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When I do research on “Financial Freedom” I found that many sites are talking about Reverse Mortgage and some even emphasize that “Achieving Financial Freedom through Reverse Mortgage”. Since my blog is about financial freedom, I decide to run a research on reverse mortgage and see whether it really can help us financial free.

1. A Home owner that 62 or older can borrow some money from home equity, this is what we called Reverse Mortgage.

2.  Interest isn’t due until the homeowner dies or move out.

3.  The amount a borrower can get depending on the borrower’s age (with couple, it depends on the youngest), the home value, the interest rate and how the money is take out.

4.  Common uses on Reverse Mortgage is covering the living expenses or for home improvement.

5.  95% of reverse mortgage are insured by Federal Housing Administration.

6.  Under FHA’s Home Equity Conversion Mortgage Program, borrowers can get their money:

a) As a lump sum

b) As a specified amount every month for a fixed period such as 10 years

c) As a specified amount every month until they die or permanently move out of the house

d) As a line of credit

7.  Closing cost of reverse mortgage include an origination fee of 2 percent of the home’s value and a mortgage insurance premium of 2 percent of the home’s value

8.  After the death of the borrower, the loan is repaid from the proceeds of the sale of the house.

Resources: Bankrate.com

How to Manage Money Financial Planning, Loan & Mortgage

In financial planning, you must plan a strategy how you going to invest and manage your money. From here, risk of investment is involved. This is why you must know your risk tolerance – how much risk you can take on your money.

Now there is a quiz that helps you understand what your investment risk tolerance is. This quiz was developed by 2 university personal finance professors.

Anyway my score is 29 which mean I’m from a group that “Above-average tolerance for risk”. What’s yours? Let’s see by taking a quiz

Via : Enough Wealth

Source

Uncategorized Financial Planning

Just found a great tool that can give you some guidelines and ideas how you can allocate your asset base on your age, current asset, saving per year and tax rate.

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After key in the relevant data, a percentage pie-chart will be shown which consisted of Large Cap, Mid Cap, Small Cap, Foreign Stock, Bonds, Municipals and Cash.

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Give it a try now

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Via : Savvy Samurai

MISC Financial Planning

When we are young, I think there are lots of people and information tried to push the “concept of saving" into our mind. It is not surprise that when come to money, people always care how much money they can save and some people, I believe, how to save money is one of the important plans in their financial planning. However, sometimes if your mind only concentrate on how to save money, then you might end up losing money that you might not realize.

Today, I just want to share with you some of the “Myths" of Saving Money that we might not realize.

1. I have a saving account, so I'm saving money!

Having a saving account and you are putting money inside does not means you are saving money. If you have credit card debts, which I think many people will have, the interest rate of these debts are ALWAYS greater than you saving interest.

1. If I buy something on sale, I'm saving money!

If you buy something on sale, you are paying less compare to the full price without promotion. For example, you buy a laptop at $1000 and the normal price is $1200. So you only pay $200 less. You only considered as you are saving money if you take out the $1200, spend the $1000, and put the $200 aside without spending it in other place. Then you are saving $200!

1. If I refinance my house at a lower rate, I"m saving money!

I bet the bank will get richer if more people think that refinance their mortgage or other loans at a lower rate will save them money. The point arises here is if you refinance your mortgage after paying 5 years of installments, you will loss you money because normally first few years you are paying for interest. So the more you refinance, you will loss more money.

1. If I made more money, I can save more money!

Theoretically, this is correct. However, this only right if you don't increase your consumption after the raise. The truth is, however, that most people quickly increase their consumption after an increase in pay.

Do you agree with the saving myths above?

How to Manage Money Financial Planning

I know maybe you read a lot of books and articles about financial freedom and decided to make it as your lifetime goal. You know the benefits of financial freedom and also make yourself familiar with the theory of financial freedom. Now I suspect what you want to know is how to achieve it, right? If you want to learn the “how to" then you must read this article because I am going to talk about how to gain financial freedom.

Being financial free will be much more easy if we able to find a certain way to achieve it. A way that consist of a plan with several simple steps that will guide you to the direction of the financial freedom.

We all know that we need a plan to achieve everything in our life. We want to achieve a lot of things but we will fail if we do not have a plan that guides us to our dreams. So what should we include in our plan to be financial free? So today I am going to share with you 1 plan that consists of 5 simple steps that you can follow or as an inspiration that inspire you to compile your version of financial free planning. I always believe statements of “One man food is another man poison". Our background and ability is different, so we might compile a plan that totally different and go through a different journey to financial freedom.

First of all, let me show you what is the 5 simple steps that I put in this plan :

1. Make Money
2. Save
3. Invest
4. Share
5. Spend

Just some simple words but there are a big meaning behind the simple words. Actually the 5 steps are the process how you manage your money.

Make Money

Everyday, we wake up and our mind will start concentrate on how to make money to support our life and family. Don't you? Every minute, every second, we are spending money. Even you are sleeping, there are certain things are getting some money out from your pocket. Either you get a job to make an income for your life, or running a business that become your income source. Maybe there are a lot of ways too you can make money from. So no matter what you are doing, the first steps in financial freedom plan is Make Money!.

Save

So after certain period, maybe after a month, you get your paychecks from your boss or your business, then how you going to spend it? So here is where personal finance and money management knowledges play their roles. In the second steps of financial freedom plan, Save, you must have a plan to save up some money. Maybe you can start a budget that let you spend your money wisely and systematically. Your objective is trying your best to save up some money before you spend it. It does not matter how much you save. As long as you save up some money, then you are taking some steps approaching the goal of financial freedom. So why you must save up some money? This is because you need to money in step 3

Invest

As we know, we need passive income to be financial free, and the only way we get this passive income is investing. Starting a business that will bring you passive income also is a good idea. However, both investing and business needs money to start it. This is why, first step we make money, second step we save up some money, so in third step we have money to invest. Investing simply a process that make money works for us and bring us the passive income. There are another meaning of the words of invest here. That is investing in your mind. Today if you want to success and be a good investor, you must have knowledge to support it. So you need to invest some money, get some reading material, audio or attending some seminars to gain knowledge that will help you investing your money. When you learn enough, then you can start invest your money for passive income.

Share

Share? What is it about? Maybe you will ask this question. Actually the step is about how you use your money to help other people. I always heard that, wealthy is a godsend from God. So if we are the lucky group, who able to make money, being rich and wealthy, then we must help those unlucky. This is a way we can express our appreciation on our wealth. If you pay attention and read some articles of all the rich people in the world, you might find that most of them will involve in charity and contribute to the community by helping those unlucky. We all know that money is evil, but if you can use your money to help people, it will become an angel to all of us. Furthermore your life will be much brighter and happier and finally you are happy to make money.

Spend

So after save up your money for investing and sharing with other people, now it is time to spend it in other category. Now you can see that money spending actually is the last steps in this plan. However in real life, most people simply make the steps as second step and a lot of money will be spent out. For your information below is the plan of most people managing their money:

1. Make money
2. Spend
3. Save
4. Share & Invest

As you can see, their trend is make money, then spend it to buy whatever they want to. If lucky enough, maybe they can save up a little money. And if really lucky enough, they will have extra money to help people and the last one mostly is investing their money. I hope you can see the different of the plan. The initial plan is more about investing which will bring you passive income, but the later one is about spending money which will bring you the short term happiness. Which you want to choose is really up to you.

Conclusion

Above are the 5 steps to financial freedom that I want to share with you all today. These 5 steps is really a guide for us to build a simple plan to be financial free. But we need a more detailed plan for each step and here you can compile your version of plan that according to your needs and financial status.

Achieve Financial Freedom Financial Planning