Personal Finance Post, #10 (Part II) Life is full of gigantic problems. The only way to solve a giant problem is to chip away at it in small, manageable chunks. You don’t need to solve a $100,000 problem in one day or in one swipe. Tackle the problem $1 at…

Personal Finance Post, #10 (Part I) In these posts, I’ve focused on the debt/liability side of your net worth equation. I’ve stayed away from the money/assets side. There are two reasons for this. First, there’s not much I can offer re advice. What am I going to say: Make more…

Personal Finance Post, #9 The Worst Kind of Debt: Credit Cards The worst debt you can have is credit card debt. As mentioned in Post #6, the typical interest rate is around 18%, and principal doubles every four years at that rate. Moreover, credit card debt is not amortizing, as…

Personal Finance Post, #8 Loan Payments and Net Worth Many of your loans have fixed monthly payments. They include your auto loan, student loans, mortgage loan. (Your credit card does not have a fixed monthly payment, and will be discussed in the next post.) If you make all the required…

Personal Finance Post, #7 The Most Dangerous Feature of Debt Your debts such as your student loan, car loan, credit cards are formed by entering into a contract with the lender. Under these contracts, you are charged a stated amount of interest for your unpaid debt. However, if you miss…

Personal Finance Post, #6 Debt Never Sleeps The price of debt is the rate of interest. Interest is the price you pay for a loan or credit. Interest NEVER stops accruing, growing while the debt is unpaid. Also, EVERY loan charges interest on a compound basis. This is how compounding…

Personal Finance Post, #5 The Two Sides of Debt Before beginning the series of the dangers of debt, I need to clarify and explain that debt is a nuanced subject. Debt can be both bad and good, even at the same time. …

Personal Finance Post, #4 The Problem with a Negative Net Worth If you have a negative net worth, you may reasonably wonder why it makes a difference. You’re going about your life in a normal way. Your net worth has been negative for years, but nothing bad has happened. So…

Personal Finance Post, #3 What is your net worth? This question is crucial for your financial health. As important as it is, some may not know how to calculate it. For most others, this may be the first time the question has been raised. For our purposes, we will use…