Want to Build Wealth, and be Secure? Focus on Learning Instead of Earning!
I just finished reading Robert Kiyosakis book, Rich Dads Increase Your Financial I.Q.: Get Smarter with Your Money and the one major takeaway is that too many people never realize their true financial potential because the get in their own way! Many people focus on earning more money when they should be focuses their time and energy on learning and increasing their money I.Q..
* Note: Kiyosaki discusses 5 aspects of Financial I.Q. in his book, but Im just going to focus on this one, general concept here.
The learning discussed in the book is not a formal education. In fact, thats one of the mistakes that many people make amassing huge amounts of debt going to college in the hopes of finding a good job and their place on the financial treadmill, only for some its more like a hamster wheel.
So what does focus on learning mean if not the traditional, middle class mantra go to college to get a good job?
It means taking risks and chances while youre young, and always learning from your mistakes as well as your successes.
Self Assessment Tax Return Form and Capital Tax Allowances
100% of the purchase price of the majority of items is deducted from ie as business expenditure to produce a net taxable profit. Purchases of certain items where that item is not consumed by the business in a single year but may be used by the business in both the current year and future years are not expensed in the year of purchase but classified as fixed assets. It is these items which are not written off in the tax year but are subject to capital allowances.
A fixed asset includes not just the original cost of the item but also the cost of alterations, improvements and extensions of the asset. The fixed asset cost does not include the repairs and maintenance of that asset which may be treated as a normal business expense and written off against ie when incurred. Accounting records need to be kept of fixed asset purchases in order for the capital allowances to be calculated and included in the self assessment tax return.
Having identified certain items as fixed assets the normal accounting practise is to use a technique called depreciation to write off the cost of the asset against profits over the expected life of that asset.
Effects of Inflation on Debt and Buying Power
Inflation is defined as a general increase in prices and fall in the purchasing value of money. With inflation, you’re generally able to buy less and less with the same amount of money. You’ve probably seen inflation happen over your lifetime. If you’re in your 30s or 40s, you were probably able to buy a candy bar and a soda for just $1 when you were a kid. Now, you could probably barely buy a candy bar for a $1, much less a soda. Because of inflation, you’re generally now able to buy less for $1 than you were several years ago.
Inflation and Paying Off Debt
In terms of repaying debt, inflation is typically considered to favor the debtor since you’re paying the creditor back with devalued dollars. In other words, you borrowed $100 last year and got the benefit of that $100. This year, the same goods would have cost $110 and you’re only paying your creditor the original $100 you borrowed. Thus, the c
5m households risking debt problems by not saving enough
A new report commissioned by the Consumer Credit Counselling Service (CCCS) has revealed that more than five million households in the UK are not saving enough to avoid future debt problems should the unexpected happen.
The research, which was carried out by the Financial Inclusion Centre, identified 1.1 million UK households which had less than £1,000 in savings and more worryingly, a total of 4.3 million families which had no savings at all.
The main worry for these households is if the unexpected should occur, such as one household member losing their job. Without savings for situations like this, or for any other sudden expenditure, families could find themselves facing serious debt problems.
The Department for Business, Innovation and Skills (BIS) recently found that 27 per cent of UK households with no savings risk debt management problems in the future by relying on credit for everyday spending. This was compared to just 9 per cent of households which had savings of between £1,000 and £10,000.
Card Holder’s Bill of Rights Passes House Vote
Reacting to the massive outcry from credit card holders across the country, The House of Representatives passed The Card Holder’s Bill of Rights which prohibits the types of sudden interest rate hikes and exorbitant fees commonly charged by credit card companies. The bill passed in a landslide bipartisan vote of 357 to 70 attributed to both public outcry and The Obama Administration’s intensive lobbying which was promised during the presidential campaign.
The bill comes at a time when the total amount of credit card debt in the U.S. has increased by 25% over the last ten years with most of that increase coming in the last few years. As of January 2009, the total amount of credit card debt stood at just under one trillion dollars with an average of $10,679 in consumer debt for each household with a credit card. These numbers are expected to grow because, for many struggling consumers, their credit cards have been the only way source of funds in the face of job losses and the tightened credit markets. Als
Blue Monday 2012- the most depressing day of the year?
As the date of ‘Blue Monday’ is calculated, we offer you some simple steps you can take to lessen the blues.
The January blues have suddenly become a lot more specific, being at their most vivid on 16th January according to a formula used to calculate the most depressing day of the year. This takes into account the weather, the distance from Christmas, the level of individual debt and failure of New Year’s resolutions; ‘Blue Monday’ is decided.
The outlook becomes even worse when you think about the large gap between most people’s December and January payday, combined with the delivery of active credit card users’ January statements.
The current economic climate means that Blue Monday is going to affect more demographics than ever before youth unemployment over a million, house repossessions forecast to rise again, to name but a few bleak statistics- it could feel that these January pressures are reaching their peak.
The outlook isn’t all doom and gloom though and there are steps you can take to put you on the right track.
Set an