Dear readers,

Everyone has their own Finance Operating System (F.O.S). The F.O.S essentially determines how one perceives the value of money. Because some people have a ’higher version’ of F.O.S as compared to others, they tend to be able to attain a higher networth over time.

Here’s my guideline on enhancing your F.O.S:

1. Upgrade your Finance Operating System
2. Uninstall unnecessary resources
3. Install anti-virus software
4. Install additional plug-ins
5. F.O.S Maintenance

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Dear readers,

As consumers, most of us would at one time or another, default on payments due to poor cashflow management, loss of job, etc. This results in a dent in our credit history.

Whenever you apply for a loan, the bank or financial institution reviews your credit history to determine whether to approve your application. With a good credit history, you may qualify for a loan with better rates and terms. On the other hand, if you have a less-than-perfect credit history, you may have to settle for a bad credit loans.

While I do not encourage taking up loans, loans can often be a saviour to cash emergencies. The Internet has made selecting and applying for bad credit loans very convenient. From bad credit home loans to bad credit credit cards, there are many types of bad credit loans to service your debts.

It is important to note that the catch for bad credit loans is the high interest rates justified by the risks lenders have to take when they give bad credit loans to people with poor credit history.

If you already have a bad credit rating you should see to it that you make timely payments on your other loans. You wouldn’t want to earn yourself a spot in the credit blacklist, would you?

[tags]bad credit loans, poor credit ratings, credit history[/tags]

Dear readers,

Are your friends constantly complaining about living from paycheck to paycheck every month?

If you ask me, I would rather look at what I’m spending on every month. What I find spending on are income generating assets. Some define income generating assets plainly as assets that generates income for the owner. For me, I would further categorise income generating assets as direct income generating assets and indirect income generating assets.

The aim of identifying income generating assets in this post is to focus on purchasing the right things and avoid spending on unnecessary expenses. I’ll discuss about identifying income generating assets to create multiple streams of income in another post in future.

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Dear readers,

In the book, The Richest Man in Babylon by George S. Clason, the good king, Sargon, had Arkad, the richest man in Babylon empart his knowledge of acquiring wealth to a hundred citizens of Babylon in the hope that these men would spread the knowledge throughout the country. Arkad has shared with these men, the seven cures for a lean purse.

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Dear readers,

I’ve just started reading this book, The Richest Man in Babylon by George S. Clason. It’s an interesting book that talks about acquiring money, keeping money, and making money work hard to make more money for you.

Yes, I know the concept is abit old and we have many books that talks about the same thing already. So why am I still reading it?

Firstly, the contents are interesting, blending personal financial management ideas into fiction to give it a readable context with useful information. So you’re not just reading a fiction story without learning anything useful. You’re picking up personal financial management knowledge along the way.

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Dear readers,

Compounding is one of the most basic and effective ways of growing money. What’s more, it’s dead simple. Instead of just earning interest on your money every year, you reinvest it and earn interest on your interest. If you do this long enough, you’ll have a huge amount of money that you didn’t have to save or earn yourself, which earns more money for you each year. Now isn’t that the closest thing we’ve got to earning money for nothing?

So how does it work?

Let’s take a very simple example to illustrate this. Let’s say both you and Dad has $2,000 to invest. Both of you are prepared to set this amount of money aside untouched until you’re 50 and add the earnings you make to your investment, instead of spending it. Let’s say you’re 25 now and Dad is 45, and you’re both earning an annual return of 5 percent.

Not taking taxations into account, Dad will have $2,552 when he turns 50. But you, with all that extra time, will have $6,772 by the time you reach the age of 50. You’ll have tripled your money and at the age of 50, you would earn near to $340 in annual returns even though you have only invested $2,000 with an annual return of measly 5 percent.

And if you’re smart enough to invest in the right instruments, compound gain get even better. If you and Dad were able to make a 10 percent annual returns instead of just 5 percent, you’d have $21,669 by the time you reach 50 while Dad would only have $3,221.

The graph below shows how compounding really accelerates when you have a longer period to invest. See how fast it sky rocket after the first 5 years or so?

You’ve probably read those ads and articles that show similar benefits if you start to invest early. It’s nothing more than simple compounding. And the earlier you start investing, the easier making money becomes.

So what are you waiting for? Start investing (or learning how to invest) NOW!

[tags]compound, invest, annual returns, growing money, economics[/tags]

Dear readers,

Let me share with you an interesting article that I came across TodayOnline.com.

Want to make a billion a minute?
Know what you are good at, think big, have a big heart

There is a long way to wealth and a short way to wealth, and we say: Do both. But if you are going to get rich, you might as well get rich fast.

Here is a quick tip from my new book: Save 10 per cent.

If you saved a dollar a day, in a lifetime, it only adds up to about $25,000. But if you were to save 10 per cent of your income and invest it wisely, it can add up to $2.75 million!

However, this does not imply that I equate monetary gains to success.

Success is being able to contribute greatly in the zone in which you are competent. Everyone is competent in some area — even the most handicapped person has great competence but may not know it.

Choosing to stay with a “perceived” stable job instead of doing something you are really good at and really like, is dumb because if you were to do what you love doing, all the doors in the universe will be opened to you.

When I tried to be a mechanic 33 years ago, I went bankrupt because I was a creator. My flow is to create stuff, not to build or fix them.

So, if you stayed with your flow, you will make a lot of money. But when you are out of it, you will get constipated intellectually, socially, spiritually, mentally and financially.

The bottom line is it is not okay to stay where you are and be contented with it, because if you have some kind of talent, you should use it.

My goal is to make the world poverty free because we have nearly 5 billion people living below the poverty level, even if the situation is looking up for certain countries.

Basically, monetary gains are just the beginning.

Once you attain “money freedom”, you will get “time freedom”. I take 90 days off each year, which means I am playing for a week every month!

I have enough money such that all my future days are paid for. That should be the goal of everyone — to be financially free by the time you hit 25.

It is not impossible. In the last few years, hundreds made more than $1 million in one year and they are all under the age of 30 — such as the creators of Google and MySpace.

Entrepreneurship is one of the best ways to attain monetary freedom. An entrepreneur is somebody who takes something with no value and turns it into something of high value.

A great example is our Chicken Soup for the Soul series, in which we took great stories of zero value, compiled and repackaged them, and made them highly valued books.

Once you achieve “time freedom”, you will also get “relationship freedom”, which means you can spend as much time as you want with your loved ones. And that in turn leads to spiritual freedom.

However, everybody should also aim for “genius freedom”. We can achieve that by working with people who use their genius abilities. That is also how geniuses come together.

We always say one can move a thousand, and two can move 10,000. So when companies get the right leaders, they are unstoppable.

If you want to make a billion in a minute, you need a big idea, big players, a big distribution and a big customer base. Then you can do big things. Finally, you must do “big charity” to give back to the community.

Mark Victor Hansen is the co-author of One Minute Millionaire: The Enlightened Way to Wealth.

Source: http://www.todayonline.com/articles/200258.asp

Dear readers,

With effect from the 1st July 2007, the Goods and Services Tax (GST) will be increased from 5% to 7%.

A week has passed since the GST increase and after a week of working life, it became clear to me that my monthly expenses and savings would need to be adjusted due to the increased expenses.

Due to the GST increase, my monthly expenses have increased by a hefty 25%! It appears that the supposedly minute 2% increase is not that minute anymore. After adjustment, my savings have declined. I guess it’s time to make some adjustments to my lifestyle to try to reduce spendings.

So how has the GST increase affected you?