Some Do’s and Don’ts with Money
By Keith Bunn Jr.
September 4, 2011
Here are some quick do’s and don’ts I’ve learned about handling money. Some of these might be common sense to some of you, but something new to others.
Do’s
Husbands and wives need to be on the same page with one another when it comes to their money. It will not only reduce stress in the relationship, but it will also increase communication and make your marriage better.
Diversify your investments into four types of mutual funds. Growth, growth and income, aggressive growth, and international.
When it comes to life insurance, term insurance is the best buy. Get ten times your income worth of insurance so when you pass away, your spouse or heirs can invest the money from your policy and replace your income.
Save up for things you want and pay cash for them. The less you owe others in payments, the easier it will be to build wealth.
On your 60th birthday, buy long term care insurance. The odds of you needing some kind of long tern care after the age of 60, go up drastically. Whether its for a nursing home, assisted living, or in-home care.
Use the power of cash when making purchases. Tell them and show them your cash and ask for a bargain. If they won’t give you one, walk away and try it somewhere else. This country is the only country that doesn’t negotiate for things we want. The worst thing they can say is ‘No’.
Give to your church or favorite charity. Giving makes you less selfish. It is also a proven fact that those who give are more prosperous in both their relationships and in wealth. Besides, its just plan fun to give!
When buying a home, have at least a 10% to 20% down payment and get a 15 year, fixed rate mortgage that is no more than 25% of your take home pay.
Use interest rates or rate of returns to your advantage. Going from 6% to 12% is not doubling your returns, its WAY more than double!
Live on the income you make. If that’s not enough, get a part time job or a better first job.
Don’ts
If you are married, never have separate bank accounts. On your wedding day, the preacher said, “and now you are one”. Act like it! You are not on a joint venture.
Never buy single stocks, gold, or savings bonds for your long term investing. They are extremely risky and make horrible investments.
Never get whole life, or cash value insurance. They are more expensive than term insurance and upon your death, your spouse or heirs only get the face value of the policy. The money you put into the savings portion of those policies, the insurance company keeps it.
Never buy things you want by making payments on them. If you want to build wealth, do what rich people do, pay for it with cash.
Never buy cancer, accidental death, or mortgage insurance. These are nothing but rip off policies
Never buy anything you don’t understand. Whether its insurance, investing, or some gadget at the store. Learn about these things before you buy them from someone who is willing to teach you about it.
Never give with the motive of getting something in return.
Never get an adjustable rate or interest only mortgage or keep a mortgage to use as a tax deduction. Bad idea!
Never invest using borrowed money or invest purely for tax savings.
Never live beyond your means. That is a sure fired way to becoming poor.
These are just a few things you should and shouldn’t do when it comes to money. But it all comes down to what you want out of life. If you want to build wealth, find someone who is wealthy and copy what they’ve done to get that way.
“Personal finance is 20% head knowledge and 80% behavior.” – Dave Ramsey –
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www.cavusfinancialcoaching.com , http://www.facebook.com/pages/Cavus-Financial-Coaching/120347681380181 , and https://twitter.com/#!/Cavuscoaching
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