We Are Wealthy

A recession is ultimately a short-term sharp decline in economic growth. This should not be confused with a depression that is a severe long recession. Recession could occur because of an inflation or deflation in prices. There is much speculation that the United States is headed towards this recession and we will discuss, in short, some of the reasons we may be headed there today. Many analysis believe the housing market hasn't hit bottom yet, and won't until after the holiday season. What exactly is the problem with the housing market? When interest rates were very low, banks made it very easy for people to take out sub-prime mortgage loans. We will cover all aspects of sub-prime loans in a later blog, but the main point with these loans is that the interest rates are adjustable. Since interest rates began to rise, many could not afford and can not afford the new larger mortgage payments. Many are being forced to sell their homes and, since more people are doin

All of this information is taken from the official FICO website that can be found by visiting www.myFICO.com Everything you do with your credit affects your FICO score. Different events affect your credit score in different ways, which we will be discussing in Part 2 of this entry. In this part I will explain why it is very important to have a great FICO score and what this score actually is. FICO stands for the Fair Isaac Corporation, and was founded in 1956 by Bill Fair and Earl Isaac. They created this method of weighing risk when lending money as an unbiased way to do so. All three main consumer reporting agencies use FICO: Equifax, Experian and TransUnion. The reason that a good FICO score is needed is because it determines all terms of a loan, most importantly your interest rate. When you want to take out a mortgage, personal loan, car loan, etc the lender wants to know how much risk is involved when lending you the money. The more risky you seem, the higher your interest rates a

“Would you like to save an additional 20% off your purchase today by signing up for a charge account with us,” is often urged at your favorite stores when checking out. Saving money is always a great idea...right? The following blog will explain the ins and mostly outs of these store credit cards many people are drawn into. Your new store credit card has very high interest rates, usually around 20% and more. Although you may save $20 here and there, a grace period is usually not present. A friend of mine recently told me how she called to check the recent transactions on her Macy’s Card, when the service representative explained that her card would no longer have a grace period, interest would start incurring the day any purchase is made. These cards love to draw customers in with the savings, but then drown you with interest. Forget about defaulting because missing one payment by even a day will cause the interest to sky rocket over 30%. These cards are not like regular credit cards t

Balance transfers can be defined as taking a balance from one credit card account and transferring it to another account. Many people receive offers from their credit card companies asking them to take advantage of a special APR interest rate when they transfer a balance to this account. This blog with discuss why a balance transfer usually isn't a good financial decision to make. Balance transfers, most of the time, carry a fee when transferring a balance from one card to another. The fee is usually around 3% and cannot be less than a certain amount and higher than another. This fee could make the card balance a lot higher than if the money was just left on the first card. Sometimes the offer might only be for a limited time: 0% APR for 6 months or 4.6% APR for 12 months are some of the offers I've seen come in the mail. You may plan to pay off this balance in the alloted time, but events come up and you're unable to pay the balance off in time. After the promotional time

Emergency funds are probably the most important thing you can have available. An emergency must be created after a budget since one must know how much money is left over for saving after all spending is known. Emergency funds are important for financial security, because they give you money to fall back on in times of need. Think how many times in the past year you have needed some money for some sort of emergency. Medical bills, flat tire on your car, pet was ill, and many more emergency money situations are happening frequently enough that this fund is a necessity. As we already covered, a budget should be completed first. Next, we need to get started on the emergency fund. Before spending your money on going out to dinner or buying a big screen TV with the money you have left over each month, get started putting as much as you can into this fund. A good rule of thumb is to save at least three to six months of living expenses. Medical bills are at an all time high, and you would need

Thanks for viewing my first blog. I look forward to providing my readers with the skills to become free of debt and on the road to success. Please bookmark this page since it will be updated with important tips and guides. Finding out where you spend your money is an important first step in becoming financially secure. During the next month make it your duty to write down every purchase you make. You will be amazed at some of the pointless purchases you make in your day to day spending. If you say “I know where I spend my money, I don’t need to write all my purchases down,” please just write everything down for fun. I have a brother who was in some financial trouble. I was telling him to write all his purchases down, but he thought he knew his money was going. He unwilling did what I asked and couldn’t believe where some of his money was going. Just about every morning he stopped to pick up a coffee before heading off to work. He lived in a city and it was easy to find a coffee shop on