Stage Seven to becoming debt free and setting up for financial success

Now that we have started to get our finances on track it is time to start looking at what we can do with any cash we have after paying all our bills and paying money into our retirement fund.

One of the things we want to look at doing is paying extra payments into our house as a minimum we really want to be paying off at least one extra monthly payment a year but if you can afford to pay off more it will mean that your house will be paid for that much quicker and you will be able to become totally debt free. By doing this you not only own your house, but you also save a lot of money on interest payments that you no longer have to make. read more

Economic Cycle

I have recently been reminded about a video by Ray Dalio that explains how the economy works and watched it again. It explains in easy to understand language how the economy works and was put together a few years ago to explain what happen to the economy during the last recession.

Ray Dalio is an Hedge Fund manager and founder of the investment firm Bridgewater he is one of the wealthiest people in the world and therefore he is a person who should be listened to. People have a look at the video and let me know what you think. read more

What is Net Worth

Just realised the first thing I should explain is how do you work out your net worth. I have already given you the target formula out of the Millionaire Next Door but I did not confirm how you work out your current net worth.

Really your net worth is the value of all of your assets minus all of your liabilities or what you own minus what you owe. read more

Stage four to becoming debt free and setting up for financial success

Now that you are free of all debt apart from any mortgage that you may have it is now time to super charge your emergency fund so that you have 3-6 months of expenses saved. This money again should be placed in a saving instant access account so that in an emergency you can withdraw the money if required without any penalty. Again this money should not be used unless it is a genuine emergency.  You should not invest this money in any type of investment as we are really not concerned about this money making you money it is purely to be used for its purpose. read more

The Normal Persons money for housing

Rather than continue talking about debt I thought it would be a change to look at housing again and how much we should be spending on our housing. I have written quite a lot about debt and paying off debt but housing is one of those things that people wish to buy that will more than likely require the taking on of some debt. This is mainly due to it requiring several years to be able to pay for a house out right so it is more than likely that you will need to take on some debt in the form of a mortgage. But one of the most important things to consider when buying a house is your ability to afford the house payments. If you are struggling to save money when you are renting and your rent is not equivalent or more to the proposed mortgage payment then you will need to look at either saving more money or probably not looking at buying but continue to rent. read more

Stage three to becoming debt free and setting up for financial success

Now that we are set up with an emergency fund and budget in place it is now time to start getting rid of all your consumer debts and paying off any loans that you may have along with paying off car payments and if possible any student loans.

You can really start with whichever debt you like.

You could start paying off the smallest debt as this will allow you to see some debt repaid early this quick pay off of one of your debts can provide good motivation early on, that will allow you to stick to your debt reduction plan. Once this first debt is paid off this will then allow you to concentrate the money saved on the first debt to repay your next biggest debt. You can then continue this method to pay off all your remaining debts until they are all paid off. This should leave you with plenty of income to spend to build up your retirement or to save towards a house or other goal. read more

Stage one to becoming debt free and setting up for financial success

Even though you may not think it, this is the most important stage to becoming debt free and sorting out your finances it is. This is the time when you need to look at how much money you are making from your work, your business and any assets you may have attained that create an income stream so you can then look at what your total income is. read more

Crash or Not be prepared 

As you may have seen from our Facebook page I have been wondering if a crash is about to hit the stock market and housing market.  At the same time there have been so many articles in the papers recently that it is unlikely that a crash is as close as I first thought.
However it is never to early to prepare. read more

Credit Cards Low APR July 2017

There are lots of credit cards in the UK market right now. There is also a lot of debate on whether credit cards are a good or a bad thing. We think you initially need a credit card so you can build a credit score for when you want a mortgage but of course you should be paying off your balance in full before the due date each month. The reason is that a lot of credit cards charge interest on the whole balance even if you pay off some of the balance. read more