4 Financial Moves that Spell Disaster
By avoiding these 4terrible financial moves, you could have a good chance of succeeding and becoming prosperous while at the same time, hitting your goals. If you’ve already made one of these,then perhaps it might be the time to know how to get back on track.
Getting More Homes Than You Can Afford – This is one of the worst ways that can hurt your financial goals. It has been said that mortgage payments should not eat up more than 28 to 34% of a person’s gross monthly income. Also, consider that the cost of furnishing a house can cost an additional 5 to 15% of the house’s value, depending on what materials will be used. Furthermore, maintenance and basic upkeep of the home could take another 2 to 4% off your annual income. You’ll need to pay for the broken water heater or hiring a landscaper – and these expenses will add up if you look at it in a 12-month period. Having your own is enough, but if you’re still treading the waters and you jump ahead in making another purchase without considering other expenses, then you may be in a lot of trouble in the long run.
Having Private Equity Investments With Your Friends – Sure, you’ll be hearing the story of this guy who invested his money in a start up company, or a newly constructed building, or a fancy new gadget who actually made a boatload of earnings. However there are still the guys and girls who invested into a friend’s new restaurant, a piece of property they never saw, or a few stocks in a new company – and this will show that not all investments will be successful, no matter how strongly you ‘feel’ about it. The odds of getting returns by investing in private equity are still very slim. Perhaps, in less than 5% of the time, the investors actually get their money back. However, the giant 95% chunk is ripped out and has lost their hard earned money. As a simple rule, if you won’t be actively involved in the business, stay away.
Letting Your Credit Card Debt Linger – Apart from a reasonable home mortgage, debt is just never a good thing. But the one killer among all debts comes in the form of credit card debt that is kept on a long term basis. Sometimes we incur credit card debt as a result of an emergency, but honestly speaking, more often than not it is just a result of living beyond your means. You spend more than you make and continue to do it for a prolonged period time – chances are you will end up owing money to the wrong people.
Not Saving Up Enough – It is indeed true that the economy has been shaky, and could actually stay as such in the long run. When you think about a goal – as an example retirement, many of us would want to retire early, and to have enough money to retire with. Because we do not have control over the markets when it comes to the overall rate of return from all of your past contributions, the best way to cash in on your retirement is to save more. By living within our means and continuously adding up to our retirement savings, then these long term financial goals will indeed happen – and you can truly enjoy a debt-free retirement and financial freedom.