Archive for the ‘money matter’ Category

Paying off debt is good for us and economy, Why?

July 12th, 2011 Vijaianand

The financial  and Subprime crisis surely bought lot of grief to our economy dragging us to an historical recession and  trying to get back up but not able to find the light at the end of the tunnel. It surely caused lot of mess starting from millions of unemployment to state government to companies disappearing to state government shut downs and list goes on and on.

Obviously we have gone through many issues and lot of bad things happened over the past few years. But the crisis surely done some good things as well. As they say, look at the brighter side of the bad thing happened. The brighter side is many americans have come out of debt inthe past few years and improved their credit. It has brought back the saving habit among Americans. The financial mess does create panic among American public and  helped American them to get of their financial mess by paying off of their debt and start to think about future in a better way.

As per the Business week article published this week(07/07/2011), the average U.S. credit score—a predictor of the likelihood lenders will be paid back—rose to 696 in May, the highest in at least four years, according to credit reporting bureau Equifax. Delinquencies on consumer loans have dropped 30 percent in two years, according to Federal Reserve data.


Improving credit quality gives households the ability to spend more. A rebound in spending would help the economy to bounce back. U.S. consumers have reduced debt by more than $1 trillion in the 10 quarters ended in March, according to the Federal Reserve Bank of New York. Households spent 16.4 percent of their earnings on debt payments in the first quarter, including lease and rental payments, homeowners’ insurance, and property taxes. That’s down from 18.9 percent in the third quarter of 2007, before the recession started.



While household obligations are at a 17-year low because of increased savings and lower interest rates, household debt still comes to 115 percent of income, compared with a 75 percent average from 1970 to 2000 as per Morgan Stanley executive. 

Our current saving rate is still well below the saving rate of 1960’s and 70’s and way below than other countries like Japan, India where the bank system supports itself through the consumers saving deposit. But atleast now consumers are realizing the fact that debt is not going to help them and help the economy and consumers should spend less and save more.

How  can they Pay off and improve their credit ?

Obviously it is not easy, gets even tough during this bad economic condition but there are always ways you can implement by tightening your belt and not stretching beyond the limit. Few simple steps you can follow to help you and your credit and the economy as well,

1. Try to be on time with your Auto, Mortgage or Credit card payments
2. Pay off every dollar you owe to any organization and aviod collection
3. Pay off high interest credit cards first and work your way down.
4. Get help from government credit counselors to consolidate debt
5. Clean up the credit report by checking them regularing
6. Don’t spend more than your Income
7. Try to save atleast 10% of your Income, Pay yourself first
8. Plan for future expenses and save for them
9. Avoid frequent visit to Restaurants and fast foods

These simple steps always will help you to be on track with your financial obligations and also make you to save money for your future. 

Just Payoff debt and Save up!!

Posted in Economy, Financial Literacy, money matter Tags: No Comments »
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Price Profiling – An Unknown Business Strategy

July 11th, 2008 Vijaianand

Few years back(2003), when I was living in an apartment complex owned by a property manager&companies(PMC). I was forced to renew the apartment lease every 6 months which was new to me moving from Boston. I came to know thats common in Houston area giving away a free ride to PMC to jack up the rent more frequently.




Many will agree obviously that is bad as tenants and shares my frustration. Most likely the rent will be increased 10% which PMC will be keen on instead of trying to retain the tenants. At the sametime they offered really good deals for the new tenants especially with free half month rents and cheaper rents to trap them.


When I enquired with the PMC folks asking them “what happened to old customer courtesy?”. We are your tenants already and don’t you like to give a good deal for us instead of jacking the rent compare to new guys. They would say, “NO, it won’t work like that way”. Once you are tenant, you don’t get any promotions and you are prone to increase in rent every renewal. They just don’t want bend.



There were lot of apartments near by so many tenants just took the pain of moving to different apartments every time they jack up the rent hoping to save some money in the long run. But some just stick with the same apartment not willing to take the pain of moving. This trend continous till today as I know from my friends who live in apartments. PMC people just don’t care about you these days, they just want to make money somehow.
 
At that time, I really didn’t understand it. Usually if you are customer with any business for sometime, they tend to show you some customer courtesy and appreciate being their customer for long by offering discounts to let you stay with them. I wasn’t really thrilled that time and so just moved on bought a home to avoid all this trouble.



I see same type of business strategy used in many businesses like Airlines, hotels, Events Tickets and other industries more in past years. I was wondering all about it and I am sure many of you might also thought about “why some of us has to be dirt cheap price and others end up paying Himalaya price”. I just thought its just the way of business until recently. I found the real answer for my unasked question in SmartMoney magazine. There was an article digging deep about this strategy. I just got to know the real essence of this tactics and wanted to share to you guys.


This common business strategy which is unknown to ordinary consumers is called “Price Optimization“. There is no more long time customer courtesy anymore, its all about how much many money a consumer should pay taking into account the current market condition, geographical location, local demand and lot more parameters with complicated calculation done by the computer software.


I know its getting interesting now. I have lot more information to share on this topic like “What other industries are starting to do ?, “How as consumer can try to escape or be on the otherside of the fence to take advantage of it” and much more with my realistic research in my next part. So stay tuned.



Have a good weekend folks…

Posted in Finance, Financial Literacy, money matter, News Tags: No Comments »
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Money Really Matters – A bite of True facts

January 27th, 2008 Vijaianand

Money truly matters to everybody whether it’ 5 year old who wants to buy his favorite toy or 60 year who likes to retire financial free. There is no doubt about it. There is lot to talk about it but we only talk less.

Like this quote,





“Money is the opposite of the weather. Nobody talks about it, but everybody does something about it.” We deal with money day in and day out but we only talk very less about it. If you look very closely, Money has taken different avatars in different parts of the world. It’s a dollar for ordinary American, YEN for Japenese and a Rupee for a normal Indian. Its stock for trader, Gold for hardcore investor, home for a realtor and lot more avatars. But each one of them has only one sole underlying factor which is to “satisfy our needs”. Thats all about it.





The need for each and every person might vary according to their surroundings but the purpose and perspective towards money doesn’t change. So how one make use of that most commonly wanted MONEY is within each one and the Money itself can’t do anything about it. Don’t you think its a true fact. Just think about it for a second.


Lot of us percieve with a wrong imagination like, if we earn more all our problems should take care of itself and will get solved. Actually I think all the problem just starts there. It is not always about how much you earn, it is about how well you can manage and work with what you make.

Knowledge is Power, we all know that very well. So if we have proper knowledge to efficiently manage our money, we can be the Kingmakers of our own hard earned money. We don’t have to be Warran Buffet(who hailed as the nucleus of Omaha shaking up the stock market) or Donald trump (successful entrepreneur) to be one. If we manage our own money properly, we are Kingmaker on it’s own version.




Money shouldn’t rule us. We should rule the Money and should put to work for us. As Robert Kiyosaki quoted, “Make your money work for you and not the other way around“. Let me give you a simple example. We eat food every day because our body needs it. We have to eat at least 3-4 times a day to get proper calories for our body to keep moving. Eventually, eating has become a habit for us. We are trained to eat 3-4 times(I know some people eat all the time!!) when we are baby and we continue to do it all our life.




What happens, if you didn’t take a night dinner, can you sleep well that night? Your physical state is going to be messed up and many of us can’t sleep except few who can fast for days. But if you train your body to fast every night, it will eventually manage to coup with it. Similarly, anything needs to praticized to make it accustomed to you, that goes to money as well. If you don’t plan well and don’t manage it properly, it is going to haunt your mental state and keep you restless for life.



Money is an enabler of our dreams. It helps you go where you want go in life. In many people case, first one third of the life goes towards earning education and knowledge needed to find money. Next one third of life goes towards finding/making the money you longed for and last one third of life should go towards using the money to its last. Most of us don’t have control over the first one third because we depend our parents but the rest two third it is all upto us to make or break the life.

So money is part and parcel of your life. We all need money to survive one day or other. It does really matter for all of us. I strongly believe, it is all about how much you make, how you manage and make that hard earned money work for you to secure a better future. Lot of us forget to delve into this basic thought.



Keep pondering on this very own thought and share your comments about what do you feel about Money and try to talk more about it. Talk is cheap so don’t need to speed a lot and take the liberty to talk about all money.

Happy Money talk!!


Posted in Education, Financial Literacy, General, money matter No Comments »
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