Crushing Credit Card Debt

Written by David Berky


Continued from page 1

Then applyrepparttar $225 payment torepparttar 112684 $5000 card for a monthly payment total of $375. Soon this card will be paid off and you will have $375 extra each month to pay off other debts or better yet, INVEST!

So, which debts should get paid off first?

Generally, you want to pay offrepparttar 112685 debts that are charging yourepparttar 112686 highest interest rates first. Inrepparttar 112687 above example you could have addedrepparttar 112688 $100 payment torepparttar 112689 $5000 credit card rather thanrepparttar 112690 $4000 credit card. Butrepparttar 112691 $4000 credit card is charging you 27% whererepparttar 112692 $5000 credit card is charging 18%. By paying offrepparttar 112693 card chargingrepparttar 112694 higher interest rate first, you will save some money on interest charges.

If this sounds too confusing, you can enlist your computer. You can searchrepparttar 112695 Internet forrepparttar 112696 keywords "debt reduction calculator" or you can visit http:/ /www.simplejoe.com/debteraser/index2.htm and review a product named Simple Joe's Debt Eraser.

Simple Joe's Debt Eraser helps you create a Rapid Debt Reduction Plan that is customized to your debts and your situation. Just enter your debts andrepparttar 112697 amount you can afford to pay each month. The software will create a plan telling you how much to pay towards each debt each month until they are all paid off.

You CAN pay off your debts. The trick is to stop charging purchases to your credit cards and develop a debt reduction plan. Your plan should include "snowballing" your payments and prioritizingrepparttar 112698 debts by high interest rate.

© Simple Joe, Inc. David Berky is president of Simple Joe, Inc. which sells the Simple Joe's Debt Eraser PC software. Debt Eraser can help anyone get out of debt quickly and inexpensively by creating a Rapid Debt Reduction Plan. This article may be freely distributed as long as the copyright, author's information and an active link (where possible) are included.


Inflation: What Is It And Why Does It Happen?

Written by David Berky


Continued from page 1

For example if you are 30 right now, wouldn't it be great to retire with a million dollars when you are 60. You could live on that forever. Right?

Well, let's factor in just 3% inflation for 30 years and see how much your million will buy then. After 30 years of 3% inflation, one million dollars will buy about $400,000 worth of goods and services. That's 60% of your money gone to inflation.

If you were counting on a monthly retirement amount of $2778 each month for 30 years, you now only haverepparttar equivalent of $1111 each month. Less than half! Could you live on $1111 a month?

Sure you may have your home paid for and you won't have to buy expensive work clothes or pay for lunch every day, but your medical bills will go up as you get older and your insurance costs will increase. Also you may want to golf or travel more than you do now. You will have more time for hobbies; how will you pay for them?

The biggest problem I see with a lot of long range financial planning, especially retirement planning, is that people forget to factor inrepparttar 112683 effect of inflation on their investments and savings.

You may be able to live on $2778 a month at today's prices, but could you live on $1111 at what prices could be 30 years from now.

So what can you do about inflation? Really nothing. It is out of your hands.

But when planning forrepparttar 112684 future you can include it in your calculations. If you want to live onrepparttar 112685 equivalent of $2778 a month when you retire 30 years from now, you need to plan to save/accumulate $1.8 million and have it invested at 5% after you retire and want it to last 30 years.

That means that if you are earning 11% (asrepparttar 112686 stock market has averaged forrepparttar 112687 last 30 years) and you are 30 now, you will have to invest $500 each month to achieve this goal. If you only invest $100 a month you will need an average return of 18.4%. (If you can average that, you should be managingrepparttar 112688 world's money!)

A good financial planner will understandrepparttar 112689 effects of inflation and help you plan for them. But I suspect that some less-trained "planners" (who are probably more like salespeople in a financial planner suit) tend to "forget", ignore or don't understand inrepparttar 112690 first placerepparttar 112691 effects of inflation.

Leaving it out ofrepparttar 112692 plan makesrepparttar 112693 calculations easier and may even help them get more "sales" because you are not discouraged byrepparttar 112694 truth. And their "product" (investment) may not seem as inadequate as it may really be.

Another quick way to account forrepparttar 112695 effect of inflation is to subtractrepparttar 112696 inflation rate from any rate of interest you will be receiving on an investment. So if you are going to assume a 3% inflation rate andrepparttar 112697 assumed rate of return is 11%, dorepparttar 112698 projection with only a 8% rate of return or interest.

This will give you a more accurate picture ofrepparttar 112699 value (notrepparttar 112700 amount) ofrepparttar 112701 investment at its maturity.

Some investments such as real estate and precious metals (gold, silver, etc.) actually benefit from inflation. This may make you want to truly "diversify" your portfolio into more types of assets, not just more types of stock.

Inflation does not have to be scary as long as you understand how it works and how it affects your future money values. Accounting for it in financial equations and projections can be done simply. But overlooking it or downplaying its effects can cause you to miss your financial goals by a wide margin.

© Simple Joe, Inc. David Berky is president of Simple Joe, Inc. One of Simple Joe's best selling products is Simple Joe's Money Tools - a collection of 14 personal finance and investment calculators. This article may be freely distributed so long as the copyright, author's information and an active link (where possible) are included.


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