Tag: Personal Finance

Anxiety Issues – 5 Easy tips for investing when you have anxiety

Posted on by Karac Avalron

Money can generate immense amounts of anxiety. We all depend on money to live. Food, shelter, electricity nothing is free. All of us, by whatever means generate income. Income is the basis by which you can obtain items you need to live and the luxuries that improve your quality of life. If you are like me, you are affected by moderate amounts of anxiety. You are functioning, likely have a full-time job and thus have to deal with all the regular poop that comes with life.

If you live in the states or in any other western culture, there is a large emphasis placed on retirement and saving. Putting your money in a bank account and collecting interest is no longer enough as bank interest is extremely low. If you are at a point in your life where you have enough income to invest, for whatever reason, it can be overwhelming and daunting.

Here are 5 easy tips that will help you.

  1. Have the money automatically drawn from your pay or your bank account: This eliminates the stress of you must transfer it yourself. Many employer plans will do this for you, and in many cases, it will be pre-tax money, lowering your tax burden.
  2. Determine what the money is for: Is this for income generation? Is this for retirement? For a new car? Decide what this money is going to be used for BEFORE you start investing.
  3. Where to invest, Large Cap Growth funds: I know your eyes are glazing over… These types of funds are normally comprised of strong companies that generate revenue and are considered very well capitalized. Companies like Apple, Boeing, Microsoft. These companies aren’t going to fold up over night if there are bumps in the economy.
  4. Time: Most investment vehicles have a return average over time. You can get this measure over 5years, 10 years etc. Look at mutual funds that have a 10-20-year track record. What was their rate of return? A 20-year avg return is a great measure because it accounts for ups and downs in the market.
  5. Trust yourself: There is no “trick” to investing. Consistent investment over years generates good returns. Don’t look for short cuts, you will regret it.

Money can equal stress, but it doesn’t have to. Remember the story of the tortoise and the hare? Slow and steady wins the race. If you stick with a long-term consistent plan you will be a successful investor. Once every 3-6 months check your investments make sure they make sense. If you have an employer with a retirement plan, sit down with HR and ask your questions. This will help with your anxiety, and that’s their job.

Remember you have anxiety, this won’t be simple, you will worry, you will react, you will make mistakes. However, you can do this, and someday with a lot of persistence and patience you will have accumulated a nice chunk of change!

Thank you for coming by and supporting my blog. Want to see another post like this one? Click here.

Am I contagious?

Personal Finance – 3 journeymen (not advanced) finance tips

Posted on by Karac Avalron

Like every finance piece I do on this blog this is my personal opinion based on 30 years of working in the finance industry. You should research thoroughly any advice you receive before making any financials decisions. The tips in today’s piece are moderate, they aren’t for beginners and those advanced in their financial journey probably have already encountered these concepts.

  1. Reviewing your insurance profile: Regularly you should be reviewing and understanding your insurance profile, likely twice a year. Now insurance is to mitigate disaster/negative situations. This is more than auto insurance or homeowner’s insurance; this should include things like long term disability insurance to replace income. Long term care insurance to mitigate costs of nursing homes or assisted living and umbrella policies that give another layer of coverage for you beyond specific policies (like home owners or auto)
  2. The care of loved ones: This extends to your elderly parents or your children. Do you have a plan for either? What if your parent becomes sick? Who will assist them? This can take on many forms, maybe you have siblings who can help as well. Point is, have a plan here because it’s when you don’t then it presents itself. Kids? Anything can happen here. From the unthinkable of devastating medical injury to helping them pay for college. You should have some plan in place to set aside some money “just in case” hopefully you can help your kid get a head start in life financially, worst case you have to support them for the rest of your life because of a medical issue. Yes, that happens.
  3. Running your finances like a business: This is the hardest one to pull off, but your check book (or whatever you use to ledger your money) is like a Profit and Loss statement for a business. You have to review this regularly, really be clear on how your business is running and call in the executives for meetings regularly on spending and revenue. I know it sounds silly doesn’t it? What this does is, it takes the “personal” out of it and all the stake holders (spouses, kids) become officers of the company who have a vested interest in its success. If you can get to this point on your personal finance journey you are one step closer to expert status, not many people get to this point.
How much is this going to cost?

In the end, a strong personal economy = better outcomes. You can be more generous, you can have things you want, you can afford a good life. When you don’t know where your money is going and you don’t assign a mission to every dollar you place yourself in a weaker position mentally and financially. Anyone can win with money; your income level doesn’t matter you just have to get a handle on where everything is going. This takes maybe an hour a week to do and over time it will take less and less, you can do this.

Thank you for coming by and supporting my blog I really appreciate it. Want to see another post like this one? Click here.

How to weather the financial rollercoaster?

Posted on by Karac Avalron

So its 2023 and the rollercoaster we have been on financially in 2022 looks like it’s not going to let up in 2023. High inflation, low job force participation, governments manipulating interest rates, high demand from consumers and then the X factors, war’s pandemics etc. This is a unique point in time for global economics, any finance professional telling you what is going to happen is honestly full of @#$%. No one really knows, things are very unpredictable and on top of all that in the U.S. 2023 will start the 2024 presidential election process in earnest which will destabilize economic outcomes more.

So how do you “weather” this and get by? To be honest there is really only 2 things you can do directly to ensure you get through this. The first is increase your income, the second is decrease your spending. Now ideally you do both at the same time but one or the other should produce the outcome of you have more disposable income. Simply put, you should have more cash to spend or save and that’s what we want. Now increasing income can be a new job, a side hustle etc. Cutting expenses? Only you know what you can cut.

Money can’t buy you happiness, but it can buy you peace of mind

The point here is you need to increase your surplus cash anyway you can and bank it. Like I have said in other finance pieces basically increasing your “rainy day” fund. You see the finance industry will throw a lot of terms at you, nuanced financial strategic plans, and language that requires a financial planner to unwind. It’s how they make money, keeping you confused and frightened. Personal finance is a lot like losing weight, there is only really one way to lose weight, you eat less calories then you burn every day.

Don’t over complicate your personal finance. Spend less then you make. It’s a simple concept that requires discipline and planning to pull off. No one is going to do this for you, you have to do it. If you do you will create excess of cash that can be used to “weather” the financial storm or better, enable you to make purchases now that you otherwise weren’t able to because you did not have the discipline to create this excess.

Personal finance is a long term play. Be consistent, have a plan, get disciplined. You can do it, and if you achieve even modest results it can be very liberating.

Thank you for coming by and supporting my blog I really appreciate it. Want to see another post like this one? Click here.

Am I contagious?

Personal Finance – 3 journeymen (not advanced) finance tips

Posted on by Karac Avalron

Like every finance piece I do on this blog this is my personal opinion based on 30 years of working in the finance industry. You should research thoroughly any advice you receive before making any financials decisions. The tips in today’s piece are moderate, they aren’t for beginners and those advanced in their financial journey probably have already encountered these concepts.

  1. Reviewing your insurance profile: Regularly you should be reviewing and understanding your insurance profile, likely twice a year. Now insurance is to mitigate disaster/negative situations. This is more than auto insurance or homeowner’s insurance; this should include things like long term disability insurance to replace income. Long term care insurance to mitigate costs of nursing homes or assisted living and umbrella policies that give another layer of coverage for you beyond specific policies (like home owners or auto)
  2. The care of loved ones: This extends to your elderly parents or your children. Do you have a plan for either? What if your parent becomes sick? Who will assist them? This can take on many forms, maybe you have siblings who can help as well. Point is, have a plan here because it’s when you don’t then it presents itself. Kids? Anything can happen here. From the unthinkable of devastating medical injury to helping them pay for college. You should have some plan in place to set aside some money “just in case” hopefully you can help your kid get a head start in life financially, worst case you have to support them for the rest of your life because of a medical issue. Yes, that happens.
  3. Running your finances like a business: This is the hardest one to pull off, but your check book (or whatever you use to ledger your money) is like a Profit and Loss statement for a business. You have to review this regularly, really be clear on how your business is running and call in the executives for meetings regularly on spending and revenue. I know it sounds silly doesn’t it? What this does is, it takes the “personal” out of it and all the stake holders (spouses, kids) become officers of the company who have a vested interest in its success. If you can get to this point on your personal finance journey you are one step closer to expert status, not many people get to this point.
How much is this going to cost?

In the end, a strong personal economy = better outcomes. You can be more generous, you can have things you want, you can afford a good life. When you don’t know where your money is going and you don’t assign a mission to every dollar you place yourself in a weaker position mentally and financially. Anyone can win with money; your income level doesn’t matter you just have to get a handle on where everything is going. This takes maybe an hour a week to do and over time it will take less and less, you can do this.

Thank you for coming by and supporting my blog I really appreciate it. Want to see another post like this one? Click here.

Finance and Anxiety: Back to basics

Posted on by Karac Avalron

So with 2021 right around the corner it’s a great time to review some basics for finance. If you are a regular reader of my blog you know I have been a finance professional for nearly 30 years. I give finance advice on this blog from time to time specifically for people with anxiety. You should always get as much information you can before making financial decisions, hopefully this blog and post is one data point you use.

There are basics everyone has to take care of, regardless of your financial situation. This year has been tough, maybe you lost a job, maybe you are out of income, maybe you are working but living paycheck to paycheck and just need direction. Below are ALWAYS the things you do first financially.

  1. Buy food: If you don’t eat and drink water, you die. Food is number 1. This doesn’t mean $50 dinners, it means you get paid, you go get huge bags of rice cheap, but you get food first.
  2. Pay Rent: You need shelter, even if it’s a rat hole its better than being out in the elements or sleeping in your car.
  3. Utilities: You need heat, you need electric, you need water. All of these things cost money and they should be top priorities for you.
  4. Clothing: You need clothes. Now you don’t need designer clothes but you need basics to be warm, basics to be presentable so you can obtain a job (if you don’t have one).
  5. Transportation: You have to have a means to get around. It can be public transportation BTW (yes this costs money too) and it can be a cheap vehicle but you have to be able to get to and from work.
The Sun will come out again.

The five things above are basics, I know they seem obvious but when you are on the ropes financially it’s hard to put things in order mentally. Maybe you are out of work and or out in the cold. What do you do first? Follow this list, even if you only get to say item 3, you are fed, you have 4 walls, you have heat.

Again this is very basic info but these are the things you take care of first every month when you are in financial straits. If you have money left over after these 5 items? Start banking it to build up an emergency fund. Many people who have anxiety and mental health issues find themselves in serious financial distress especially on or around the holidays.

Take a deep breath and get back to basics. If you have these 5 things covered you are okay, and you will make it. Take it one month at a time, and as time goes on the 5 basics above happen and you can start to build a vibrant financial future.

Thank you for coming by and supporting my blog I really appreciate it. Want to see another post like this one? Click here.

Finance and Anxiety: Back to basics

Posted on by Karac Avalron

So with 2021 right around the corner it’s a great time to review some basics for finance. If you are a regular reader of my blog you know I have been a finance professional for nearly 30 years. I give finance advice on this blog from time to time specifically for people with anxiety. You should always get as much information you can before making financial decisions, hopefully this blog and post is one data point you use.

There are basics everyone has to take care of, regardless of your financial situation. This year has been tough, maybe you lost a job, maybe you are out of income, maybe you are working but living paycheck to paycheck and just need direction. Below are ALWAYS the things you do first financially.

  1. Buy food: If you don’t eat and drink water, you die. Food is number 1. This doesn’t mean $50 dinners, it means you get paid, you go get huge bags of rice cheap, but you get food first.
  2. Pay Rent: You need shelter, even if it’s a rat hole its better than being out in the elements or sleeping in your car.
  3. Utilities: You need heat, you need electric, you need water. All of these things cost money and they should be top priorities for you.
  4. Clothing: You need clothes. Now you don’t need designer clothes but you need basics to be warm, basics to be presentable so you can obtain a job (if you don’t have one).
  5. Transportation: You have to have a means to get around. It can be public transportation BTW (yes this costs money too) and it can be a cheap vehicle but you have to be able to get to and from work.
The Sun will come out again.

The five things above are basics, I know they seem obvious but when you are on the ropes financially it’s hard to put things in order mentally. Maybe you are out of work and or out in the cold. What do you do first? Follow this list, even if you only get to say item 3, you are fed, you have 4 walls, you have heat.

Again this is very basic info but these are the things you take care of first every month when you are in financial straits. If you have money left over after these 5 items? Start banking it to build up an emergency fund. Many people who have anxiety and mental health issues find themselves in serious financial distress especially on or around the holidays.

Take a deep breath and get back to basics. If you have these 5 things covered you are okay, and you will make it. Take it one month at a time, and as time goes on the 5 basics above happen and you can start to build a vibrant financial future.

Thank you for coming by and supporting my blog I really appreciate it. Want to see another post like this one? Click here.

How to navigate the finance industry

Posted on by Karac Avalron

First a disclaimer: I have been a finance professional in many different roles for nearly 30 years. The advice I give on this blog should not be taken as fact but rather an educated opinion. When making financial decisions you should always do your own research and not trust singular voices a world away.

Now that out of the way let me tell you how to navigate the finance industry. The finance industry is the multi-billion dollar apparatus that uses fear to get you to give them money. I know it sounds sinister, because it is IMHO. “You need a million dollars to retire!!!!!!!!!” the shouts go up nearly daily. Really? Because I know many people who didn’t have a million dollars and had a good retirement.

Sure if you want to travel all over the world first class, yep you are going to need MILLIONS. If you intend on staying in the home you have purchased and been in for years, and live a normal life (dinner a few times a month a nice vacation once a year, a long weekend away twice a year as an example) then you need income to support this. Is this what you are doing now? Do you have millions in the bank?

The finance industry uses fear to get the outcome they want. They want you to give them money, so for a fee, they can invest it in products they created and give you money back in the future. Oh by the way there is no guarantee you will get MORE back, or even the same amount you put in initially. “As you age medical expenses go through the roof you need MORE INSURANCE”

Am I contagious?
OMG what is this guy talking about?

Another cry goes out. Perhaps you will, perhaps you won’t. The important thing here is to step back and observe what is happening. You are being sold, and then they are upselling you. I know you are amazed to read that the nice men and women SHOUTING you need to save millions might be selling you products to make THEM money but hear me out.

When you go to an auto mechanic and he says “you need a new alternator coil” how do you know you actually do? You went to him for his expertise, you are TRUSTING that he is giving you the right information. He might be, or he might be upselling you something you don’t need because you are ignorant of what you really need.

I know I am rambling a bit, it’s because the finance industry annoys me. Maybe I am jaded (ya I am) or maybe I have a better way. So here it is, the pay off, the moment you have been waiting for….

KARAC HOW DO I NAVIGATE THE FINANCE INDUSTRY.

You seek out teachers, not salesman.

Here is what I mean. All of the sarcasm I spewed above may actually be true. You may need millions, I don’t know your life or the life you desire to lead. Rather than place your trust in someone selling you a product, how about you place your trust in someone who is willing to teach you about the product? Finance isn’t complicated. I know you don’t believe me, because you’ve been conditioned not to. If you make 30K annually and you live on 29K annually you have enough to live. If you wish to live a life that requires 39K annually you have to make 9K more to do it.

Find someone who will teach you about finance, about how to make money grow. About what insurance you need at what phase in your life. Find someone to teach you about investing, about how to buy a car, about how to save for college. This knowledge is out there and it’s easier to obtain then you think.

You can navigate the finance industry with one simple step, commit to not be sold, commit to learning.

Thank you for supporting my blog I really appreciate it! Want to see other posts like this? Click here.

A Sinking Fund is perfect for people with anxiety

Posted on by Karac Avalron

There are all sorts of financial terms used in the finance industry to create the appearance of complexity. A sinking fund is one of those terms but it’s actually a very effective tool to use. For those of you unaware I am a finance professional. Now this blog isn’t a finance blog but from time to time I do financial posts for those with anxiety. Today we are going to quick post on sinking funds.

What is a sinking fund: A sinking fund is simply a strategic way to save money by setting aside a little bit each month.

It really is that simple. The key to the sinking fund is assigning the savings a purpose. As an example if you want to go to Ireland, or you want a new car, or you want a Great Dane. The sinking fund is a long term strategic effort to achieve that end.

So you’ve decided you want a Great Dane puppy, its $2,000 and you want it in 2 years. You now have the basis for a sinking fund, you are going to “sink” money into this fund until you hit the $2,000. Now the “fund” can be a simple savings account, an envelope in your dresser or a stack of cash under you mattress.

This isn’t an investment fund, and this is a key difference. Your goal isn’t to get interest, or get dividends or buy shares. Your goal is to get $2,000 in 24 months.

So you look at this weekly, monthly, annually however you want. Monthly you take $2,000/24=83.3 dollars per month. You then find this money in your current budget and begin to set it aside. Months go by the fund grows you get closer to your goal.

Can I Round up to $85….

I know this all sounds simplistic, it is, until you actually have to do it. You see the hardest part of a sinking fund isn’t putting the money aside, its knowing the money is there. Something else will come up in the 24 months per the example above and you will be tempted to use this sinking fund to fix it. You can’t, the sinking fund has been assigned, and that is the trick.

Now the truly disciplined can use this principal for multiple long term objectives, like:

  • Planning a wedding
  • Saving for a down payment on a home
  • Buying a car
  • Elective surgery

Remember the Sinking fund has a designation for a singular planned event. That’s its great strength as that money is to be used for nothing else. I saved for my first vacation to Cancun Mexico this way, it took me 3 years a LONG TIME AGO. It worked, I was a broke 22 year old at the time, I had very little to my name but I had saved 4,000 by scraping every month for years. I started at $10 a week and every month put that money in a savings account. I adjusted the amount as I went but ALL OF IT went to the “Cancun Mexico Sinking Fund” and I went and had a blast.

If I can do it, so can you! Thanks for coming by and supporting my blog I really appreciate it!

Did you like this post and want to see more? Check this post out.

Quick tips for buying a car when you suffer from Anxiety

Posted on by Karac Avalron

Hello readers another financial piece here. So, you need a new car, you have anxiety what do you do? First you must be honest with yourself about your anxiety and how it affects you. Negotiations aren’t something you might be good at, you might fear new places, you may not like germs and can’t fathom how to shake a car salesman hand.

Whatever the source of your anxiety is, we all need transportation. If you need a car here are 5 tips that are going to help you.

  1. Determine what car you want first, before anything else. Toyota and Honda’s are top of the line for reliability, low repair costs, and resale value. Do a little homework now and be educated when you execute the purchase.
  2. Limit the car purchase to vehicles that are half your income or less. So, if you make 40K a year, your vehicle AT PURCHASE should not cost more than 20K. If it is its likely you will have to finance, it and that becomes a broader more complex discussion.
  3. Pay cash, by private, if you can. Dealerships are designed to get you to finance and enter into a long-term contract. Avoid this at all costs unless you have no other options. Buy a used car, from a private person have a mechanic check it out, pay cash. Dealerships are money pits.
  4. Buy used. Why? Because its true what they say, cars depreciate the minute you drive off the lot. You simply can’t go back the next day and try and resell the vehicle to the dealership for your purchase price they won’t pay it. There are millions of good used cars on the market at fair prices. I drive a 2007 Toyota Solara Convertible, it starts every morning, no problems.
  5. Buy it and move on. One of the biggest issues in purchasing a new vehicle is the sense you might not have gotten the best deal, it wasn’t what you truly wanted. You buy it, own it. Your anxiety will spike if you dwell on the deal you made.

Cars are a needed asset to generate income. If you don’t need one kudos to you. Many of us live away from cities and need to commute. Here is an outstanding resource on the theories above. I subscribe to Dave Ramsey’s principals of finance (mostly).

This is a major purchase, and like me you have anxiety. You need to take extra care here, do research take your time and plan out the purchase. You can do this, and you can be extremely successful. You are doing awesome, one day at a time. Comment below if you need help or have questions on a car purchase, I will help you as best I can.