Car loan refinancing in 3 steps

A car is often the second largest loan the average Canadian has; the first being a house loan. Refinancing your car loan can save you thousands of dollars if done right according to our source, macombdaily.com. We will source the article below so you can read their entire article here for your convenience.  Before we provide you with tips about your car, you should attempt to not have a car loan. Often Canadians buy cars with making a budget which can lead to you being in car debt for four to seven years. Loan Away advise spending a maximum of 15% of your net income on transportation. This includes car insurance, car payments, gas, and maintenance like weather tires. If you are spending more than 15% you should refinance your car loan or get a car that is within your budget. With all that being said, let’s get into macombdaily.com guide to refinancing your car loan.

 

 

 

3 reasons to consider refinancing your car loan

Most people know they can refinance their mortgage, but less than half are aware that they can also refinance their auto loan, according to a study by Harris Poll for Ally Financial. It’s a simple task that could reduce your car payments by about $1,300 a year.

The following considerations can help you determine whether refinancing your auto loan is the right step for you.

• Interest rates: Can you reduce your monthly costs by lowering your rate? Compare your current interest rate to those advertised. Keep in mind that there are several aspects of your financial history that may have impacted your interest rate for a loan, including credit score and credit history. If your credit score has significantly increased since you financed your vehicle, it may be time to refinance to a lower interest rate.

• Tight monthly budgets: If you need to make some room in your budget due to changing life circumstances or simply have a desire to sock more money away into savings, refinancing your auto loan is a move that may have a substantial impact on your finances. For example, those who have refinanced their vehicles through Clearlane, Ally’s online auto financing platform, have reduced their monthly payments by an average of $112.

• Reducing the term: Another reason many choose to refinance is to reduce the number of payments they will have to make, with the goal of reducing the total amount of interest paid over the course of the loan. This may appeal to you if you can now afford a higher monthly payment than when you purchased your vehicle, thanks to a raise or new stream of income.

If you choose to refinance, be sure to review your loan agreement and terms to make sure you understand your current loan. You should also be aware of any costs that could be incurred by refinancing or changing the terms of your loan.

 

Did you find the article informational? Employees at Loan Away sure did. Three employees are keen to refinance their vehicle to better suit their budgets. Some are going to have fewer payments and pay off the loan faster, while others are extending so have more disposable income. This decision is based on your current financial situation. If you have an extra $100 each pay, you should consider using that money to pay off your debt instead of saving it in a saving account. Saving accounts often have very low interest while car loans can be more expensive. Before anyone starts saving thousands of dollars, it is recommended to pay off your debts first. Saving and investing should always come last. Here are the steps you should follow.

1. Paying off any high-interest debt ( Car loan, credit cards, etc)
2. Creating an emergency fund of 3-6 months salary
3. Pay off low-interest debt ( Student loans, mortgage, etc)
4. Investing/saving

Very simple to follow right? If you are unsure how to invest, there are several investing great books available for your needs. If you enjoyed this post, share it to help the Canadian economy become more aware and educated on their car loans.

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Credit card debt hits record high

There are two ways to interpret the title of this article. One way is “Wow, the average person has more debt than ever. This cannot be good for the economy!”. The other way is “Well with inflation, population growth, and a expensive housing market, this is expected.” To summary, did you see this coming? The financial experts at Loan Away did. We will explain how much debt the average person has and how you can avoid this fatal situation. However, debt in some cases is not bad. If you have $10,000 in personal debt, it may seem awful, but that money could’ve been spent on starting a small business which will generate thousands. That debt does not seem that bad now does it? Exploring debt maybe intimidating at first, however, you’ll be surprised when you learn everything behind the credit card in your wallet.

 

Credit card debt hits new record, raising warning sign

Americans’ outstanding credit-card debt hit a record in November, highlighting a more confident U.S. consumer but also flashing a warning signal of potential trouble down the road.

Revolving credit, mostly credit cards, increased by $11.2 billion to $1.023 trillion, the Federal Reserve said Monday. That nudged the figure past the $1.021 trillion high-water mark reached in April 2008, just before the housing and credit bubbles burst. Over the past year, revolving credit has surged by $55.1 billion, or 5.7%, according to the Fed and Contingent Macro Research.

Non-revolving credit, such as auto and student loans, rose by $16.8 billion to $2.8 trillion in November.

The all-time-high for credit-card debt doesn’t pose the risks to the economy that existed in 2008 because incomes are higher, UBS Credit Strategist Stephen Caprio says. The ratio of credit-card debt to U.S. gross domestic product is about 5%, compared with 6.5% in 2008, he says.

“It’s a potential early warning sign but not a financial stability issue” for the broader economy, Caprio says.

Still, Caprio notes that credit-card delinquencies have increased to about 7.5% from 7% a year ago, underscoring growing stresses for low-income households in particular. While that’s still below the 15% delinquency rate reached during the financial crisis and the 9% historical average, he says the increase over the past year raises some concerns. With jobs and income growing, the rise isn’t creating significant problems now but it could if the economy and labor market take a downward turn.

“People should make 2018 the year they focus on knocking down their credit-card debt,” says Matt Schulz, senior industry analyst for CreditCards.com. With the Federal Reserve continuing to raise interest rates, “that credit-card debt is going to grow faster and faster,” siphoning off money Americans should be putting aside for retirement,” Schulz says.

thumbnail courtesy of usatoday.com

 

At loan away, we provide loans with lower interest rates than the average credit card. Providing loans for people who need a loan cheaper than credit card and loans for people with bad credit. Our goal is to provide loans to all Canadians in need of a loan. Once again, how does this make you feel about the economy? Are you worried for the outcome or you think more people spending money can on benefit it? We will you, the reader, be the judge of that. For more information how credit cards will affect both Canadian and American economy, Loan Away will be posting a new article daily on everything you’ll need to know. Liked this article? A share can not only helps someone gain more knowledge, but it helps Loan Away.

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Payday Lender versus Government

Payday Lenders thrive on providing short-term loans to people for over %200. This is already criminal offense according to financial experts, however, Charles M. Hallinan, may have to pay just under 500 million due to racketeering.  If you are unfamiliar with the term racketeering, here is a definition of the term. This is just one the examples of what is happening with the money payday earn. Supporting crime and illegal activity and getting a loan for over %200 is the last thing you should be doing. Mr. Hanllinan takes advantage of the poor and uses that money to support localized crime in America, which is never good for the economy or community. Even though Mr. Hallinan may be going to prison for a decade, this does not mean that other payday lenders are not participating in Racketeering. Each payday company should be investigated to ensure the safety of the community. For more information, the article is attached below.

 

Payday Lender May Have to Forfeit $491 Million

How much should a racketeering conviction cost a man who for years flouted Pennsylvania laws and preyed upon cash-strapped Americans to build one of the nation’s largest illegal payday-lending empires?

More than $491 million, if the government has its way.

That’s the sum federal prosecutors in Philadelphia hope to recoup next month from Charles M. Hallinan, the so-called godfather of payday lending, in one of the region’s largest criminal forfeiture proceedings.

In addition to cash from 18 bank accounts — including more than $484,000 from Hallinan’s personal coffers — the government has laid out a staggering wish list of additional items to forfeit.

Among them: Hallinan’s $2.75 million lakefront condo in Boca Raton, Fla.; his family’s $1.8 million, 8,000-square-foot home in Villanova; and a small fleet of luxury vehicles including a $142,000 Bentley Flying Spur.

But a month after a federal jury convicted the 76-year-old former investment banker and Wharton School graduate on 17 counts including conspiracy, international money laundering and fraud, Hallinan’s lawyer says it is the prosecutors who now are driven by greed.

Defense attorney Edwin Jacobs is expected to argue at forfeiture proceedings before U.S. District Judge Eduardo Robreno that a more appropriate figure, taking into account Hallinan’s business expenses, would be closer to $9.5 million,

“A forfeiture judgment which exceeds $450 million would be … grossly disproportionate to the offense committed,” Jacobs wrote in court filings in December.

Federal law requires prosecutors to seek forfeiture in racketeering cases like Hallinan’s to financially penalize wrongdoers and to lessen the economic power of organized crime. The Racketeer Influenced and Corrupt Organizations Act forfeiture statutes allow the government to seize any money or property derived directly or indirectly from a criminal enterprise.

Usually, those laws have been used to strike back at the financial clout of the Mafia or large drug-trafficking organizations.

But Hallinan’s case is one of a few brought by the Justice Department in recent years to apply the same thinking to large-scale payday lending operations. Prosecutors have successfully argued that there is little difference between the exorbitant fees charged by money-lending mobsters and the annual interest rates approaching 800 percent that are standard across much of the payday lending industry.

“When crimes are motivated by a desire to make money, the criminal committing those crimes should be deprived of the proceeds of his or her crimes,” Assistant U.S. Attorneys Sarah L. Grieb and Maria M. Carrillo wrote in court papers.

In Hallinan’s case, jurors concluded in November that he made millions of dollars by illegally offering low-dollar, high-interest loans to financially desperate borrowers with limited access to more traditional lines of credit. Interest rates on many of the loans he issued ran far in excess of rate caps instituted by the states in which borrowers lived, like Pennsylvania, which imposes a 6 percent annual limit.

Hallinan entered the industry in the 1990s with $120 million after selling a landfill company, offering payday loans by phone and fax. He quickly built an empire of dozens of companies offering quick cash under names like “Tele-Ca$h,” “Instant Cash USA” and “Your Fast Payday,” and originated many of the strategies to dodge regulations that were widely copied across the industry.

As lawmakers in dozens of states sought to crack down on exorbitant fees charged by payday lenders, Hallinan instituted sham partnerships with licensed banks and Native American tribes to be fronts for his businesses.

In all, prosecutors concluded, Hallinan’s lending empire brought in more than $491 million between 2008 and 2013, the period covered by his indictment.

They now say they are entitled to every penny.

Hallinan “collect(ed) hundreds of millions of dollars in unlawful debt … knowing that these businesses were unlawful, and all the while devising schemes to evade the law,” Grieb and Carrillo wrote.

But Jacobs maintains that the government has willfully misinterpreted how Hallinan’s business and racketeering forfeiture laws work. Although he does not dispute the gross revenue brought in by his client’s companies, the lawyer argues that the vast majority of that total was Hallinan’s own money paid back to him after it had been lent.

Forfeiture laws, he argued in a recent court filing, allow prosecutors to seize only the financial gains a convicted racketeer made through criminal acts — a figure, which in Hallinan’s case, Jacobs puts at just under $69 million.

When legitimate business expenses like advertising, promotion, and lead generation are taken into account, Hallinan’s profit was closer to $9.5 million, Jacobs wrote. What’s more, he argued, the government has not considered that many of the loans Hallinan issued were entirely legitimate and issued to borrowers in states without the usury laws that prosecutors used to convict him.

“The central issue before the court is whether direct expenses are properly deductible for the purposes of calculating (criminal) proceeds,” Jacobs wrote, “or whether the court should adopt the government’s figure … without taking into consideration any expenses whatsoever.”

Still, the $491 million the government wants to collect from Hallinan is not even close to the largest sum Justice Department lawyers are seeking to forfeit in other cases against payday lenders. That distinction belongs to the $2 billion that prosecutors in New York hope to get from Scott Tucker, a professional race car driver and former business partner of Hallinan’s who was convicted in October on a similar racketeering indictment.

Others convicted in payday lending cases face substantial potential penalties. Jenkintown lender Adrian Rubin, a former Hallinan partner who pleaded guilty to racketeering charges in Philadelphia in 2015, faces potential forfeiture of $7.5 million. Prosecutors hope to take $161 million from Richard Moseley Sr., a lender convicted in Manhattan.

And Hallinan’s longtime lawyer, Wheeler K. Neff — who was tried alongside him and convicted of devising many of the faulty legal strategies that allowed Hallinan’s businesses to continue to rake in profits — faces a potential forfeiture bill of more than $360,000.

Like Hallinan, Neff and the other lenders could be ordered to pay additional penalties in the form of fines and court-ordered restitution to victims.

Hallinan faces a possible decade in prison or more at a sentencing hearing scheduled for April.

thumbnail courtesy of hamodia.com

 

Do you think 10 years and 491 million is fair? I’ll let you decide what you think would be fair after what Mr. Hallinan has done. This is just one example of why payday loan companies are untrustworthy.  Loan Away’s goal is to provide fair loans to people who are considering getting a payday loan. Our loan interest will always be lower than payday loan companies because we care about clients financial situation. We also provide loans based on your needs. If you need a loan for three years or a few months, we are able to provide you with a loan. Bad credit is accepted because we believe everyone should have a chance to receive a loan.

 

For more information about us, please visit our website. If you enjoyed this article, what are you waiting for? Share it with a friend! It could make their day even better.

 

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Canadian Money Management Advice

Everyone can improve on managing money. Even if you think you are doing a perfect job managing your money because you have read books, have a financial adviser, or follow financial experts you can still improve. The Globe and Mail have asked several experts this exact question: “If I could change one thing about how Canadians manage money, it would be to”. The answers they got were informational and unique. I advise everyone to look over the advice given because it is rare to have several experts give an answer to a very asked question. A question that has been asked already answered is “Should I consolidate my loans if I have bad credit?”. The answer is almost always yes. Managing money can be complex and difficult without any resources and that is why Loan Away has gathered the best sources to answer “If I could change one thing about how Canadians manage money, it would be to”.

 

Canada’s advisers reveal their best suggestions for managing your money in 2018

The people who have seen you naked, financially speaking, have some ideas about how you can better manage your money in 2018.

Financial planners and investment advisers in my LinkedIn network were asked a few weeks ago to complete this thought: “If I could change one thing about how Canadians manage money, it would be to…” Here are some highlights from 199 comments covering a great range of topics, starting off with overspending and undersaving.

Note the sense of urgency in many of these comments. Taken together, they suggest a genuine sense of worry about excessive spending and not enough saving and investing. Cynics will say advisers are just prospecting for more money to invest with their suggestions, but that’s an evasion. Given the record household-debt levels in this country, all ideas for improving our finances deserve a hearing.

Here’s how the planners and advisers answered the question:

“Have them save 10 per cent of their T4 income first, and enjoy spending the rest.” (note: The T4 is a tax slip documenting how much gross income you were paid by an employer)
-Barry Rebuck, adviser

“Have them learn to live on 80 per cent of their after-tax income and save the rest for retirement.”
-Brenda Antonyshyn, chartered financial analyst (CFA)

“Have them live below their means. Simplify their financial lives and stop trying to keep up with the Joneses. The Joneses are in debt.”
-Cheryl Campbell, certified financial planner (CFP)

“To have them ensure their cost of living never exceed their actual revenues.”
-Mathieu Joubert, certified public accountant

“Understand that FOMO – fear of missing out – is driving many of your money decisions.”
-Meghan Chomut, CFP

“Don’t fall into the trap of using your home equity line of credit as your personal ATM. Budgeting instead of borrowing. Understand the real cost of ‘buy now, pay later.’”
-Karen Sage, CFP

“Stop spending money you don’t have to buy crap you don’t need to impress people you don’t know.”
-Robert Gignac, financial industry speaker and author

“Plan for the unexpected. Life will throw you a curve ball – new roof, sickness, disability, etc.”
-Angel Georgijev-Low, CFP

“Understand that paying off debt is the only guaranteed positive rate of return.”
-John Harvey, manager of public investments at Nunavut Trust

“If I could change one thing about how Canadians manage money, it would be invest in themselves before investing in a portfolio. The greatest return is an investment in your skills and your greatest earning power comes from those skills. Invest in yourself first and allow the dividends from that investment to fund your portfolio.”
-Lampros Parousis, private client wealth adviser

On the role of housing in your investment planning:

“Understand that an investment in real estate is NOT guaranteed to go up.”
-Amandeep Sangha, CFA

On investing:

“Realize that Canada is only 3.2 per cent of world capital markets and a very poorly diversified index. [It] lacks health care and technology exposure, two huge growth sectors for decades to come.”
-Larry Berman, chief investment officer, ETF Capital Management

“To not be overweighted in Canadian bank stocks.”
-Connie Brown, chartered market technician (CMT)

“Understand that investing is a marathon, not a sprint. Do not allow irrational and impulsive emotions to alter your long-term plan.”
-Aleem Israel, CFA

“Understand the compounding effect fees have on your long-term returns. For most people, they can save hundreds and thousands of dollars by moving to lower fee products.”
-Steve Bridge, money coach

On retirement:

“To have a better understanding of how much you really need to save in order to retire comfortably. Find an adviser who asks you what your goals and values are and who doesn’t just focus on performance and fees.”
-Julie Reimer, CFP

“To plan on living (and working) a lot longer than your parents’ generation.”
-Marc Vincelli, statistical consultant

“To retire when you have practised living on your retirement budget. I have seen people fairly adamant that their grocery budget for two adults would be $300 a month. Perhaps I need to take some shopping lessons from them!”
-Margaret Clarke, personal financial planner (PFP)

On working with an adviser:

“Ask questions and be engaged – financial/retirement planning is a team sport.”
-Derrick Lindsay, financial adviser

thumbnail courtesy of theglobeandmail.com

 

Informational to say the least right? The advice that Loan Away commends the most is the advice by Brenda Antonyshyn. She said “Have them learn to live on 80 per cent of their after-tax income and save the rest for retirement”. Imagine if you had 20% of your net income invested over a lifetime? You would probably retire with over 1 million dollars if everything was invested and had an average rate of 7%. The possibilities are endless if you followed Brenda’s advice. I know this may not be possible if you are currently living a certain lifestyle, but if you make the necessary changes like downsizing your home or ride your bike to work, you will be able to accomplish your financial goals quickly.

If you enjoyed this article, share it with a friend or two. They might enjoy it even more than you. For more information about bettering yourself financial, visit our website Loan Away’s website for everything you’ll need.

 

 

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The best financial books of 2018

Reading is what separates the average person from the successful person in a career according to Huffington post.ss We recommend reading for at least 30 minutes each day. The book doesn’t even have to be business related, it can be a fiction book for pleasure. The end goal is to use that 30 minutes reading instead of watching television or doing something unproductive. Loan Away, a financial institution in Mississauga, Canada wants you to create better habits for a better career and life. This is why we have sourced this great list of business/entrepreneur/financial books to increase your net worth in 2018. The financial advisors of CNBC have chosen eight books that can help you become financially literate in no time. Before you read the list, do some research about the book and the author. You want to make sure the book you purchase will help you personally. Buying a book about being a better CEO won’t help you if you don’t even have a business right? Now, onto the list of best books to help you financially in 2018!

 

8 books to help you become wealthier in 2018

Boosting your financial I.Q. is a worthwhile resolution for 2018.

CNBC.com asked financial advisors what books they recommend to increase your understanding of how you should manage and invest your money.

Here are their top picks.

“I Will Teach You To Be Rich”

This book by Ramit Sethi provides a six-week program aimed at young adults ages 20 to 35.

Financial advisor Michael Kitces recommends the book because it not only teaches good habits, it also emphasizes the value of reinvesting in yourself.

“I find most personal finance books skip this oh-so-important aspect of trying to improve your financial situation by focusing on your earning power, rather than just your expenses or your portfolio investments,” Kitces said. “That’s what puts his book high on my list.”

“The Ultimate Financial Plan: Balancing Your Money and Life”

This financial planning book by Jim Stovall and Tim Maurer covers your overall financial situation, including your cash flow, insurance coverage and estate plan.

“This book is good for the DIY-ers who want take tackle and have the time to manage their own financial household,” said advisor Rianka Dorsainvil, founder and president of Your Greatest Contribution.

The book can also help you if you are already working with a financial advisor or planner.

“You will be able to bring ideas and thoughts to the table so it can feel like more of a partnership,” Dorsainvil said.

“The Millionaire Next Door”

Written by Thomas J. Stanley and William D. Danko, this book examineshow truly wealthy Americans often live frugal lifestyles and rarely show off their wealth with flashy spending.

“It lays the foundation, and shows the impact of how living within your means and spending less than you earn can give you the financial freedom at an early age,” Dorsainvil said.

Reading the book should give you an understanding of how all decisions – from buying a home to a car – impacts your long-term wealth, according to Dorsainvil.

“Think and Grow Rich”

Napolean Hill’s book was first published in 1937 and draws lessons from rich men of that era, including Andrew Carnegie, Thomas Edison and Henry Ford, among others.

The book teaches you the “mindset one needs to become wealthy,” according to financial advisor Ivory Johnson, founder of Delancey Wealth Management in Washington, D.C.

“Our mind is incredibly powerful and thoughts turn into reality,” Johnson said.

“The Rational Optimist: How Prosperity Evolves”

Author Matt Ridley makes the case in his book for increased prosperity this century, in spite of what pessimists say.

That message, according to financial advisor Tom West, a partner at Signature Estate & Investment Advisors in Tysons Corner, Virginia, can help investors who shy away from the market because of their fears of what could go wrong.

“Ridley does a masterful job of contextualizing the progress of modern society in an accessible way, laying the groundwork for rationally expecting the world of tomorrow to be materially better,” West said. “The book was published after the financial crash but now seems just as timely.”

“Make Your Kid a Money Genius (Even If You’re Not)”

Beth Kobliner’s book is aimed at helping parents of children from toddlers to young adults teach money management.

Financial advisor Diahann W. Lassus, president of Lassus Wherley in New Providence, New Jersey, recommends the book because it uses “language that is easy to understand without the alphabet soup we can get caught up in.”

The book addresses various financial topics including charitable giving and breaks down advice by age group.

“It is a valuable reference that will guide the parent at each stage of the child’s life,” Lassus said.

“The Elements of Investing: Easy Lessons for Every Investor”

Legendary investors Burton G. Malkiel and Charles D. Ellis provide basic advice on investing and saving in “The Elements of Investing.”

“This books distilled all of the best investment insights from each author’s classics, ‘A Random Walk Down Wall Street’ and ‘Winning The Loser’s Game,’ while also including personal finance and saving advice,” said Peter Lazaroff, co-chief investment officer at Plancorp, in St. Louis, Missouri. “This book is great for beginners looking to get a better grasp of how to invest for long term goals.”

“The Most Important Thing: Uncommon Sense for the Thoughtful Investor”

Howard Marks, co-chairman of Oaktree Capital Management, shares his investment philosophy in his book, which includes his personal recollections as well as investment advice.

Louis Abel, chief investment officer at First Foundation Advisors in Irvine, California, said it is “one of the best books on value investing and investing in general.”

The book is required reading for all of the financial advisors at Abel’s firm, he said, and it is “suitable for both sophisticated and amateur investors alike.”

thumbnail courtesy of cnbc.com

 

Have you found a book that peaks your interest? Hopefully, you did because these books are some of the best available. If you didn’t, please let us know which book you are planning to read. For people who want to start investing their money, Loan Away staff recommend Millionaire Teacher by Andrew Hallam. Excellent read if you are a novice to investing your money like a financial advisor should. Regardless, this is a great list for anyone.

If you have bought any of these books and would like to share what you have taken away, please feel free to share this article with your experience. Sharing this post might just help someone become a better investor, so give it a chance and let your friends and family know about the eight books that could make them wealthier this year.

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Improving Your Credit Score Is Simple

Options for Entrepreneurs with Bad Credit

To start a business you will need capital and lots of it at that, but what do you do if you have bad credit? Well, you came to the right article! Loan Away, a financial institution in Ontario, Canada has gathered useful resources for the entrepreneur with bad credit. Often, having bad credit can feel like you are stuck and have little to no options, however, for this to happen to someone who is starting or maintaining a small business is devastating. This is true if you are unaware of the options. Yes, there are options for you to get a business loan or personal loan in Ontario. Jared of Enterpreneur.com has written a great article about the available option you have for getting a loan. We have included as a source for our readers.

 

 

Bad Credit? Even an Entrepreneur in Your Shoes Can Score a Loan …

Most business owners struggling to overcome poor credit have a notoriously hard time qualifying for the financing they need to grow their businesses. In fact, just 10 years ago, these entrepreneurs might not have had any small business financing options on the table.

Related: 4 Steps to Establishing a Good Business Credit Score

The reason: Traditional banks have always had tight credit requirements for small business owners, and a less-than-perfect credit score generally precluded entrepreneurs from qualifying.

Thankfully, though, times have changed in the world of business lending. Alternative, non-bank lenders have entered the market, willing to work with borrowers with poor credit.

What are the best loan options for entrepreneurs with bad credit? Here are your three top options.

1. Short-term loans

If you’re looking for bad credit business loans that come with a structure you’re familiar with, short-term loans might fit the bill.

Short-term loans are structured like the traditional term loans you know well: You receive a lump sum loan that you’ll pay back with fixed payments over a predetermined amount of time. They’re almost exactly like what traditional bank lenders offer — with a few key differences.

First,, these loans are, well, short. Instead of being offered over a multi-year period, these loans have terms lasting anywhere from just three to 18 months. And because they come with such short terms, they’re most often paid back with daily or weekly repayments instead of a typical bank loan’s monthly repayments.

Short-term loans also have lower limits (ranging anywhere from $2,500 to $250,000), meaning that the borrower’s payments will be proportionally less than what you’d be responsible for with a bank loan.

Fortunately, it doesn’t take much time or effort to apply for a short-term loan. They often have simple applications and a short waiting time to funding, so if you need quick cash to act on an important business decision, a short-term loan can be a great fit.

Further, short-term loans are at the top of the list for the best loans for bad credit, as these lenders typically work with borrowers with a minimum FICO score of 550. Thanks to the loan’s short-term and frequent payments, lenders can take on more risk when it comes to choosing whom to work with.

So, if you’re looking for a predictable and straightforward small business loan with your bad credit, a short-term loan could be for you.

2. A business line of credit

While traditional banks are known for their business lines of credit, alternative lenders offer smaller, shorter and more accessible lines of credit, as well.

With a line of credit, you’re approved for a pool of funds that you can tap into whenever you need them for your business. You’ll pay interest only on the funds you draw, and once you’ve repaid that laon in full, your credit line will get refilled to its original amount.

Business lines of credit are great financing tools for business owners in need of flexible financing. They’re a particularly good option for entrepreneurs who struggle with irregular cash flow: when you enter a slower month, you can draw from your line of credit to keep your cash flow from slipping into the red.

Minimum requirements typically include having at least six months of business under your belt and $50,000 in annual revenue. Plus, you can get approved in as little as one day.

3. Invoice financing

Invoice financing helps business owners free up capital when pesky unpaid invoices are slowing their cash flow. If it fits your unique funding needs, invoice financing is another top option for business owners with bad credit.

This option involves a self-collateralizing loan, meaning that the outstanding invoice itselfacts as collateral for the financing.

This is great news for bad credit borrowers. Invoice financing companies are more likely to work with borrowers with bad credit because the value of the invoice acts as a security blanket. If, in the worst-case scenario, you can’t make your repayments, the financing company can simply collect on the invoice to recoup its losses.

Lenders offering invoice financing can help you turn your invoices into immediate cash, and will often work with borrowers with credit scores in the 500s.

An alternative option: business credit cards

While you might not normally consider business credit cards when you need business financing, they’re worth adding to your list.

It’s best to use these credit cards for your monthly expenses and working capital needs, since, basically, they’re revolving lines of credit with high interest. However, there are definitely some advantages to seeing a business credit card, instead, as a kind of small business loan.

Business credit cards can be a great substitute for traditional loans when you need financing quickly, you need need flexibility in how much you borrow or you don’t have collateral to offer against the capital.

Plus, using a business credit card with a 0 percent introductory APR period is essentially like taking out a free loan: You can borrow up to your credit limit without paying interest on the balance you carry over. Just don’t forget to pay down your balance once your introductory period is up!

When it comes to financing options for bad credit borrowers, there are a handful of cardsthat work for lower credit scores.

The best part about using a credit card to handle small-scale business capital needs is the potential to build your credit score with good borrowing behavior. Paying your balance on time and in full every month will gradually build your score, helping you qualify for better business financing products in the future.

What to watch out for with bad-credit business loans

There are more financing options available to borrowers with struggling credit today than ever before. All things considered, this is to the benefit of entrepreneurs growing their businesses.

However, owners with bad credit need to know that accessible financing comes at a cost. These bad-credit business loans can be augmented by a load of interest that’s way too expensive for any small business to handle comfortably.

 

Must be a great feeling to know that you have options to get capital for your business right? Bad credit is not the end of anyone’s small business with invoice financing, a business line of credit, and short-term loans being available. Small business drives the economy, that is why these options are available. If only those who have perfect credit and a small loan of a million dollars create a business, there won’t be a lot around. Explore which option works best for you and your business. The rule of thumb is to have multiple options before making a final decision. Consider having a business analyst to look at these options and how it will affect the business short and long term.

Learned more options you have as an entrepreneur with bad credit? Great! Share this with someone who would benefit from knowing these options. The more options people are aware of, the better choice they make. Saving someone thousands of dollars can be as simple as a sending them a link. If you enjoyed reading this, please let us know. If you an opinion on how we can improve, don’t hesitate to contact at 1 (866) 689-0091.

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Build Your Wealth In 2018

Building wealth is challenging without guidance or a plan. Loan Away created this article to provide both guidance and a personalized plan. Why have we done this? Well, we enjoy giving back to the Greater Toronto Area community. Also, the best way to learn and master anything is by teaching it. Want to learn something? Practice first, then teach someone young, like a younger sibling. Since they are young, you will have to first explain it in its simplest form. If you can, try to teach someone interested in the subject so they ask questions and provide useful feedback. We have gathered great resources to provide you with everything you’ll need to get started. However, this is not a “Read this and became rich”. This is simply our best advice on growing your wealth, not becoming rich. We have discovered that personal debt consolidation for Canadians can help with that. Our goal for this article is to help you increase your net worth. We recommend you calculate your net worth before reading this guide.

 

 

7 simple money habits that will help you build wealth in 2018

You may already know that toxic behaviors that can derail your finances. But just as important as breaking bad money habits is forming good ones.

Below, CNBC Make It rounds up seven simple money habits you can adopt today that will help make 2018 a more lucrative year.

1. Automate your finances

If your financial plan isn’t on auto-pilot, change that immediately, encourages self-made millionaire David Bach. Automating your finances— sending your money automatically to investment accounts, savings accounts and creditors — allows you to build wealth effortlessly.

It’s “the one step that virtually guarantees that you won’t fail financially,” Bach writes in “The Automatic Millionaire.”

“You’ll never forget a payment again — and you’ll never be tempted to skimp on savings because you won’t even see the money going directly from your paycheck to your savings accounts.”

Here’s what you should be doing now to become a millionaire later

2. Invest your ‘spare change’

Investing is one of the most effective ways to build wealth, and contrary to popular belief, you don’t need a lot of money to get started.

In fact, thanks to micro-investing apps such as Acorns, you can start by simply investing your “spare change.” The app will round up your purchases to the nearest dollar and automatically put any spare change to work.

Other apps also aim to make investing simple and accessible, and automated investing services known as robo-advisors can work for you, no matter how much you have in the bank.

The key takeaway: Start investing sooner rather than later to take full advantage of compound interest. As Bach explains, “the miracle of compounding can transform a relatively small but consistent amount of saving into major wealth.”

3. Come up with specific money goals

“The number one reason most people don’t get what they want is that they don’t know what they want,” self-made millionaire T. Harv Eker writes in his book “Secrets of the Millionaire Mind.” “Rich people are totally clear that they want wealth.”

To reach that level of clarity, he suggests writing down goals for your annual income and net worth. Like all goal-setting, be realistic, but don’t be afraid to challenge yourself. After all, the wealthiest people aren’t afraid to think big.

How rich people save

4. Save, don’t spend, unexpected cash

Pretend that extra money, such as a bonus, birthday check or any windfall, doesn’t exist.

Get in the habit of putting any surprise cash, even if it’s just that $20 bill you found in your coat pocket, to work. Apply it to student loans, credit card debt, your emergency fund or an investment account. It’ll add up.

Plus, establishing this habit early on will help you avoid lifestyle inflation when you get more surprise cash in the form of a raise.

5. Spend 30 minutes a day reading

Rich people tend to read. They continue to teach and invest in themselves long after formal education is over. “Walk into a wealthy person’s home and one of the first things you’ll see is an extensive library of books they’ve used to educate themselves on how to become more successful,” self-made millionaire Steve Siebold writes in his book “How Rich People Think.”

If it works for the millionaires and billionaires, it could work for you.

Check out CNBC’s round up of some of the best personal finance booksout there, or consider Bill Gates’s favorite books of 2017.

Money classics, summed up in one sentence

6. Set your alarm clock earlier

In addition to reading, wealthy people tend to wake up early. Self-made billionaires Richard Branson and Jack Dorsey start their days at 5:00 a.m., and they’re far from the only successful people to get up before the sun.

In a five-year study of hundreds of self-made millionaires, author Thomas C. Corley found that nearly 50 percent of them woke up at least three hours before their work day actually began.

We can’t guarantee that joining the early bird club will make you rich, but it can’t hurt, and it will almost certainly make you more productive.

7. Surround yourself with successful, high-earners

Who you hang out with matters more than you may think. In fact, your net worth tends to mirror that of your closest friends, Siebold points out.

“Successful people generally agree that consciousness is contagious, and that exposure to people who are more successful has the potential to expand your thinking and catapult your income,” Siebold writes. “We become like the people we associate with, and that’s why winners are attracted to winners.”

thumbnail courtesy of cnbc.com

 

If you follow this guide, your chances of building your wealth have easily increased tenfolds. The advice goes further than increasing your income or investing in cryptocurrencies that you have little to no knowledge of. Each step/tip can be done by the average person. In today’s Canadian economy, you need to stay ahead as much as possible. Simple things like saving each $5 bill you get into a jar or saving any secondary income into saving can go a long way. Most financial experts advice may seem impossible to achieve, but this guide is novice-friendly to all Canadians. What everyone should take away from this article is, there is no perfect time to invest or save money; you need to start now. This allows you money and yourself to grow. While you investments age, you became more financially literate. The only advice not in the article is tracking your finances. This can be done with a mobile app, spreadsheet, or paper and pen. Knowing how much you spend on food, transportation, and other expenses can help you understand where your money going. After doing this, I realized that I spent too much money on food. After three months, I have saved $300. That money is now being invested instead of ruining my healthy diet. These small changes can and will make you wealthier in 2018.

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You Can Get A Loan Even If You Have a Bad Credit History

There are different factors that determine why specific customers might be thought of as less credit worthy, and for that reason considered risky to lend to. For a lending institution to grant a loan, every customer’s previous credit history is examined thoroughly and based upon how they handled their previous accounts, the bank will either provide the customer a loan or decline them.

However, if you don’t have a good credit history, all might not be always lost, given that some organizations will give loans to customers with bad or unfavorable credit records. Bad credit loans are often approved more than people think. There are lending institutions that really specialize in helping customers with a bad credit history.
Naturally customers with a less favorable credit rating will pay more for their loans. These lenders may wish to safeguard themselves and one way of doing that is to charge a higher rate of interest. On the individual level, this may be thought of as counter productive and may serve to perpetuate the bad credit situation of the borrower. However, as a business, the higher interest rates charged to customers helps to offset the loss from the customers who default on their loan.

As soon as you find out that you have a bad credit and that it is too challenging to get a loan through the conventional method, you may need to take a look at those lending institutions that might work with bad credit people despite the fact that they are considered riskier to led to.

The loan obtained from these lenders can be used for anything you like, it is for buying something important to you or to purchase products to upgrade your home.
Even if you have a small business and you require money injection to keep the company going, you can apply for a bad credit loan if you can’t get a loan from anywhere else. Lenders take a look at every case separately.

Therefore, whether you are an individual that needs a personal loan or a small business loan, feel encouraged to approach these lenders. Most of these organizations offer loans to customers with bad or unfavorable credit records because they know that life happens. They are aware that individuals often experience hard times and sometimes are unable to make payments on their financial obligations. After all they are humans too and do know that these things happen and that people need a second chance.

Lending organizations such as banks and other financing companies will look more thoroughly at a customer’s credit history prior to giving them a loan. Every customer’s previous credit report is examined thoroughly and based upon how they efficiently handled their previous credit a decision is made to grant or decline the loan.
However, every case is dealt with according to the particular profile. That is why bad credit loan lenders might charge different rates of interest to different people, based on their credit history. Individual circumstances and the seriousness of how badly damaged credit they have may also determine the amount of loan offered to them. Some might have defaulted frequently, some might have outstanding credit judgement and yet still others might have actually ended up being insolvent.

In making a loan decision, a group profile is also considered. Customers who share similar financial backgrounds tend to behave the same. Either they are good payers or they are persistent defaulters.

There are many lenders for people with bad credit. You can find them online and in newspapers. Another popular source which used to be popular before the days of the internet is a broker who serves as an intermediary between the lender and the borrower.

If you need a loan but has a bad credit, never despair. You can find a loan that will suit your personal circumstances. Loan Away Inc, is one of these lenders who will give you a loan, notwithstanding your financial credit history. Apply for a loan away loan at https://loanaway.ca

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Business or personal Credit Card?

If you aren’t a business owner, then your decision should be easy, however, if you are a business owner your decision should also be easy. The reality is, business owners don’t have a business credit card. Hard to believe when there are several benefits of having a business credit card. Personal credit cards are exactly what it sounds like, personal. These credit cards have lower credit limits because a single person spends less than a business. As well as a business trends to earn more than a single person.

Still not convinced you should make the switch over? Fine. An article by entrepreneur went into great detail why you should make the switch if you own a business.

 

There’s a Real Difference Between a Personal and Business Credit Card

If you’re a business owner, there are dozens of reasons to have a credit card. For one thing, they are a great way to keep track of all your business expenses in one place. They also offer opportunities to earn points or rewards on purchases you would make anyway. Not to mention, they can be an excellent option for financing your business, especially if you are in the startup phase and can’t yet qualify for a small business loan.

But one thing many business owners get wrong is putting all their business expenses on a personal credit card. While business and personal credit cards may function the same way (in terms of how you use them), there are some key differences that set them apart. Here are the most important differences between a personal and business credit card — and why the latter should definitely be in the back pocket of every business owner.

Higher credit limits on business credit cards.

You read that right: you can typically get a much higher limit with a business credit card than with a personal one. This is because businesses, in almost all industries, have more expenses than an individual person ever would. They also have more capital coming in than individual people, so it makes sense that they’d have more spending power.

That higher limit can be invaluable to your business for several reasons. For one thing, you’re going to have to make some big purchases as a business owner, and putting them on a business credit card is a great way to give yourself some short-term financing.

Related: Does a Short-Term Loan Ever Make Sense for Your Business?

For another, a high credit limit means a better opportunity to build your business credit score. One of the important factors for determining your business credit score is your credit utilization rate — the percentage of your available credit that you have used up, on average.

A healthy credit utilization rate is anything under 30 percent. So, if you have a credit limit of $10,000, you only want to owe up to $3,000 at a time. The higher your credit limit, the easier it will be to keep your spending well under the desired credit utilization rate, which will, in turn, help build your business credit score — something that will be crucial for the future of your business.

It affects business credit and personal credit.

Using a business credit card is quite important in building your business credit score, which will be vital in helping you qualify for other forms of financing down the line. However, before jumping into using a business credit card, it’s important to understand just how it affects both your business and personal credit.

While your personal credit card use will only affect your personal credit score, how you use your business credit card will affect both your business credit score and your personal credit score. This is because most business credit cards require a personal guarantee. This gives your business credit card company the security of knowing you’re personally responsible for paying off your business credit card debt if something should happen and your business can’t cover it.

Because of this inevitable intertwining of your business and personal history, business credit card companies will typically look at your personal credit score as part of your application. Some business credit card companies report credit card activity just to business credit bureaus, while others report to consumer credit bureaus as well.

Related: 4 Steps to Establishing a Good Business Credit Score

If you have a business credit card but are unsure which bureaus your issuer reports to, ask them to find out. Do the same when deciding which business credit card to apply for. It may not affect your decision, but it pays to be fully informed.

Business cards aren’t as protected.

Consumer protection laws, such as the Credit Card Act of 2009, make it so that personal credit card activity is closely monitored and controlled. However, the same kind of advocacy that exists for consumers does not so much apply to businesses.

This means that your business credit card issuer could apply higher late fees than you’d receive with a personal credit card should you miss a payment. Additionally, your business credit card company could throw more curveballs your way than you’re prepared for, such as a sudden increase in your APR.

Of course, you may not have to worry — most business credit card companies issue the same protections to business owners as to consumers simply as good practice. But it’s important to spend carefully, closely monitor the activity on your business credit card, and read all of the fine print before applying for a business credit card or accepting an offer for one.

Rewards programs built for business owners.

One of the biggest reasons people use credit cards these days is to earn rewards, in the form of cash back or points that can be used for everything from consumer purchases to travel. Personal credit cards often have great rewards programs, but if you’re a business owner, you’ll want the perks that are specifically geared towards business.

For example, your business credit card may award the most points in spending categories that are typical of business owners, such as computer software, advertising spend, and office supplies. Personal credit cards, on the other hand, typically award the most points for spending in categories like restaurants, gas or groceries. There are plenty of travel perks for both business and personal credit cards depending on the rewards programs.

If you’re going to earn points, you may as well earn in the categories where you spend the most. A business credit card will be set up much better to reward you for business spending.

Related: 4 Credit Card Tips to Make Business Travel Easier

No matter whether you’re a business owner with dozens of employees or simply a sole proprietor, if you’re regularly making business purchases, you should have a business credit card. Just know what you’re getting into — such as not being protected by the same laws that aid consumers.

A business credit card can help you build business credit and reward you for purchases you’d be making anyway. If that’s not a smart business move, what is?

thumbnail courtesy of entrepreneur.com

 

Convinced yet business owner? Probably. That was a well-written article by Jared Hecht. Using a credit card for your business only has advantages, which is rare. Usually, in business, you have to accept some disadvantages with making business decisions, but this one is a no-brainer! The biggest advantage is having more credit available for your business. Being able to spend more money on your business increases the chance of ROI. If you had a small loan of million dollars, you would be more likely to succeed that someone who didn’t get any capital. To make money, you have to spend money right? The more you spend, the better the chance you will generate income. The other reason every business owner should get a business credit card is for the simplicity of organization and the rewards. Having all of your business expenses on one or two credit cards make it easy to track your expenses and you get rewards for doing so. Sounds pretty good to me and hopefully you feel the same way.

 

Want to learn more about credit cards, credit scores, debt consolidation and everything finance? Great! Loan Away is the post blog articles about everything you need to know about finance. Enjoyed this article? Share it with a business owner to ensure they are taking advantage of business credit cards.

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The Canadian housing marketing in 2018

2017 was.. well something to remember. The Canadian housing market has been expensive, to say the least. Don’t worry, 2018 is looking to shape up for the new buyers in Canada (No promises for Vancouver or Toronto).  For those looking to buy a home in Canada, please pay off your personal debt first. Even if you have a bad credit score, a loan to pay off your debt would help get you the house you wamt. Loan Away has attached the well-written article on the Globe and Mail by Robert Mclister so fully understand the source of our article. Before we discuss what the experts have to say about the housing market, we would like to hear your thoughts first. We encourage you to write your predictions before analyzing the article to see how your thoughts match up with the housing market expert himself, Mr. Mclister.

 

Mortgage policy changes: Decoding what’s to come for 2018

 

January must be right around the corner because, once again, Canadians are facing a momentous change in mortgage policy.

It’s almost a tradition that Canada’s mortgage czars clamp down on housing in the new year. This year is no exception with the federal Office of the Superintendent of Financial Institutions (OSFI) enacting the big kahuna of credit regulation, the uninsured mortgage “stress test.”

For some homeowners, this portends a slew of changes in 2018. Here’s a foretelling of what’s to come:

1) Debt restructuring gets costly (for some)

Folks trying to bail themselves out of debt by refinancing could get a rude surprise in 2018, especially if they want to mortgage 80 per cent of their home’s value (the federal limit for refinancings). The banking regulator’s new stress test will slash the amount of debt they can consolidate by up to 18 per cent. It’s not an exaggeration to say this week could be the last chance for debt-heavy homeowners to refinance at rock-bottom rates.

2) Credit unions pinch bank market share

Credit unions, which are provincially regulated across Canada, will toast the new year as they scoop up borrowers declined by banks. These are borrowers who would have easily qualified today and any time in the past few decades. For creditworthy borrowers who can’t pass the banks’ new stress test, credit unions will welcome them with open arms – albeit at higher interest rates. That’ll push credit union market share from 17 per cent of uninsured mortgages to more than 20 per cent in 2018.

3) A bumpy road for home prices

Depending on who you listen to, anywhere from 10 per cent to 17 per cent of home buyers will be forced to alter their purchase plans in 2018. That should knock down home values in most Canadian markets. But price weakness won’t be absolute and it won’t be forever. Condos should hold up better, at least in big cities.

4) Rates jump on non-prime mortgages

Mortgage shoppers with harder-to-prove income (e.g., self-employed borrowers without an income track record), weak credit and/or high debt ratios will pay more in 2018. OSFI’s stress test will force many of them into the arms of costlier non-federally regulated lenders with easier qualification criteria. This added demand will encourage alternative lenders to jack up their rates.

5) Extended amortizations: 30 is the new 25

In 2018, more than two-thirds of uninsured mortgagers will extend their payback period beyond 25 years. The reason? People limited by OSFI’s stress test will do anything they can to lower their payments and qualify for a bigger mortgage. The Bank of Canada has already expressed its concern. And when the central bank issues warnings, regulators listen

thumbnail courtesy of theglobeandmail.com

 

Did your predictions match Mr. Mclister? Mine did not. I predicted that it will be easier to get a home or condo in 2018. I was sadly wrong. If anything, 2018 may be as tough as 2017. Unpredictable prices, condo’s in big cities are going to remain expensive, and mortgages payback period will be 30 as the standard instead of 25.  This is very disappointing for new home buyers and great for those who bought homes years ago. Where your prediction correct? If they were, you are probably a homeowner that is grateful to have bought a house before the market became an expensive bidding war.

What did you take away from this article? Let us know if you are still planning to buy or sell based on these predictions. If you know someone who is going to buy a home in 2018, share this article as it may just help them make the best financial decision-based market research.

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Advice from a Billionaire

Wanted advice from the owner of the Dallas Mavericks about money management? Well, you clicked on the right article. Mark Cuban, one of the investors on Shark Tank and tech billionaire has three tips that can make you richer in 2018. Listening to the rich about money is a good, but take it with a grain of salt. If they reveal all of their secrets, others can copy it and that would mean less money for him. Obviously, no one will do that right? Yeah, so when a billionaire says ” This what you need to do!” think twice. If everyone did this, would everyone be rich? Probably not. I only mention this because most financial experts disagree with one of the Mark Cuban’s suggestions to become wealthier.  Financial experts encourage those with debt to use an online loan to improve credit score. Read the article below by CNBC about the best money tips by Mark Cuban and see if you find the suggestion that financial experts disagree with.

 

Mark Cuban: The 3 best tips to save more money in 2018

 

With a new year, you have a new opportunity to take charge of your money, your career and your future.

In the spirit of financial resolutions, star of ABC’s “Shark Tank” and billionaire technology entrepreneur Mark Cuban gives CNBC Make Itthree pieces of advice to see your bank account flourish in 2018.

1. Ditch the plastic

Step one in Cuban’s playbook: “Don’t use credit cards,” Cuban tells CNBC Make It. “If you use a credit card, you don’t want to be rich,” Cuban writes in a 2008 blog post.

It was a lesson he learned the hard way. “I would charge something and think I would be able to pay it off and then not be able to. I can’t tell you how many credit cards I had ripped up,” he tells Money. “[T]he 18 percent or 20 percent or 30 percent you’re paying in credit card debt is going to cost you a lot more than you could ever earn anywhere else.” On average, credit cards charge 16.7 percent interest, according to Bankrate.com.

Fellow “Shark Tank” investor Robert Herjavec agrees. “When I was young, I would carry a balance on my credit card,” Herjavec tells CNBC Make It. “My advice — pay off your credit cards every month and therefore pay no interest. Credit card interest is probably the most expensive loan you could ever get.”

2. Watch your spending

“Be a smart shopper,” Cuban tells CNBC Make It. “You will quickly find that the greatest rate of return you will earn is on your own personal spending,” he writes on his blog. “Save your money. Save as much money as you possibly can. Every penny you can. Instead of coffee, drink water,” he writes. “Instead of going to McDonald’s, eat mac and cheese.”

Cuban also suggests things like buying two years’ worth of toothpastewhen it’s 50 percent off. “There’s an immediate return on your money,” he tells Vanity Fair. Cuban’s “Shark Tank” co-star Kevin O’Leary takes a similar tactic. He refuses to spend $2.50 on a cup of coffee. “Do I pay $2.50 for a coffee? Never, never, never do I do that,” O’Leary tells CNBC Make It. “That is such a waste of money for something that costs 20 cents. I never buy a frape-latte-blah-blah-blah-woof-woof-woof for $2.50.”

He makes coffee at home, and puts his savings to work in the stock market. “I drink coffee, one cup every morning,” he explains. “It costs about 18 cents to make it, and I invest the rest.”

3. Put your money to work

All that money you didn’t spend? “Once you have at least six months salary saved, put what you can in a low-cost SPX mutual fund every month,” Cuban tells CNBC Make It, in order to grow your wealth. That means investing in an index fund with low fees made up of companies in the S&P 500, which is comprised of the 500 biggest companies in the stock market.

This is also a well-known suggestion of Warren Buffett. “Consistently buy an S&P 500 low-cost index fund,” Buffett told CNBC’s “On The Money.” “I think it’s the thing that makes the most sense practically all of the time.”

thumbnail courtesy of cnbc.com

 

Did you find the questionable suggestion Mark Cuban made? It’s the credit card suggestion. Using a credit card wisely has only positives. If you have a problem returning a product bought with a credit card, the credit card company will fight for you. Why? It’s the credit card company money, not yours.  Often, credit cards have rewards. Cashback or points to buy items. Why wouldn’t you use a credit card? If you know you are not responsible with having access to thousands of dollars, then don’t get. However, if you know you will pay off your credit card in full every month, you should be fine.

I am surprised that Mark Cuban would tell people to spend less money. If anything, this could (In the smallest amount possible) could hurt his wealth. If fewer people are spending money on let’s say basketball tickets, he make’s less money. I thought he would say “Everyone should use credit cards! The rewards are great and it’s not your money, so feel free to spend it!”. Even though many responsible adults enjoy using their credit cards, his recommendation to not use them is noble.

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2017 is the year of the wealthy

Compare yourself to yourself when it comes to lifestyle

Life is hard and challenging, as a result, you may be struggling with finances. Going on vacation, buying new clothing, getting the newest car, or buying a house is something that you cannot do at the moment. You would think that people your age, like your friends, would be in a similar situation right? Nope. You see that they are currently on vacation, bought the best clothing brands, drive the newest car, or live in a nice home. “How?” you must be asking yourself when looking at their Instagram, Facebook, or Twitter. Before you get disappointed with your life, because you might not have everything they have, look at your social media profiles? Did you post when you were struggling or did you post only positive moments in your life? Only the positive you say? For all you know, they could have declared bankruptcy.  Read the article below to see why you shouldn’t be concerned about what others post on Instagram.

Don’t bother wondering why your friends seem to have nicer homes, cars, and vacations — there’s only one  measurement that matters

 

It seems like I’m falling behind my friends financially. They take nicer vacations and drive more expensive cars than mine. How am I really doing compared with others my age? It happens every morning, from Wichita to Washington: We wake up feeling good. We pick up our phones and scroll through Instagram.

We guess at the carat weight of a college friend’s engagement ring and marvel at a cousin’s shiny new truck. We’re lifted into tornadoes of jealousy over photos of a friend’s puppy. We puzzle over how they afford it. But this social media highlight reel leaves a lot out.

“You don’t find people posting about missing a rent payment,” says Doug Amis, a certified financial planner and president at Cardinal Retirement Planning, Inc. in Cary, North Carolina.

Know where you really stand

If you’re under 35, here’s how your peers are really doing, according to the Federal Reserve Board’s Survey of Consumer Finances:

The median income for families with a head of household under 35 was $40,500 in 2016. Nearly half of families under 35 had credit card balances, with median debt of $1,400 per family. About 42% of families under 35 had retirement accounts, and their median value was $12,300.

Lastly, about 45% of families with a head of household under 35 had education debt. The median amount was $18,500 per family, but the amount varies widely by income level and highest degree attained.

Follow rules of thumb, not Instagram

You won’t find a real answer to how you’re doing in a Federal Reserve survey or a social media feed.

You will find it by measuring yourself against rules of thumb, refined over decades and endorsed by financial pros, that point the way toward true financial health. Start with these:

• Do you have an emergency fund of at least $500? It should eventually include three to six months of basic expenses.
• Are you paying down high-interest debt, like credit cards and personal loans? That should come before attacking lower-interest debt like student loans.
• Do you spend less than you earn? A budget based on the 50/30/20 rule can help: You’ll spend no more than 50% of after-tax income on necessities, no more than 30% on wants and at least 20% on savings and debt repayment.
• Do you follow the 28/36 rule? Lenders use this to qualify you for a mortgage, but Amis suggests it’s also a helpful way to assess cash flow even if you’re years from buying a home. Housing costs should be less than 28% of your pretax income. With other debt payments, like credit card, car, or student loan bills, the total should come under 36% of pretax income.
• Do you save for retirement? Socking away 10% to 15% of your pretax income is the goal.

These guidelines are aspirational. But your progress toward them is a better measure of whether your money is working for you than surveys or Instagram. In the end, your financial well-being boils down to whether you can meet your basic needs today, plan for a better tomorrow, and enjoy life as you go.

Set your own goals

While these best-case scenarios might not seem feasible right now, don’t wait to start saving until you can set aside the amount you feel you’re supposed to, says Emily Guy Birken, author of “End Financial Stress Now.” For instance, save even 1% of your income for retirement if that’s all you can afford. Increase the amount by 1% every six months as you get accustomed to having less in your paycheck — or at least whenever you get a raise.

And most importantly, set your own goals — when to buy a house, say, or how quickly to pay off student loans — based on what you value most. While some friends may take fancy vacations, they may also have massive credit card debt you don’t know about. Besides, Birken says, “Would you really choose to have all of their problems, and have all of their foibles, flaws, and issues, just because they’ve got one thing you don’t have?”

thumbnail courtesy of businessinsider.com

Still going to envy people you see on social media? Hopefully not. You have no idea how much debt they have because of their new car, similar to they not knowing how much debt you have. If anything, you should feel better about yourself. They might have a new car, but you just saved twice the price of the car they bought. If they bought a new Mercedes-Benz for $50,000, yes, they spent $50,000, but they will allow losing 50-80% of the additional value because of car depreciation. If you invested the same $50,000 for the life of the car, 10 years for example at 7% invest. You made $50,000 of invest on top of your $50,000. $100,000 is the total. Now that person with the car sell it for $10,000 & lost the $40,000 of the initial price because of depreciation & $50,000 of invest if invested. They lost $90,000 to drive that Mercedes-Benz for 10 years. You don’t see that on Instagram.

 

Basically, your net worth is more important than any house, car, clothing, or vacation. So next time you see someone on social media “living the good life”, just know you can look rich or be rich. They chose to look rich, which one will you pick? If you enjoyed this article, please share it with someone that is “Looking rich”, but might not have enough to live rich.

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