How to Grow Money

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Credit Cards and Holiday Shopping
Minimize Credit Card Spending During the Holidays

The holiday shopping season is a much-anticipated time of year for both the retail industry and consumers. For the retail industry, the largest percentage of their sales are earned during the holidays by consumers who have failed to plan and are easily lured to make impulse purchases for shiny new gadgets. Consumers on the other hand mak... Read personal finance article



Diversification - An Important Term
"Succeeding is not really a life experience that does that much good. Failing is a much more sobering and enlightening experience." -Michael Eisner

Diversify! Diversify! Diversity! Diversification is the newest trend and most advised strategy in investing. Most people do not know what diversification is or why is it is so important. Below is some basic information about diversification ... Read personal finance article



How to Grow Money
Have you ever wondered what happens to your money when you make a deposit into your retirement plan? Here are two key principles that govern how your money grows when you invest.

Compound interest

Compounding occurs in your retirement account, your savings account, and in any other account that accumulates interest. Compounding adds the interest you make on your investment to the principal balance over and over as time goes by.

Here is one example of how it works. You invest $1,000 as your principal. After the first month, you earn $10 in interest. That $10 is added to the $1,000 and next month you will earn interest on the new total amount of $1,010.

$10 in interest might not seem like much, but that is only after one month. At that same interest rate, your balance after one year will be $1,127. Leave your money there for 30 years, and you will have $35,949 just from the benefit of compounding! That is a lot of growth, and you never made another deposit! Without compounding, the value of your account would only have been $4,600 after 30 years. See the difference?

Now, instead of leaving the $1,000 alone in the account, we are going to add $100 every month. That is where dollar-cost averaging comes in.

Dollar-cost averaging

Dollar-cost averaging is a great keyword that very few people know, but they rely on this principle all the time. If you invest in your 401(k) through work, you automatically reap the benefits of dollar-cost averaging. Your money is invested every month regardless of the current market price of the investment.

Because you invest the same amount every month, sometimes the value of one share of the investment is higher, and therefore you are buying fewer shares. But when the price of a share is very low, you get more shares that month.

So what does your $100 a month buy you? In our example, your mutual fund one month costs $25 per share, so you get 4 shares. Next month, the price dips to $10 per share, so your $100 now buys you 10 shares. You were able to take advantage of the price when it was lower. In effect, you bought the shares on sale!

So why does it matter? The market, which is the buying and selling of stocks and commodities including our mutual fund in the example, goes up and down depending on many factors. Dollar-cost averaging works for the average investor because you do not have to watch the nuances of the market as you invest over time. When the market is down, and the price of one share of your investment is lower, you automatically take advantage of the sale price.

Making It Work for You

Let's put the two concepts together now using our example. With both dollar-cost averaging investing and compound interest, after 30 years, the value of your account would be $388,941! That is based on investing only $36,000 of your own money.

The best part of these two keys to making your money grow is that you can take advantage of them without doing anything but signing up for a retirement plan through your employer. Even if you decide to invest on your own, you can still use these two principles. And that is something you can take to the bank!

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Andrew Marx writes articles on topics including personal finance and higher education, emphasizing a practical and informed approach to his ideas. His weekly column can be read at http://www.smartremarx.com/

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Cash Advances - Payment Terms

The payment terms vary from one cash advance loan to another because of the various amounts of cash that you can borrow.

If you borrow a very small amount of money it means that you can most likely repay it all at once including the amount of interest. On the other hand, if you plan to apply for a higher amount of money, then you must have a more structured repayment plan that fits both you and the cash advance company.

You need a budget so that you can have enough cash to survive and also pay your bills for the cash advance every month. If you are prepared, the cash advance repayment will seem a little less frightening.

The terms at which you must repay the cash advance loan will depend on the amount of the loan. If you have enough money to make the monthly payments over a long period of time, then you can apply for the higher loan.

Obviously, if you only need a small amount of cash until payday, then you can borrow the amount and then repay it all at once. You can even spread out the payments, but it is better for you to pay it all at once just to get it out of the way.

The payment terms will typically require you to pay the cash advance company every month. You will receive the payment structure with the amount that they expect you to pay each month.

Even though the amount will generally stay the same for the whole duration of the repayment period, you will be in a position to establish the ideal budget so that you can work your pay check around both bills and the cash advance repayment.

Alex Fir shares a wealth of information on his website Payday Cash Loan Guide. If you want to learn more about payday advance loans visit his site right now.




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How to Grow Money
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