Monthly Archives: July 2012

The Perils of Payday Loans

  By Christian | July 21, 2012 - 7:00 pm | loans
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It’s the end of the month. Your rent is coming due. Your hallway table is piling up with utility bills. Your cupboards contain a can of beans, a jar of olives and half a box of spaghetti. But the worst thing of all is you don’t have any money left in your account. Payday is 10 days away. What are you going to do?

 

There seems to be a solution. On the corner of a street near you is what many refer to somewhat charitably as a “€œnon-traditional bank.”€ It is a small storefront, covered with neon signs. The signs advertise check-cashing, faxing, and short term loans. You enter the storefront and inquire about how to get one of these loans. Will this be the solution to your money problems? Actually, as you will see, using payday loans can make things worse. A lot worse.

 

First of all, you should know that the interest rates on payday loans can run into the triple digits. Credit cards have interest rates approaching 30% for subprime borrowers. Seem high? Consider this: payday loans can have rates as high as 599% for a two-week loan. This constitutes a fee of up to $23 for each $100 you borrow. Think about how much you are willing to hand over to this “œbank” for a short term problem.

 

Secondly, with interest rates like that, it is little wonder that borrowers have trouble paying the loans back on time. After all, if you had the money, you wouldn’t need a payday loan, right? Well, late payments lead to more fees, and eventually after repeated late or missed payments, the bank will report your situation to the credit reporting agencies. That will be the start of a number of problems. Having a black mark for late or missed payments is bad enough. But it also matters that the delinquency is for a payday loan. Anyone who is assessing your credit to see if you are a good risk will see that you were using this type of credit. Users of payday loans are not known to be good credit risks, and you might be denied, or end up paying higher interest rates that you otherwise would.

 

Thirdly, you will have to pay it back. And all that money that you are paying in interest will mean that it will take even longer for you to dig yourself out of the hole you got into. You could end up paying ten times the amount of the original loan. That is money that you could have been putting toward other expenses- your utility bills, filling that empty fridge, paying your rent on time. Would you rather be giving it away, or spending it on things you really need?

 

There are other things you can do before you take on a payday loan. Swallow your pride and ask your landlord for an extension. What have you got to lose? Contact the utility company and see if you can get assistance. Perhaps there is a payment plan that will allow you to break your payment into smaller chunks. If your budget is a recurring problem, seek credit counselling. You will learn how to manage your money better so that it lasts throughout the month. Resist the temptation to get a payday loan. You won’t regret it.

 

 

Simple mental hacks that can help you get richer

  By Christian | July 13, 2012 - 3:00 pm | investing
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There are many psychological tricks that you can do to make yourself earn more money. Frame of mind is extremely important, and with the right one you can find that you will begin to earn more money on your investments and at your job. A few mental tricks that you can do to begin earning more money are to weigh financial decisions in a foreign language as this helps you think through a problem. You may also find it beneficial to try to stop worrying and to set goals on how much money you want to have in your savings accounts. Using photographs of things that you are saving for, such as your children for their education also helps many people focus on their investments. Another good idea is to visualize your older self, imagining what you want to do when you finally get to retire and visiting your aunts or grandparents. Finally, be sure to always focus on the math in a decision instead of your feelings. While these tips may seem silly, esteemed universities have found that by doing these things you can trick your brain into making you want to earn more money, which will hopefully result in actually tangibly saving more money.

Making A Profit Over Stock Market Volatility

  By Christian | July 8, 2012 - 9:02 pm | investing
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Nowadays, stock program trading and international markets have made price volatility more prevalent than ever. While the conventional view was that the risk of stock trading goes down over time, a recent joint study between the University of Chicago and the University of Pennsylvania shows that the opposite is true.

Their research shows that investors who are not sure of their own investments should stay away from the stock market. The recent 2008 financial crisis only served to illustrate this point. The CBOE volatility index, a measuring stick for short-term erratic price changes, hit record numbers in the last two decades, with five of those spikes recorded in the last ten years.

Investment planners recommend a smaller risk for stock traders, preferring a trusted mutual fund or diversified portfolio, no matter how small the estimated returns.

Other portfolio managers recommend learning to see the ebbs and flows of the stock market until one becomes fluent in the way the market works. Although it will take some time and dedication, being able to see the early warnings of a downward market will save investors more returns in the near future.

Investment managers also suggest looking to the Internet for inspiration. With the advent of online stock watchers, investors can rest assured knowing how their portfolio moves with the market without having to consult their brokers separately.

Toronto’s Living Spaces Getting Smaller

  By Christian | July 6, 2012 - 12:24 am | saving money
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InToronto, Canada, living conditions are becoming more and more cramped as condos are becoming smaller and smaller. Prices are not really decreasing much for living in a smaller space. As of right now, over 63 percent of condos that are ready to be lived in are either studios or one bedroom. A tiny 4 percent are more than two bedrooms, and only 9 percent of the two bedrooms include a den. Also, of the over 9,000 condos planned to be ready by the year 2014 for the city ofToronto, 67 percent of those are only studios or one bedroom.

 

 

As I said, the average size is also going down dramatically. As of right now, the average size of a condo is 822 square feet. For the projected estimates for 2014, that size will go down to 644 square feet. Living in smaller spaces for the same price is not going to be an easy task for many Canadians, but it seems there will soon be no choice with all of the building plans being on a smaller scale. You can see an interactive graph of this information and better understand the impact this will have on new buildings by clicking here http://www.cbc.ca/news/interactives/toronto-newcondos/.