Are You an Impulse Spender?

everydayminimalist.com

Answer these questions truthfully:

1.)    Does your spouse or partner complain that you spend too much money?

2.)    Are you surprised each month when your credit card bill arrives at how much more you charged than you thought you had?

3.)    Do you have more shoes and clothes in your closet than you could ever possibly wear?

4.)    Do you own every new gadget before it has time to collect dust on a retailer’s shelf?

5.)    Do you buy things you didn’t know you wanted until you saw them on display in a store?

If you answered “yes” to any two of the above questions, you are an impulse spender and indulge yourself in retail therapy.

This is not a good thing. It will prevent you from saving for the important things like a house, a new car, a vacation or retirement. You must set some financial goals and resist spending money on items that really don’t matter in the long run.

Impulse spending will not only put a strain on your finances but your relationships, as well. To overcome the problem, the first thing to do is learn to separate your needs from your wants.

Advertisers blitz us hawking their products at us 24/7. The trick is to give yourself a cooling-off period before you buy anything that you have not planned for.

When you go shopping, make a list and take only enough cash to pay for what you have planned to buy. Leave your credit cards at home.

If you see something you think you really need, give yourself two weeks to decide if it is really something you need or something you can easily do without. By following this simple solution, you will mend your financial fences and your relationships.

My mum says, 'Go with your first instinct,' but this can lead to impulse buying!            - Linsay Lohan

Please Avoid These Investing Mistakes

1. Not invest at all!!!
Along the way, you may make a few investing mistakes, however there are big mistakes that you absolutely must avoid if you are to be a successful investor. For instance, the biggest investing mistake that you could ever make is to not invest at all, or to put off investing until later. Make your money work for you – even if all you can spare is $20 a week to invest!

2. Investing before you are in the financial position to do so
While not investing at all or putting off investing until later are big mistakes, investing before you are in the financial position to do so is another big mistake. Get your current financial situation in order first, and then start investing. Get your credit cleaned up, pay off high interest loans and credit cards, and put at least three months of living expenses in savings. Once this is done, you are ready to start letting your money work for you.

3. Don’t invest to get rich quick. 
That is the riskiest type of investing that there is, and you will more than likely lose. If it was easy, everyone would be doing it! Instead, invest for the long term, and have the patience to weather the storms and allow your money to grow. Only invest for the short term when you know you will need the money in a short amount of time, and then stick with safe investments, such as certificates of deposit.

4. Don’t put all of your eggs into one basket. 
Scatter it around various types of investments for the best returns. Also, don’t move your money around too much. Let it ride. Pick your investments carefully, invest your money, and allow it to grow – don’t panic if the stock drops a few dollars. If the stock is a stable stock, it will go back up.

5. Thinking investment in collectibles really pay off
A common mistake that a lot of people make is thinking that their investments in collectibles will really pay off. Again, if this were true, everyone would do it. Don’t count on your Coke collection or your book collection to pay for your retirement years! Count on investments made with cold hard cash instead.

Rule 72: Rougly estimate when your saving become double.

Let say you have $100k and you are thinking of to save it in your favourite bank. Your favourite bank everage dividen rate is 6% per annum. You want to know when is your saving become double because you  have plan something in future. By using rule 72 you can estimate your saving doubling time. The formula is : 72/rate per annum( or per day or months - result will in days/months)

Initial investment: $100,000
Dividen rate - compounding : 6% per annum
Estimate period: 72/6=12 years

It means, roughly 12 years required for your saving to be worth $200k.

Table below show the actual your saving balance if your bank interest/dividen rate is 6% every year.

Year	Date	Balance
0	1-Jan-13	100,000
1	1-Jan-14	106,000
2	1-Jan-15	112,360
3	1-Jan-16	119,102
4	1-Jan-17	126,248
5	1-Jan-18	133,823
6	1-Jan-19	141,852
7	1-Jan-20	150,363
8	1-Jan-21	159,385
9	1-Jan-22	168,948
10	1-Jan-23	179,085
11	1-Jan-24	189,830
12	1-Jan-25	201,220

For more accurate, you can use future value formula or use your financial calculator.