become rich – In order to become rich, you need to earn more than you spend plus more than inflation. That’s all. Remember the stories of the simple-living cleaning woman who left a million dollars to a school or library. It’s happened a few times.

5. Buying items on sale, clipping coupons, etc. can save you a lot of money – ONLY if they are items you honestly would have bought anyway, and you know enough about the usual pricing that you know it’s actually lower than usual, and you didn’t have to spend extra expensive fuel and time getting to where you bought it.

4. Zero-interest loans are great ways to buy a car, appliance, dental work, etc – Why is this company giving money away? It isn’t. Watch for these common hidden charges; they get that interest up front added to the price of the item, there are “fees” that add up to a lot, or you will be slammed with extortionist interest rates if you are a day late on a payment, possibly on the full amount regardless of how much you have already paid off.

3. Credit card debt is too hard to get out of – Aussies are racking up a serious amount of personal debt on credit cards every year. Stop adding more debt to your credit cards by changing the way you spend money and the way you live. Learn to be frugal! Don’t just stay with your current card out of sheer laziness…make a budget and take steps to reduce your existing debt by moving to a new card more suited to your situation. For example, if you don’t clear your credit card balance every month then you’d be better off on one of the low interest credit cards which has the ongoing low rate.

2. I work hard; I deserve to buy this thing, go on this vacation –
And you don’t deserve just as much to have a debt-free life and a strong savings account? To measure your worth as a worker by what you spend is a myth perpetuated by companies that make their money by selling things and vacations to those who believe the myth. YOU are not your stuff, and what you deserve has nothing to do with your acquisitions or your wealth.

1. The only way to get rich these days is to inherit, cheat a company, or hit a lottery – This is one of the deadliest myths if you’d like to be wealthy, because it keeps you from doing the small things it takes for you to start acquiring wealth. Start now by buying less or buying it more inexpensively. Pay down the credit card. Save a little in the bank or retirement plan and don’t forget your Super fund. Learn to return to the joy you used to feel in playing outside, talking with friends, or whatever cheap or free activities delighted you as a child – go surfing!; don’t let advertisers tell you how to be happy.

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10 Finance Tips For Working Mums

Being a working mum can be a difficult task what with having to do a balancing act between maintaining the home and doing justice to professional duties. Here are some tips to make your life as a working mum easier and more worthwhile.

1. Get paid help: Spending a little money on getting help might well be worth it, because your overall career ambitions are better met when you are free of household worries.
2. Contract out the work: Finding people to take care of your chores on a short-term contract basis might be a solution that is both flexible, and works out cheaper in the long run.
3. Be prepared for hard work: Many women give up too easily on the professional front because of the pressures on the personal front. Being prepared for a bit of hard work from the beginning will help you combat this.
4. Make a budget: If you fail to plan, you’re planning to fail. As a working mum you need to budget both your financial and other resources.
5. Earn more: How much you earn might be another important factor in determining your success as a working mother, because that might be the best way to fight the temptation and pressures to give up.
6. Choose your employer with care: When your children are still young you might need to work for someone who understands.
7. Choose the job with care: There may be certain jobs that wouldn’t allow you to do justice both to the job and your role as a mum. Avoid taking on such jobs.
8. Involve your husband: Your problems as a working mum can be substantially reduced if your husband understands and helps you out.
9. Don’t worry about lost time: If you proceed on maternity leave, you’re going to have to lose some time, but don’t let that worry you. You can always make up that time later with a bit of hard work.
10. Make yourself the best: If you excel in your job your other disadvantages will disappear, and your employer might even volunteer help.

One final tip. More than likely you’ve got a credit card with a significant balance which isn’t being cleared. So, stop slugging around credit card debt – make moves to shake it or at least move your to one of the decent balance transfer credit cards on the market in order to take advantage of zero percent interest for a few months.

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