Is It Ever Possible to Be Financially Free of Parents?
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Is it every possible to be financially free of parents? Despite the honest efforts of many people to get debt help and attain financial independence, they still wind up having to ask their parents for help.
This trend is starting to affect people in their 40s and 50s, who are moving back home to live with their aging parents. With rising credit card debts and a slumping economy sweeping the nation, self-sufficient adults are finding themselves without a job and with little or no resources to survive the crisis. As a result, they wind up taking assistance from their elderly parents rather than claiming bankruptcy.
Financial planners are concerned about both ends of this situation. First, the younger generation has to take more aggressive steps to avoid financial peril. Cutting back, saving money along the way and having insurance policies are all ways to avoid financial ruin. Secondly, the older generation is not always equipped to take on the burden of adult children in their 40s and 50s. Often these seniors wind up in financial difficulty themselves when they try to help their family. In fact, Karin Maloney Stifler, a financial planner, states these well-meaning parents, “jeopardize their financial freedom by continuing to subsidize their children.”
Further, a recent AARP survey revealed a quarter of Generation Xers (people between 28 and 39 years old) get financial help from family and friends. The same survey found more than half the people felt they were “financially independent”.
Clearly, the younger generation needs to learn more about the real meaning of financial independence and their parents may need to exercise some tough love to teach them about it so they can finally become financially free of parents.
Tags:Financial Freedom Financial IndependenceFinancial Independence So You’re Not A Servant To Debt
Financial independence cannot be achieved as long as you remain chained to high interest debts. If you remember your history lessons, you will recall studying about indentured servants such as share croppers who worked for free to pay off an obligation. When your hard-earned money is allocated to high interest credit card and loan debts, is there much of a difference?
If you are drowning in credit card debt, you are not alone. There are literally millions of folks in America with a total of over 2 trillion dollars worth of revolving consumer debt. More than 60 billion bucks of credit card debt gets “charged off” as uncollected annually. Debt is like an epidemic sweeping the nation and taking control of more lives everyday. Are you on this distressing bandwagon? If so, it’s take to get off and start reaching toward financial independence.
Look realistically at what you owe and how much you’re spending on interest. Do you feel sick now? If so, it’s time to start making major changes. Stop using your credit cards and start paying them down. Earn extra money by starting your own passive income enterprise so you can pay more toward your outstanding balances. Create a budget and live by it without fail. Review your expenses and trim the fat wherever you can. When more money goes out every month than comes in, it may be time for professional financial advice from an accountant, debt counselor or financial planner.
Financial independence is an attainable goal for everyone, regardless of how much debt you are in. Figure out the damages and work toward eliminating them for a financially free future so you don’t feel like an indentured servant.
Tags:Debt Management Financial IndependenceTeaching Financial Independence To Children
Teaching financial independence to children is a key element to success. Many of us grow up with a myriad of misconceptions about earning money and becoming financially free. Giving children essential skills at an early age will prepare them for a more secure future.
Education – financial independence depends on it. So how do you teach your children about money? Give them an allowance and let them learn firsthand. By kindergarten or first grade, most children are ready to receive weekly allowances. If your little ones get upset, they can get a few shiny pennies until they are old enough to differentiate money and the various amounts. However, don’t hold the older children back for the little ones.
Allowance amount vary based on the financial needs and age of your child. Guidelines include $1 per grade level, starting at first grade. You can also pay an allowance equal to half the child’s age. Pay the money on a regular schedule. Set up expectations for using the cash, such as saving 10 percent and donating 10 percent. You can also have your children put 10 percent in college savings then allow them to spend the rest as they see fit.
An allowance should be separate from chores, which should be performed regardless of pay. Parents can offer inspiration by paying extra for children completing chores outside their regular scope of daily responsibilities. This also teaches your children how to be enterprising and earn extra money when they need it. Avoid lending money ahead to your children – after all, we want to discourage credit. If your child needs to borrow money for an important reason, such as a school trip, make sure the money is promptly repaid on a schedule or withhold a portion of their allowance until the debt is covered.
You can encourage your children to save more by offering to meet their savings, sort of like their own little investment or pension plan.
Finally, if your child spends money on a toy that breaks the first time they use it or wastes their allowance on candy the first day then can’t go out on the weekend, these are learning experiences. Instead of “I told you so” let your child learn from their mistakes to become a wiser consumer.
Teaching financial independence to children starts with a weekly allowance and how its handled.
Tags:Debt Management, Financial Freedom Financial Independence
Financial Independence Through Real Estate – Part 3
The final entry of our financial independence through real estate series will discuss the formula to determine if a property is a good investment. To become financially free, you need to establish sources of passive income such as owning profitable real estate.
First, figure out the total income you will get when you own the property. Consider all rentals and sources of income and add them up. Now consider expenses of owning the property such as gas, electricity, maintenance, taxes and your mortgage. Some of these expenses will have to be estimated, such as utilities or taxes, because they vary from year to year. Subtract the expenses from the income to see your immediate profits for owning the property. Also consider that expenses rise but the value of owning property usually rises too. As you pay off the property, you will build larger equity and more wealth.
Real estate is a solid investment and provides an ongoing source of passive income as you build wealth. Choosing the right property can help you attain the financial independence you want. Working with honest real estate agents and financial planners can help you reach your goals for a financially free future.
Tags:Financial Freedom, Financial Independence Passive IncomeFinancial Independence Through Real Estate – Part 2
In the second part of our series about financial independence through real estate, we will explore types of real estate investors. There are several reasons to invest in real estate, depending on what your goals are and what you hope to accomplish financially.
The first type of real estate investors are savvy about finances, usually work with a financial planner or accountant and invest in properties for capital gains advantages. This type of sophisticated investing is a topic for later down the road, once you have established yourself as a financially independent entity with experience in real estate investing.
The second type of real estate investor is looking for cash flow. Quite simply, the investor wants to purchase property or properties that will yield an income, either by renting or selling the property. The third type of real estate investor is looking for a combination of the two.
When you start out, cash flow is the most important element and should be your focus. You need to buy a property that will not represent an immediate loss but a quick profit through rentals or a profitable sale. The property may require a bit of cosmetic work that you can do yourself to realize a profit in just a short couple of months. Working with a good real estate agent and carefully examining properties before you buy are key elements to success. Have the property inspected to make sure there are no hidden surprises that could cost you thousands of dollars after the sale occurs.
Tomorrow we will discuss the financial formulas to figure out of a property will help you attain financial independence through real estate.
Tags:Financial Freedom Financial IndependenceFinancial Independence Through Real Estate – Part 1
Financial independence from the wise purchase and sale of real estate has been the basis for many millionaires’ success. Our new blog series will help you understand the basic concepts of investing in real estate to you can get rid of debt and get on the path to financial freedom.
Today we will cover a few basic definitions to prepare you for the entries ahead:
-capital gain is the increased value over time realized on your real property;
-cash-flow is the income you make from real estate investments after you pay all the expenses;
-cash on cash return is the percentage return on your real estate investment, also called CCR;
-expenses are the costs related to owning real estate such as the maintenance, mortgage and insurance;
-gross operating income is the total amount of money you earn, such as from collecting rent or having a fee for parking or storage on the premises also called GOI;
-net operating income is determined by taking the gross operating income and subtracting your current total expenses;
-proforma is an analysis of how real property is expected to perform; and
-vacancy rate is the amount of time the property will not be occupied.
With a basic understanding of the terms used to describe real estate properties when you are investing, you will better comprehend our future entries about attaining financial independence through real estate.
Tags:Financial Freedom Financial IndependenceFinancial Independence and Women
Woman need to consider financial independence for many reasons. First of all, most women live 7 to 10 years longer than men yet their retirement income is less than half that of men. Further, the National Center for Women and Retirement Research found lower salaries and less time working equaled retirement benefits for women that are a quarter of those paid to men.Further, about half of women over 50 are single as a result of a death, divorce or choice so they are financially responsible for themselves and possible children. Without financial independence, women become dependent on someone else or the government for support.
Kim Kiyosaki, Robert’s wife, talks about financial freedom for women and refers to 1989 when she was the one to scrape up money to invest in her first property. She now enjoys a multi million dollar real estate empire and encourages other women to seek financial freedom regardless of their circumstances. Whether women have a wealthy partner or are on their own, financial independence allows them to make their own decisions.
By getting a financial education and dealing with reputable, familiar companies, women can make the most of what they have and set goals for financial freedom. No matter what your lifestyle, financial freedom is just a few good decisions away.
Tags:Financial Freedom Financial IndependenceFinancial Independence For The Disabled
Having a disability can make financial independence seem almost impossible when you depend on a fixed income and government assistance to meet your basic needs. There are ways to improve your situation, despite your health difficulties and limitations.
First of all, reach out to community organizations including health care facilities, libraries, local community centers and local political representatives where you can find out about special programs for the disabled. By taking advantage of little-known community programs, you can get a greater level of assistance for more financial and personal independence over time.
Tax credits, savings programs and training to help disabled people get part-time employment are just some of the programs offered by various communities. By reaching out, you can improve your situation and feel less alone. With additional financial assistance and training, you could increase your income for greater financial freedom.
Online resources give you a place to research disability programs through forums and even write about your experiences for money. By blogging, writing articles, starting your own website and even selling affiliate products on your sites, you can make additional income despite your disability.
While financial independence may seem far away when you are disabled, it’s not impossible and you can achieve your dream if you reach out and grab it.
Tags:Financial Freedom Financial IndependenceFinancial Independence and Long Term Care
If you worry about your financial independence if you become ill, you are thinking wisely, The unfortunate truth is that many adults would rather consider their will than long term care insurance. Many felt a nursing home was worse than bankruptcy or death.
While we don’t like to think about losing our personal independence, another key consideration is losing our financial independence. If we find ourselves in a position that requires care, having long term care insurance can protect the assets we worked so hard to attain.
As you get older, the chance of developing a debilitating illness that requires ongoing care increases. Having long term care insurance takes care of you when you need it most without being a burden on family members or exhausting your financial resources. Just as you make a will, have a pension plan and save for retirement, long term care is another relevant issue to handle before your twilight years. Long term care insurance gives you options, such as getting services at home or a facility.
You can protect your savings, get higher quality care and have control over the type of care you receive when you have long term care insurance. Protect your future and your assets to preserve your financial independence by investing in long term care insurance.
Tags:Financial Freedom Financial IndependenceFinancial Independence and Women
Financial independence is often a subject that both men and women are unsure about. In some situations, a father, husband or boss takes control of finances and women feel they don’t need to but this simply is not the case. No matter what your situation, women can become financially independent now based on their own merits rather than the efforts of others.
With a few simple steps, you can be on the way to financial independence without the help of anyone else. Start by setting specific goals, such as when you want to retire or how much you want to earn. Be realistic about your goals and realize they take time, patience and discipline to achieve.
Organize your personal finances by having a budget and tracking all income and expenses. Consider your assets in your overall value as well as loans, credit cards and other liabilities. Decide from your budget how much you can devote to investments or business enterprises.
Establish sources of passive income by investing in stocks and bonds or creating your own business such as affiliate marketing, blogging, ebooks or a website. Have a financial advisor assist you with investments and keep your choices conservative when you start.
Carefully monitor the results of your investments and business enterprises and make necessary changes to keep them profitable. With a bit of knowledge and effort, passive income is easy for women to achieve on their own for greater financial independence.
Tags:Debt Management, Financial Freedom, Financial Independence Passive Income