Get on the Right Financial Track by Tracking Your Expenses

We keep track of our expenses because things add up, sometimes in surprising ways. To make significant changes in your spending habits, you need to know your outflow or expenditure score. Record-keeping enables you to spot that all-important “big picture”: exactly how much you spend, and on what, as well as how it swings over time. If you can’t trace your expenses, making changes in your habits will be fairly jumbled. You might strike on something that will save you a lot of money, or you might not. You might cut down expenses a lot in one area, only to spend more in another area without realizing it. On the other hand, if you do know where your money goes, you can target those areas that need work the most, and you can make good decisions about how to spend your money. Often, your assumptions will be wrong.

Whether you earn much or just enough, the same principle applies. We frequently commit the error of considering each expense in isolation, deeming it worthy, and moving on… only to find that somehow there seem to be more worthy expenses than there’s money to pay for them. The technique is to look at the big picture and the real one…

How to track your expenses

Let’s fire up with the traditional method of record-keeping, and suppose that if you’re a computer geek, you’ll settle toward software later on. For the time being, keep it straightforward!

I suggest purchasing a small, cute or manly notebook. Why so? Because this is a constructive venture; strengthen it by using an nice-looking notebook, one that says “I’m doing a good thing for my life!” when you look at it.

For daily expenses, you can either write everything down in your notebook right away, in which case you need to carry your notebook with you, or you can save the receipts from your purchases and then use those receipts in the next step. But if you do the receipts-saving method, make sure you actually get a receipt for everything, and that you actually do save them.
Once you have gathered enough information to start looking at the big picture – and this could be after as little as a week or two, if you’re eager to get started – then start categorizing the expenses and adding up the totals. To do this, you’ll need not only your daily record of purchases, but also any credit card bills, utility bills, checkbook register and any other bills that you have paid.

Keep in mind, be honest, be detailed, and be prepared to be surprised.

Hidden Expenses

Jotting down even the little bitty expenses is significant, because if you’re not sure where your money is going, it’s often going to what I call hidden expenses: ones that are small enough that ignore them.

The hidden purchases usually fall into one of three types:

• impulse buys
• Low-cost purchases
• part of a routine or habit

Impulse buys often don’t get noticed because we don’t tend to plan for them: the CD on sale, the chocolate bar at the drug store. Even when they’re expensive, the fact that they seem spontaneous somehow tends to sabotage our rational spending: we justify the purchase as being exceptional. Even impulse buying often falls into some sort of pattern overall, though.

Low-cost items are another type of purchase that tends to fall under the radar. Something that only costs a dollar or two, like a cup of coffee or a little knick-knack, seem almost too small to be worth tracking. Except that little items add up to bigger totals. If you let a $1 purchase slip by every day without thinking about it, by the end of the year you would have let $365 drift away without knowing where it went. I bet you’d be interested in keeping track of the $365 if it were given to you all at once!

Purchases that are part of a routine are often the hardest to track, but in many ways the most important. These are purchases that we don’t even think about, but they can account for a lot of money: buying sodas from the soda machine at work, popcorn at the movie theater, coffee and a magazine on the way to work in the morning. Each purchase individually may not be expensive, but they add up, particularly since you may make these purchases frequently. The fortunate thing about this kind of spending is that it’s possible to change your routine slightly and eliminate a lot of these expenses: bringing a snack from home to work instead of plugging money into the vending machine, for instance.
In the long run

Once you’ve gotten a clear picture of your finances over the course of a year or so, you may or may not want to stick with the “record every penny” method, depending on your personal style, I still recommend that you keep a reasonably exhaustive record, so that you can keep track of changes in your spending… are expenses in one category starting to creep up again? Recordkeeping also ties in well with budgeting, so it’s a win-win situation to keep track of your expenses. Good record keeping is essential to your financial survival.

7 Biggest Money-Making Strategies

Nearly everyone desires to have more funds and retain more of the riches they have for their future or for some pursuits. However, a good number of us live paycheck-to-paycheck, deep in arrears and unsure on how to break out of the snare.

Here are the 7 biggest Money-Making Strategies you should learn:

1. INVEST. Whether you're 20 or 60, you are never behind schedule to begin. You'll be no better off in three years than you are right now if you don't start investing right now. Even a dollar a day in a mutual fund can make a big difference in a short amount of time.
2. MAKE YOURSELF IMPORTANT. You deserve to have some money set aside for you and to make as much money as you'd like. No one can stop you unless you let them.
3. GET A GOOD RATE OF RETURN ON YOUR MONEY. If most of your money is in a checking account paying 4 1/2 %t, you're losing money! Inflation will make your money worth less tomorrow unless you're getting at least 5-10 % interest on your account.
4. THINK THAT NO ONE ELSE WILL TAKE CARE OF YOU FINANCIALLY. Whether you're depending on the government or meeting Mr. or Ms. Right, you're banking on something very unpredictable. It's time for you to take control.
5. ASK FOR HELP. There are lots of money advisors, books, seminars -- you name it -- on making your money work for you. Only people who want to succeed ask for help.
6. PLAN FOR THE FUTURE. Retail therapy can be fun. But how long does the thrill of a new outfit or gadget last? Will you regret what you spent later when you are barely scraping by? How good will that purchase make you feel if you can't pay your bills?
7. TAKE TIME TO MANAGE YOUR MONEY. Good for you -- you've read this far so you have invested in yourself already. Spend at least five minutes each day managing your accounts, learning more about money and investments, and tracking your expenditures.

The time you spend will yield wonderful outcomes and facilitate your having your richest life!

Read Also

• How To Save Money In A Depression (savingcashtips.com)
• Financial overhaul misses easy fund fixes (seattletimes.nwsource.com)
• Play it safe with life-cycle investing (financialpost.com)
• Investing Advice for the Small-Business Owner (nytimes.com)

The Frugal Connection

I received just last week an email from a friend who now stays in Japan for good. He got married there and excitedly broke the news on his first born. Unwittingly, I replied by telling him that he’s got to have another one soon for he’s growing older, now at 43. He got back at me with all the pick holes on how hard life is, financial woes, high cost of living, difficulties in raising children, etc. Then I remember how tightfisted he was with us. Being single for 40 years, I could not remember any generous initiative he’s made in terms of spending. Maybe we were wrong or maybe he had a different view of life – stoic like the Japanese. But other people find him miserable and stingy, and worse, selfish. He said to me once that he’s just being frugal – a defensive mechanism huh! So I thought of discussing frugality for a while. I’ll hold tight my chance to understand him next time…

Frugal living doesn’t mean being miserable, or giving up what you want. It doesn’t call penny-pinching attitude that holds down your sharing capability. It doesn’t say ignore others and suppress your needs. Frugality is basically the system of finding less expensive alternatives. Being frugal simply means to spend wisely. Don’t waste money on things that you don’t need but don’t be cheap and skimp on the things that you do need. Being frugal means that when you do have to go out and buy things, you don’t really need the best of the best most expensive things. Buy things for less, and what do you get? More money left over to buy more of what you want! Frugality doesn't have to mean living without comfort.

On the other hand, maybe you don't buy the idea of clipping discount coupons and buying clothes at rummage sales. That's okay because that never was and never will be the important part of truly frugal living. For it to be the most advantageous, frugality has to launch with the big things, and if it never gets down to the small items, you'll still be further ahead financially than most people. Here are some suggestions for you to consider.

Ways to Cut Spending

1. Consider dropping your home telephone line. Your cell phone is probably all you really need, and most likely it has free long distance. You could save $30 or more per month by dropping your "land line".
2. Cut back on trips to Starbucks or other premium coffee shops. Often called the "latte factor", spending several dollars per day on luxuries like premium coffee can really add up. For example, if you spend $4 for a cappuccino five times a week for 50 weeks out of the year (you're on vacation the other two weeks), you would spend $1,000 in a year. Try treating your trip to Starbucks as a treat instead of a habit. You'll save money and probably lose weight too!
3. Pay your mortgage payment bi-weekly instead of monthly. You'll pay less interest and pay off your mortgage faster.
4. Carry cash instead of credit cards. Psychologically it's harder to spend cash than it is to use the credit card. You'll spend less and save on interest charges.
5. Use the "envelope system" for groceries, dining out, entertainment, and other discretionary spending categories. This will help you track how much you spend in these categories as well as prioritizing your spending.
6. Raise the deductible on your homeowners and auto insurance policies. It's not wise to file claims for small losses anyway (insurance companies love to raise rates after you file a claim), so a higher deductible will save you money now and in the future.
7. Buy regular gas instead of premium. Most cars don't need premium gasoline. Also, take public transportation if it's available in your area. Take advantage of "park and ride" and carpooling options.
8. Plan your purchases to avoid impulse buying. Take a list with you to the grocery store and stick with it. Studies show that impulse buying can add $10-50 to your grocery bill ouch!
9. Go to the library instead of the bookstore. If you're an avid reader, give yourself a book budget for books that you will want to keep, and go to the library for everything else.
10. Take a vacation at home. Check out all the local sites and happenings. You'll rediscover your hometown and save on travel and hotel costs.

These are just a handful of ways you can cut spending and stretch your dollars, but if you follow these tips you'll discover you have more money at the end of each month to apply to other financial goals, such as saving for college, retirement or just for a rainy day.

Frugal Living Examples

1. Search the Sunday paper for coupons and clip them out. Make a list of things on sale that you can stock up on in order to get your average cost down. Plan and run a route of four stores in order to get everything where it is the cheapest. Total extra time spent: three hours.
2. Sit with a pen and paper and determine what you really need in your new house to be happy. List the cheapest homes that meet your criteria. Make several extra phone calls and check out several bank websites to get the interest rate down to 6.25% from the 6.75% you were expecting to pay. Total extra time spent: three hours.
3. Let's assume you save $30 on your groceries for your effort. Your frugality made you about $10 per hour. In the second example, suppose you found a suitable home for $20,000 less. Let's say you only have to borrow $120,000 at 6.25% instead of $140,000 at 6.75%. Your payment would be $169 less per month, for a total savings of $60,900 over the thirty years of the mortgage. In this case, your frugality made you about $20,000 per hour.
4. I think you can see that it is the big stuff that makes a difference in frugal living. On the other hand, sometimes the small stuff is the big stuff, especially when it is repeated over and over. This is why it makes sense to save money on groceries. They are something you buy every week. How you do it makes a difference though.
5. Suppose you don't want to clip coupons or spend time looking at sales flyers. Let's face it; if it only saves you $10 per hour of effort, you might be better off staying a few hours extra at work and skip the hassle. On the other hand, why not invest just an hour or two to figure out which store is cheapest for the things you buy? Then shop only there, and buy more of the things you use and like when they are on sale. You might still save $20 per week, with no additional investment of time. That's a $1,000 per year!
6. Have you read newsletters and magazines about saving money? They often have tips on things like how to re-use plastic wrap or aluminum foil. Is it worth the time to wash out and dry your ziplock bags? Maybe, if you like that sort of thing and you are making minimum wage. For most of us, it is better to spend the time analyzing the big and the recurring expenditures. That is the key to frugal living.

The Best or the Safest Way to Invest Money

The finest way to invest money is to engage in something that you really know and that makes you feel self-assured. It is understanding if your investment capital is your family nest egg or extra risk capital. So, make out your plan and have a good idea of your goals. There are so many ways to invest money and they differ so greatly in risk and return. If your investment goal is to provide retirement income, this suggests one type of investment. If your investment goal is to make a large profit on some extra cash that you have managed to accumulate, this would suggest a completely different investment. Once you have an idea of your investment goals, the next step is to educate yourself about the investment opportunities that are suggested. You might be interested in the stock market, or in Forex trading. You might be considering commodity trading. Many people are drawn to mutual funds or bonds. If you are interested in any type of investment, you need to learn as much about it as possible. Many investments use their own terminology and it can be as confusing as a foreign language without a little research. Even if you plan to discuss your investments with a financial advisor, it is a good idea to have a handle on the terminology first.

One of the ways to categorize investments is by looking at their possibilities. All investments carry risk, but it is obvious that the risk of Certificates of Deposit at your local bank are very low. The risk of the stock market is quite a bit more of a concern and using your funds as venture capital is even more uncertain. When you have made a plan, and chosen an investment based on your goals and considered the risk to return ratio that makes you comfortable, you are ready to make your investment. One mistake made by new investors is to be prone to panic and not see things in the long term. If you invest in a stock, for example, and it suffers a drop in price, you need to consider holding on to it and giving it a chance to recover rather than selling in panic and taking a loss. The best investment strategy is a long term one.

But is the best way the safest way or what’s the risk level? The rule seems to be that the more risk involved in an investment, the more chance for a good return. Some investors like to refer to this as the “no guts, no glory” theory. You can invest in safe and secure investments, but you will not make big profits or grow rich. You also will not be likely to lose your investment and go broke either. When you understand this principle, the answer to the question becomes dependent on the rate of return you are expecting. It would be better to go ahead and phrase it this way: What is the safest way to invest money to realize the return on my investment that I desire?

It does not really matter what type of investment you chose. There are still some ways to make the investment safer. The most important is to study the investment carefully. When you are armed with knowledge, you have a much better chance of negotiating the rocky waters of investment. You can develop an investment strategy that further reduces risks. What you can not do is find a sure thing in investing. Certainly not in an investment that offers the chance of a large return. If you are not willing to take some risks, the savings account at your bank might be the best course for you.

Specific Guidelines for Saving Money Successfully

Nearly all of us were taught the value of saving money when we were still young. You perhaps remember your parents or a beloved aunt or uncle advising you to put coins into a piggy bank or a portion of your Christmas and birthday money into a bank savings account. Unfortunately, for most of us those lessons were among the first to be forgotten or ignored as we grew older and, purportedly, smarter.

What happened, no one exactly knows. I presume that impulsive financial demands of adult life coupled with insidiously effective marketing caused us to forget those early, ever-so-valuable lessons. After all, inflation would only cause your savings to lose a great part of its value.

Those who yield in to the dictates of excessive consumerism often never come to their senses until retirement looms near. By then it would be too late to recover from the circumstances. But such shamble doesn't have to be your destiny. There are effective ways to start saving money seriously and these can be immediately put into work before you run out of time:

Encourage yourself that you matter at least as much as everyone else.

We never get serious about starting a savings program due to our entrenched harboring of a precariously mixed-up set of priorities. We pay all our bills first, and then see what's left at the end of the month to save. And because our month lasts longer than our money, that predominantly accepted mind-set is an intoxicating recipe for lifelong insolvency.

You work hard for your money so surely you deserve to compensate yourself first, or at the very least second depending upon your religious beliefs? By choosing to first set aside a chunk of change for yourself, you'll be sending a message out to the world. One that's bold, simple and clear: "I matter to myself. That's why I pay myself ahead of others. This puts me back in control of my financial destiny."

Comprehend the true potential of compound interest.

While financial experts suggest that we set aside 10% of our earnings, the real economic heavyweights should set loftier goals. Inspire yourself to gradually spread out your talents set so you'll be capable of earning more and more money. Concurrently, lay down a personal goal of achieving a 40% - 50% savings cum investment rate over the next ten or twelve years.

Well, that’s rather extreme and it certainly is by the criterion of today's consumerist society. This is simply your decision TODAY to simply get started. So, calm down because your resolve is more important than setting such high final savings targets.

Given sufficient time and with sheer luck (don’t forget to say your prayers), even small sums parked in low-yielding financial instruments can mature to surprising values. So, make a start. And while you're at it, don't forget the primary lesson we all absorbed in childhood: We should learn to crawl before we can walk before we can run. Learn to save before you try to invest or, scarier still, speculate.

Unleash the power of goal-setting in this vital area of life

Get serious about instituting a personal wealth building strategy, or you will end up becoming pawns in someone else's personal scheme to grow affluent... at your expense. Learn to set challenging and motivating goals/priorities to help inspire yourself to commence on your own journey to financial autonomy. That onset is nothing more complicated than ascertaining in your heart that you have great value, and it’s your uncontestable privilege to save money for yourself.

You may begin your personal savings agenda in something as secure and straightforward as a bank account or a money market fund. Concentrate more on gradually raising your personal savings rate than in reaching - or over-reaching - for yield.

Let these three straightforward tips prompt you to immediately embark on a personal savings program or to get far more earnest about the one that you already have. I wish you luck in your personal pursuit for financial freedom.

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Casinos! Are they right for you?

Casinos definitely serve as great venues of excitement and enjoyment. These public edifices can be effective alternatives for spending leisure time or for achieving relaxation from the daily pressures of life by aiding gambling activities to customers. All major hotels, restaurants and shopping centers often provide arrangement for casinos in order to propose amusement to entice more consumers. They offer gorgeous packages which are appealing to most players. During the festive season or special occasions, hotels, eateries and retail shops flood their consumers with remarkable opportunities to earn handsome amount by gambling in their casinos. Such special offers also enable the players to earn at times more money than the amount invested. One of the reasons behind offering such grand bids is to make sure that these consumers visit these locations again which would prove to be profitable for the restaurants and hotels.

As a prevalent means of increasing income on the part of the casino owners, casino operation can contribute immensely in the economic prosperity of a region as most locations in the world have their own gaming authorities which preside over casinos and gambling activities। This is particularly true for the various hotels, restaurants and even retail outlets which offer facilities for gambling in their casinos. In case of the retail shops, the existence of casinos allows them to provide recreational opportunities which are like add-ons to the shopping experience. This factor thus aids in increasing the final profit revenue of the outlet. Most restaurants provide facilities for gambling in casinos and its economic impact can be manifold. Restaurants are traditionally eateries and are joints where individuals from all walks of life assemble. Often times, many revelers prefer to indulge into a bit of harmless gambling in casinos aside from the eating experience. The primary purpose of hotels who offer casino gambling is to attract more tourists by providing them not only the opportunity to gamble in the casinos but at the same time they often offer attractive offers or packages to lure their residents into indulging in casino gambling which on their part will provide magnificent revenues and income.

Technological development and the introduction of computers and the internet have greatly revolutionized communication thus allowing casinos to spread their activity online as well. The online casinos are also often referred to as internet casinos or virtual casinos. Online casino gambling is at present a very lucrative source of making money. It allows the gamblers to play casino games via the internet and indulge in gambling while at home making such arrangement extremely favorable for many. While it is true that some of these casinos require software downloads for gambling, most of the websites offer minimum signup bonuses to new players against their first deposits.

On the basis of their interface, online casinos can be of three major kinds by means of which gambling activities can be carried out. These are download-based online casinos, web-based online casinos and live-based online casinos.

• For download-based online casinos, as the very name suggests, online gambling becomes possible after having downloaded the required software formats in order to gain access to the multitudes of casino games offered online. In this case, the casino service provider and the online casino software work in cooperation with each other and while the initial download is a time consuming process, the download-based online casinos function faster than the web-based online casinos. Some of the prominent casino software manufacturing companies include Gaming, Microgaming etc.
• In case of web-based online casinos, users are required to log in to the websites in order to indulge in gambling but here no software tools are necessary to be downloaded। The various plug-ins like Java, Macromedia Flash and Macromedia Shockwave are responsible for signifying the different casino games with suitable assistance from the browsers.
• Live casinos are the latest innovations with reference to online casino gambling by means of which the users are able to freely interact with casino dealers online in an authentic casino environment. This recently introduced facility of live casinos is also quite fascinating.

One of the primary reasons behind the success of online casino gambling is the fact that similar to traditional casinos, they also offer similar payback amounts in case of online gambling. Moreover, signup bonuses are also prevalently offered by most online casinos for gambling. Baccarat, online slot games and poker are some of the famous online casino games.
With the technological innovations advancing with the progress of time and the inception of online casinos, it also provides great prospects of increasing economic growth as a certain amount of money has to be deposited in case of participating in the initial gaming procedure online apart from the internet usage charges.

However while it is true that proper marketing can greatly upsurge economic growth of a region, a note of caution should always be borne in mind that overindulgence can spell disaster.

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How to Become a Little Richer

Most of us want to be in the happy state of knowing each night as we drift off to sleep that we are a little bit richer than we were when we woke up that morning। Can you relate to that desire? Of course, you can. After all, the importance of money in our interconnected world grows each day. Yet, I still believe that if you hope to live a happy, balanced life, you'll be smart enough to consider that wealth is only an instrument to be used, not a god to be worshipped.

So, if you wish to sustain balance in your life, retain a sense of deep joy, and successfully grow richer and richer over time। Focus on enhancing two personal quantities: your cash flow surplus and your net worth. Strengthening the first will automatically beef up of the second.

The way to ensure that you grow a little bit richer each day is to focus on your cash flow patterns over just one day, then over one week, later over one month, and so on. If within each time segment you always make it a point to spend less than you bring in on a net basis (after tax and other standard deductions) then you will be transforming the unutilized portion of your net earnings into a personal store of capital; and you will be acting as a capitalist in the finest sense of the word!
Possessing a growing store of capital will empower you to further load up your net worth statement with fruitful or productive assets like bank savings, money market funds, bond funds, equity funds, property funds, rental-yielding properties, dividend-yielding stocks, and the like। In essence, you will be choosing to exercise deferred gratification by giving up a portion of your capacity to consume today for the opportunity to possess far more (and to enjoy a lot more) tomorrow.

It is important to realize that a net worth statement has two parts, as does a cash flow statement. The net worth statement's twin components are assets and liabilities. In general, it is tempting to utter clichés and say that assets are good and liabilities are bad. However, that would be an excessive generalization. Let me explain:
Assets can either be appreciating or depreciating ones। Obviously, appreciating assets like growing bank deposits, investment funds, appreciating properties, and high quality stocks are good. Depreciating assets, on the other hand, lose value over time. These may include your cars, computers and mobile phones. The wise course is not to avoid owning depreciating assets but rather to ensure you have much more in appreciating assets.

Liabilities also can be good or bad. Good forms of debt might include well-structured mortgages on second or third pieces of property that you earn rental from. Bad types of liabilities most certainly include all unpaid, regularly carried over credit card debt and loans.
It is a tremendous eye-opener to understand that unpaid credit card or loan balances are dreadful liabilities for regular people like you and me to have, but are wonderful assets for the banks and lending investors!

So ask yourself if your goal in life is to sacrifice your personal long-term financial health to bolster the bottomline of some faceless financial institution, or is it to manage your money wisely to ensure you grow a little richer everyday? As Confucius said: When prosperity comes, do not use all of it.

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Buffering Up Your Safety Zone

Money doesn't grow on trees. There's never enough money. You have to sacrifice or work hard for money. Money is the root of all evil. Whew! Such clichés about money make you squirm? Well, money isn’t really the most essential thing in life, but it’s practically close to oxygen on the ‘gotta have it’ scale.

Have you ever been to the circus and watched aerial acrobats perform their live routines on a high wire act? Then, you should also have noticed, at least momentarily, that the safety net strung out directly below the trapeze artists serves a critically important function! Likewise, to thrive in our financial lives, we too need a 'safety net'.

More specifically, I urge you to establish a reserve fund for 3 - 12 months' regular expenses. This reserve fund or cash buffer or economic safety net shall serve as an emergency buffer fund. Its fundamental purpose is to provide both fiscal certainty and emotional stability.
Do whatever you must to develop a certainty about money, a certainty that you deserve money and that money will be a resource to assist you in your contingencies and in the accomplishment of your goals. There is one key secret known by all of the world's money masters: money by itself has no power whatsoever. The power or energy of money lies in our attitudes, beliefs and control about it. And this is true for you.

Manage Your Money and Manage Your Life

Money management suggests pulling off greater control over cash flow, both in personal and business perspective. It is the process of budgeting, saving, investing, spending and/or overseeing the cash handling of an individual or group. Effective money management can be achieved by establishing budgets and analyzing costs and income. A relatively second-rate investment can roll into a dynamic gold mine through effective handling of financial assets. What percentage or what part of your wealth should be put into risk in order to maximize your utility function? Controlling risk by proclaiming the amount of closing-out loss is different from directing risk through a money management model that determines the extent of your problem. You do not have to save your entire paycheck, but you should save at least a little something out of it. You must use a method to trace where every single dollar goes. Only when you know where your money is going, can you take steps to channel it to your savings and investments.

Financial management gives practical advice for gambling, for business contingencies, and for stock trading/buying or selling stock shares. Deficient money management is one major cause of bankruptcy among unseasoned traders. Only when you develop the habit of managing your personal finances, can you manage the finances of your own business. So many people financially mismanage their businesses into bankruptcy because they mismanage their own finances. Don't be one of them! It may take some time to change your habits and actions, but it will pay well in the long run if you do. If you want to be wealthy, do not expect it to happen automatically. You must commit to spend time on your finances. Millionaires spend an average of an hour a day on personal wealth management, while most people spend less than an hour a month, usually on paying bills. Financial stress resulting from poor money management skills can affect our capacity to make good decisions, harm our relationships, affect physical and mental health, and ultimately to function well in life. Many people think that if you cannot manage your life, you can't begin to manage your money.

On Borrowing – A Curse or A Blessing?

Consumer borrowing has convincingly muscled itself into the 21^st century’s global retail economy. Borrowing money has leveled up its stature as a safe and easy, natural, respectable, time-honored tradition for financing business operating capital, expansion, the purchase of equipment, building up inventory, and to even-out cash flow. In fact, it is the most logical means of financing business and business operations nowadays and it seems that it is no longer feasible to live and stay out of debt. Yet there are those who have remained debt-free and still, many people assume that all debt is bad... even categorically evil. Is it desirable to totally eschew or abstain from debt? Is it realistic to extricate oneself from the clutches of clinging debt! Is debt a curse or a blessing?

Debt is one of the few things in life that cannot be appropriately viewed in black and white! It should be viewed in the full spectrum of color and hue. Just like water, debt can be a great ally if properly harnessed. But it can scratch you for life or even permanently bump off your breath if it is allowed to rant and rave out of control. Typical consumer loans are taken on for years at a stretch to buy items that plunge in value, at times suddenly during the term of the outstanding loan! But too much consumer debt indicates a well-entrenched helplessness to exercise one of the key criteria for long-term success, a commitment to deferred gratification - the willingness to give up something good today in anticipation of something far better tomorrow. This philosophy of deferred gratification points to a person’s superior emotional aptitude. Mature people can exercise deferred gratification with regard to consumer items. Immature people can't, won't or simply don't! And the dividing line often has little to do with chronological age.

On the other hand, a viable business debt - under the right circumstances - can be productive. Money may be borrowed, say at 12%, to engage in productive economic activities that yield perhaps 25% or more. The ability to do this continually leads to burgeoning, upward spiraling profits, which are the cornerstone of sound, vibrant capitalism and the goal of all self-respecting capitalists. However, this could be construed as greed; and unadulterated self-indulgence is cancerously evil. But a healthy desire for profits, as long as it is attained by ethical business practices devoid of scraping others, is not only good, but wonderful. After all, the fair exchange of useful commodities and services for money is the foundation of a vigorous economy. Modern life is centered upon the benefits of profits earned honestly and shared benevolently.

Still, in a viable business borrowing, intelligent restraint should be used. Business owners and managers must use extreme caution regarding borrowing to start new ventures, to maintain cash flow and operations capital in existing businesses, or for expansion. One should try to identify which financial debts are productive, good business-type ones, and which ones are the more common destructive, consumption-type that only make financial institutions richer at your expense! Then embark upon a focused program of debt-eradication within the second group. Either pay off debts in order of the most expensive ones (meaning those with the highest interest rates) first; or pay them off in order of the smallest ones first.The first strategy is mathematically more efficient, but the second is more emotionally fulfilling. Go for the first if you're well-disciplined. Use the second if you're like most of us mere mortals and in need of quick reinforcement through positive feedback! Try your best in crushing the monster of excessive consumer debt and thus rescuing your future income streams from being devoured by this implacable foe. Will you be an intelligent borrower or economic slave?

Are We Happier When We Have More Money?

Many of us think that more money leads to greater happiness and contentment. As a matter of fact, almost everyone works for money and our job accomplishments are measured in terms of monetary returns. Thus, it seems that in our consumerist society, people are compelled to follow the tenet that luxury is the status symbol of success and prominence. More money means finer cars and houses. The possession of material wealth implies the prospect of more holidays, travel to exotic places and quality entertainment. Lavish consumption somehow pervades as the goal of our economy. Would you deny the fact that having more money enables you and your family to survive the unforeseen financially draining events such as serious illnesses and disasters? And who is in a better position to help the less fortunate? Obviously, these rationalizations account to the pervasive notion that more money brings happiness.

Now, let’s look into some research findings so we can really spot the score:

• Factors predicting the subjective well-being of nations In the Journal of Personality and Social Psychology (1995) indicated that while there is a strong relationship between income and satisfaction at the lower income levels, the relationship becomes insignificant at the higher income level. This suggests that once the income rises above the poverty level, further increase in income does not increase happiness level by any significant level. This also suggests that people in rich nations may not be happier than those in poorer nations. Correlates of financial success as a life aspiration showed that the more a person values money, the less satisfied he will be when he gets it. This suggests that in order to be happy, we need to value money less.
• Using a battery of statistical data from a variety of sources including UNESCO, the CIA, The New Economics Foundation, and the World Health Organization, plus the subjective responses of 80,000 people across 178 countries worldwide, Adrian White, an analytic social psychologist at Leicester developed the first "World Map of Happiness”. The countries that are found happiest are those that are healthy, wealthy, and wise. Smaller countries with greater social cohesion and a stronger sense of national identity tended to score better, while those with the largest populations fared worse. Good health may be the key to happiness, but money helps open the door. While admitting that happiness is subjective, White defends his research on the grounds that his study focused on life satisfaction rather than brief emotional states. The frustrations of modern life, and the anxieties of the age, seem to be much less significant compared to the health, financial, and educational needs in other parts of the world.
• On the World Database of Happiness, which is based on average responses to a question about life-satisfaction, the determinants of happiness include (a) economic development, political democracy and a cultural climate of tolerance, (b) the individual’s position in society; not only the position on the social status ladder, but also inclusion in social networks, (c) psychological strength, assertiveness and self-understanding, (d) sheer good or bad luck.
• Dr. Luisa Corrado, a Marie-Curie fellow at the economics department of Cambridge University in Britain, confirmed through studies and research that our happiness and well-being would be more likely to flourish in a mutually supportive and trusting society. It is not enough for governments to focus on improving wealth and material standards of living. Well-being goes beyond the maximization of each individual's pleasure or wealth. Public contentment is the outcome of individual, social and institutional factors such as social cohesion, an effective welfare state, social mobility, low unemployment, higher income, and less inequality. This is because people measure their satisfaction against the success of others. Here, the individual not only maximizes personal pleasure, but also considers how institutional, environmental, personal and relational factors are affecting his whole life. However, Corrado also observed: "We cannot think about becoming happier forever." In fact, she noted, although people (in advanced countries) are generally much wealthier than their fathers and grandfathers, their levels of happiness are either equal to or below those 50 years ago.

From these studies, happiness or well-being may be considered as an offshoot of a more holistic complementation of factors which include social cohesion, higher income, health & environment, good governance, and psychological vigor. To talk about more money per se as an indicator of happiness is insufficient. As proposed by in 2006 by Med Yones, the President of International Institute of Management, Gross National Happiness as a socioeconomic development metric which is an index function of the total average per capita of the following measures: Economic Wellness, Environmental Wellness, Physical Wellness, Mental Wellness, Workplace Wellness, Social Wellness, and Political Wellness. Also Bhutan’s King Singye Wangchuk coined in his definition of Gross National Happiness that the true development of human society takes place when material and spiritual development occur side by side to harmonize and reinforce each other.

Are we happier then when we have more money? Yes but No. Or we better modify the question. What do you say…

Stuffing Our House with Stuffed Toys

Why are we inclined to accumulate things? Do we gain satisfaction and pleasure simply from the things we amass? Is it the nostalgia bug that compels people to collect? Is it the intrinsic value of the thing or its specific provenance that compels interest and pushiness?

I remember one day last December 2007 when my wife asked me to buy a large bear stuffed toy which was on 50% sale at a Watson Store. Discounted but still pricey for me, so I declined. The next day it ran out of stock. Alas, she shoved me with a two-day snippy stance. That was a few months ago, now I’m stuck griping on stuffed toys stuffed in every available display area in the house. Bad for my rhinitis or real bad for our pockets? But at least I get liberated from her gruff slant.

When she goes to work, she leaves her guise haunting me in her collection. I stuff my head with questions like: What does she get with these stuff? What’s in her mind? And she even hides some from me.

I picked up one stuffed animal on display; I chose it because it stands out in color and peculiarity. It’s lovely though. I held it and tried to put it in my arms like she often does. It kind of melts, the silky fur is squishy. Its softness makes it perfect for cuddling. I tried another stuffed animal. Oh, what a color – black. Off-beam proportion, huh, so I tried reorienting it, starting with the hand. Wow! This is a talking monster and it snorts like I do and even its stomach bulges. What a crap, but it’s amusing. I wanted to find out about the rest but I refuse to get into her world … a kind of self-preservation.

Ironically, I have my own stuff too - a collection of 350 CDs and 250 DVDs plus nearly a hundred gigs of MP3s. Does she feel and get fulfilled in the same way? Perhaps I understand. By the way what’s wrong with it? Or what’s wrong with us?

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Pat My Back for a Breeding Hack

“Have you seen my childhood?” Michael Jackson sings these lyrics with sheer emotion, somehow grimacing with the pain of lost childhood. Not everyone can handle the distress when they connect the dots in their own lives. Some suffer in silence, others cry out in disillusionment because there is such a twinge of mislaid or bungled childhood. Though we’ve always been advised to shake our heads and get over it, we could not deny the obvious impression of childhood woes (or wows) in our lives especially during adolescence. And this girl is no different...

She would show up like a placid river with that gentle flow of painful releases. She was ignored and bruised to leaving her abode or shall I call it quarters? She said she threw her clothes in her 1 ½

bags and immediately set to come back to her former place, for a vacation maybe. Here, all her childhood prodding took shape. She had a family then and much more complete without her real mother ... and father. Her grandma, aunts, uncles, cousins were physically all around her. She had the material things she needed. Everyone, in his/her own little ways, influenced her life. She thought she was the favorite, well, by her grandma perhaps. She practically grew up with her and the old woman loved her…very much. But she was taunted and mocked unwittingly by everyone else – nobody realized this somehow. She would then search for the social nod that would push up her person over her peers. And then, this placid lake (did I say river?) swirled. The inner turbulence of confusing values ran out of control. Her grandma could no longer manage her. The old woman died and at 13 she had to go to and live with her real mother.

After more than a year or maybe two, she showed up with her 1 ½ bags of clothes. She sobbed and cried out her pain and frustrations. She doesn’t want to be like her brother, she will continue with her studies with us. I had the chance to feel her soothing gentle massages over my head for that migraine smack. Of all the children I’ve met, she was the only one who could last 30 minutes (or more) of hand pressing over my aching head. She hasn’t changed and when I asked her to stop and rest, she said “call me again uncle…”. But she couldn’t last the bore of staying home for good. She thinks her friends and boyfriends are better options for filling the void in her. She left the next day midmorning without a message and came back home at midnight. If that is the arrangement she wants for her life, we have to let go.

Now, she is struggling to find her own niche. Will she rumble back to where she left?  Will she blame us all for what we made of her? Have we tried our best to help her in her dilemna? Maybe we confused her, we hacked her breeding. Maybe not, pat my back … ask her mother…

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