Are you an average American struggling with debt and more debt

Are you and Average American Struggling With Debt

Did you know that in 2005 Americans had $2.2 trillion in total consumer debt, more than twice the consumer debt that they had in 1994.  That doesn't even take into account the amount of debt our government has racked up.  On top of that, the average personal savings rate in the United States in 2005 was -0.5% which was the first time this rate has dipped below 0% since the Great Depression?  Unfortunately we are a have it now society and we incur a lot of debt. This all forces the next point, 70% of American workers plan to work into retirement. Unfortunately, 40% of the future retirees will end up having to leave the work force earlier thank expected due to health problems, disability or company downsizing. Coupled with all of this the average American had $12,000 in home equity loans that was needed to pay off credit card debt.

So with all that whats a person to do. Fortunately that is what this blog is all about. Check out the following articles about these challenges.

1. Debt consolidation and paying off your debts
2. Saving for your retirement
3. Setting up a family budget

I hope you enjoyed this post. If you have a question or a idea make sure you leave a comment and I will try to research it and write about it. Final thought if you enjoyed this post why not Subscribe to Strategies for Life it's free.

12 Steps to becoming a millionaire as an employee

Kiplinger.com had another article that talked about becoming a millionaire while you are an empolyee. The article title Making It Big on a Paycheck by Follow these 12 steps to become a millionaire as an employee. Here is what they said with my comments.

A number of the people profiled made their millions as entrepreneurs. But working for the Man doesn't mean you have to be a wage slave or resort to buying lottery tickets to strike it rich. The trick is to maximize your income on the job (and know when to move on), make the most of your employee benefits and tax breaks to pocket more cash, and use that extra money to start investing. Here's what to do:

1. Keep your eyes peeled for better ways to do your job. Streamline a procedure, shave costs, create a new profit center, become an expert on a specific topic, volunteer for a company committee, anything that will make you stand out as a prime candidate for a promotion or a pay boost. I wrote an article Top 11 ways to get noticed at work which covers this topic in detail. Many people will leave work right on time at 4 pm while the boss hangs out and works his but off until 5:30 pm and they wonder why they don't get ahead. You have to add value to you company. It is an information society, use your brain, think and help find a way to make the company better. Over time you will get noticed.
2. Don't be afraid to negotiate. In a study of master's-degree graduates from Carnegie Mellon University, economics professor Linda Babcock found that those who negotiated their first salary boosted their pay by 7.4% compared with those who didn't bargain. As I have always been told you get what you negotiate. The only real time that you can negotiate your salary is when you are coming an going. You really cannot negotiate when you are already and employee, you might have a little chance when you receive a promotion but even then when you get a promotion the company already has something in mind in regards to the salary increase.
3. Get your ducks in a row and your numbers on paper. If possible, quantify how much your efforts add to the company's bottom line. If that's not feasible, spotlight your value with comparable salaries for workers in your position from a Web site, such as Salary.com, or from a professional association. This helps prime your boss that you are really underpaid or he/she should think about a good merit increase next year instead of the 3% he/she was thinking about offering you. If your boss really values you and you know you are underpaid and now they know it. They will get the clue that you are probably looking around and might pursue outside opportunities. So, if they want you to stay they will have to figure out a way to keep you. Note: This only works for a while and you cannot continue to extort larger pay increases from you boss. It will get old and eventually the boss will grow tired of the game. If you really feel you are underpaid test your options outside of your company, see point 4.
4. Plot your strategy when it's time to move on. Create a professional-looking page on MySpace that tells prospective employers why you're an exceptional candidate, recommends John Challenger, of the outplacement firm Challenger, Gray & Christmas. And don't neglect more-conventional networking: Join a professional association, or show up at school reunions toting business cards. I guess I would have to disagree here with the MySpace comment. There are not too many sites on MySpace that are professional in nature. You might be better off posting the resume on Monster.com or on Hotjobs.com.
5. Milk your benefits. Contribute as much as you can to your 401(k) and other tax-deferred retirement plans. You'll not only build a bigger nest egg, but you'll also cut your tax bill. In the 25% federal tax bracket, every $1,000 you contribute to a 401(k) trims your taxes by $250. And you'll save on state income taxes, too. The goal here is to become a millionaire. You can only save so much so why allow your employer to help you get there faster. For most people the 401K is also one of their largest tax deductions and the best way to defer income.
6. Flex your tax-saving muscle. Contribute pretax dollars to a flexible spending account to pay for dependent care or out-of-pocket medical expenses. If you set aside $1,500 per year and you're in the 25% bracket, avoiding federal income and Social Security taxes means Uncle Sam will subsidize almost $500 of your expenses. I use this all the time, the thing to be careful on is how much to save. One year we contributed $3000 because we were paying for my daughters braces. So that was easy we just submitted the bill every month. Last year I only contributed $1200 and it was difficult to spend so everyone got glasses and contacts at the end of the year to use up the funds.
7. Review your tax withholding. If you're expecting a refund this spring, you're having too much tax withheld from your paycheck -- and making an interest-free loan to Uncle Sam. That's no way to become a millionaire. Put more money in your pocket by using our withholding calculator and then filling out a new Form W-4. I have never been very good at this. On the other hand this does have an advantage of being a forced savings. We usually apply our tax refund to paying off a debt or saving it for kids college or something else.
8. Stash savings in a Roth IRA, if you're eligible. Withdrawals in retirement, including decades of compounded earnings, will be tax-free. This year, income-eligibility limits for a Roth increase to $114,000 for individuals and $166,000 for married couples.
9. Invest like crazy. Don't delay. The quicker you get a jump on putting money aside, the easier it will be to stuff a seven-figure cushion. If you start at age 25, for example, investing $286 per month will get you $1 million by age 65, assuming you earn 8% annually. Most people now days to do not have pensions. You have to save your way to retirement. In general, I think you need about $3 million to retire so it is 40 years of savings and the earlier you start the better.
10. Invest automatically, either through your employer's retirement plan or by setting up a regular deposit to a mutual fund or broker. You'll never miss the money, and you'll avoid two big mistakes: buying too much when stock prices are high and not buying at all when prices fall. Another automatic savings that I have found to be very useful is a special savings account. These accounts are great to help you pay for things like Christmas, vacations, property taxes or whatever. Don't you hate it when the Christmas bills come in January and you think how and I going to pay for these. Use a special savings account and pop in $100 or $200 per month and when January Christmas bills come you just pay them off from that account. This of course works if you have maintained a budget and have not run over the amount you have saved. Either way it helps ease the pain in January.
11. Watch for fund fees. The more you pay, the tougher it is to earn an above-average return. The typical hedge fund, for example, takes 20% of any gains, and that's a huge hurdle to overcome. A better bet: no-load mutual funds with low expense ratios of 1% or less. If you trade individual stocks, watch those commissions. Picking the right mutual fund is always a challenge. I prefer not to pay loads on funds. Additionally make sure that you have good diversification and don't hesitate to get a good financial planner.
12. Keep it simple. Be wary of get-rich-quick schemes or sales pitches for complex investments, such as oil-and-gas partnerships, that trade on the millionaire cachet to lure investors into buying high-fee products they don't understand. Most millionaire households accumulate their wealth over the long term by sticking to a regular investing plan in a balanced portfolio. Unfortunately there are not a lot of sure fire ways to get rich quick. If there were everyone would retire at 35 and have a great life. The number one rule of Warren Buffet is don't lose money.

I hope you enjoyed this post. If you have a question or a idea make sure you leave a comment and I will try to research it and write about it. Final thought if you enjoyed this post why not Subscribe to Strategies for Life it free. Free is good right?

8 Point Plan to Become a Millionaire

Kiplinger.com, March 2007 had an interesting article that I actually listened to on their Podcast titled Yes, You Can Make a Million. Whether you're an entrepreneur or you earn a salary, take a lesson (or two) from 11 people who made it.

Maybe a million bucks isn't what it used to be (there are nine million households worth seven digits in the U.S. today). But by the same token, making a million is a more-attainable goal than ever. Not there yet? Then let us inspire you with the stories of 11 men and women who started off just like you and then made it. Each of them offers advice you can use. And we'll add our own 12-point plan for launching you on your way to your first million. The rest, as they say, is up to you.

In summary the 8 points are:

1. "Believe that it's going to happen"
2. Seize an opportunity.
3. Exploit your talents.
4. Learn the ropes
5. Have a plan
6. Put in the time
7. Be patient
8. Take a chance

I hope you enjoyed this post. If you have a question or a idea make sure you leave a comment and I will try to research it and write about it. Final thought if you enjoyed this post why not Subscribe to Strategies for Life it free. Free is good right?