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Is the YOLO (You Only Live Once) Mentality Dangerous for Your Finances?

debt_snowball

When you are young and of limited means, access to experiences can be few and far between — at least without debt.

But to some, experiences are so important that they’ll head off on vacation in spite of mounds of debt.

One of the underlying characteristics of the “You Only Live Once” (YOLO) philosophy is that you should enjoy yourself now, before it’s too late.  What happens if you fritter away all your young and healthy years without truly living, only to find that your golden years are taken up by infirmity?  All that money you scrimped to build a nest egg just goes to paying medical bills.

YOLO says that it’s ok to be comfortable carrying a certain amount of debt, as long as you are pursuing great life experiences and enjoying the lifestyle you want to live.  In some cases, it’s even ok to incur more debt in order to travel the world — as long as you can handle the payments.

How YOLO Can Become Problematic for Your Finances

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President’s Day Money Quotes

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In honor of President’s day here are quotes from twelve of our esteemed leaders:

All the perplexities, confusion and distress in America arise, not from defects in their Constitution or Confederation, not from want of honor or virtue, so much as from the downright ignorance of the nature of coin, credit and circulation.

-John Adams

It’s clearly a budget. It’s got a lot of numbers in it.

-George W. Bush
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Exploding Meteors, Electric Car Problems, Ruined Cruises and Links

It certainly was an interesting week in the news. 

First, you have a cruise ship lose all power and drift for a while in the Gulf of Mexico before two tug boats could slowly pull it back to safety.  Passengers slept on the deck of the ship, had no working toilets, and food started to get low.

Then you have a meteor unexpectedly exploding in the air over Russia with the equivalent power of 20 Hiroshima-sized nuclear weapons.

Lastly, you have an aspiring electric car maker sparring with the New York Times’ reporting of its vehicle.

But a piece of news that you might have missed, but is likely more important to you personally: The National Foundation for Credit Counseling launched a Spanish version of its online tool called MyMoneyCheckUp.  The tool aims to help consumers evaluate different areas of the personal financial lives such as planning for retirement, saving money, budgeting, and credit management.

You input some data about yourself and your habits, and the tool gives you a report of things you should keep doing as well as serious risks you are currently taking.

Tracking all four of the above money topics is critical in life. Here are some reads to guide you in some of them:

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Why You Won’t Get Rich Quick

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Get rich quick schemes are everywhere.

From late night informercials touting real estate success to the coffee shop barista that wants to sell you on the magical pyramid scheme he’s caught up in, it just seems so tempting.

You see everyone else has it better than you.  They’ve figured out the trick, and they’ll let you in on the secret for only 17 easy payments of $42.71.

Deep down we know better.

We know that getting rich quick schemes won’t work, but we’re still drawn to them because… well… being rich sounds great.

We live in an immediate gratification society and if we could all snap our fingers to be rich the resulting sound of the cumulative snaps would be a sonic boom.

Unfortunately, getting rich quick just doesn’t work.

Why Getting Rich Quick Doesn’t Work

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Signs You Have a Bad 401(k) Plan and What to Do About It

Sometimes we’re just happy to be with an employer that has a 401(k) plan, since so many don’t.

It may not even seem important whether or not it’s a good plan or a bad one – at least not at the beginning.  After all, any 401(k) plan is better than having none at all.

But there are bad 401(k) plans out there, and that becomes even more important and obvious the longer you’re in one.

What are Some Signs of a Bad 401(k) Plan?

No employer match

One of the real incentives to invest money in a 401(k) plan is an employer match.

A typical match is 50%, where the employer contributes 3% of your income while you contribute 6% out of your compensation.  Employer matching contributions can be more or less generous.

Some employer plans provide no match at all.  In and of itself this does not indicate a bad 401(k), but in combination with other negative factors it’s a strong sign.

Poor or limited investment choices

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The Perils of Private Student Loans

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The cost of college is growing faster than inflation, and now many students find it difficult to go to college without some type of loan financing. 

To illustrate this, Heather Boushey, economist for the Center for Economic and Policy Research explains, “In 1981, a student could work full time all summer at minimum wage and earn about two-thirds of annual college costs.  Today, a student earning minimum wage would have to work full time for a year to afford one year of education at a four-year public university–and that assumes she saves every penny” (USA Today).

According to FinAid.org, “Two-thirds (65.6%) of 4-year undergraduate students graduated with a Bachelor’s degree and some debt in 2007-08.”

While the vast majority of those student loans are federal student loans, a small portion of them are private student loans.

Getting in student loan debt too deeply is a risk for all students, but private loans in particular come with inherent risks.

Before you sign on the dotted line, make sure you know what you are getting yourself into.

The Benefits of Private Student Loans

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Investment Strategies During a Bear Market

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As an investor, you might have heard of a bear market.

This is actually a market condition wherein the prices of securities are falling.  There is widespread pessimism within investors about the market.  Because of this negative feeling, investors would continue to sell due to the anticipation of losses.

This only leads to growing pessimism.

Despite this fact, there are still ways to make money from a bear market; or at the very least not to lose money from investments.

Before going into that, you have to completely understand what a bear market really is.

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