Don’t Let Your Ego Stop You From Filing Bankruptcy

It doesn’t take a rocket scientist to figure out that the US is facing one of the toughest economic times in the history of the country. Currently, the US debt has surpassed the annual GDP rate, making the United States the most indebted nation per capita in the world. With this kind of behavior in the federal, state and local governments is no surprise that Americans have followed suit with the same behavior. As of the end of 2011, the average American has close to $16,000 in credit card debt. This is taking into consideration all Americans, including those too young and too old to even use a credit card. It’s pretty frightening to think that the credit card debt is now close to $800 billion. This doesn’t even include the student loan debt problem that has now surpassed $1 trillion. Add to that mortgages, car loans etc. and we have a bubble that is about to pop. Not enough money in the world will bail us out and as many countries of the world are bailing out of the US dollar, the US won’t be able to print their way out of this one.

As Americans, we have been raised with a lot of pride. The growth of this great nation was brought about by Christian values and a capitalistic society. There probably isn’t one person in the world that hasn’t heard the phrase the American dream. People come from all over the world just to get a piece of this and leave persecution of socialistic countries that suppress the entrepreneurial spirit. Part of what makes this country great is being able to have second chances when things don’t work out. Filing bankruptcy is a way out of unsustainable debt when unforeseen circumstances arise. The problem is, many Americans let their ego get the best of them and walk around with a chip on their shoulder while trying to avoid filing bankruptcy. The topic of bankruptcy to many holds a stigma of failing. To this group, filing bankruptcy is saying that you’re a failure, when in reality in many cases it’s just plain old good business.

Over the last couple years many household names have filed for bankruptcy to get out of bad labor contracts, overpriced vendors and so on. Most of these companies leave a bankruptcy filing being leaner and meaner and hence becoming more profitable. When someone hears about this, people think of the wisdom of the CEO that pulled the trigger and entered bankruptcy. So why would an individual filing bankruptcy be bad and a big business filing be good business? It’s because of the stigma that crushes an individual’s ego if they need to use a bankruptcy filing as a way out. To big business a bankruptcy attorney is an asset to the team and in this economy we should take on the same attitude. We didn’t receive bail out checks back in 2008 like the big banks did and it’s time that the perception of filing bankruptcy changes. Pride can be harmful to relationships, finances, work and every aspect of life if you let it control you. Learning to be humble and asking for help when trouble arises will usually shorten the length of pain that you must endure. The first step to freedom when financial trouble arises is consulting a bankruptcy attorney to discuss one’s situation.

3 Steps to Disciplined Trading

In this article I’m going to show you the path to disciplined trading in 3 simple steps as recommended by a trading expert with 45+ years of market experience.

The path to disciplined trading

Step 1 – Methodology

The 1st step is to find a systematic rule-based approach to trading the markets that has been proven to work, either by computerised backtests or manual testing. This is extremely important because without a validated strategy you will not be able to build confidence in it and will likely just end up losing money and increasing stress.

Make sure you stay away from strategies that do not have clearly defined rules you can program into a computer, the rules should be simple and not require interpretation otherwise the results will be inconsistent. This step must be completed properly, if you do not then the string of losses you will likely experience will make it very difficult to continue following the strategy and you’ll either stop trading or jump to the next strategy and repeat the losing process.

Step 2 – Confidence

The 2nd step is to gain confidence with the strategy by understanding how it works, why does it make money? Really understand the backtest results, know the type of markets it works in best, then either paper-trade it or trade it with a small position size for a while to get a feel for how it behaves.

This process can take some time so don’t rush it. Also, don’t assume you can trade it just because you know the rules and have read the backtest report; there is a large difference between knowing something and doing it, so while you may think you can handle the performance characteristics of the system it can be an entirely different scenario once you’re risking your own money with it.

Step 3 – Discipline

The 3rd step is to gain discipline by following the strategy religiously. This is very important because not following the rules will erode your confidence and invalidate the results.

Make sure you resist the temptation to constantly ‘tweak’ the strategy rules, especially based on the results of a small number of trades. All strategies have winning periods and losing periods and the results are not defined by any one trade, rather you need to apply the strategy over a large number of trades to let the edge work in your favour.

If you find you constantly want to change the strategy or can’t enter or exit trades when the strategy requires it, you lack confidence in the strategy and the only solution is to stop trading it and go back to steps 1 and 2 again.

Go do it!

By following these 3 steps you can become a more disciplined trader. It won’t be easy, there are many challenges in trading, but if you remain persistent and are always looking to improve you give yourself a much better chance of being a successful trader.

Fun Things to Do When You’re Low on Money

So it’s the weekend or holidays and your bank balance is dismal. The days can really seem quite long and boring when you have little or no money for entertainment. It seems the ability to spend money has made us a bit laid back on being creative with how we spend our time.

Have you ever watched little kids play? They are able to turn almost any object they can get into an interesting plaything complete with names and storyline. I know my kids do that all the time. They can even keep at it for hours at a time. With a bit of creativity and imagination, even adults can forget the daily grind of money matters and just have plain, cheap fun. Here are 15 fun things you can do on a very low or no budget at all!

1. Play board games: Board games are a fun, cheap way for families to spend time together. All the intrigues and goofing can make for lots of fun and bonding too. Most of them come with instructions and the most popular ones include Chess, Monopoly, Backgammon, Checkers and educational games like Scrabble and Pictionary.

2. Go on a bike ride: Alone or as a group biking is fun and gets some exercise in too. Try pushing yourself by exploring new terrain (but not after dark).

3. Take a walk around your neighborhood: Get out of the house and stretch your limbs by taking a slow casual walk around where you live. The fresh air and scenery will take your mind off money for a while anyway.

4. Take your kids to the local park or playground: If you don’t have kids around you could volunteer to take your nephews or nieces. It would be a lot of fun watching the kids laugh and play and the most it would cost you would probably be a scoop of ice cream per child. You’ll become their favourite Aunt or Uncle in no time.

5. Learn a new art project online and teach your family or friends: There are so many fantastic websites that teach art projects completely free. Some are designed specifically for kids and others for adults. The range of choice is awesome and many of the projects are truly mind-blowing. The great thing about this is many of these sites use old items you can easily find lying around the house to create keepsakes you would be proud of. The added advantage for kids is that it helps to bring out their creativity too. I bet you will be able to keep them occupied for long making these projects.

6. Have a campout on the garden lawn: There are so many things you could do with a campout this point actually deserves an article of its own. Basically be creative and plan ahead. Invite a few friends or just keep it in-house with your close family. Include fun games, water splashes, a sizzling barbecue and of course scary stories. Try putting up funny looking decorations round your lawn and lights they look fantastic after dark and don’t forget the tents.

7. Check out the library: When last did you visit one? Many of them have new improved books, CDs and DVDs you could borrow. Or just sit there and read for a while, you never know you may meet someone interesting and make new friends.

8. Bake or cook something new: The aim here is to spend little or nothing so don’t go overboard. Search round your kitchen cabinet for some ingredients you have not used in a while (please check the use by date first) and come up with a new recipe or just a dish you have not made in a while.

9. Teach your friends a craft: Do you have a craft you could teach? Can you sew, knit, sculpt or mold? Why not gather a few friends or colleagues from the office and show them how it’s done? Everyone could volunteer to bring a couple of drinks or dishes along but not expensive ones. If someone else in the group also has another skill, you can take turns.

10. Pay a visit to the local hospice or orphanage: Find out if you have a children’s hospital or orphanage in your town and what are the rules for visiting. If they do accept visitors, make a habit to visit even if just once a month. With time you could even begin to offer free services like reading to the children or singing.

11. Volunteer to visit a retirement home: Give back to society by sparing a few hours of your time to visit the elderly. Many of them may not have had any visitors in months.

12. Set up a blog if you are up to it: A platform like Blogger or WordPress offers an opportunity for you to express your views and interests and best of all its free!

13. Make a plan for the next 5 or 10 years: If you don’t already have one, this is a great time to write what you want to achieve in every aspect of your life in a few years. Where are you now and where do you hope to be? How do you intend getting there? Write it and start following through.

14. Spend quality time with your partner or spouse: Talk about issues you don’t normally have time for or just give each other a cheap spa treatment or massage.

15. Have an in-house movie night: Let your friends come over each one with their favorite films. Create a cinema setting by switching off the lights and providing popcorn, drinks and comfy blankets to sit or lie on. Have more fun by laughing at each other’s choice of movies.

There you have it. It’s not that hard when you set your mind to it. Try to deemphasize spending money all the time and look inwards more. This way you learn new things and also save some money you would have otherwise spent.

Which Bills Should You Pay First?

Managing your bills can be very stressful. Some studies have shown that carrying some debt may be bad for your emotional well-being, so it is important to try and take the problem on as soon as possible. In order to relieve the stress, you need to think about the debts that you have. What debts go to necessities? How will your interest rates be affected by the payments you make? Can you consolidate?

Deciding Between Urgent and Non-Urgent Debt

Here is one way to tell the difference between urgent and non-urgent debt:

-Basic housing needs like mortgage or electricity



-Student Loans

-Unsecured loans

-Loans where household goods are used as collateral

Once you have figured out which bills should be given the most priority, you can decide how much of your funds to put towards each one. Any money you have left after making your minimum payments can be used to get the balances owed lower.

Deciding Between Interest Rates and Balances

It’s always a wise idea to pay off the balances with the highest amount of interest first. If you don’t follow this rule, you may end up paying thousands of dollars in interest. Some people try other strategies such as:

-Boosting morale by paying off lower balances first.

-Lowering your highest balances first. This could lower your minimum payments, making debts more manageable.

-Decide based on other factors, such as which will help you pay off debt the fastest.

How to Consolidate Your Debt

Those with multiple debts may want to consider consolidation so that they only need to make a single payment each month. There are several ways to achieve this, such as:

-Home Equity Loans – Your house is used as collateral, which causes rates to be lower and gives you more spending power. The interest paid can also become tax deductible. The only downside is that your home could be on the line if you skip a payment.

-Credit Cards – If you have several different credit cards, transferring all of the balances to a single bill may help you. This helps to make it one payment and could give you a lower rate; however, you need good credit in order to get this option.

-Retirement Fund – You may be able to borrow from your 401(k) or other funds at a low interest rate; however, you are expected to pay the money back in a short time. Otherwise, you may be taxed. The money you borrow also isn’t earning a return, which can result in a loss of future income when you retire.

-Personal Loans – These loans can be a quick way to consolidate your debt until you find a better interest rate; however, the rate will be based on your existing credit.

Consolidation can be difficult as you need to borrow money in order to pay off the debt, which may mean reassessing your budget.

Get Debt Help

Learn more ways to reduce your debt and get the assistance you need by contacting a local credit union today.

Job Costing and Estimating

Small business owners are an underserved group. Tax planning and tax preparation should not be the only skills offered by the business’ advisors. And to small business owners, don’t be so stubborn. Read carefully to understand this discussion. This just might save your life long dream from collapsing.

Construction, roofing, and custom manufacturing are all business types that will benefit from a discussion of direct and indirect expenses. Most already know that direct expenses for a given job or project have to be considered in the cost. Direct expenses include the labor and materials used. It is the indirect expense that is most often forgotten or mistakenly allocated to job cost. The indirect expense is a cost that relates to all jobs or projects and not to one job specifically.

Examples of indirect expenses include: depreciation on machinery and equipment in the production process, depreciation on plant facilities if owned by the small business, rent on the plant facilities, shop supplies, vehicle expenses, utilities, insurance, and the compensation of supervisors, plant managers, and owners of the business. And of course, don’t forget about payroll taxes. There could be other indirect expenses in a given business, but the aforementioned will serve to demonstrate my point. It is also important to mention here the compensation of the business owner or owners. If the owner participates in the production process, a portion of compensation (or all) should be treated as an indirect expense to be allocated to the job cost.

Now that there is a list of indirect expenses, how should they get allocated to the job cost? Typically, indirect expenses are allocated based on direct labor dollars, direct labor hours, or direct materials. My personal favorite method of allocation is based on direct labor hours. If there are 20 direct laborers in a given business, and each is projected to work 1,900 hours annually, there will be 38,000 hours of total direct labor in a given year. If the summation of indirect costs is $1,500,000, this business will have an indirect cost per direct labor hour of $39.47. If my average hourly wage for direct laborers is $25.00, then total cost per direct labor hour is $64.47. If this particular business desires an industry average gross margin of say, 36%, it will need to charge $100.73 per labor hour. This billing rate is determined by using the full absorption method of accounting. Full absorption accounting is a required “generally accepted accounting principle” and must be used in all external financial statements unless otherwise disclosed.

Now, I can hear the naysayers from the cheap seats, “what if the market won’t bear this”? Well then, the business will have to accept a smaller margin, shop around for lower direct and indirect costs, or understand the behavior of fixed costs and “economies of scale”(a discussion for another article). The point of this article is to ensure that a business covers all of its production costs. I hope that I never hear again a small business owner say: “I am busier than ever, but I don’t have any money”! As always, the small business owner is free to do as he or she pleases. However, it is important to remember that my way is better.