Author: Sahel Tamayo

Sahel Rafael Tamayo is a Cuban American business executive, business owner, and investor. He is a voracious entrepreneur who has played a pivotal role in the growth of finance and credit industry as the Founder and President of Creditmergency.com, an online credit repair company. Under his guidance, Creditmergency.com has grown to one of the leading credit repair companies in the United States.
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Top Five Reasons to Get Out of Debt

Top Five Reasons to Get Out of Debt

Debt is like a dark cloud that looms over people. There are times when this cloud can turn into a storm that can destroy lives. Whether you like it or not, debt can limit your options and control your decisions.

The last thing you want is for your debts to turn into boulders of obstacles that stop you from moving forward with your life. Below are the top five reasons to get out of debt sooner than later:

  1. Ensure a Better Future for Your Children

Getting yourself out of debt will create a better future for your kids. For parents, this is probably one of the biggest motivators to get out of debt. When you are debt-free, you will have more income to spend on your children and their needs.

Having no debt also makes you a much better parent because this will improve both your mental health and emotional state. Debt freedom lowers your stress levels turning you into a more pleasant person that will also benefit your kids in the long run.

  1. Improved Mental Health

Debt can wreak havoc on your mental health. Even if you don’t feel depressed because of your debts, these can still make your existing depression symptoms worse. The good news is that getting out of debt can do wonders for your mental health.

This improved mental health will also help you deal with the debts you have to repay. Being debt-free also makes you less likely to suffer from depression or anxiety, helping you lead a happier life as a whole.

  1. Reduce Financial Risks

Every time you are in debt, you also need to take risks with your finances. You will bet on your ability to pay back your debts, and this alone already involves risks. Things might not really feel this way with debts becoming the norm in today’s society.

However, when you are in debt with no savings at all, you might just be a single emergency away from a serious financial disaster. Paying off your debts and being debt-free can help you get rid of these risks.

4. Free Up More Income

Getting out of debt will also give you more money you can use for your needs and enjoy your life to the fullest. If you need to pay off debts, most of your money will go to the lenders rather than spending it on things you love. It might not be easy to free yourself of debt in the short term but down the road, this will give you more free money that can help you live the kind of happy life you deserve.

  1. Lower Your Stress Levels

A life filled with debts is a stressful life. Do you still need more reasons to get out of debt aside from the fact that this can lower your stress levels significantly?

Debt can stress you out and cause anxiety. Being in debt will always put you on the edge, worrying constantly about having to pay your bills and the possible things that can happen if you suddenly lose your job.

If you want to truly relieve yourself from stress, let these top five reasons to get out of debt convince you to do so sooner than later.

 

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Should You Pay Yourself Dividends at the End of the Year?

Should You Pay Yourself Dividends at the End of the Year?

Are you a business owner? If yes, then, you might be glad to know that you actually have the option to pay yourself at the end of the year. There are several ways for you to do this. You can pay yourself dividends, salary, or a combination of these two. The question now is, are dividends a great choice for paying yourself dividends?

What Happens When You Pay Yourself Dividends

Dividends are regarded as a form of investment income, making them different from a salary that is considered as a type of personal income. Dividends might yield a significantly lower tax rate compared to what is often paid on a salary because these are still subject to the corporate tax rate.

These dividends are also not considered as an expense of the company and will therefore not reduce the overall taxable income of your company. Most of the time, dividends are being paid out to the shareholders of your company.

If you plan to provide dividends to the shareholders, money will be transferred to the bank account of the shareholder from the corporate account. When you prepare dividends for both yourself and all of your shareholders, you also need to prepare and file the individual statements of income for each individual who will receive one. The same process will also be applicable for you if you decide to pay yourself dividends at the end of the year, as is the case with the other shareholders.

The thing about dividends is that they tend to be a bit tricky since these are paid and issued according to share ownership. For instance, if Company X is planning to issue dividends worth $100,000 to the owners of the Class A common shares, this will be paid out depending on the ownership percentage.

This means that if Mr. Smith owns 20% of the class A shares of the company and the remaining 80% is owned by Mr. Jones, Mr. Smith can expect to get $20,000 while Mr. Jones would earn the residual $80,000.

It is at this point that the process can get somewhat confusing. When there are several shareholders who own the same class of shares, there might be some challenges in allocating varied amounts of income.

You have to remember that there is no need to have a payroll registered and remit the source deductions when your company is under your sole ownership. Opting for the dividend route is recommended for those who don’t want to be forced into contributing to their pension plan. However, it is still important for you to be prepared so that you can be fully prepared for your finances in the future.

There is No Definite Answer

Just like many other things in this world, the question of whether or not you should pay yourself dividends at the end of the year will depend on many different factors. Make sure you review all of your personal needs and come up with a decision depending on what best suits your existing business and personal circumstances.

 

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How to Find Your Dream Job

How to Find Your Dream Job

Now more than ever, the job of your dreams may seem out of reach. In fact, the mere idea of trying to land that perfect job for you may feel too overwhelming.

The good news is that there are several creative ways on how to find your dream job. Here are a few tips to help you get started:

Change Your Pace

Have you always wanted to get that job position, but you always fall short each and every time? There might be many reasons why this happens. But have you also thought that it could be because the job is not suitable for your skills and personality?

Don’t be afraid to look for new opportunities you probably never considered before. Most of the time, a simple change of pace might open doors for the right job for you.

Know What Your True Dream Job Is

It might seem a bit obvious, but it is important to be sure what kind of job your dream job is in the first place. Not having the slightest idea about your dream job will just make it impossible to find it right from the get-go.

Consider your own personality and those activities you love doing. Do you love working alone or do you do better in a social and busy environment? All of these factors play a major role in how to find your dream job.

Take note of your requirements on a piece of paper or journal and ensure that you apply for jobs that meet these criteria.

Learn More about Nearby Companies

It is easy to be too judgmental and to assume that you won’t like to be part of a company because of misconceptions about their offered jobs.

It is also all too common to come up with wrong assumptions about employers or industries, and people who are close-minded usually miss out on some great job opportunities.

Be sure to look into the companies hiring near you. For all you know, the right job for you might just be there hiding in plain sight. All you have to do is to take your time to actively search for it.

Take Advantage of Social Media

Websites such as LinkedIn can be quite effective when it comes to linking the perfect candidates with hiring managers. Maintaining a positive presence on the different social media job community platforms can help put your name and your face in places where hiring managers search for potential talents.

Social media provides a quick snapshot of the kind of person you are and the kind of employee you will be to recruiters and hiring managers. This isn’t something you can just convey through your resumes and application letters.

The ability to show prospective new employers who you are and the things you believe in is a wonderful and easy way of selling yourself and getting job offers you would never find through the traditional job search.

Now that you know how to find your dream job, get started right away to embark on a new career path for you!

 

 

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When is a HELOC a Good Idea?

When is a HELOC a Good Idea?

Taking advantage of your home’s equity is one of the best ways to get your hands on cash that you can use to boost your finances or pay for emergency renovations. However, you need to be extra careful before you tap into that roof above your head. HELOC or home equity line of credit is one of the most common choices available to access your home’s equity.

Below are some instances when HELOC can be a good idea.

Emergency Cushion

The unexpected can always happen that may put you in some sort of financial emergency. A HELOC may serve as that much-needed additional cushion that can cover that expensive car repair with no need for you to take out anything from your savings.

Down Payment for a Second House or an Investment Property

Yes, a HELOC can be used for buying that second dream house or that coveted investment property. If your existing house has lots of equity built up and you need a down payment for a new property, HELOC is your best answer.

Home Improvements

It is probably one of the most common uses for HELOC. Home improvements in the form of repairs or renovations can boost or maintain your home’s value. Some of the popular home improvements that generate high returns on investment include bathroom remodels and additions, kitchen remodels, siding replacement, and others.

New Business Venture

When your capital for your new small business is a bit short, a HELOC will be able to provide you with the necessary funds. Getting a HELOC is often easier and faster than unsecured loans or lines.

Pay Down Debts

A HELOC’s interest rate is often lower compared to the usual credit card debts with high interest that people often struggle with. Consolidating high-interest debts and paying them off using HELOC can make your payments simplified and lower interest costs.

Pay for Special Occasions and Events

It is also a good idea to use HELOC to pay for the wedding of your child, prepare for a new baby, or fund that dream vacation for your wedding anniversary.

Pay Long-Term Care Expenses or Medical Bills

With healthcare being a serious concern now more than ever and with many people not having access to the best health insurance, you can count on your HELOC to be of great help. You can use it to pay off several medical bills so you can focus on paying off your credit line.

Pay Student Loans

If you still haven’t paid off your student loans, your HELOC can be a great way for you to pay them off once and for all.

Pay for Tuition and Other Educational Expenses

A HELOC will also help you manage school-related costs so you can access the necessary funds as and when you need them.

Although all the above reasons are wise and ideal uses for a HELOC, again, it is important that you give it careful thought to prevent regretting your decision and putting your home in jeopardy.

 

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What is Compound Interest?

What is Compound Interest?

Compound interest is usually called the 8th wonder of the world for a good reason. This is because this can make your money work on your behalf.

Compound Interest – A Short Definition

Compound interest can be defined as the interest on deposit calculated depending on the accumulated interest from past periods and the initial principal alike. To put it in simple words, compound interest refers to the interest that you make on your interest. It is possible to compound interest on varied schedules of frequency like yearly, monthly, or even daily.

The compounded interest is greater if the number of the compounding periods is also higher. You can try to picture it like a snowball. When you start to save sooner and you add more money to your snowball, it will also grow bigger over time.

Now, imagine pushing this snowball down a hill covered with snow. The snowball that you already formed will remain and you will accumulate more snow along the way. Once the snowball gets to the bottom of the hill, this will still contain the amount of snow you began with together with the snow that it was able to pick up on along the way then even more snow above it.

This interest-on-interest effect will be able to generate returns that continually increase according to the amount of your initial investment. It means that if you save more often and when you save a larger amount, this will also return bigger interest amounts. It is known as the compound interest’s miracle.

Importance of Compound Interest

Compound interest makes it possible for your wealth to see faster growth. This can make the sum of money grow at a much faster rate compared to simple interest since you will be earning returns on your invested money and the returns when each compounding period ends. It means that there is no need for you to save as much money to achieve all your goals.

Compounding and its magic can be a crucial factor when trying to build your wealth. When you open an account that bears interest and start to stock money away earlier and sooner, you will also earn more money in compound interest. This is also the secret that can help mitigate factors that can erode your wealth such as reduced purchasing power, inflation, and higher cost of living.

Benefits of Compound Interest

It can be very helpful to have a compound interest when you can give your investment a substantial amount of time to grow and flourish. Compound interest also has the power of making even small investments earn large profits over long periods of time.

Compound interest can also help your account funds to increase fast since the growth rate is calculated according to the amount of accumulated money through the years on top of the original principal amount. This can also exponentially increase your money since your original investment and earned profits increase together at the same time.

If you wish to see your investments grow sooner or later, take advantage of compound interest to the fullest.

 

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What Happens When You Invest in 99% Equities?

What Happens When You Invest in 99% Equities?

There are some well-meaning “experts” out there who will try to tell you that long-term investors must invest in 99% equities.

This very idea was advocated when the US stock market’s long bull trend neared its end. However, there are a few things you need to know about such an appealing albeit potentially risky idea.

The Strength of 99% Equities

Proponents of the 99% equities strategy have a straightforward and simple main argument for it. After some time, equities outperform cash and bond. This means that allocating almost your entire portfolio to stocks can help maximize returns.

The supporters of 99% equities cite the extensively used historical data of Ibbotson Associates, which “proves” that stocks were able to generate higher returns compared to bonds and in turn, these would have generated more returns compared to cash. Most investors, from the fresh beginners to the seasoned professionals, accept the assertions without any additional thought.

Although these historical data points and statements might hold some truth to an extent, any investor must try delving a bit deeper into the possible ramifications of and the real rationale behind a 99% equity strategy.

The Weakness of 99% Equities

The Ibbotson data that is often cited is not that robust at all. This only covers a specific time frame in just one country, specifically from year 1926 to present day in the United States.

Through the years, many other countries that are not that fortunate have seen complete disappearance of entire public stock markets that result to 99% losses for investors with 99% equity allocations. Although there were great returns that occurred in the future, compounded growth on nothing doesn’t really amount to anything.

However, it might not be wise to just base your strategy for investment on doomsday scenario. But, if the near future will look almost similar to the benign past, there is still an issue to 99% equities. This is because even if stocks might outperform cash and bonds down the road, you might still go almost broke in the meantime.

Should You Invest in 99% Equities?

99% equities are never the best solution for long-term investment portfolios. A portfolio dominated by equities will only be reasonable when you assume that equities are going to outperform cash and bonds over long-term timeframes.

But, it is still a must that you widely diversify your portfolio across several classes of assets. These can include US equities, international equities, long term US Treasuries, real assets, emergency markets equities and debt, as well as junk bonds.

Your age will also play a role here. If you are already nearing retirement, there is more reason for you to cut allocations to holdings with more risks and increase assets that are less volatile. For many people, this means moving away from stocks to bonds little by little. Target-date funds can do it for you automatically.

If ever you are lucky enough to be an accredited and qualified investor, your allocation of assets must also include healthy numbers of alternative investments such as buyouts, venture capital, timber, and hedge funds.

 

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How to Invest Like the Rich

How to Invest Like the Rich

There is this common misconception that rich people have some insider into ultra-classified secrets for money management that help them earn millions or even billions of dollars a year. There are even people who claim online that they were able to discover these secrets and are willing to reveal these for a fee.

However, in reality, rich people actually know a few things about money that many people don’t. One of these is that they have the right know-how on how to make their money work for them. Simply put, rich people know the most effective way of investing their money.

Here are some helpful tips on how to invest like the rich so you can also watch your wealth grow in no time:

Learn to Delay Gratification

The ability to delay gratification is probably the most critical attribute you should hone and develop to make money. Wealthy people know that it is more important to invest in their long-term goals instead of focusing on their short-term needs and wants.

Among the most important ways that rich people practice delaying gratification is that they save their money first instead of spending it on things they want.

Delaying gratification is also applicable to luxury purchases. Rich people purchase luxury items using the money they save instead of getting them on credit.

Diversify Your Investments

Rich people also know that it is never waste to have all their financial eggs in just a single basket. Their investments are diversified in different vehicles as this can help weather financial storms that may come along their way.

There are also company 401(k) programs that can have your money invested in several companies suitable to your preferred investment style. You can look beyond the stock market if you want your portfolio to be diversified. You can invest in index funds or treasury bonds. One more option is to invest in a CD or certificate of deposit.

Be Conservative with Your Investments

Every time you imagine how the ultra-rich invest, do you picture them risking millions or billions of dollars on new startups or putting huge bets on just any company? If this is how you assume them to be, it might be time to stop believing those movies and shows you have been watching all this time.

The truth is that many millionaires try to avoid risks as much as possible instead of making money. They follow two major investing rules. The first is not to lose money and the second is not to forget the first rule.

This is the reason why many rich people opt to invest in safer mutual funds like stocks and index funds that show slow yet steady growth rates. Many wealthy people put their investment in treasury bonds as well.

Make Some Long Term Investments

Finally, aside from being conservative, many rich people invest with the purpose of making long-term profits. These people stay away from hot stocks scheduled to rise “any time now.” They would rather buy investments and hold onto this for several years.

If you want to invest like the rich, be sure to follow these tips to the T.

 

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How to Break Free from a Stereotype

How to Break Free from a Stereotype

There is no problem at all when adjectives such as intelligent, feisty, and seductive are used for describing individuals. However, once they are used for describing groups of people, the same adjectives might lead to stereotypes.

What are Stereotypes?

Stereotypes refer to qualities that are assigned to certain groups of people in relation to their nationality, sexual orientation, and race, just to mention a few. Since they tend to generalize groups of people in ways that can ignore a group’s diversity and result to discrimination, it is important to avoid and break free from a stereotype.

Stereotypes are Complex

Although stereotypes might refer to a particular country, race, religion, or sex, they often link different identity aspects together. For instance, a stereotype regarding black gay males often involves sexual orientation, sex, and race.

While this stereotype targets a particular African American segment instead of blacks as a whole, there is still a problem in insinuating that black gay men all act in a certain way. There are a lot of other factors that can make up the identity of a certain black gay man to associate him with a definite list of traits or characteristics.

Stereotypes can also be complex once they factor in sex and race, members of a similar group can be pegged in different ways. Some stereotypes are applicable to Asian Americans in general but once the population of Asian Americans has been categorized by sex, it is easy to see that the stereotypes of Asian American men and women are different. Stereotypes that involve gender and race may peg men of a specific racial group as striking while the women are an exact opposite or the other way around.

How to Put an End to Stereotypes

There are several things that can be done in order to break free from these stereotypes:

    • Educate yourself.

Among the first and most important steps you can take is the same thing you are doing at this very moment, and that is educating yourself. Be sure to learn more about the issue and improve your awareness of stereotypes and how you can combat them.

    • Have the motivation to avoid being controlled.

Yes, one of the most effective ways of making sure that stereotypes don’t control you and your thinking is to just be motivated enough not to let them control you. With just a bit of effort and awareness on your part, stereotypes will never bother you ever again.

    • Know the facts.

It is all too easy to judge things, situations, and people as you see them with the naked eye. However, before making any assumptions, getting the facts straight will ensure that you don’t end up using unnecessary stereotypes.

    • Meet more new people.

While it is always good to learn about racism and race, it is never enough all by itself. Studies have long been revealing how establishing reciprocal and meaningful relationships with people from other different groups can work to put an end to stereotypes.

 

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Does Family Set You Back in Life?

Does Family Set You Back in Life?

Do you always feel shy being around your own family?

Does it seem weird when you are with your family and you meet someone your age?

Are you uncomfortable talking to a friend of the opposite sex while your parents are keeping an eye on you?

While it is always great to have your family around, there are times when they may also be the same people who may set you back or even pull you down in life.

Below are some of the most common ways that your family may not be helping you at all.

Addiction

Addiction is something that can result to numerous unhealthy relationships among the members of a family. There are many effects that addiction can have on a family’s emotional health and sometimes, this can even last from one generation to another.

Conditional Love

A dysfunctional family member may become too manipulative when it comes to their affection wherein they give love only if they want or need something from you. This habit of withholding love may make you want to please them all the time without even giving you a chance to just relax and enjoy being who you are.

Fear and Unpredictability

It is not easy to establish a trusting relationship if you are constantly living a life filled with fear and uncertainty.

If you are not sure how you parents will respond, you will always anticipate conflict and you will never be honest when expressing yourself. Instead, you will anticipate their criticisms all the time.

You may even want to stay away from things that could have been enjoyable and fun such as holidays and vacations.

Neglect or Abuse

Abuse is an indication of active harm such as physical or verbal abuse and violence. Neglect is a form of inactive harm that can either be emotional or physical. Examples of these are not feeding your kids or withholding attention, interest, or love.

Neglect and abuse can both be very problematic. Families may be caught in continuous cycles that may normalize dangerous treatment. People who are reared in such families may exhibit similar behaviors to their own children that may cause a new cycle of abuse or neglect.

Lack of Boundaries

The following are examples of lack of boundaries in a family:

    • An older child who takes on the parent’s role.
    • An intimidating parent who aggressively discourage children to assert themselves or even to speak their mind.
    • A controlling parent who takes charge of making life decisions for their kids and ignore their opinions.

No one in such families has their own personal space. No one respects the autonomy of each other. Living such a life may lead to codependent and unhealthy relationships later on in life.

Lack of Intimacy

There might be no signs of closeness within your family and no honest and genuine emotional support. The relationships in the family are more superficial instead of being emotionally available. This kind of relationship can make it difficult for you to be anywhere close with anyone because you have never practiced to do so in the past.

If you see or notice any of these signs, then, there is a chance that your family is indeed setting you back in life.

 

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Do Financial Problems Get in the Way of Marriage?

Do Financial Problems Get in the Way of Marriage?

There is always something beautiful about marriage. Two people who love each other decide to build a new life and this time, they will do it together.

Unfortunately, marriage is not as colorful and festive as those lovely wedding decorations you used during the ceremony.

Financial problems and challenges will always pop up along the way, no matter how much you try to avoid them. And the sad news is yes, financial issues can get in the way of marriage, whether you like it or not.

Read on to know how financial problems can harm or affect your marriage:

Financial Problems Can Lead to Resentment

There is really nothing new about couples arguing about money. In fact, a study has found out that money was the most recurring and common topic that most couples fight about.

If you and your other half go round and round in circles talking about the same old financial topics without actually addressing the issues, resentment may start to build up soon. You might start feeling like your spouse no longer listens to you or cares about what you feel.

Financial Problems Can Damage Trust and Communication

There are many couples who are more willing to share about their weight than the money they have in their savings account. It only shows how hard it is for couples to be more open when talking about their finances.

The moment a financial issue occurs during your marriage, this may compromise your communication skills that can later on damage the trust that you and your partner used to had between the two of you.

Financial Problems Can Increase Stress Levels

Your marriage ought to be your personal haven or sanctuary instead of something that will just make you feel worse about yourself. However, mixing finances and marriage will always create the perfect recipe for stress.

Studies revealed that it is more likely for low income couples to suffer from mental health issues and stress.

Stress will not only increase your levels of irritation as it was also discovered to hurt marriages and a person’s mental and physical health. Excessive stress may then lead to:

    • Lower libido or change in sex drive that can limit intimacy that is essential in promoting a bond among married couples
    • Angry outbursts
    • Anxiety
    • Changes in eating
    • Depression
    • Difficulty sleeping
    • Fatigue
    • Headaches
    • High blood pressure
    • Lack of patience
    • Restlessness
    • Upset stomach

Financial Problems Can Reduce Opportunities

Many experts also agree that financial difficulties can reduce the number opportunities for a couple’s future. Poor credit, job loss, or high amounts of debt can all significantly limit your financial choices as a couple. Lack of income may make it hard for you to buy a house or car, save for retirement, go on travels, and even start a family.

Financial problems will always happen even to the best couples with the best budgeting plans. Never let them bring your marriage down. Discuss things out in the open, set goals, prioritize your expenses, and seek help when needed.