Author Archives: Daniel

The Financial Times – Stay on Top of the World

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Sponsored Video below.

Too often, we’re given information without knowing what to do with it. Almost all of our news sources are biased in some way, so how are we to know what’s valuable data and which data are being selectively chosen to prove a point? They can’t give us all the information because we’re looking for analysis, but one company came up with an innovative way to present it.

The Financial Times recently displayed the following video in New York’s Grand Central Terminal. It tackles the question of how the United States stacks up in various financial areas as compared to other countries.

It’s not all that surprising that the US ranks first is a few areas, but also ranks lower down the list in a few (sometimes surprising) categories. The often entertaining graphics cover a number of financial issues: total GDP, GDP per capita, economic growth rates, spending on education, cost of living, wages, etc.

Some of the statistics I found most surprising include things like: despite the fact that the US has a higher GDP than Russia, Brazil, China, India, and South Africa combined, China has a higher growth rate than the US. I think everyone knew that, but the surprising part is that Qatar’s economic growth rate doubles China’s.

Another cool fact for impressing your friends is that even though Americans enjoy (on average) the highest wages in the world, our friends in the Netherlands make (on average) more than us per hour, when their comparatively shorter workweeks are taken in to account.

The last tidbit I’ll leave you with is something that will upset even the most cheery of the American workforce. Out of the US, Brazil, Russia, China, and India, Americans are legally entitled to the fewest yearly vacation days, with a whopping zero guaranteed. This is in contrast to Brazil’s 30, Russia’s 28, India’s 12, and China’s 5 days off per year.

So how does America stack up? We have it pretty good here in the land of the free and home of the brave. We have apparently some catching up to do (or slowing down) in terms of working shorter weeks, and getting more days off, but other than that, we make a pretty good living.

Readers, what did you think of the video? Did you like the information displayed in this format?

Sponsored by Financial Times

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Investing in the Long Term

Written by in Investing
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Recently, I’ve been thinking about retirement – what it will mean and how I’ll manage. Retirement planning, in a sense, has been on my mind since I joined the workforce. And while it hasn’t always been possible to invest, I’ve tried when I could. I have a pension and can also expect social security, and have done what I could to maximize those benefits.

But it has also occurred to me that beyond managing my pension and social security, I should consider other things, such as whether I might one day need some sort of long-term care. It’s important to save money and budget planned and unplanned expenses, but all that planning would be meaningless if my nest- egg were to disappear in the event of illness – or let’s face it – plain old age.

Based on the statistics, it seems like a good idea to invest in a long-term care insurance policy. However, I want to be clear that insurance is not an investment, per se. Insurance is protecting yourself against an uncertain future, while investments are intended to appreciate and give you a return on your initial sum.

Protection Against the Future

Long-term care insurance qualifies as a protection against your future, and in that sense, it is an investment - and one that should be made wisely. It’s important to understand that long-term care insurance is too expensive to purchase when you need it most – that is when you’re older and your health is deteriorating. Also, some plans will disqualify you if you have a preexisting condition.

Plan Early, Benefit Later

Long-term care insurance is affordable and will be there when you need – if you think ahead and look into your options early. You should realistically assess all of your assets and income, and know beforehand whether you have family members who could potentially support financially, if necessary. Consider that usually you will have the option of lowering your amount of coverage if you plan early in life, but it can be increasingly difficult to raise coverage as you age and your health declines.

What to Consider When buying Long-Term Care Insurance

Make sure you fully grasp the limitations of the policy you are considering. Depending on the type of policy you choose, certain items may not be covered. It is important to ensure that you have planned for possible expenses that fall outside coverage, such as medical supplies, medications, and linens.

Aside from health and age, external factors can lower the cost of LTCi. Location will affect cost, so if maintain a proximity to family and friends, it is important be sure to understand the cost of care in your area. Additionally, you can see if your state offers a Partnership Program, a collaborative effort between the state and private insurance companies selling policies in that state and to state residents. A partnership qualified policy provides the purchaser with the ability to apply for Medicaid under a feature called “asset disregard.”

Consider your options with your family and then talk with a professional before making a decision. And remember, don’t buy out of fear and don’t buy when you are highly emotional; this decision merits a steady head and the ability to plan for contingencies.

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Our Decision To Join Our Finances

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When Lauren and I got engaged last year, we had an important decision to make: did we want to combine finances or keep them separate?

We are on the same page financially, we have similar goals, and are equally frugal. We buy what we want but also have things we want to save for in the future.

There are couples who keep their finances separate and there are others that combine their finances. It can work either way, so every couple needs to find out what works for them.

Advantages of Keeping Our Finances Separate

Since we have the same goals, why combine finances? Lauren doesn’t need me looking at each of her purchases and questioning the little things. We’re focused on the big picture, so why worry about individual transactions? She should be able to spend money guilt-free without me looking over her shoulder.

As we began to talk through it, we realized one thing: we didn’t want to have an allowance.

Since I am working full time and Lauren is in school full time, keeping our finances separate meant that I would be transferring money from my account to hers. We thought that would have the potential to create a rift where I would want to reduce the amount she gets each month. This was definitely something that wouldn’t work for us.

So, we thought about joining our finances and what that would mean for us.

Advantages of Combining Our Finances

We’re about to get married, and we love thinking about how everything will be shared. “Ours” is our new favorite word. We’ll be able to consolidate accounts, which I like. Lauren won’t feel like I control how much she spends.

Lauren has some student loan debt (and maybe a few instant loans I am unaware of?), and by combining finances, we can pay down the debt together. With separate finances, Lauren would be responsible for her student loan debt. It would cost us a lot of money if we had to wait until she finished school to stay paying off her loans.

However, when we combine our money, she’ll have my help paying down “our” loans. This is especially true since she has some loans at a high interest rate that I would love to pay off in the near future. Now, we’ll be able to tackle them together.

Both emotionally and financially, it makes sense for us to combine our finances.

Readers, do you have separate or joint finances with your spouse? What do you think of our decision?

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Secure Your Future by Developing Multiple Streams of Income

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If you are like most people, you work hard at your day job. Maybe you used to make what you considered a good salary, but now, with the economy, your income seems to be dwindling. Perhaps you haven’t gotten a raise in several years, or if you have gotten a raise, you simultaneously face an increase in health insurance premiums, negating your raise. Then, there are the increased gas and groceries prices which are costing more of your paycheck. To make matters worse, your employer may ask you to work more hours than ever before and also assume other work that wasn’t previously part of your job.

Sound familiar?

In this kind of environment, you may think it is wise to develop alternative streams of income, and I couldn’t agree more. The more income streams you create, the more money you are able to generate and the more secure your finances become. If you lose one source of income, there are several other streams of income from which you can draw.

The Internet has made it much easier for people to develop additional income streams. There are so many ideas you could choose from. You could choose to blog, become a freelance writer, be a virtual assistant, or create an online store.

Of those choices, the one that is the most passive is an online store. Decide what you want to sell, find your product, set up the website, chose a secure method to offer for payment (there are many merchant account processing businesses to choose from), and launch your store.

Of course, it is not as easy as that. You will need to market your business and advertise, and you will also need to handle customer orders and complaints as well as keep inventory. However, you can make your online store more passive by selling your own ebooks, for example. Then, you don’t have to worry about keeping up with inventory. Sure, you invest your time in the beginning when you write and produce the ebooks, but once you have marketed them, you can find that you sell copies and make money while you sleep!

The current economy has made it difficult for many people to get ahead. Now is the time to take steps to change that. Decide what is the best way for you to create multiple streams of income. You will feel much more secure knowing that you are not solely relying on your employer and his decision to give you a raise or not; you have also created your own income sources.

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