Personal Finance

Take control of your personal finance to be wealthier and happier in life.

If You Die Without a Will, Who Gets the Money and Who Gets the Kid?

May 28, 2016 Leave a Comment

CNN Money explores different scenario to see what happens when you die without a will.

Who gets the money if you die without a will? If you die without one, you cede control to the state where you lived and all proceeds will roll into your estate and be distributed according to state rules. Its laws will determine who your heirs will be and the state will choose the executor of your estate. While inheritance laws differ from state to state, they generally favor spouses, registered domestic partners and blood relatives as heirs.
Who gets the kids if you die without a will? A will is also extremely important for parents, because it’s the primary instrument by which you name the guardian of your minor children, and otherwise provide protections for them when you’re gone, said estate planning attorney Jeffrey Molever of JUX law firm in Minneapolis. Without a will, the court will appoint their guardian. “The judge will gather as much information as possible about the children, their family circumstances, and the deceased parents’ wishes and try to make a good decision. The primary rule is that the judge must always act in the best interests of the children,” according to NOLO.

The Inventor of the 401(k) Says He Created a ‘Monster’

May 27, 2016 1 Comment

American workers now take for granted they can sock away pretax earnings with a company match, but at the time many couldn’t imagine Ted Benna’s idea of turning a little-noticed new subsection 401(k) of the tax code to replace pensions as the bedrock of American retirement. The father of the 401(k) says he created a monster: The plans had grown so overcomplicated and so fraught with hidden fees and opportunities for bad decisions that they were better at enriching the financial industry than the actual savers. “For all its issues, the 401(k)’s biggest value is that it turns spenders into savers,” he said. “Not that I spend much time basking the glory of the 401(k). What matters most to me now is spending time with my grandchildren and my horses.” (marketwatch.com)

Poverty is Linked to Obesity

May 26, 2016 Leave a Comment

In modern world, poor people are more likely to be obese than wealthy people. Thomas Corley of richhabits.net found that povery and obesity are linked together in his research. Here’s what he found:

66% of the poor were overweight by at least thirty pounds. 79% of the wealthy were not
25% of the wealthy visited fast food restaurants three times or more each week. 69% of the poor admitted to eating at fast food restaurants at least three times a week
57% of the wealthy counted calories vs. 5% of the poor
70% of the wealthy ate less than 300 junk food calories each day. 97% of the poor ate more than 300 junk food calories each day
76% of the wealthy exercised aerobically 30 minutes a day, four days a week. 73% of the poor did not regularly exercise aerobically
25% of the wealthy visited fast food restaurants three times or more each week. 69% of the poor admitted to eating at fast food restaurants at least three times a week
53% of the poor admitted to having some health issue. Only 18% of the wealthy had health issues

Corley explains: “Poor people have Poverty Habits. They don’t watch what they eat. They eat too much junk food, go to fast food restaurants too frequently and they don’t exercise regularly.” (richhabits.net)

Millionaires Chalk Success Up to Hard Work and Family Values

May 25, 2016 Leave a Comment

Jackie Wattles writes on CNN Money: “Most high net worth Americans say they worked their way up from a lower class. That’s according to a report released by U.S. Trust on Monday, based on a survey that asked 684 adults in the U.S. with $3 million or more of ‘investible assets’ hundreds of questions.
About 77% of those surveyed said they grew up in the middle class or lower, including 19% who say they were poor. And they credit their success to three somewhat surprising factors: Hard work, ambition and family upbringing. Respondents even went so far as to say that these influences were much more important than ‘connections’ or ‘innate talent.’ The survey was also a shout-out to strict parents. About 80% of respondents said their parents were firm disciplinarians. They also named ‘academic achievement,’ ‘financial discipline’ and ‘work participation’ as the family values that were most emphasized in their homes.” (cnn.com)

Maintain Your Excellent Credit to Save Over $6,000 for Car Loan

May 25, 2016 Leave a Comment

According to 2016 Auto Financing Report from WalletHub, buyers who have fair credit will end up spending about six times more to finance a vehicle than someone with excellent credit, which equates to $6,304 in additional interest payments over the life of a $20K, five-year loan. As the auto industry witnessed its highest sales in 15 years, WalletHub realeases a study to help you make an informed decision about your next vehicle. Here are other key findings:

Interest Rates: For new cars, interest rates are at their lowest point in the past three years, with the average new-car loan today charging 17 percent less interest than the average used-car loan.
Credit Standing: Buyers with fair credit will end up spending about six times more to finance a vehicle —about $6,304 in additional interest payments over the life of a $20,000, five-year loan — than consumers with excellent credit.
Financing Sources: Consumers in the market for a new car should begin their search for financing with car manufacturers (rates at 38 percent below average) and credit unions (rates at 29 percent below average). Secondary options include national banks (rates at 2 percent above average) and regional banks (rates at 30 percent above average).
Transparency: Car manufacturers continue to lack transparency when it comes to leasing offers, with the average automaker receiving a WalletHub Transparency Score of 4.68 out of 10.

(wallethub.com)

Cash Now Used for Fewer Than Half of All Payments by Consumers

May 23, 2016 Leave a Comment

With cashless payments gaining popularity, cash was used in Britain for fewer than half of all payments by consumers for the first time in 2015. Cash made up 45.1% of payments in 2015, compared with 64% in 2005, and is expected to fall to just a quarter by 2025. As cash will be replaced with payments by contactless cards, consumers need to cautions about spending. Research from Drazen Prelec and Duncan Simester of the Sloan School of Management at MIT shows that consumers spend more money when using a credit cards rather than cash. (theguardian.com)

12 Things the Rich Do Every Day

May 22, 2016 Leave a Comment

So what do the rich do every day that the poor don’t do? Drawing from the study by Tom Corley, Dave Ramsey summed up the differences between the habits of the rich and the poor. Here are 15 things the rich do differently from the poor:

86% of wealthy love to read vs. 26% of poor.
81% of wealthy maintain a to-do list vs. 19% of poor.
80% of wealthy are focused on accomplishing some single goal. Only 12% of the poor do this.
80% of wealthy make Happy Birthday calls vs. 11% of poor.
67% of wealthy write down their goals vs. 17% of poor.
88% of wealthy read 30 minutes or more each day for education or career reasons vs. 2% of poor.
67% of wealthy watch one hour or less of TV every day vs. 23% of poor.
6% of wealthy watch reality TV vs. 78% of poor.
79% of wealthy network five hours or more each month vs. 16% of poor.
84% of wealthy believe good habits create opportunity luck vs. 4% of poor.
86% of wealthy believe in lifelong educational self-improvement vs. 5% of poor.
74% of wealthy teach good daily success habits to their children vs. 1% of poor.

(daveramsey.com)

Mob Burns Venezuelan Man Alive Over $5 As Justice Fails

May 21, 2016 Leave a Comment

The mob burns Venezuela man alive over $5 as the country sinks deeper into chaos and the justice system falls apart. Five dollars might not be a lot for you, but in Venezuela it could have bought a family a week’s worth of food. The AP reported: “The mob didn’t know at first what Roberto Bernal had done, but he was running and that was enough. Dozens of men loitering on the sidewalk next to a supermarket kicked and punched the 42-year-old until he was bloodied and semi-conscious. After all, they had been robbed of cell phones, wallets and motorcycles over the years, and thought Bernal had a criminal’s face. Then a stooped, white-haired man trailing behind told them he’d been mugged. The mob went through Bernal’s pockets and handed a wad of bills to the old man: The equivalent of $5. They doused Bernal’s head and chest in gasoline and flicked a lighter. And they stood back as he burned alive.” One of the participant, Eduardo Mijares, said: “We wanted to teach this man a lesson. We’re tired of being robbed every time we go into the street, and the police do nothing.” (ap.org)

Americans’ Credit Card Debt to Hit $1 Trillion This Year

May 21, 2016 2 Comments

Thanks to aggressive credit card pushing by banks and growing consumer confidence, credit-card debt balances are poised to hit $1 trillion this year, coming close to the all-time peak of $1.02 trillion in July 2008. Consumers are taking on other forms of debt, too. Auto-loan balances surpassed $1 trillion in the first quarter, a record for the industry, according to a report Thursday from credit bureau Experian. Banks are aggressively pushing their plastic and cashing in on the profit from consumers. “Credit cards are the best business in banking,” said Robert Hammer, who runs the consulting firm. (wsj.com)

Two-Thirds of US Would Struggle to Cover $1,000 Crisis

May 20, 2016 1 Comment

Two-thirds of Americans would have difficulty coming up with the money to cover a $1,000 emergency, according to the poll conducted by Associated Press-NORC Center for Public Affairs Research. Three-quarters of people in households making less than $50,000 a year and two-thirds of those making between $50,000 and $100,000 would have difficulty coming up with $1,000 to cover an unexpected bill. Even for the country’s wealthiest 20 percent — households making more than $100,000 a year — 38 percent say they would have at least some difficulty coming up with $1,000. Having a modest, immediately available emergency fund is recognized as critical to financial health. Families that have even a small amount of non-retirement savings, between $250 and $749, are less likely to be evicted from their homes and less likely to need public benefits, an Urban Institute study found. (ap.org)

Pope Condemns ‘Bloodsuckers’ Who Exploit Poor Workers

May 20, 2016 Leave a Comment

Pope Francis condemned “bloodsuckers” who grow rich by exploiting others. Making “slaves” out of workers and setting unfair contracts was a mortal sin. During mass at the Vatican, he told a story about a girl who found a job working 11 hours a day for $729 a month. “This is starving the people with their work for my own profit! Living on the blood of the people. And this is a mortal sin,” he said at the service in his Santa Marta residence. (yahoo.com)

Our finances are a mess – could behavioral science help clean them up?

May 20, 2016 Leave a Comment

Hal Hershfield, University of California, Los Angeles and Abigail Sussman, University of Chicago writes:

The first few months of a new year can be a stressful time financially. The Christmas holidays typically lead to depleted savings and higher credit card balances, while tax season is right around the corner. Unfortunately for most us, this isn’t a seasonal dilemma but a chronic problem that brings anxiety throughout the year. Indeed, as many as 44 percent of American households don’t have enough savings to cover basic expenses for even three months. Without a savings cushion, even regular seasonal expenses like holiday celebrations may end up feeling “unexpected” and lead households to turn to credit to cover costs. U.S. consumers currently hold US$880 billion in revolving debt, with an average credit card balance of almost $6,000. The picture is even more dire for lower-income households. So how can we turn this around? [Read more…]

7 Things Unhappy Couples Have in Common

May 19, 2016 Leave a Comment

Brittany Wong of Huffington Post compiles some tips from relationship experts who share 7 biggest mistakes people in unhappy relationships make. It’s hard to buy happiness with money but you can increase your happiness for free by learning how to avoid these 7 behaviors in your own relationship:

They compare their behavior now to their behavior when they dated
They’re pros at passive aggression
They can’t agree on who’s right and who’s wrong
They put in phone time instead of face time
They allow their relationship to grow stale
They lose sight of their partnership
They don’t touch

(huffingtonpost.com)

The 10 Most Expensive Places to Raise a Family in U.S.

May 18, 2016 Leave a Comment

The basic family budget for a two-parent, two-child family ranges from about $50,000 to more than $100,000 depending on where a family lives, according to data from the nonprofit and nonpartisan think tank the Economic Policy Institute. Across regions and family types, child care costs account for the greatest variability in family budgets. Among two-parent, two-child families, child care costs exceed rent in 500 out of 618 family budget areas. Even in the best of economic times, many parents in low-wage jobs will not earn enough through work to meet basic family needs. Here are the 10 most expensive places to raise a family with 2 adults and 2 children:

Washington, D.C. with an annual cost of $106,493
Nassau-Suffolk, N.Y. with an annual cost of $103,606
Westchester County, N.Y. with an annual cost of $99,592.
New York City with an annual cost of $98,722
Stamford-Norwalk, Conn. with an annual cost of $97,350
Honolulu with an annual cost of $94,092
Poughkeepsie-Newburgh-Middletown, N.Y. with an annual cost of $92,837
Ithaca, N.Y. with an annual cost of $92,603
San Francisco with an annual cost of $91,785
Danbury, Conn. with an annual cost of $89,000

(marketwatch.com)

3 Tips on Investing in Stocks from Warren Buffett

May 17, 2016 Leave a Comment

We all can learn a few things from Warren Buffett, the third richest man in the world and one of the greatest investing minds. Kendrick Chua explained 3 tips on investing in stocks from Warren Buffett:

Never lose money: When investing, do proper and thorough research. Don’t overlook risk while there is also a need to prevent losses
Socks or stocks – Buy quality when marked down: Buffett advises us to buy when things are on sale – whether they are socks or stocks
Be greedy when others are fearful (and vice versa): Buffett advises investors to go against the herd. Herd mentality is common when the market reaches new heights.

(rappler.com)