Finance Book

If you’re hugely in debt, you are definitely looking for a way to manage your debt. This is possible either through self-help efforts or by getting some help from a trained expert from a debt reduction management company. It’s all up to you how you help yourself, but you should follow some advice from books, magazines and other sources if you want to reduce your debt and financial burden.

So, would you like to manage your debt? Here’s how.

1. Debt consolidation.
Debt consolidation is one of the solutions for you if you want to make paying your debt easier. While it does not change how much you owe – so for example, if you owe something like $40,000 to some lenders, you will still need to pay that much but this time, you will only have one lender to pay – you will get to pay much smaller rates, making it easier to pay off your debt.

2. Cut back on expenses, and make more money as much as possible.
This means many things. This means lowering your spending on things that are not needed or can be replaced with cheaper alternatives to help you save money. For example, stop unneeded subscriptions to magazines and cable. Stop buying new stuff every time. Stop using your credit cards when you go out. Stop eating out every lunch time. The money you save from doing these will go towards your debt payment and will help in your debt elimination efforts.

On the other hand, make more money as much as possible to increase your monthly payment. This is possible by having a secondary job or a business which can increase the amount you pay for your debt and at the same time, you should keep paying off your debt and not incur any more.

3. Set up a payment plan with your creditors.
Arrange a payment plan with your creditors so it will be easier for you to pay off your debt. Just explain first if you will do this, that your situation is only temporary and you are going to follow your agreement. When you pay off your debt, you should remember that you have rights, too, and there is a law that protects you from debt collectors. The Fair Debt Collection Practices prohibits debt collectors from calling the debtor before 8 am, after 9 pm, and when they know that your employer does not approve of their calls. It protects debtors from harassment. Also, they should honor your written request telling them to stop harassing you.

4. Avoid defaults and foreclosures
Most car loan agreements allow creditors to repossess your car if you’re on default. If you want to get it back, you need to pay the available balance as well as the towing and storage costs. So if a default is highly possible, sell the car right away and pay off the loan from the profit you made instead of being on default, which is worse, because it will be marked on your credit report.

On the other hand, you should also avoid foreclosure if you are paying off your mortgage loan. If you can’t pay off your home loan, you can solve this problem by talking to your lender and see if he will agree to another payment plan with you. A lot of lenders are willing to suspend your payment schedule or set up a longer payment term. But if that’s not possible, you may try contacting a housing counseling agency. Some of them offer free assistance to anyone who has problems paying off their mortgage loans.

5. Use the service of a debt help settlement company.
A debt help settlement company is there for those who are too overwhelmed by their large debt problems. You will need their help if you:

a. avoid calls and mails from debt collectors because you want to avoid their harassment
b. you don’t want to go out because you feel bad about your financial state
c. you just don’t know exactly how to pay off your mounting debt that seems so big you can’t do it on your own

You should first do some snooping before you give your financial information to a debt reduction management company. But you should prepare, though, to follow their advice, because your debt help counselor will follow up on you to make sure you help yourself and reduce your debt.

There are many other advice regarding debt management and settlement. Visit my blog for more tips on personal finance.

By: Marie Roxas

In this article we are going to learn about Suze Orman’s 9 Steps to Financial Freedom. I will be explaining each step in full detail and then giving you my opinion on how the step is/isn’t applicable to personal finances and benefiting you. 9 Steps to Financial Freedom is a book that Suze Orman wrote in 1997. It is now over 10 years old but has stood the test of time and is still liked by many today.

Suze Orman’s 9 Steps to Financial Freedom:

Step 1 – Seeing how your past holds the key to your financial future

In Orman’s 1st step of her book she talks about how most people have some past memory that effects the way they perceive money and finances. In this chapter she helps you to realize that past memory and move on from it so that you can start new with your personal finances.

This steps to be a bit off and useless for most people. There are some people who have bad memories regarding money but in general most people are just to lazy and undisciplined. For most people it is an issue of motivation and not an issue of a bad experience. This step could be helpful to some people to get them started but it not broad enough to be applicable to a lot of people.

2 – Facing your fears and creating new truths

Here Orman makes a connection with the first step in the book. Orman has her readers look at their past memories and see how they cause them to act toward money in their current life. Orman suggests writing out a list of your money related fears and then realizing how to overcome these.

Again, I find this step to be more of a mental exercise for those that need it but not to be widely applicable to all people. The first two steps in her book seem to be more related to a traditional self-help type book and not a personal finances or financial planning book.

Step 3 – Being honest with yourself

In the third step of Suze’s book she goes into detail about budgeting. Suze suggests getting all of your past records and realizing where you money has gone over the past 2 years. The plan is to use previous records to determine your budgeting plan for the future.

This step is extremely good and something we should all consider. Setting up a budget to track our income in the most basic and important step in starting on a quest for financial freedom. The only issue here is having 2 years of old records. If you do not have 2 years go with whatever you have to make estimates for the future.

Step 4 – Being responsible to those you love

In step 4 Suze talks about setting up your money so that it can help your loved ones if you were to pass away. The basic setup of this step tells you all about insurance, estate planning, trusts, and wills.

I find this step to be very important but it seems to be out of place. I think that before you can begin to plan for others once you are gone you need to get your own personal finances in order. If you do not get your own finances in order you won’t have anything to leave to your heirs and it will be useless. Steps 4 & 5 should be switched.

Step 5 – Being respectful of yourself and your money

Here Orman focuses on helping her readers sort through and organize their own finances. This chapter includes information on putting money towards retirement, eliminating debt, and many other things. Orman writes how taking control of your finances can make you feel a whole lot better about yourself.

This is another one of Orman’s best steps out of the whole book. This is the most important step in achieving financial freedom. Without the proper savings, debt elimination, and future financial planning people cannot even start to think about financial peace.

Step 6 – Trusting yourself more than you trust others

This step talks about how people should trust themselves over others when making financial and investing decisions. It says that people should always go with their gut-feelings too.

I find this step to be completely inaccurate. People should always seek out the proper advice about financial planning from experts and have all moves planned out rather than going with a gut-feeling at any moment. I think that all people should have a personal financial advisor to help them with their finance and investing decisions. It is important to note that a financial advisor is only an advisor and all final decisions should come from you.

Step 7 – Being open to receive all that you are meant to have

In this step Orman goes into detail about money not bringing happiness but the opposite being true. It also goes into detail about the joys of donating to charities.

Here Orman contradicts many statements from the earlier in her book. In earlier parts of her book she continually talks about happiness and feeling better about ones self but then says the opposite here. She says that you get happy first and then you achieve financial freedom. What does that even mean? The two are completely independent of each other in both ways.

Step 8 – Understanding the ebb and flow of the money cycle

Here Orman writes about how sometimes all the tough and bad times in our lives teach us really good lessons for our futures. She talks about how to make the most from our past failures to see success in the future.

I think that Orman hits the nail on the head with the accuracy of her statements but again, what does this have to do with the nuts and bolts of financial planning?

Step 9 – Recognizing true wealth

In the last step of Orman’s book she writes about how the real value in life does not come from money and wealth.

Again, I feel this section contradicts some of what Suze says throughout the book but I also think that it is very true.

Overall, Suze’s 9 Steps to Financial Freedom is an excellent book for people who want to learn about the psychology of money and want to change their mindset about it. It is more of a self-help book for these people.

Her books give very little true financial advising plans and there is not much mechanical substance to it. I would not suggest this book for people looking for the nuts and bolts about personal finance advising. For these people I would suggest something by a different financial advising expert.

By: Jesse Chettle

This is the third book in the Rich Dad’s series Robert Kiyosaki wrote after the hugely popular Rich Dad Poor Dad. Robert casual style of narration makes it both enjoyable and easy to digest the close to 400 pages book. I took about six weeks to complete the book.

This book focuses a great deal on the B-I side of the quadrant as well as the B-I Triangle. To become rich, we have to be both an investor and a business owner. To be a really great investor is to become an ultimate investor. A person who invests from the inside of the company, who takes the company public and sell the shares to outside investor. Robert also explained all the components of his B-I triangle, which Rich Dad taught him, to build a strong business dedicating one chapter for each component. If any of the component of the business is weak, the business will be in trouble and fail.

Although Robert gives very clear explanation to every concept, you still find his explanation open-ended, requiring you to figure out what is best for your own financial future. I have learnt many lessons from this book and summarized here below:

The various investor controls needed Different level of investor e.g. accredited, sophisticated. Increase finanancial intelligence. The need to have 3 financial plans. One to be secure, one to be comfortable, one to be rich. Understand financial statements. The 90/10 rule of money. The tax benefits enjoyed by a business owner compared to an employee and self-employed. The difference between saving and investing. See the flip side of the coin for any investment. Living in the information age versus industrail age. What it takes and how fast to be a billionaire in the information age. and much more… I like to recommend this book to those of you who wants to be a better business owner and investor. It would be better if you had read the first two books “Rich Dad Poor Dad” and “Rich Dad’s cash flow quadrant” as it builds on the fundamentals of the two earlier books.

By: Raymond Heng