One Way or Another, You Pay Credit Card Debt.

Good morning.

I wanted to take a break from the markets today and talk about debt for a bit.

One of the biggest financial mistakes people make is getting too deep into credit card debt.

Too much credit card debt can come back to haunt you in the event of a loss of income due to a job loss or illness.

Here’s an example.  Let’s say you have $10,000 in credit card debt, suddenly lose your job, and find yourself unable to pay back the loan.

Eventually the credit card debt will go into default, and the credit card company will charge the debt off as a loss.  You will then be hounded by debt collectors who purchased your debt from the original credit card company in hopes of recouping some, if not all, of the balance you owe for a profit.

Debt collectors have a seven-year window to legally collect the debt from you.  If they fail to do so in that time limit, they cannot legally pursue the debt.

At that point, you may think you’re in the clear.

Not quite!

The IRS will recognize any debt that you have been excused from paying as income…and tax you accordingly!

So the $10,000 in debt you did not pay will be considered income as far as the IRS is concerned, and you may get hit with a tax bill of between $2000 and $3000.

So just remember, when it comes to credit card debt (or debt of any kind), you will pay one way or another.

*  The Stock Market is For Everyone, Eric Milton’s short guide to stock market investing for beginners, is available in e-book and paperback formats.  If you like what you see on this blog, we hope you’ll take a moment to purchase and read the book, let us know what you think via a blog comment or Amazon review, and share this information with others!  Thank you. *

 

How’s Your Net Worth?

Good morning!

As we close out the year and begin a new one, I wanted to revisit one of my first posts.  Net worth is the most important indicator of financial health and fitness.  Take stock of your net worth now, and reevaluate it at the end of March.

Here is the post: What’s Your Net Worth?

I wish you all a happy, healthy and wealthy 2019!

*  The Stock Market is For Everyone, Eric Milton’s short guide to stock market investing for beginners, is available in e-book and paperback formats.  If you like what you see on this blog, we hope you’ll take a moment to purchase and read the book, let us know what you think via a blog comment or Amazon review, and share this information with others!  Thank you. *

 

Wealth And Credit!

Yesterday, the Federal Reserve announced that they would be increasing interest rates by a quarter of a point.

“How will higher interest rates affect me?”  If you’re wondering about this, read on:

First off, auto loans, home equity lines on credit, and some other loans will not be impacted by the Fed’s decision.

The biggest change you will likely see is that the interest rate on your credit card will go up by the same amount of the increase.  If you carry a balance from month to month, then this is obviously not a good thing.

What I would do in this situation is contact my credit card company and ask them if they could lower my rate.  Many people are not aware that you can do this, but you most certainly can!

And remember: debt is the enemy of wealth.

You should pay down your balance as soon as possible, and avoid carrying a lot of credit card debt.

Until tomorrow!

*  The Stock Market is For Everyone, Eric Milton’s short guide to stock market investing for beginners, is available in e-book and paperback formats.  If you like what you see on this blog, we hope you’ll take a moment to purchase and read the book, let us know what you think via a blog comment or Amazon review, and share this information with others!  Thank you. *

Debt Is The Enemy Of Wealth!

Good morning!  Today I’m going to talk a little about debt.

I was inspired to mention this topic by something that I overheard at work.  A small business owner applied for a business loan, and was denied due to a FICO score of around 500.

Building wealth while racking up a large amount of credit card debt, defaulting on loans, and the like is very difficult, if not impossible to do.

Remember: debt is the enemy of wealth.

I listen to a podcast about financial planning.  The host was talking about a couple he knows that has an annual income of $1,000,000.  They have a net worth, though, of -$200,000.

How could that be?

Debt!

If you’re in trouble with debt, take steps to get out today.

*  The Stock Market is For Everyone, Eric Milton’s short guide to stock market investing for beginners, is available in e-book and paperback formats.  If you like what you see on this blog, we hope you’ll take a moment to purchase and read the book, let us know what you think via a blog comment or Amazon review, and share this information with others!  Thank you. *

A Mania is a Mania!

So…it seems like last year’s cryptocurrency mania has been displaced by cannabis mania.

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I will express the same thoughts regarding cannabis as I did with crypto:  Manias never end well.  The people that end up getting wiped out are the individual retail investors, who tend to buy at the top and sell at the bottom.

Before you you get a case of FOMO (fear of missing out), please remember what happened with bitcoin and all the other cryptocurrencies.

Until next time, Wealthy Joes and Janes!

*  The Stock Market is For Everyone, Eric Milton’s short guide to stock market investing for beginners, is available in e-book and paperback formats.  If you like what you see on this blog, we hope you’ll take a moment to purchase and read the book, let us know what you think via a blog comment or Amazon review, and share this information with others!  Thank you. *

10 Shares Is All It Takes!

I can’t stress enough the importance of investing in the stock market to build real wealth!

It remains the best kept secret out there.

This morning, I’m going to show you how investing just 10 shares at a time can build you a small fortune.

Success stories like Apple (NASDAQ: AAPL), Amazon (NASDAQ: AMZN), and Netflix (NASDAQ: NFLX) are not easy to find.  But they do exist.

All you need is to do some research, have an open mind to what’s possible, and take minimal risk.

Let’s use Apple as an example.

Let’s say you wanted to start investing in January of 2003, 15 years ago, and you decided to start buying Apple, 10 shares at a time:

  1. January 2003: 10 shares @ $14.33 = $144.33
  2. May 2003: 10 shares @ $19.00 = $190.00
  3. January 2004: 10 shares @ $25.00 = $250.00
  4. March 2004: 10 Shares @ $35.00 =$350.00
  5. January 2005: use part of tax return to buy 10 shares @ $64.00 = $640.00

If you wanted to, at this point, you could stop.

Now let’s examine the results.  You now own 50 shares, with a total cost of $998.33, not including transaction costs, which would be another $50.00.  So round up to $1048.33.

Over the next 9 years, Apple would go from $64 to $773 a share, and split 7 for 1.

This means your 50 shares would be 350 shares today.

Your account would be valued at $76,244 today.  Plus, you would receive $1000 a year in dividend payments, which you could either reinvest, or splurge on something nice for yourself.

Please tell me…what would be better than this?!

These kinds of results are possible!

Please…if you’re not already in the market, get in today.  If you’re just getting started, pick up a copy of my short beginners’ guide, The Stock Market is For Everyone.  It will tell you everything you need to know to begin.

Looking to invest in your child’s future?  Don’t miss out on my Birthday Bonanza series.  Read the first installment here.

Until next time!

*  The Stock Market is For Everyone, Eric Milton’s short guide to stock market investing for beginners, is available in e-book and paperback formats.  If you like what you see on this blog, we hope you’ll take a moment to purchase and read the book, let us know what you think via a blog comment or Amazon review, and share this information with others!  Thank you. *

3 Traits Of The Wealthy!

I have read many books and articles on wealthy people.

I’m interested in how they built their wealth – and, more importantly, how I can apply it to my own life.

As it turns out, adopting a “get wealthy” mindset is something you don’t have to be born with.

Take this statistic: only 1/3 of your wealth is a factor of your income.  The other 2/3 is a product of money management.

Hence, there are no shortage of seven-figure households with a negative net worth.

Without further ado, here are three key traits commonly found in wealthy individuals:

1. Wealthy people have the ability to remain unusually calm while those around them panic.  I’m not saying they don’t feel emotion, because they do.  It tends to run counter to what most people experience, however.

For example, a severe market selloff might spook most investors, but people who possess this trait look at the selloff as a buying opportunity.  They become greedy when others are fearful, and fearful when others become greedy.

2. They live below their means.  Contrary to what the media wants you to think, the majority of people in America who are wealthy live very normal lives.  That’s how they got rich, and it’s also how they stay rich.

They don’t suffer a great deal from income creep.  Income creep is when your spending increases as your income increases.

A great example is Warren Buffett.  The man is worth close to $90 billion and still lives in the house he bought for $31,500 in 1958, which is about $250,000 in today’s dollars.

The key is to save and invest the majority of your additional income over time. That’s how you build wealth.

3. They don’t care what other people think of them.  Depending on your age you may be familiar with the term “keeping up with the Joneses”.  Meaning that if your neighbor buys a new car, you feel as though you need to as well.  The wealthy don’t care about keeping up with the Joneses.

The wealthy will live in the same house and drive the same car until they run it into the ground.  They understand that debt is the enemy of wealth, so they avoid it like the plague.  Although it may not look like it, these people are sitting on a net worth of $10,000,000.

This is how you build wealth.

Until next time, my wealthy Joes and Janes!

*  The Stock Market is For Everyone, Eric Milton’s short guide to stock market investing for beginners, is available in e-book and paperback formats.  If you like what you see on this blog, we hope you’ll take a moment to purchase and read the book, let us know what you think via a blog comment or Amazon review, and share this information with others!  Thank you. *