The Easiest Most Effective Saving MethodWritten by Jeff
Over time, a little bit of money can be turned into a nice wad of cash. The beauty of being a teen in this day and age is that you have plenty of time to that. The key to getting this money is to make it and save it. Make money any way you can think of. One easy way is to ask your parents for an allowance. Do chores around house that your parents are too busy for. Offer to clean pool, mow lawn, pull weeds, go to grocery store(if you have your license), wash cars, etc... If you want to make more money, then get an actual job. Look for "now hiring" signs. Work at grocery stores, food places, at your parents work, golf courses, surf shops, mall, etc... With money that you're making it's important that you don't blow it all on clothes, video games, and other "stuff." Buy things that you need, not stuff that you would be cool to play with for a couple of days. Also, don't buy expensive versions of everything. Here is a great saving method: You don't need to buy most expensive skater shoe brands for $80. Buy older on-sale versions that are just as comfortable, work same, but only cost $40-50. Or you could really save and buy shoes at a sporting good store, or a regular shoe store and get shoes for $20-30. Think of it this way. Let's say in a year you buy 4 pairs of shoes. If you buy four $80 shoes, that's $320 a year. That's almost a $1000 dollars after three years. What's point? What if you buy 4 pairs of $40 shoes. That's $160 a year, and $480 after three years. What if you went all out and bought 4 pairs of $20 shoes. That's $80 a year (the price of one expensive pair of shoes), and only $240 after 3 years. You save $160 a year if you buy $40 shoes instead of $80 shoes. If you really want to save and buy $20 shoes instead of $80 shoes, you save $240. Hmmm, which one should I buy? If you don't think you can do that, then control limit yourself to only one or two pairs of expensive brand of shoe, and buy discount price shoes other times and you're still saving money.
| | Are mortgages a risky business?Written by Jenny Barclay
A bank or mortgage company is nothing more than a box in which to keep money. The owner of box has to do a few calculations. Firstly, how much is he going to offer those people who deposit cash in his box, in return for such a deposit? Secondly, how much of that money should he keep as cash in case owners of that cash want it back? Maybe 5%, maybe 10%, what are regulations in his jurisdiction? Thirdly, how much is he going to charge those people who wish to borrow money of others, previously deposited in his box?The person who owns box then sets out to find lots of other people to put their spare cash in box, in return for which he promises to give them their money back plus interest. In eyes of some economists, these people are lenders and not investors. This terminology is based on fact that capital investment of lenders does not change, whereas capital value of investors, in stocks or property for example, can go up or down. The owner of box then has to find other people who do not have spare cash, but in fact wish to borrow it. Fixed or variable? Both lenders and borrowers can sometimes be bewildered by variety of terms offered by such institutions. The easiest terms to understand are those that are based on a current rate that will vary according to market for interest rates, which alters daily, although companies will try to even out such daily fluctuations with only periodic changes in rate. Fixed rates, for a given period, are more difficult for average lender or borrower to understand, a fact that has given rise in past to greedy companies being able to reap huge benefits from such lack of knowledge. The reason for an institution wanting to attract deposits at a fixed rate could be based on fact that their advisors calculate that interest rates are going to rise. Should they find it possible to attract deposits at e.g. 3% over 3 years, and then find that current rates are 5%, they will be somewhat pleased. In case of a borrower finding that they are in this situation they should be congratulated for being better at guessing than company’s advisors. On other hand, a borrower tied in to a contract at say 10% for several years who then finds that rates have dropped to 5%, will not exactly be celebrating. In my short experience since I started at university fourteen years ago, I have seen deposit rates vary from 14.5% down to 1.5%.
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