Budgeting Basics

Easy Money Planning

Are you worried about how much money you are spending, but you cannot ever seem to spend less? This easy accounting software gives you the means to track your spending in a way that you can SEE, so that you will be able to much more carefully manage your money in the future. Most of the problems that people face involving money come from the fact that most people do not pay careful attention to their accounts; if you cannot physically see how much money you are spending you are not likely to ever change your spending habits. This software gives you the ability to track your income and expenses and allow you to directly see what you need to cut in order to make your accounts correct for that month. We have set up the spreadsheet where you need to input your amounts; literally all you have to do is enter numbers and we can help you improve your spending habits today! More here...

Easy Money Planning Summary


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My Easy Money Planning Review

Highly Recommended

Easy Money Planning is a professionally made product. Professionally done by acknowledged experts in this area of expertise.

In conclusion, I would say that the learning curve for this software is quite steep and lengthy to get the full benefits from it's use. But if you are prepared to put in the hours needed to learn it's full capabilities this piece of software will give you many times that back. I can recommend this software to anyone.

Spending Habits

Now we want to take a look at your current spending habits. One of the secrets of growing your net worth is finding some extra money each month to help fund another investment (and another, and another, and another). The good news is that you can create this money by investing, working harder and or smarter, or you can create it by saving. Either way, you'll have more on the bottom line.

Your Advisorgood Or

Have you been asked to show your tax return to your advisor Is he or she in contact with your CPA Does your advisor ask about your 401(k) at work A good financial advisor needs to know everything about your financial life. If your 401(k) at work is heavily weighted in technology stocks and stock funds, your portfolio with your advisor shouldn't be. Make sure your advisor knows everything he or she needs to know in order to make the best possible recommendations to you. If your advisor doesn't seem to care, or isn't listening when you bring it up, it's time to find someone else who will.

The Essentials of Stock Investing

Understanding the essentials of stock investing and investing in general will only help you, especially in uncertain economic times. Stocks may even touch your finances in ways not readily apparent. For example, stocks are not only in individual accounts they're also in mutual funds and pension plans.

The Why and Hout of Mutual Funds

Before you're even ready to start investing in funds, your personal finances need to be in order, so in Part I, I give you some financial house-cleaning tips. You also discover the importance of fitting mutual funds to your financial goals. After your finances are shipshape and you've identified your goals, you are ready to find out how to pick great funds, how to avoid losers, where and how to purchase funds, and how to read all those pesky reports (such as prospectuses and annual reports) that fund companies stuff in your mailbox. Part I touches all these bases.

Assembling a Team of Experts and Advisors

In addition to providing expert guidance and advice for seizing opportunities and avoiding common pitfalls, experts deliver leads to potentially profitable properties, affordable financing, and quality contractors. They can assist you in managing your finances and in renovating and selling your property for top dollar after you purchase it. And, by delegating some of the workload to others who are better equipped to handle it, you free up time and resources for finding the most profitable opportunities.

Introduction Between Scylla and Charybdis

This book is written for people of moderate income engaged in risking their personal finances on a speculative venture. It is for the brave new world of stock and futures day trading, spread betting, options hedging, or any activity requiring courage owing to financial and personal risk.

Funding Your Stock Program

You may as well call them dot-com-and-go. You can learn from their mistakes. (Actually, they could have learned from you.) In the same way that profit is the most essential single element in a business, a positive cash flow is important for your finances in general and for funding your stock investment program in particular.

Planning for Being

As rich dad said, The problem with being young is that you don't know what it feels like to be old. If you knew what being old felt like, you would plan your financial life differently. He also said, The problem with many people is that they plan only up to retirement. Planning to retirement is not enough. You need to plan far beyond retirement. In fact, if you're rich, you should plan for at least three generations beyond you. If you don't, the money could be gone soon after you're gone. Besides, if you don't have a plan for your money before you depart this earth, the government does.

ReVieut your insurance coverage

In reviewing your insurance, you may also discover unnecessary policies or ways to spend less on insurance, freeing up more money to invest in mutual funds. (See my book, Personal Finance For Dummies, 2nd Edition, published by IDG Books Worldwide, Inc., to learn about the right and wrong ways to buy insurance and whip the rest of your finances into shape.)

Accounting for taste and a whole lot more

I Assets minus liabilities equal net worth. In other words, take what you own (your assets), subtract what you owe (your liabilities), and the rest is yours (net worth) Your own personal finances work the same way as Microsoft's (except yours have fewer zeros at the end). See Chapter 2 to figure out how to calculate your own net worth. Accounting can be this simple. If you understand these three basic points, you're ahead of the curve (in stock investing as well as in your personal finances). For more information on how to use a company's financial statements to pick good stocks, see Chapter 11.

Benefits to Tenant Buyers an Eager Market

Qualifying for a lease option may be no more difficult than qualifying for a lease (sometimes easier). Generally, your credit and employment record need meet only minimum standards. Most property owners will not place your financial life under a magnifying glass as would a mortgage lender.

The Biggest Risk of

And that is exactly why my rich dad said the average investor does not make much money in the market. Rich dad said, The average investor has the count your chickens before they hatch mentality. They buy items that cost them money each month, yet call them assets based upon opinions. They count on their house going up in value in the future, or they act like their house can be sold immediately for what their real estate broker told them it is worth. Have you ever ended up selling your home for less than what your broker, or banker thought it was worth I have. As a result of basing financial decisions on these opinions and expectations, people lose control over their personal finances. That to me is very risky. If you want to be rich, you must take control over your education as well as your personal cash flow. There is nothing wrong with hoping the price of something goes up in the future as long as you do not lose control of your finances today. He would also say, If you're so...

Make sure you get the best funds

If you've optimized the structuring of your finances and you have a chunk of money that you're willing to pay as a sales charge to invest in load funds, make sure that you're getting the best funds for your investment dollars. The criteria to use in selecting those load funds are no different from those used to select no-load funds

Other Economic Indicators

The retail sales report is a measure of the total receipts of retail stores from samples representing all sizes and kinds of business in retail trade throughout the nation. It is the timeliest indicator of broad consumer spending patterns and is adjusted for normal seasonal variation, holidays, and trading-day differences. Retail sales include durable and nondurable merchandise sold, and services and excise taxes incidental to the sale of merchandise. Excluded are sales taxes collected directly from the customer.

Use Compensating Factors to Justify Higher Qualifying Ratios

Types of Compensating Factors What types of compensating factors might lenders consider Virtually anything positive that reasonably demonstrates you can make your monthly payments responsibly and control your finances. Here are a dozen examples Put Your Compensating Factors in Writing After you've developed a list of reasons why you can afford the mortgage you want, put your reasons in writing. Get supporting letters from your employer, minister, former landlords, clients, customers, or anyone else who can vouch for your good character, creditworthiness, job performance, earnings potential, or personal responsibility. Sometimes, too, it's a good idea to write out a household budget. Deliver all of your evidence to the loan underwriter. With good explanations, you'll break through qualifying guidelines that would deter or delay other ill-prepared investors.

Whats needed from you

To get started on your loan approval process, your lender will ask for some information concerning you (the borrower) and your finances. These documents need to be given to your lender as soon as you have a signed purchase contract in hand. These items from you set everything else into action and headed toward approval. Here's a list of things that the lender needs from you

Whats needed regarding the property

Besides needing info regarding you and your finances, your lender also needs certain items concerning the property itself. She uses these documents to start building a case of why this property is a good risk for the multimillion dollar loan that you're seeking. You need to get these items to her within five days after the purchase contract is signed. Here's a list of things that your lender will request from you

Filling Out a Loan Application

You should be familiar with FNMA Form 1003, a standard loan application form used by most mortgage brokers and direct lenders to gather information about your finances. You should also have one filled out on your computer that you can provide to your lender (you can download a fillable Form 1003 on my Web site at < www.legal wiz.com 1003.htm> . You should always fill out a Form 1003 truthfully and honestly, but, like income tax returns, there are many gray areas when it comes to stating your income, debt, and assets. If you have any doubt, have your mortgage broker review it before submitting it to the lender.

Personal Consumption Expenditure PCE Deflator

Because consumers are constantly adjusting their spending patterns based on price levels and changes, there is no question that the PCE deflator shows a slower rate of inflation than the CPI-U or the chained CPI. While this reflects more of what consumers are paying, it may not reflect a true cost-of-living because consumers may not be equally well off when they change their spending based on prices (see Figure 7.4). Sometimes we change our spending patterns toward lower priced goods because we are forced to (due to income constraints), not because we think that eating manufactured crab product is better than eating real crabmeat.

No Documentation and Nonincome Verification Loans

The best defense to these tactics is a good offense speak to your lender or mortgage broker up front. Identify documentation issues up front, educate the lender about your finances, and be truthful. The more a lender suspects you are hiding something, the more documentation the lender will ask for.

Impatience with Fools

At what hotel do you stay and where do you eat when you have to go to your favorite city on business Do the answers change when you are paying the bill What class do you fly on business What class do you fly on vacation Most people have different spending habits on expense accounts than when it is their own money. This is human nature, not good and evil. As soon as it is the managers' own money, spending habits change.

Neat brokerage account options checks and debit cards

Financial life by saving you from writing a check every month to pay your I ffOj credit card bill. On the other hand, you give up the float the free use, until the credit card bill is due, of the money that you owe because debit cards quickly deduct the money owed from your account. Some brokerage accounts come with even more features that make organizing your finances easier, such as unlimited check writing and a bill payment service. These services cost more money at Fidelity, for example, you must put more money into your account ( 10,000 instead of 5,000), pay a 5 monthly service fee, and also pay an annual account fee of 24 if you don't place at least one trade per year.

Addressing Selfsabotage Behaviours

Vacations Take regular small breaks and go somewhere or do something that you find fun. Successful traders take a break every six months or so for a couple of weeks and try not to bring the market with them. It depends on your finances of course and it has been my personal experience that short breaks away from home incurring minimum costs are as much fun as more expensive international sojourns.

Do Not Let Bad Credit Be an Anchor around Your Neck

There is nothing worse than living with bad credit. If you have it now, make yourself a promise that you will solve that problem as soon as you can. The quicker you can go from a negative to a positive, the better your chances for a future as a real estate investor. If you are truly up to your neck in debt, the best solution may be to talk to a good bankruptcy lawyer. This can help get you back on the positive side of your finances, and there is no negative stigma to bankruptcy. Some of the most wealthy real estate investors in America have found out that bankruptcy was their road to success.

Persistence In Economic Series

As discussed earlier, the requirement to build in momentum effects will depend very much on why and how the model is to be used. Other persistence effects that sometimes have to be considered in economic modelling are seasonal effects. For example, retail prices tend to show a marked (calendar) annual effect as a result of systematic variations in spending patterns through the year. We do not consider the modelling of seasonal effects in this chapter as our focus is more on financial instruments, which will typically discount known seasonalities and therefore do not exhibit very strong seasonal patterns.

How to Avoid Mistake

The alternative of building many joint ventures. This enables you to do projects on a deal-by-deal basis. You do a deal, if it works out, you do another and another and so on. That way, you're not bound by a partnership, and you're not obligated to each other's personal finances. When you outgrow the relationship, you simply move on to new joint ventures.

Commentary On Chapter

If you perennially struggle to make ends meet, have no idea where your money goes, find it impossible to save on a regular schedule, and chronically fail to pay your bills on time, then your finances are out of control. An adviser can help you get a grip on your money by designing a comprehensive financial plan that will outline how and how much-you should spend, borrow, save, and invest.

You Your Primary Asset

From start to finish the best use of your time will always be in generating leads, looking at real estate and in doing deals. At the Own a Million stage you'll have two new issues that you would be wise to include on your short list. First, you'll want to watch your finances with an eye toward maximizing your returns, which was described in the Money section. Second, you'll be holding others accountable to keep your time free.

Stage 1 Establish Your Base Camp

The first stage in building a financial track to run on is to establish your financial base camp. The key to this is to incorporate the Net Worth Model into your life. The first step is to create a personal budget and stick to it. This will allow you to make sure you don't spend all your money and will have some to invest. A personal budget will challenge you to live well but well below your affordable means until your financial wealth has been accumulated. By following a budget you will begin to understand why you buy expensive things after you become wealthy and not

Spend Less Save More

So what's the lesson that you can learn To build wealth in real estate, don't wait until you get the cash or credit and then decide to invest. No First, commit yourself to investing, then figure out how to come up with the money. You can keep wishing and a-hop-ing to invest someday. Or you can now decide to own property and immediately begin to shape up your finances and create a plan to invest.

Moneyand Fear

Sometimes our fear of money is directly linked to a past action that drives us. For instance, when you were young did you get an allowance What did you do with this money Save it or spend it Does your reaction to your allowance connect with your reaction to your current salary In other words, do you still find it hard to part with your money, or are you spending it the minute you get it By identifying your money habits, it becomes easier to change the bad habits. Of course, fear may drive you away from even looking at your financial habits.


Software and services based on open source technology for various enterprises. Its products include Red Hat Enterprise and Linux Red Hat Application Solutions, which include software for managing web content and software development. The Linux systems and storage availability was a sure thing for investors, one of those can't lose propositions. As Figure 1.4 shows, that is not how Wall Street saw it in the long run or how it rewarded the stock price. However, there is hope and as you can see, the stock is springing to life. The examples here illustrate how investors need to watch over their own investments. The markets generally overreact both on rallies and on declines. Sectors and business cycles change competition can force companies to lower prices, thus resulting in lower profit margins. Business models, consumer spending habits, and the leadership or management of a firm can change. That can have a direct impact on and can change the morale and the business structure of a...

Cash Flow Analysis

Many value analysts today place more emphasis on cash flow than on earnings. Cash flow is normally defined as after-tax earnings, adding back depreciation and other noncash charges. If we take two companies with similar outlooks, markets, products, and management talent, the one with the higher cash flow will usually be the more rewarding stock. In investing, as in your personal finances, cash is king. The company with good cash flow can capitalize on market opportunities that a firm with weaker cash flow sadly must let slip by. Firms with strong cash flow can also better ride out economic storms than their weaker competitors.

The Future

I often say to my classes, Be sure you have a plan. First, ask yourself if you are planning to be rich or if you are planning to be poor. If you are planning to be poor, the older you get, the more difficult you will find the financial world. Rich dad said to me many years ago, The trouble with being young is that you don't know what it feels like to be old. If you knew what being old felt like, you would plan your financial life differently.

Money Management

Up until that point in my life, I had been fairly conservative in my personal finances and was lucky enough to have accumulated a comfortable amount of money. After my guru made his pronouncement via a newsletter, I immediately took a piece of paper and began plotting my course to riches. I divided 800 points (the expected grand-supercycle move) by 8 (the approximate amount of Dow points needed to move the OEX index up or down one point) and came up with the number 100. I then quickly multiplied 100 times 100 (the amount of money one OEX option increases in value on a per point move) and came up with 10,000.


Smiling and laughing quietly to himself, he said, Investing is not a race. You are not in competition with anyone else. People who compete usually have huge ups and downs in their financial life. You are not here to try to finish first. All you need to do to make more money is simply focus on becoming a better investor. If you focus on improving your experience and education as an investor, you will gain tremendous wealth. If all you want to do is to get rich quickly, or have more money than Mike, then the chances are you will be the big loser. It's OK to compare and compete a little, but the real objective of this process is for you to become a better and more educated investor. Anything other than that is foolish and risky.

Consumer Attitudes

University of Michigan Survey The Survey Research Center at the University of Michigan has conducted the Surveys of Consumers since 1946. Initially, the surveys were annual events but soon became quarterly and finally monthly since 1978. Each month, the survey contains 25 core questions that cover three broad areas of consumer sentiment personal finances, business conditions, and buying conditions. The population samples are designed to be representative of all U.S. households except Alaska and Hawaii. Every month, the Survey Research Center interviews 500 consumers by telephone. The scores of questions are summarized and developed into three indexes the Index of Consumer Sentiment, the Index of Consumer Expectations, and the Index of Current Economic Conditions.

The Magic Carpet

Because they seem to magically take you behind the scenes into any business, any piece of real estate, and any country in the world. It is much like taking a diving mask and suddenly looking below the surface of the water. The mask, symbolizing the financial statement, lets you see clearly what is going on beneath the surface. Alternatively, a financial statement is like having Superman's X-ray vision. Instead of trying to jump over the tall building, a financially literate person can see right through the building's concrete walls. Another reason I call them the magic carpet is because they free you to see and do so many things in so many parts of the world, all the while sitting at your desk. You can invest in so many parts of the world or just in your backyard with so much more knowledge and insight. Improving my financial literacy ultimately reduces my risk and improves my investment returns. A financial statement lets me see what the average investor cannot see. It also gives me...

Fullservice brokers

The greatest distinction between full-service brokers and discount brokers is the personal attention you receive from your account rep. You get to be on a first-name basis with a full-service broker, and you disclose much information about your finances and financial goals. The rep is there to make recommendations about stocks and funds that are hopefully suitable for you.

Track Your Worth

Michael didn't advocate keeping a general ledger for my household expenses. The general ledger is where a business records all its expenses in detail. For an individual, a general ledger would involve the tedious tracking of all his or her monthly receipts. (That's what most people think of when they think of budgeting and what I like to avoid.) The two documents Michael did advocate were the P& L and the balance sheet. A household P& L statement is just another name for a personal budget that tracks your income and expenses to show a net surplus or deficit or, in the case of a business, a profit or loss. At the time I was meeting with Michael I had a simple budget and adhered to it pretty well. Therefore,

Other discounters

You may decide that it's too much trouble to research mutual funds and plan the rest of your finances. So you'll be tempted to find a financial advisor to relieve you of the burden. Dealing directly with various fund companies or simply selecting funds from among the many offered through a discount brokerage service may seem overwhelming to you.

Heres How to Qualify

This chapter will also help you deal successfully with potential investment partners, real estate agents, and OWC sellers. Even though these folks won't scrutinize your finances as closely as a mortgage lender, they will still want to see evidence that they can count on you to live up to your promises.

Accounting for Value

Stock investors need to pick up some rudimentary knowledge of accounting to round out their stock-picking prowess and to be sure that they're getting a good value for their investment dollars. Accounting is the language of business. If you don't understand basic accounting, then you'll have difficulty being a successful investor. Investing without accounting knowledge is like traveling without a map. However, if you can run a household budget, using accounting analysis to evaluate stocks will be easier than you think.

Major Indicators

Consumer Confidence - Survey of consumer attitudes concerning both the present situation as well as expectations regarding economic conditions conducted by The Conference Board. Five thousand consumers across the country are surveyed each month. The level of consumer confidence is directly related to the strength of consumer spending. Consumer spending accounts for two-thirds of the economy, so the markets are always dying to know what consumers are up to and how they might behave in the near future. The more confident consumers are about the economy and their own personal finances, the more likely they are to spend. With this in mind, it's easy to see how this index of consumer attitudes gives insight to the direction of the economy. Changes in consumer confidence and retail sales don't move in tandem month by month. Consumer sentiment - Survey of consumer attitudes concerning both the present situation as well as expectations regarding economic conditions conducted by the University...

Cyclical industries

Your own situation offers you some common-sense insight into the concept of cyclical industries. Think about your behavior as a consumer, and you get a great clue into the thinking of millions of consumers. Think about the times you felt good about your career and your finances. When you (and millions of others) feel good about money and about the future, you have a greater tendency to buy more (and or more expensive) stuff. When people feel financially strong, they're more apt to buy a new house or car or make some other large financial commitment. Also, people take on more debt because they feel

The Fibonacci Secret

This chapter is extremely dear to my heart because knowledge of the Fibonaccis saved my financial life. You have no idea how many times I wanted to throw in the towel because I couldn't figure out how the market works. Every new trader has dreams, and those dreams can quickly turn into nightmares when you don't know what you are doing, which is why I am so adamant about finding a mentor. I didn't have a mentor, and my dreams quickly turned into nightmares.

Risk Management

Yet so many I talk to, even professionals, call it a game. If this is a game, then it is one of the most dangerous games in the world. My financial life is at stake here. Not only that, my self-respect, my self image, my whole outlook on life can be destroyed in this so-called game.

Braving Budgets

Braving Budgets

Get All The Support And Guidance You Need To Permanently Get Your Budgeting Under Control. This Book Is One Of The Most Valuable Resources In The World When It Comes To Ways To Learn How To Better Your Finances By Budgeting! Most people are weary of budgeting due to the wrong perception that budgeting would mean having to stop spending on non essentials and concentrating only on essentials.

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