₦airaland Forum

God bless GEJ

Parents are often scared to talk to their kids about money.

Some lessons mean admitting mistakes; others signal unattainable goals. But the consequences of not imparting those lessons on your own kids could be more dire than ever. Unlike grandpa, who may have a pension and employer provided health insurance — most children now need to understand much more than basic budgeting. Big brother doesn’t have anyone’s back anymore.

Kids will need to understand how to save for their own retirement, manage health care costs and even cope with diminished Social Security benefits. Sounds like this is jumping the gun? It’s not.
Proper preparation of your children, even at a young age, can start them down the path of a successful financial life.

Talk early and often. Children start learning about money long before their first savings account, job or credit card. Begin the conversation even before they’re in school by talking about work and money. Avoiding the subject until your child needs a bank account can make the conversation hasty and confusing.

Everyday activities are teachable moments. A trip to the grocery story is a good time to explain price comparison, value and inflation. An ATM stop offers a chance to explain that money doesn’t actually come from a machine. You can discuss both earned income, investment returns and even inheritance. Opening bills is a chance to talk about payment for services, credit card debt and interest rates. Children need to be taught about debt, specifically loans and credit cards. Talk about insurance with teens, especially as they learn to drive or as you’re selecting what health care options are available to your family.
Follow a guide. There are online websites and even games that families can use to get the conversation going such as Thegreatpiggybankadventure. Other examples include Feedthepig.org, kids.gov and TheMint.org/kids.
Talk about giving. Children should learn that money doesn’t always need to be used for them. It can also provide assistant to others. Don’t just write the charitable check. Get the kids involved in the process by asking them to pick and vet charities. Websites like http://www.charitynavigator.org and guidestar.org provide information and ratings.

Encourage your kids to work for money. Not all teens have the time to work, but about half of college-bound high school students expect that they will have to foot some of the bill. Sometimes an odd job is just as valuable a learning experience as a steady job.

Start an allowance. Before your kids are able to venture out for their own jobs, even babysitting, teach them the relationship between work and money. You can even develop an incentive or bonus system for excellent cleaning.
Build a budget for things you provide. Take clothing or electronics: you can give them the chance to spend their category budget all at once or learn to save and look for the right item at the right price.
Open a checking and savings account. They will learn about fees, account maintenance and even interest. You can provide an incentive for thrift, offering a match if they put the money into savings, perhaps 25 cents on the dollar. Many banks and credit unions have special savings accounts and credit cards for students.

Teach them about investing and retirement savings. Waiting until that first full-time job to learn about 401(k) plans is a mistake. The sooner they start saving for retirement, the more they’ll benefit from compounding returns and good habits.

Teach basic investing. When the balance in a savings account reaches $1,000, show them how to open a custodial investment account. A good initial investment is a broad-based index fund. Teens can go online and research performance and ratings.
Open an IRA or a Roth IRA. What better way to show the importance of retirement savings than to open a retirement account. You can even fund one for your child as long as he or she is earning a paycheck.

What not to do. Don’t get frustrated because your kids don’t take your advice. Kids need to make some financial mistakes in order to understand the consequences

Don’t be a lifeline. A bad purchase or a bounced check is a relatively painless way for a young person to learn better money management skills, but you may need to intervene if they’ll damage their credit score. If they get into debt, help them strategize how to pay it off and why.
Don’t set their goals. Let kids set their own financial goals, say financial advisers, or they’ll never learn the basics and discipline. SOURCE www.moneywisdomtips.com

I’ve said many times that success in managing personal finances is pretty simple: spend less than you earn over a long period of time. If this is the heart of your financial plan, it’s likely that you’ll be prosperous.

That said, there is one other thing you’ll need to do – you must avoid the financial pitfalls that can significantly derail your finances. I call these the worst money moves anyone can make. I’m listing them below in countdown fashion along with some suggestions for avoiding them. Here are the top ten IMO:

10. Not having an emergency fund.

An emergency fund is your first line of defense against unexpected financial problems.

And believe me, unexpected financial problems happen rather regularly. Washing machines break, cars need repairs, kids need braces, and so on. It’s a fact of life.

If you don’t have an emergency fund, you will likely have to borrow money when an emergency pops up. And as we’ll see soon, borrowing is an even worse money mistake.

So how much should you save in your emergency fund? There’s actually a scale of different emergency fund suggestions based on your financial/work/life situation but a good rule-of-thumb is to have six months’ of living expenses saved up. In addition, be sure to keep your emergency fund in a safe place — you certainly want it to be there when you need it. Don’t worry about earning a ton on it, no one ever became rich by making money off their emergency fund, just make sure it’s safe and accessible.

9. Neglecting to make a will.

Money magazine reports that 57% of Americans don’t have a will, including 69% of parents with kids under 18.

Without a will, guess who decides what happens with your finances and your kids? The state! Do you really want to let your state decide these issues for you?

To avoid this bad money move, you need a will and the other documents that account for good estate planning – probably at least Patient Advocate and Medical Records Release documents for most people. For some guidance, see Four Documents You’ll Need as Part of Your Estate Plan, Five Questions to Choosing a Guardian, and 12 Critical Things Your Family Needs to Know.

8. Not having enough insurance.

I think of insurance as a very big emergency fund that supplements your cash emergency fund. It covers the things you couldn’t save up to cover in advance, helping to replace/protect the largest assets you have – your career, your home, your investments – if you experience a major accident, death, or injury.

I’ve already detailed the types of insurance we all need as well as some general guidelines for each of them. In addition to that list I’d add umbrella insurance to cover general liability – in case you’re sued for one reason or another (and we all know what a sue-happy country we live in these days.)

One more bit of advice: do not go overboard and become over-insured. No one needs to win the lottery when misfortune occurs (for example, your family most likely does not need a $10 million life insurance policy on you. If you have one and you don’t make $1 million a year or so, you’re probably spending too much on life insurance.) But you do want to be sure you have enough insurance to replace your assets in times of trouble or loss (for example, you want life insurance to cover these costs).

7. Marrying the wrong person.

There are actually two major financial mistakes related to marriage: marrying a spendthrift and getting divorced.

Couples where both spouses know and apply financial basics do much better than ones where one or both spouses have bad financial habits. The Millionaire Next Door says:

What if your household generates even a moderately high income and both you and your spouse are frugal? You have the foundation for becoming wealthy and maintaining your wealth. On the other hand, it is very difficult for a married couple to accumulate wealth if one is a spendthrift. A household divided in its financial orientation is unlikely to accumulate significant wealth.

In addition, a divorce is a major hit to any couple’s finances. According to the Journal of Sociology, those who divorced saw their wealth shrink by 77 percent – a larger decline than would occur by simply splitting a couple’s assets in half.

So here’s some advice regarding money and marriage:

Discuss finances prior to marriage (here are some questions to ask).
Marry a money-wise spouse.
Stay married – if you have financial issues, seek counseling or financial help.
Share in financial decisions while married.

6. Not saving.

As I noted earlier, the formula for financial prosperity is pretty simple:

Spend less than you earn
Do this for a long time

If you do these two things, you will be wealthy. Why? Because you’re saving money.

On the other hand, if you’re not saving, you’re not making progress financially. And the longer you wait to save, the harder it will be to catch up later.

The proper financial move is to save a portion of every paycheck you receive. A good rule-of-thumb is to start out by saving at least 10% of your income, and from there the amount should increase over time.

And some may ask just what you are saving for? Any major expense you know you’ll have in the future: a house, retirement, cars, college costs for kids, etc.

5. Buying too much house.

A house is probably the biggest purchase most of us will ever make. And unfortunately, many people buy homes incorrectly:

They let a bank or real estate agent set the amount they are able to spend on a home.
Then they find a home they “love” that is even more expensive than that.
So the home becomes a financial stretch to the point where they can barely make payments – as long as nothing goes wrong.
Then something goes wrong – which it always does because life happens.
But because things are so tight, when a money issue occurs (sickness, pregnancy, unexpected expense, and so on) everything falls apart financially (or at a minimum it starts the financial drop).

Instead of that, here’s my formula for buying a house:

Buy a house you can easily afford – one where you can make payments and still have some financial cushion.
Put at least 20% down.
Put extra payments into your budget as well as bonuses, gifts, second job income and all other “extra” sources of money into paying off the loan (assuming you have no other debt).
Become debt free in 7-10 years.

That’s what we did and it worked like a dream.

For those of you who want a bit more, the book Stop Acting Rich gives more precise rules:

If you’re not yet wealthy but want to be someday, never purchase a home that requires a mortgage that is more than twice your household’s annual realized income.

4. Waiting to invest.

There are three factors that determine how well your investments (savings) perform:

The amount that’s invested (how much is invested)
The return rate on your investments
The length of time they are invested

Most of what we see in the media deals with getting the best return on your money. But actually, the factor that most influences the value of your investments is the time you have it invested.

And the longer you wait to save and invest, the more you’re costing yourself.

Here’s an example (PDF) that illustrates the power of saving early:

Smart Saver starts saving $3,000 every year, starting at age 20. After 10 years, her $30,000 total contributions are worth $47,000 (at an annual growth rate of 8%). At age 30, Smart Saver stops saving and makes no further contributions. She just lets the money grow at an 8% annual rate of return for the next 30 years, until age 60. At age 60, the $47,000 will have grown to $472,000.
Her sister, Late Saver, waits until age 30 before she starts saving $3,000 a year. Unlike her Smart Saver sister who stopped saving after 10 years, she doesn’t stop saving. She saves every year for 30 years, from ages 30 until she is 60. At age 60, her account is worth only $367,000.

Now I’ll add a couple extra points to this example to show how Smart Saver could really have made it big in saving and investing for retirement:

If Smart Saver would have kept saving $3,000 her whole life, she would have ended with almost $835,000.
And if that $3,000 would have been $5,000, she would have ended with $1.4 million.

So the solution for this money problem is to:

Save early
Save often
Save more (as a percentage of your income) as time goes by

3. Being deep in debt.

I have noted previously that leading investing company Morningstar says that, “Over a lifetime, the average American will pay over $600,000 in interest.”

$600k? Ouch! This is a pretty big example of the fact that debt is very costly — it can rob you of hundreds of thousands of dollars.

The solution to this mistake is simple:

If you’re in debt, start taking my steps for how to get out of debt today.
If you’re not in debt, don’t get into debt.

2. Not working to maximize your career.

I’ve stated (again and again) that your career is your most important financial asset. This is because the average American can reasonably expect to earn in the neighborhood of $2 million during his lifetime. But if that person works hard and grows his income at 8% per year, he could have more than $3 million more than that. If he doesn’t, his $2 million can dry up to a bit over $1 million (or even less). So not working to make the most of your income can cost you millions of dollars.

To avoid this bad money mistake, simply develop and execute a plan to make the most of your career.

And let me add a couple other mistakes you do not want to make because they can derail your career and your income as well:

Do not quit your job without another job lined up. Yes, it may be stressful to work where you do, but not having enough to eat is much more stressful.
You must take care of yourself physically. Eat well, get plenty of rest, exercise, and enjoy life. Your career and its earning potential are dependent on you being able to work.

1. Over-spending.

If your outflow exceeds your income, then your upkeep will be your downfall.

The first step to gaining wealth is spending less than you earn — it’s vital to making any financial progress. So when you over-spend, you’re doing the most damage possible to your finances.

Here’s what Stop Acting Rich says about the issue:

Most people will never earn $10 million in their lifetime, let alone in any single year. In fact, most households (97%) are unlikely to ever earn even $200,000 or more annually. So what if you are unlikely to become rich by generating an extraordinarily high realized income? The only way you will become rich is by being like those millionaires at the other end of the continuum: by living well below your means, by planning, saving, and investing.

There are two types of over-spending that can ruin your finances:

Over-spending on the little things – the small amounts that seep out of your pockets here and there and eventually become large.
Over-spending on the big things – homes, cars, boats, cottages, and so on.

The top complaint I hear from people who don’t have balanced budgets is, “I don’t make enough money.”

I’m telling you that in the vast majority of cases (probably 95% or more), it’s not the amount these people make – but the amount that they spend that’s the problem. (In some cases it’s true that people simply don’t make enough money to save, invest, etc. As such, they need to concentrate on increasing their income as much as they need to control over-spending.)

My wife and I once counseled a guy who made $130,000 a year. This was back in the early ‘90’s, so $130,000 was worth something (it’s still pretty good today.) When I saw his income, I thought “this will be a piece of cake” to make a balanced budget. But once we got through the mortgage on the mansion he owned, the four luxury cars he leased for himself, his wife, and his kids, and the amounts they spent on clothes and vacations – they had spent it all and then some.

And people who make much, much more can spend it all as well. Here’s a quick review of several wealthy people who spent more than they made – despite the fact that they made a bundle:

Mike Tyson — The famous boxer reportedly earned $300 million in his career, but it wasn’t enough to support a lavish lifestyle. He filed for bankruptcy in 2003, owing $27 million.
MC Hammer – Despite a former $33 million income, he filed for bankruptcy in 1996.
Scottie Pippen – The former Chicago Bulls star lost $120 million in career earnings due to poor financial planning and bad business ideas.
Evander Holyfield – Four-time boxing champ reportedly made over $250 million in cash during his boxing career, but despite this he is now flat broke.
Some others who made big money and spent it all and then some include: John Daly, Nicolas Cage, Bernie Kosar, Gary Coleman, Kim Basinger, Don Johnson, Michael Vick, Andy Gibb, Isaac Hayes, Lenny Dykstra, Latrell Sprewell, Mick Fleetwood, and Marvin Gaye.

This is why over-spending is the #1 money mistake – because no matter what your income is, if you spend it all plus some, you’re going backwards financially and you’re losing ground.

What to do to combat this: develop a budget and live on it.

I’ve talked about the 10-10-80 budget – give 10%, save 10%, live on 80%. IMO, this is a good, simple budget to begin with.

From there, the 10’s should get larger as you give and save more through the years. The 80% should become a smaller number over time. You may still end up spending more in total because your income is rising too, but as a percentage of what you earn, spending should decline as income increases.

So, that’s my list of the worst money mistakes anyone could make. What do you think of it? Did I miss anything? Is the order wrong? Feel free to add your thoughts in the comments below.SOURCE www.moneywisdomtips.com

na wa ooooooooo

What if Sept 11 was in Naija.....
A political aspirant was asked the question during one of those debates,

QUIZ: After the tragedy in New York and Washington September 11, the question arises:
WHAT WILL HAPPEN IF NIGERIA IS ATTACKED?
...
ANSWER:Well ... if that happens, there can be no comparison. That's because in Nigeria we are much better prepared for these kind of attacks, given the following reasons:

1. We do not construct exaggerated elevated buildings.
2. We all get on the job late in the morning, so at 8.45am there won't be sufficient people to kill.
3. Fire fighters and police officers will do their utmost not to get to the spot in time. They will reach there just when everything is over, so there will be no casualties among them.
4. The Nigeria airways would surely have fouled up the terrorists' plans by being delayed again, and of course losing the luggage - containing the bombs.
5. A Nigerian would not have used his cell phone to call home. He would've hit the terrorist with it over the head.
6. If a terrorist was living for one year in Nigeria (Oshodi), he would've been robbed and molested so many times he would've given up and gone back home long time ago.
7. In Nigeria the terrorists would not have gotten the flight manual, they would've had to pay for it.
8. In Nigeria juju would make all the passengers disappear before the thing hit Mushin or Ajegunle.
9. Osama would be so confused with who is really in power

You see...in Nigeria we are well prepared.

This is all lies

Lol

http://m.facebook.com/story.php?story_fbid=3582910222840&id=1575764303&refid=8&_ft_=qid.5741771243058236647%3Amf_story_key.4324062274047638023

Chelsea will pay for their sins today

Nonsense

Congrats girl

I think Messi may get it again,no player from the 2 playing the final except Gomez is looking it.Well i don't know all the parameters they use.Let us know your views and votes

Good move

What will appease this igbo people,always seeking revenge

Any time any day,Obasanjo is one of the best things that has happened to this nation

Ronaldo make sure u don't score again

Tuberclosis Joshua's death is close

I agree

Lets learn to appreciate JTF...

http://m.facebook.com/photo.php?fbid=443201069029880&id=167019949981328&set=a.171376319545691.44985.167019949981328&refid=7&_ft_=qid.5737663080697163374%3Amf_story_key.9027076959335612519