Real Estate Business and Investing

Debt from credit cards can be very stressful, and lead to an awful situation. Many people using their credit cards more these days, debt is never good, as it leads to bankruptcy and the destruction of your credit report. Even though you can get a credit card debt help easily, getting out of it is something that takes a lot of work. To get out of debt, it will take you quite a bit of time and effort as you get the debt under control and begin the long process of rebuilding your credit.

No matter how much credit card debt you are in, you can always find debt management services or debt consolidation agencies that will help you. Credit card debt is very common these days, something many of us have experienced. Although there are ways out of credit card debt, the best way to get out of it is to avoid it all together. If you pay your bills on time and never miss a payment – you will never need any debt consolidation loans, you’ll always live a debt free lifestyle.

The words Financial Freedom are so much popular these days, one has to wonder just what it really means. While it sounds like something that everyone would want, it can mean different things to different people. Let’s take a look at a list of just some of the possibilities to help determine what financial freedom may mean to you. What usually comes to mind first for most people is having enough money to take care of all of their expenses ~plus a little more for luxuries, and not having to go to work every day for that income.

This means not having to trade your time for money, which is what the vast majority of the population does. You go to work for eight hours (or more) per day, 40 hours (or more) per week, and you make “x” dollars per hour or week to compensate you for the time spent. And, of course, all of this time is spent working for someone else’s dreams.

For others, their dream of financial freedom means being free from the mountain of debt they now carry. It’s been shown that many marriages are ending due to the stresses of financial burdens, so putting an end to their debt situation could contribute to greater happiness for many.

Maybe you just want more time to be with your family and to pursue your own interests.

Not everyone has grandiose dreams of being a multi-millionaire with huge homes and fancy cars. Some people prefer a more modest home or car, but may long for the ability to travel to far-away places. Those who tend to be a bit less extravagant may be able to attain a level of financial freedom more quickly than those who prefer a more flashy environment.

For me, it simply means having control over my own life: being able to make my own schedule and choose what I do with my time — without having to worry if there’s enough money to do whatever I desire.

Take some time to visualize the life of your dreams. What does it look like? Where are you living? What are you doing? Who is with you?

Ultimately, YOU determine what financial freedom means to you. Once you have that determined, you will have to decide how you’re going to get there.

There are so many ways to do so. You may find that you can achieve that goal on income from a business with your own product or service; you can create a big-enough nest egg that can be liquidated over a time period; or you can build a passive income that will continue to bring in money on a regular basis. It’s generally accepted that having multiple streams of income is the surest path to financial freedom.

As I promised before that I’m gonna write about disadvantages of Payday loans on my earlier post about Should you take any payday loans?, and here we are! So what are the disadvantages? The most obvious one — high costs. A payday loan can cost you say, $15 per two weeks. If you’re borrowing only for two weeks, that doesn’t sound like much. However, if you calculate the Annual Percentage Rate (APR), you’ll see it comes to 391%! If you don’t think that’s too much, let me ask you this question. If you invested money in the stock market, what would you consider a good annual rate of return? 20%? Maybe 30%? If you made a 20% return (on average) in stocks year after year, you’d be doing very well indeed. And this is for an investment that’s generally considered high risk. Now compare that with what the payday loan companies charge. You are providing them with a return on their money they likely won’t get anywhere else on the planet!

There is another, less obvious reason why payday loans are dangerous. According to some estimates, over 60% of borrowers roll over a payday loan. Many take loans repeatedly, too.

Let’s put in some numbers so that you can clearly see what rollovers imply.

Assume you borrow $400 for two weeks at a cost of $15 per $100 per two weeks. At the end of two weeks, you owe them a total of $460.

Let’s say you don’t repay the $400 at the end of two weeks. Instead, you request a rollover. So you pay them the lending fee of $60 and they agree to roll over the loan for another two weeks. The total cost of the loan at the end of 4 weeks may be as follows:

Original loan amount: $400
Fresh lending fees payable: $60
Late fees payable: $60 (assuming late fees apply at the same rate as lending fees)
Lending fees already paid: $60
Total: $580

At the end of this period (which is 4 weeks from the day you originally took the loan), you decide that you don’t have $580 available and so request them to roll the loan over for another two weeks. Then this is what it can cost you in total at the end of 6 weeks:

Original loan amount: $400
Fresh lending fees payable: $60
Late fees payable: $60
Lending fees already paid: $120
Late fees already paid: $60
Total: $700

If you continue this process for six months (more specifically, for 24 weeks), this is what it may cost you in total:

Original loan amount: $400
Fresh lending fees payable: $60
Late fees payable: $60
Lending fees already paid: $660
Late fees already paid: $600
Total: $1780

For an original loan of $400, in a mere 6 months, the payday loan company will collect fees and charges of $1380 from you. That’s 3.45 times the amount you borrowed. In APR terms that’s 749.5%! If over 60% of borrowers roll over their loans, no wonder many payday loan companies are wildly profitable!

Snowballing costs can easily lead you into a debt trap if you get addicted to payday loans.

So what are the key points to keep in mind when dealing with payday loan companies? Two things:

First, avoid them if at all possible. The best way is, of course, to get your finances fully under control so that you always have cash and / or credit available to meet emergencies.

Second, if you do choose to borrow from payday loan companies, borrow only an amount you’re 100% sure you can repay on the due date. If that amount is too low to meet your needs, get additional funding from other sources. Because rolling over cash advances is one of the worst things you can do to yourself.

Payday loans have many names — cash advances, signature loans and paycheck loans, etc. Payday lenders provide quick and easy short-term cash to those who need money immediately. That’s the big reason why they’re so popular. However, payday loans come at exorbitant costs. This can — and often does — lead borrowers into a downward spiral of rapidly escalating debt. Let’s look at the issue from various angles to get a complete picture.

First, the pluses. Here’s why cash advances may hold enormous appeal for you.

* You can have bad credit and still qualify for a payday loan. In most cases, no credit check is conducted.

* The process is fast — it takes as little as 20 minutes to complete. You can even find lenders who target approvals in 30 seconds!

* There are no upfront costs — so the buy-now-pay-later mentality can find full expression.

* You can apply in person at a local outlet, over the phone or over the Internet.

* You get funds deposited into your bank account in 24 hours.

* Compared to some other sources for cash, payday loans are discreet — no one else needs to know about it.

* The transactions are secure — your financial information remains private.

If you’re faced with an emergency — say, unexpected medical bills — your only consideration might be to get money now. The speed and convenience of a cash advance comes in handy here.

So what are the disadvantages? Next Post!