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An Ex-Smoker’s Million

February 21, 2013 in Lessons Learned with Comments Off

There are so many reasons to quit smoking.

Aside from the highly increased risk of lung cancer, throat cancer, heart problems and circulation problems, there’s the premature aging to consider and the fact that it impairs your senses of smell and taste. Plus, there’s the socially awkward stigma of smelling like smoke.

Now the Investor’s Chronicle has offered up yet another reason to quit smoking; the chance of making nearly a million.

Paul Claireaux, researching on behalf of the Investor’s Chronicle, calculated that a 20-year-old smoker of 20 cigarettes a day could put saved cash into a tax-efficient pension; he or she would have raked in close to a million by retirement.

In fact, by putting the £7.50 a day savings into a SIPP, the ex-smoker would have a pension pot of £530,000 by the age of 55. Continuing the saving till the age of 65 would garner £953,865 by the age of 65.

The calculation relies on the assumption that a 20-year-old smoker invests the money into a pension which has a 60% employer contribution. The government then tops it up by 20%, assuming the ex-smoker is a lower rate tax payer.

Higher rate tax payers get a 40% government top up, which obviously would garner a larger sum by the time of retirement.

According to the article, smoking 10 cigarettes a day after retirement will require a pension pot of about £36,000.

After retirement, however, smokers receive high annuities thanks to their reduced life expectancy.

Today, the benefits of quitting smoking are common knowledge between smokers and non-smokers alike. Those who can’t kick the habit are increasingly turning to alternatives. With health services offering free support for quitters and patches and gum on prescription, cigarette companies seem to be fighting a losing battle. Plus, across the world ‘plain’ packaging is being enforced on packets, emblazoned with horrific images of throat cancer or deceased smokers.

E-cigarettes offer nicotine and the feeling of using a cigarette without all the associated health risks. Plus, they’re good for around 30 cigarettes so could save you money. You can work out how much you can save on the calculator below.


Created by ECigarette Direct

 

Conflict Mediation is the Answer

September 28, 2012 in Expenses, Lessons Learned, Personal Finance with Comments Off

It seems that legal disputes are a dime a dozen these days.  There are the typical slip and fall accidents at your local shopping mall, or a celebrity getting into an ill-advised brawl at a nightclub, or perhaps you crashing into another car that was parked at a stop light.  At least one person, if not both people, is at fault for causing the accident, but unfortunately the resolution is never as easy as placing the blame. 

Consider that you are driving behind a vehicle that suddenly slams on their breaks to stop at a red light.  This sudden stop then causes you to abruptly run into the back of their car.  Whose fault is the accident?  This answer can actually vary by location.  In my state, if you rear end a car the circumstances don’t matter, you are at fault regardless.  Some other states view this differently, and a number of factors can shift the blame to the other party.  Even though the traffic violation itself is determined by the law, any civil suits often are not. 

A civil suit involves two or more parties, where one is suing the other for some form of wrong doing, and in some cases the latter party is countersuing.  It’s often been said that the only winners in a lawsuit are the lawyers.  The more I think of this old adage the more it rings true.  Lawyers can be a costly bunch, and often times the lawsuit doesn’t go as you expected.  You may be the defendant that finds themselves on the wrong side of the judgment, owing both the damages and the legal fees for both parties.  Whereas, you could be the plaintiff and find yourself out the damages altogether because a jury rules against you, or at the very least a 30% reduction in the awarded amount due to legal fees.

Sometimes it’s just best not to gamble with the outcome of a courtroom or jury selection, and to mediate into an agreement.  Companies like Global Mediation (which can be found at http://www.globalmediation.co.uk/) offer unique money saving services that allow two parties that are in disagreement to come to a mutually beneficial arrangement.  This takes the guess work, uncertainty, and hassle out of a lawsuit.  They even provide education and training that will allow you to facilitate these disagreements on your own.  The best part is that their services are relevant across all arenas, both personal and business.

How to Borrow Without the Sorrow

August 8, 2012 in Debt, Lessons Learned, Money with Comments Off

Keeping control over your finances can be difficult, especially in these economically challenging times. There will inevitably be a point in your life where you may need to borrow money to make important payments, so being properly educated and equipped to make the right call is therefore hugely important.  Here is some advice for those considering borrowing money.

Avoid wasting assets

You should try to avoid borrowing money to buy things that will not produce any income or worse, drain your income. Wasting assets can be anything from holidays to a new car; they are an unnecessary cost that should never be borrowed for to attain.

If it is hugely important that you do borrow money to buy a new car (for business purposes for example) it’s equally important that you borrow sensibly in order to buy it, making sure that the way you borrow leaves you with the most manageable debt to repay.

Use a credit card

There are a number of 0% interest credit cards out there that can help you make payments. 0% interest cards will normally give you 12 months of 0% interest on all your transactions or balance transfers as long as you meet your minimum monthly payments. Provided that you can pay them off, ideally at the end of every month. these cards are a great way to cover the costs of your day-to-day spending.

Making sensible use of a card will give you more flexibility, meaning you can deal with large bills that come out of the blue. On top of that, if you are responsible and quick to pay off your card debt, you can beef up your credit rating.

To reinforce the point, credit cards, managed well, can be beneficial. But fail to pay them off before the initial low interest rate ends, or fail to make repayments, and they can see your debt spiral.

There are a number of different credit card options, suitable for different financial needs, so be sure to compare credit cards to find the right solution for you.

Don’t borrow from friends and family

It can often seem like the best and most convenient way of borrowing money, but borrowing from friends and family is normally a bad idea. Unless the loan is agreed in a fully professional manner, it can lead to many disagreements and possible ending of friendships. Taking loans from proper institutions forces you to take your finances seriously and make payments on time.

Never risk your home

Losing your home because of missed loan payments can heart breaking. You should avoid any form of loan that is secured against your home; you will be surprised how many loans include this in the small print, so do your research! You should only be taking out loans against your property to pay for improvements or extensions to your property because they can add value.

The Basics Of Good Personal Finance Management

August 4, 2012 in Lessons Learned, Make Money, Personal Finance with Comments Off

Personal finance isn’t simply about money. Indeed, basic logic and reason play large roles. Wisely managing your finances is a behavior that must be learned, often times, the hard way. Consider this advice and start to make positive changes to the way you handle your finances and you are going to discover that you are starting to lead a less stressful and happier life.

Generally avoiding debt can be the best way to be in control of your personal finances. Loans are unavoidable for the big purchases in your life, like autos and houses. But, in your everyday life, you should avoid paying with credit at all costs.

If the time isn’t right then do not sell. If you are making a good profit on your stocks, hold on to them for the time being. If certain stocks are doing poorly, decide if you want to sell them.

Be vigilant for mail from credit card companies that inform you about changes to your account. You have a legal right to be informed of changes 45 days in advance. Read the new terms of agreement and changes the company is going to make. This will help you decide if you wish to continue being their customer. If you do not like the changes, resolve to paying off the account and closing it.

Use cash or debit cards for small purchases. Don’t break out the credit card at every opportunity. Credit card companies have minimums on purchases nowadays, so to avoid that, make sure to carry a debit card and cash on you.

If you can, try putting some cash in your IRA, or Individual Retirement Account. Doing so will allow you to build your future finances. Those interested can open up IRAs with a brokerage firm, mutual fund company, bank, or credit union. Regularly contributing to your IRA will allow you to enjoy a financially secure retirement.

Paying your bills early each month will make keeping your finances in order fairly simple. If you pay bills early, you will then know how much cash you will be left with. This will also give you peace of mind when an unexpected financial situation arises, as you will not need to worry about the imminent bills.

An ideal emergency fund should have at least the equivalent of what you make in three months. Put the first 10% of your paycheck in a savings account with a high yield.

The most effective method for avoiding debt is spending less money than you earn. You must cut back on your spending, save some money and pay off your loan and credit card debts. Go out to eat and part less to save some greenbacks. Another option is to pack a lunch for work instead of eating out. If restoring your credit is important to you, you will need to follow through and lower your overall spending.

It is in your best interest to keep track of important deadlines and dates for filing income taxes. If you are anticipating a refund, then file as soon as possible. It’s better to file closer to the due date of April 15 if you owe money to the government.

Personal finance varies with each different individual, so it is up to you to know how to manage the finances in your own home. Hopefully, you’re now well-equipped in better managing your finances and you can use the knowledge that you’ve learned here. Post reminders of the things you’ve learned in your home, wallet or desk. The faster you put these tips to good use, the sooner you can enjoy the results!

Why You Need to Consider Making a Will

June 26, 2012 in Lessons Learned with Comments Off

Nobody relishes the thought of dying, especially when it could be unexpected.  But that doesn’t change reality, and unfortunately anything is possible.  Now, I am an unmarried man, for the next month anyways.  I never really put any thought into whether or not it would benefit me to make a will.  I always just filled out the direct beneficiary forms on the paperwork for my benefits.  However, now that I am going to be getting married soon it is only right to start considering different possibilities.  After all, it isn’t long until I’ll have children to worry about as well.

A will is little more than a document stating the transfer of your property upon your death.  It could be as simple as leaving all of your worldly possessions to your loved one.  Or it could be a more complicated scenario that involves dividing up your assets (and sometimes liabilities) amongst several different family members.  Whatever the case, a will is a necessary evil, but it needn’t be an expensive one.  Granted you can create your own will, but I wouldn’t advise as such.  One simple legal mistake and the validity of the will can be taken into question.  Instead you need to shop around for reputable legal counsel that will aid and assist in generating a sound will.  Also, like most other services today, there are online legal services that will help you generate a solid and secure will for a fraction of the cost of hiring an actual attorney.

What to Know When Buying Furniture

May 25, 2012 in House, Lessons Learned, Personal Finance with Comments Off

It’s been over two years since I purchased my home.  I figured after the hefty down payment and associated closing costs that all of my big ticket items were out of the way.  That couldn’t have been further from the truth.  I came from several years of renting apartments and houses with several different friends.  Each of us brought our own bedroom furniture, and a compilation of used tables, chairs, and couches that didn’t come close to matching each other.  Once I bought my house I realized just how empty it all was.  I went from sharing 1600 square feet of living space with three guys, to having over 2300 square feet all to myself.  Heck, my bedroom furniture didn’t even take up much of the master bedroom.  I knew it was time to start loading up on new furniture, but the sum total of all the furniture I’ve accumulated probably outweighed the down payment itself.

While I normally like to purchase items online, furniture is the one thing I need to see and feel.  Not to mention the cost of shipping, and then the pain of assembling the furniture is outside my range of knowledge.  I started off by purchasing living room furniture.  After all, this was going to be used just about every day.  I needed a sofa, couch, end tables, coffee table, and most importantly, a large screen television.  I made sure I was extra economical and went to a discounted furniture store and shopped their clearance section.  In the end, I wound up with very nice leather furniture for a fraction of the regular price.  I was quite happy with my deal from this store, and I stuck with them through some other furniture purchases.  I actually purchased my bed from this store as well.  That time around I was a bit more seasoned and learned that buying furniture is much like buying a car, you can always haggle regardless of the sticker price.  This actually led me to my final furniture buying lesson, don’t buy a mattress from a furniture store, you’ll get ripped off every time!  Mattresses are severely marked up at brick and mortar stores, you need to find a specialty discount retailer…preferably a mattress surplus warehouse.  I ended up visiting one of these stores that had a Groupon available, and picked up a good deal at a fraction of the price.

Some Myths on Personal Finance

April 13, 2012 in Budgeting, Credit Cards, Debt, Expenses, Income, Investing, Lessons Learned, Make Money with Comments Off

The best way to increase your financial stability is by doing a thorough evaluation of your savings and spending. This way you will be able to find out how you may save on your existing earning so that you may have better funding in your account. Here, are some of the common myths that you get to learn along with the rational basis or even lack of it in them.

Myth 1# Investing in stocks and mutual funds is truly necessary

Most people will inform you to invest in stocks and mutual funds. However, if you have to invest do so after appropriate assessment of your financial position. Every other person may feel a different way to invest, and there is no reason why one must only invest in mutual funds or stocks. One can make steady interests from saving accounts also by maintaining a stable balance.

Myth 2# Investing in property is better than taking on lees

Another popular myth that is passed on from one to another is that it is better buying a property instead of renting one. Often there are many cases where it is more advantageous to buy a house, but in case you are not particularly keen on your credit do not try to buy a house. The equated monthly instalments will be substantially higher than what you may actually spend on renting the same property. Again, you may obtain interests if you had invested the same amount in your account in some other place.

Myth 3# Closing credit card accounts will save money

Closing credit card accounts is yet another factor that you may do, but think about stuff like paying off the dues in regular intervals instead of in one shot. You can choose not to use your credit card instead of closing your credit card account. Moreover, you can use the card in emergency and this way you will learn to use the credit card judiciously.  

Myth 4# You cannot get a loan if you have poor credit or debit details

This is an absolute myth, and there is actually no rational reasoning in it. There are loans that are specifically made for people with poor scores. Many people take personal loans to reduce the burden of finance. This helps the person to remove personal debts and pay against only one loan.

Myth 5: I am too young or too old for retire plans

Most people ignore their retirement plans because they think they are too young, but youth is the best time to take a retirement policy.

This is the time to take action now, and if needed you can take the help of your financial adviser.

Don’t Let Your Mortgage Control Your Life

April 21, 2011 in House, Lessons Learned, Mortgage with 1 Comment

With the current mortgage crisis gripping the whole world, and foreclosures still going on at an alarming rate, your mortgage may be at the top of the list. The stress is affecting people everywhere, but you can’t let your loan control your life.

The Crisis Isn’t Over Yet

Though economies around the world are showing signs of recovering, that does not mean we’re out of the crisis yet. Foreclosures are still continuing at an alarming rate, and the stress of keeping up the bills is affecting many people around the world. Here are eight tips to help you beat the heat:

Continue Reading…

Teaching Kids the Right Financial Mindset

November 8, 2010 in Financial Planning, Lessons Learned, Money with 2 Comments

The following is a guest post from Steven Stanich of Financial Planning Tips

I know that many of the great money management skills I have came from my parents, especially when it comes to saving money. And there are definitely certain things I’ve had to learn on my own, and certainly some things I could improve on.

But what if you could teach your kiddos from early on how to be personal financial planning superstars—such that you’d never have to worry about their financial health?
Continue Reading…

When There’s Movement – Stuff Happens

October 29, 2010 in Career, Entrepreneurship, Lessons Learned with 2 Comments

Goals

I had a whiny, way below my age breakdown yesterday. I’ve been putting in a lot of time with BudgetSnob but I haven’t seen the results I had planned by this point. So, I was a little lot down. I felt like I was staring at the Himalayas standing at the bottom of a dry lake bed in Death Valley. 

Then I read something that profoundly changed my outlook. It was a newspaper article about a little (or maybe not so little) obscure blog called TheAwl. I knew the rest of the article would be good after reading this…

If you were going to assemble a business plan for a Web site, you would look closely at everything The Awl (theawl.com) did and then head in precisely the opposite direction.

Why? Because the three co-founders, newly laid off, started a blog they wanted to read. Meaning, they didn’t try to find an audience. There were the audience. TheAwl’s posts are mostly short, punchy, and (in many cases) complete nonsense.

I found myself wondering if reading these posts was like hearing someone’s thoughts. Thoughts make perfect sense to the thinker. Not so much for anyone else. Obviously, I was not the audience there were trying to reach.

After a few months of massive content generation, TheAwl founders sold out to Yahoo! for $30 million dollars. There’s only one problem. That’s not the truth. Not. Even. Close.

By August 2009, they had chewed through their savings..when an anonymous donor sent in a few hundred dollars at one particularly stretched-thin moment…which they used to buy food.

They started in September 2008. Then spent a year—full-time by the way—hammering out content. A lot of content. When I checked yesterday, they had 20 posts up.

So, after a year of posting, they barely had enough to live on. When a donor shows up with two hundred bucks and they buy food. Why? So they can quit while they’re ahead? And go find real jobs?

Nope. They do it because they have to keep posting. And that would require staying alive. By eating food.

The Awl is attempting to build a low-cost site that delivers a certain kind of content for a certain kind of audience. And the owners don’t have to get rich — The Awl has no investors — they just have to eat.

Mr Sicha, one of the founders and interviewee throughout the article, sums it up in a breathtakingly, honest manner.

“My friends keep talking to me about how they want to start a Web site, but they need to get some backing, and I look at them and ask them what they are waiting for,” Mr. Sicha said. “All it takes is some WordPress and a lot of typing. Sure, I went broke trying to start it, it trashed my life and I work all the time, but other than that, it wasn’t that hard to figure out.”

That was the end of my whining.

I don’t know where you are today. But I do know that you’re more than likely not satisfied with some part of your life that just hasn’t materialized like you thought. Maybe you’re thinking about quitting. And what makes it worse is that you’ve been doing the right things, maybe for months or even years.

It’s one thing to simply be lazy and make excuses when nothing happens. I think we all know deep down when we’re lazy. But it’s an entirely different matter when you’ve been busting your butt…and nothing happens.

But I challenge you (myself too) to keep moving. Because breakthrough is just around the corner. The activity you’ve been doing. Those seeds you’ve been planting. Neither will come back empty.

Some amazing things happened to me today. Subtle but very powerful. All because I made the decision to keep moving forward. I hope you make the same decision.

TheAwl founders were interviewed for an article in the NYTimes.

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