New Rules of Finance

The concept of finances has existed since the beginning of time. In Mesopotamian days people would trade goods for other goods and services, which would quickly morph into a form of currency. Some rules have existed since the beginning of time about finance. Budget, save for retirement, spend less than you earn to build up your wealth.

Other financial advice holds up less than adequately in the 21st century. With a new financial culture and the everchanging way of the younger generation viewing finances, the rules of the trade have changed. A common rule preached throughout the late 20th century was to save six month’s worth of living expenses for emergencies. That includes rent, utilities, and any fixed necessary expenses. While saving for emergencies is incredibly important, it’s not necessarily doable for Millenials in today’s market. Most individuals have trouble saving 1,000 dollars for emergencies, much less 6 months’ worth of expenses. There are now new and other ways of looking at finances and saving money.

Another old rule is that buying an old home is better than throwing away money on rent. While that may be applied in the 1920s when buying a house was equivalent to now buying a smart refrigerator, the same can not apply now. Since the 2008 housing crisis, buying a home has become an increasingly difficult process. Instead of that old rule, make your new rule of thumb is to examine your expenses, and don’t rule out renting. Often in today’s market, renting is the safest option, especially for Millenials and Generation Z.

Another old rule had to do with investing. Previously it was recommended that you do not invest in any stocks until you pay off your debts. The thought process that investing in stocks with the risk of not paying out debts was greater than reward. With the current options for not only paying off debts but investing, the opposite may be true. As a new rule of thumb, focus on paying off your high interest and regular debt payments, while investing in a low-stakes stock. The ability to grow your portfolio can help in the long run instead of hurting.

While trends come and go, the importance of finances do not. Don’t be afraid of new lines of thinking, and more relevant options for your financial journey.

This post was originally published on Etienne Kiss-Borlase’s Finance Blog. For more info about Etienne, please visit his homepage.

New Rules of Finance

How To Deal With A Financial Crisis

A crisis is defined as a time of intense trouble, misfortune, or danger. A financial emergency can come at any age, to any demographic, in any area. A crisis can come out of nowhere; bank accounts hacked, sudden car troubles, an unforeseen medical expense. Or, they can occur after a series of poor choices and mistakes that culminate in a state of emergency. There are ways to manage and work through a financial crisis; a crisis doesn’t have to be the end of your world.

 

Start by calming down. Decisions made under stress or suddenly can be more harmful than helpful. Take notice of what feelings are linked to your crisis. Do you feel panicked, out-of-control, or full of anticipation? Are you scared, sad, or angry? Your feelings are valid, but do not let them control your decisions. After making yourself aware of what your feeling, try to spend some time calming down. Some individuals find a lot of peace in meditation or prayer. Others find themselves calmer after deep breathing and perspective. Whatever works best for you, lean into the process of calming down. 

 

Move to analyzing what your expenses are. Start by breaking it down into two categories, fixed and fluctuating expenses. Fixed expenses are an expense that happens regularly.  Things like bills, subscriptions, and set budgets for groceries happen weekly, bi-weekly, or monthly. Fluctuating expenses are expenses that change and vary every month. Shopping, furnishing, eating out are all examples of expenses that change and morph over time. 

 

Next, decide what your wants and needs are. Needs are expenses that you need to pay to function normally. Wants are expenses that you don’t have to fulfill every month. For example, a fixed-needed cost is a payment like a mortgage or rent. A fixed-want is something like a Netflix or Amazon subscription. 

 

From there, try cutting out or cutting down on the things that you want. Minimizing what you pay for is not a fix-all treatment. But it is a start to help ease you out of your financial crisis. 

This post was originally published on Etienne Kiss-Borlase’s Finance Blog. For more info about Etienne, please visit his homepage.

How To Deal With A Financial Crisis

Minimalism and Finance

A strong symbiotic relationship exists between minimalism and finance. Minimalism is the art of living with less. In recent years a plethora of podcasts, books, and documentaries have been produced in concern to the rise of minimalism. The most famous being the documentary titled “Minimalism: A Documentary About the Important Things.” The documentary takes the audience into the many flavors of minimalism by following individuals and families through their living-less lifestyle. 

 

The bare bones of minimalism are fundamentally about intentionality. Although there are many avenues and flavors of minimalism, a definition can be broken down into the following; the process of identifying what is essential in your life and having the courage to let go of the rest.” The framework is done by figuring out the difference between needs and wants. The way you approach minimalism relies on what your unique wants are. For example, someone who may put a considerable amount of time and effort into fashion may be challenged to trim their wardrobe down to the bare essentials. Some minimalists can fit their entire wardrobe, shoes and all, into one suitcase. Someone who puts a priority on having the newest and brightest kitchen gadgets may be challenged to having only what you need to cook with—limiting themselves to one set of silverware, pots, pans, and a hot plate. 

 

So, where does finance come in? You may think that the things that you own, that you deem essential, don’t directly correlate to your finances, but the opposite is true. Finance is simply defined as the management of money. Your money management includes fixed income like bills and taxes, as well as flexible income, which can consist of anything from a grocery budget to going out with friends. Our flexible income reflects our priorities. When we prioritize a minimalist mindset, our finances will reflect that choice. 

 

Adopting a minimalist mindset is unavoidably intertwined with your finances. If you consider adopting a minimalist mindset, make sure you adjust your funds accordingly. 

This post was originally published on Etienne Kiss-Borlase’s Finance Blog. For more info about Etienne, please visit his homepage.

Minimalism and Finance

Six Simple Ways To Save

When it comes to money, we all set out with good intentions to spend and save wisely. In the midst of a busy life, constant advertisements, and quick spending, saving money can seem impossible. In reality, we can only save money when we develop healthy habits. Check out a few simple habits that will turn your saving habits around. 

 

Revise your Grocery List

When people begin to make a budget, one of the most surprisingly high categories is their grocery budget. Your grocery budget is one of your more critical funnels. To save money, try making a grocery list and sticking to that list. If you walk in without knowing what you’re going to ger, you’re more likely to buy things that you don’t need. If you’re trying to save money, try buying bargain items over brand name items.

 

Cancel Automatic Subscriptions 

In the age of instant gratification and regular subscriptions, subscriptions like Hulu, Netflix, Ipsy, and HBO can quickly add up. Figure out which subscriptions you use most, and eliminate the ones that you don’t often use to save the extra money each month. 

 

Save Automatically

Automatic saving is your best friend when it comes to saving money. Most banks or cards have the option to automatically save a portion of your deposit. Try saving 10% of your paycheck each month to build up a savings account.

 

Pack a Lunch

The average American household spends around 280 dollars per month on eating out. An easy way to minimize how much you spend is by packing lunch. When you can, pack food, snacks, and drinks when you go out or go to work. If you do need to eat out, buy simple, smart foods that are good for your body, and your wallet. 

 

Freeze Your Spending

A popular way of saving money is by “freezing” your spending. Take a week, or even a month, and only spend money on absolutely essential items. Prep meals ahead of a time and make sure your bills are set up to be paid and cut out spending. You’ll be surprised at how much you save by not spending for set amounts of time. 

 

Set a Budget

Setting a budget is one of the simplest ways to save money. Sit down and figure out where you spend money, and how much you usually set. Set realistic, budgeting goals and stick to them. Don’t be afraid to ask your friends who are in a similar life stage/situation what their budgets look like. There are even helpful online budget makers that you can research and check out. 

 

Saving money is an essential part of being a healthy adult and setting up a good future for yourself and your family. Try to spend the next month being intentional about your spending, and track positives and negatives of your new way of living. 

This post was originally published on Etienne Kiss-Borlase’s Finance Blog. For more info about Etienne, please visit his homepage.

Six Simple Ways To Save

Building Your 2020 Budget

Creating a budget is an important financial strategy for building a future nest egg. One way to conquer the temptation to spend too much money during and after the holiday season is to establish a sound 2020 budget and stick with the plan. The following tips offer helpful suggestions for devising a workable budget:

 

  1. Think About Future Expenses

 

Include all prospective future expenditures in the 2020 budget and estimate the costs for each. For example, include a potential college tuition expense expected to occur in the new year, or the cost of a new car if yours is getting older. It is also important to encompass prospective gains. Whether these gains refer to an expected raise at work or projected investment dividends, an accurate budget must depict all expenses and increases.

 

  1. Learn to Estimate Conservatively

 

Since it is not always possible to know what the future holds, it is wise to make conservative assumptions. Instead of including low estimates for expenses, a 2020 budget should incorporate high estimations. Applying the reverse procedure for income, the budget should include low estimates for expected increases in income.

 

Infusing a budget with these techniques means gives the plan a realistic basis. It is also helpful to think about the possible rising costs of everyday expenses, including gasoline for vehicles and utility hikes. It is better to overestimate and underspend. 

 

  1. Study the Current Spending and Savings Trend

 

Viewing the current year’s expenses and savings enables a person to have a clear understanding of how to set future goals for a 2020 budget. A person may discover that they need to spend less money eating out and deposit more earnings into a savings account.

 

Paying off debts is another important aspect to consider. A golden rule of budgeting is to avoid overspending. Living within a person’s means is the optimum way to develop a 2020 budget.

 

  1. Obtain a Credit Report

 

A good credit score provides the opportunity to take out a loan on a car or mortgage and pay less interest. A poor credit score has the opposite effect. So, it is a good idea to include a debt payment plan in the 2020 budget and eliminate all current debts. After the debts are gone, the next best thing is to limit expenses to one credit card and pay for most expenditures with cash.

 

This post was originally published on Etienne Kiss-Borlase’s Finance Blog. For more info about Etienne, please visit his homepage.

Building Your 2020 Budget

The Rise and Fall of Facebook Libra

Facebook Libra has been in the news a lot lately. This cryptocurrency was envisioned as a so-called stablecoin. Libra was designed carefully to avoid the huge fluctuations faced by cryptocurrencies like Bitcoin. The plan was to offer a more stable currency, backed by stable securities. Sponsors like Visa, Mastercard, and Paypal seemed just about ready to get on board with the project.

 

However, by late October, they had all pulled their backing off the table. eBay, Stripe, and Mercado Pago were other potential sponsors who didn’t quite come through. Why the loss of confidence? Many aspects of Libra have been too up in the air for too long. In particular, Facebook’s role in the project opened it up to special concerns.

 

Facebook was famously always the social network that required real names. With Libra, if they offered anonymity, it could create liabilities. The platform could attract lots of black market activity and scams. However, if Libra were too closely linked to people’s Facebook profiles, it could cause problems in terms of privacy issues. The social network has alarmed consumers when it comes to data already.

 

Asking Facebook’s end users for access to financial details could really increase their risk exposure. If the two services were too closely linked, any data breach to either network could prove devastating for everyone involved. The idea of the low-volatility securities backing the stablecoin also seems overly optimistic in the wake of the 2008 recession.

 

Perhaps most importantly, Facebook is already facing calls for increased regulation. These are coming from powerful political figures, including candidates for the US Presidency like Elizabeth Warren. Entering the world of currency will almost definitely lead to more government scrutiny. For one thing, governments need a stable currency and don’t want people to use an alternative that undermines theirs. For another, Facebook has already been implicated in election tampering.

 

Critics of Libra point out that there are already better ways to do many of the things Facebook claims this currency will solve. Solutions like Ripple follow the rules set in place by the federal government. They’re already used to facilitate payments internationally at reasonable costs. There seems to be no real way that Libra would do the same thing at a lower cost, or with more efficiency.

This post was originally published on Etienne Kiss-Borlase’s Finance Blog. For more info about Etienne, please visit his homepage.

The Rise and Fall of Facebook Libra

How to Make Money Without Getting a Second Job

Most people want disposable income and walking around money so they can have a more enjoyable lifestyle, but for those who are otherwise content with their current employment situation, it might not be a viable option to switch careers. In this day and age, it is easier than ever to have a lucrative side gig in addition to having a regular job. 

 

For any side gig, it’s important to weigh the pros and cons of the time and money that will be spent on your end in order to achieve the ultimate goal of having more cash in your pocket. One way to earn money pretty easily is through passive income – getting paid for something you’ve already done. If you enjoy taking pictures, you can sell your photos online as stock images to a number of online galleries. This is the gift that keeps on giving because after you provide a one-time product, you still reap the rewards.

 

Another good source of income is to offer you and your car as a transfer service by transporting people or goods around town. Roadie is an on-the-way delivery service that helps bring together people with delivery needs and others who happen to be going in the same direction. The major advantage to you, as a driver, is that you can earn money without deviating much from your typical schedule. Ridesharing services are also a great way to earn some extra income. Lyft and Uber are two major players in the mobility service industry by employing regular citizens as contract employees. 

 

Unclaimed funds are a topic that most people don’t even think about, but there are individuals out there who have money waiting for them for various reasons such as uncashed payroll, insurance reimbursement, stock dividends, balances from bank accounts, and estate revenue. It is important to be cautious when checking the online databases to see if your name appears. There are only a couple of sites that are legitimately certified by the government. They are missingmoney.com and the National Association of Unclaimed Property Administrators (NAUPA). You may file a claim to collect any money that belongs to you. Unclaimed gift cards are another way of getting funds with minimal effort. Many establishments will buy back unused gift cards for a small transaction fee. 

 

If you are someone who is handy or possesses a unique skill set, you can sign up for task services. People are always in need of help such as painting and repairs. Task Rabbit is the most well-known app out there for matching peoples’ needs with the right helpers. 

 

This post was originally published on Etienne Kiss-Borlase’s Finance Blog. For more info about Etienne, please visit his homepage.

How to Make Money Without Getting a Second Job

Understanding Retirement Annuities

There are multiple options for investors saving for retirement including employer-sponsored and self-employed pension plans, 401k or 403b plans, Individual Retirement Accounts (IRAs), and deferred annuities. Here is some information to help you understand retirement annuities and how they can fit into your financial plans.

 

What is an annuity?

 

Financial institutions, mainly investment and insurance companies, offer annuities to individuals as long-term investments for retirement savings. Someone can make a lump sum investment or monthly installments to fund an annuity. At some future date, the annuity contract will provide a reliable income stream to the individual. Social Security and defined benefit pension payments are classic examples of how annuities are intended to work.

 

It helps to understand the concept of fixed or variable and immediate or deferred annuities. A fixed, or lifetime, annuity provides a lifetime stream of income starting at a predetermined date and continuing until death. A variable annuity is popular as a way to defer some portion of income taxes. An immediate annuity takes a lump sum investment and converts it into payments that start immediately and continue for life. A deferred annuity can be funded with a lump sum investment but usually involves monthly investments designed to grow over time before being converted to the lifetime income payment stream.

 

Why should someone invest in an annuity?

 

There are few arguments against planning for and investing in your retirement. If there is a “con” to investing an annuity, it is that you give up a portion of today’s dollars to create a future income stream. The obvious benefit is that you create a lifetime future income that starts as soon as you retire. Another benefit of deferred annuities is tax savings. Many annuities allow you to defer taxes on investment returns or contributions until you start taking monthly distributions.

 

Considerations

 

There are many annuity products to choose from, so you need to consider the:

 

  • High cost and limited tax benefits of variable annuities
  • Hefty commission associated with fixed annuities
  • Risk of loss due to outliving your assets
  • Risk of loss due to insolvency of insurer or annuity company

Advice

 

Financial planners and retirement planning professionals recommend purchasing annuities from more than one company to reduce the risk of loss, minimize costs, and maximize returns. Even if you choose to invest with a single financial institution, it pays to understand how annuities work. Whether you need to invest a lump sum today to create a lifetime income or need to invest for your future retirement, this information can point you in the right direction for including annuities in your retirement plan.

This post was originally published on Etienne Kiss-Borlase’s Finance Blog. For more info about Etienne, please visit his homepage.

Understanding Retirement Annuities

Spotlight: Switzerland’s New Platform 10 Art District

Every year in Basel, Switzerland, Art Basel presents an exhibition featuring high end works by local artists. This yearly exhibition has turned Switzerland into more than just a blip on the map in the world of contemporary art.

 

This event brings together hipsters with art curators and gallery owners to create a community of passionate and dedicated artists. Due to its overwhelming popularity, there are now two competing art shows held in Hong Kong and Miami Beach.

 

Art has always been a significant part of the culture in Switzerland. Since Art Basel was launched, the fine arts have been treasured throughout the country. As a result. Switzerland boasts world-famous art museums. Some of these museums include:

 

  • Bern’s Zentrum Paul Klee Museum
  • Zurich’s Kunsthaus
  • Lucerne’s Rosengart Collection

 

Currently, under construction, Plateforme 10, set to be the largest museum in Switzerland, will be the next-door neighbor of the Lausanne train station. As the center of the city, it will be a prime spot for tourists to visit.

 

Once it is open for business, the Plateforme 10 is poised to set the city’s definition of an art district. It will hold a total of three museums on its property. These three museums are currently spaced out around the city. The Plateforme 10 will be the new home of:

 

  • Musee Cantonal des Beaux-Arts
  • Musee de l’Elysee
  • Museum of Contemporary Design And Applied Arts

 

In total, the three museums will come together to cover a campus stretching 237,000 feet. As a result, all three museums will have more space in which to display their exhibits.

 

To many, Lausanne is the perfect place for this new museum to open. The city is known as the world’s most free-spirited. As the Canton of Vaud capital, Lausanne borders the French Alps and Switzerland’s famous Lake Geneva. The city exudes the vibes of a young generation. As an artistic hub, it embraces a generation that thrives on their creative spirit.

 

Any art lover owes it to him or herself to plan a trip to Switzerland The Platform 10 District is not to be missed. It is an experience that visitors will never forget.

Spotlight: Switzerland’s New Platform 10 Art District

Personal Finance Habits that Everyone Should be Following

Millions of Americans are deep in credit card and student loan debt. There is a big fear of an upcoming retirement crisis because people have so little saved for their golden years. Much of the problem in American personal finance stems from the lack of good financial habits. Here are three great habits that everyone should follow.

 

 

Set up a Budget

 

A budget simply allows a person or family to track income and expenses. Many expenses are fixed each month. For example, a car payment or a rent or mortgage payment will generally stay pretty stable from month to month. Other expenses are variable. Utility bills fluctuate by the season. Food costs can vary widely from one month to the next. At the beginning of each month, it’s a good idea to set aside some time to look at the expected income for the month and then see what’s available for discretionary bills like food and entertainment. One month might require leaner food choices while another might allow for a few steaks. A budget will help a family decide which direction to go.

 

 

Create a Plan for Savings

 

Those who pay themselves after everyone else will have little to save. It’s a good idea to pay yourself first. This requires a savings plan. It’s possible to save even before the IRS takes its share. To achieve this goal, it’s necessary to save in a tax-advantaged plan like a 401(k) or an IRA. The traditional options actually cut taxable income and allows a saver to save every penny of those dollars up to the IRS limit. Starting at a small percentage and then building it over time can allow a family to ease into savings and make changes less painful.

 

 

Pay Down Debt Aggressively

 

Many people are comfortable with debt. However, every dollar that goes toward paying off debts and the interest on them is a dollar that cannot be saved or used for something else that’s more beneficial. Paying the minimum on a credit card could leave a person in debt for 10 or 20 years even on a very small balance. That’s why it’s important to pay more than the minimum each month.

 

 

These are just three financial habits. However, few are more important when it comes to building wealth and achieving financial freedom. Getting started as soon as possible is the key to long-term success in personal finance.

 

This post was originally published on Etienne Kiss-Borlase’s Finance Blog. For more info about Etienne, please visit his homepage.

Personal Finance Habits that Everyone Should be Following