Saving Money - The Magic 20 Percent

Written by Emmanuel Mendonca

Saving money is not easy and is made more difficult if you have a short-term outlook regarding your personal finances. If, like many people, you are living from one pay cheque torepparttar next, it is difficult to put some money aside for a rainy day or for a summer holiday. But what if you were to change your financial outlook into a medium to long-term one? You might believe that you cannot afford to think ahead and make plans, but in most cases you would be wrong. Most people should be able to save some money and with some effort, maybe even as much as 20 percent of their salary each month.

Income Analysis

First of all it is important to have a handle on where your income is going. Unless, we are on an extremely tight budget or are very money conscious for other reasons, many of us have never really sat down and considered what our money is being spent on – we just know that byrepparttar 148538 end ofrepparttar 148539 month, it has all gone! You will know if you are consistently spending your money on unnecessary purchases, for example. Having this knowledge equips you withrepparttar 148540 control to change things a little or a lot.

Saving Money Mentality

Many people have never been taught to save and as children, immediately spentrepparttar 148541 money they received without any forethought. You often hear people say, “Life is short, if you want something buy it now”, but thankfully for most of us life is not really so short and alongrepparttar 148542 way we will have to deal with both opportunities and challenges. Having some money saved will help you makerepparttar 148543 most ofrepparttar 148544 opportunities and riderepparttar 148545 challenges.

Five Myths About Inflation

Written by William Cate

Five Myths About Inflation By William Cate

A classic definition of inflation is any increase inrepparttar money supply. Understanding inflation is vital to anyone seeking investment profits or attempting to build a successful company. As with most basic issues ofrepparttar 148537 global economy, inflation is surrounded by myths and misinformation.

Myth #1 Inflation is bad for everyone.

Inflation is bad for lenders. It's good for borrowers. To break even on a loan, a lender must charge sufficient interest to offset inflation and taxes onrepparttar 148538 resulting interest income. Forrepparttar 148539 past decade, inflation has hovered around 6%/year inrepparttar 148540 USA. If you assume that State and Federal taxes on interest income are 40%,repparttar 148541 lender needs a 10% interest rate to breakeven. There haven't been any relatively safe U.S. Investments paying anything near 10%/year, for over two decades. If you have a 30-year fixed mortgage at less than 6%, you are benefiting from inflation. Assumingrepparttar 148542 inflation rate remains at 6%, (which is very optimistic) you are making more money onrepparttar 148543 borrowed mortgage money than you would earn having depositedrepparttar 148544 same amount of money into a bank savings account. America's biggest borrower isrepparttar 148545 U.S. Government. The Government's plan has always been to ensure thatrepparttar 148546 inflation rate offsetsrepparttar 148547 Government's interest payments. Follow Washington's lead and be a borrower inrepparttar 148548 United States. However, borrow to create income and assets, not to liverepparttar 148549 good life. When people no longer accept their currency, lenders usually go bankrupt andrepparttar 148550 borrowers will pay their debts with worthless paper. There are two examples in American history ofrepparttar 148551 loss of confidence inrepparttar 148552 U.S. Dollar. Afterrepparttar 148553 Revolutionary War,repparttar 148554 Continental Dollar was no longer accepted as currency. Afterrepparttar 148555 Civil War,repparttar 148556 Greenback Dollar was no longer accepted as currency. Both were printed byrepparttar 148557 Government to pay for a war. In both cases,repparttar 148558 dollars where bought by speculators andrepparttar 148559 Government eventually redeemed them at face value. The reason thatrepparttar 148560 U.S. Constitution has a provision limiting currency to gold and silver is directly related torepparttar 148561 failure ofrepparttar 148562 Continental Dollar. The strategy that benefits from this inflation paradox is to be an American borrower of dollars to buy hard assets and a foreign investor (lender) of your investment funds.

Myth #2 A gold standard would end inflation and result in a better life for all.

You can't eat gold. You can't wear gold. It takes too much gold to build a house. As Art Hoppe suggested twenty years ago, chicken eggs would make a better hard currency than gold. At least you could eat your nestegg whenrepparttar 148563 Government scrambledrepparttar 148564 economy. Western Europe had eight centuries ofrepparttar 148565 gold standard. From roughlyrepparttar 148566 4th Century torepparttar 148567 12th Century, everyone was onrepparttar 148568 gold standard. Usury was outlawed everywhere, It was againstrepparttar 148569 teachings ofrepparttar 148570 Catholic Church. It's still againstrepparttar 148571 teachings of Islam. Money was limited to gold, silver and land. This period in Western History is called "the Dark Ages" for good reason. After WWI, Winston Churchill tried to move Great Britain back onto a modified gold standard. Not only did his effort fail; it was amongrepparttar 148572 secondary causes ofrepparttar 148573 Great Depression in England. Fiat money is intrinsically worthless. Gold is intrinsically worthless. The advantage to paper currency and credit is that it can be expanded at any rate and thus create perceived wealth. This perceived wealth could be used to create products that create more jobs and more perceived wealth. The goal is to ensure that those hurt byrepparttar 148574 expanding money supply aren't aware of their lending mistakes. As long as everyone agrees that paper money has value,repparttar 148575 system works better than people agreeing that gold has value.

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