Check out the 5 financial tips for the 4th week of August 2011
1. Pay yourself first.
It one of the smart financial strategies that help you meet your goals in life. When your wage is electronically deposited in your checking account, you should issue the first check in your name. Withdraw an amount which will be enough to meet your family expenses. You should use a certain portion of this amount for contributing to your retirement account. You should never fail to contribute money to your retirement account in the midst of financial difficulties. Once you have contributed a specific amount of money to the retirement account, you can use the remaining amount to pay your bills.
2. Always wear your seat belts while driving to avoid penalties.
You should always wear seat belts while driving a car. It is said that the insurance companies are not providing the full compensation in those car accidents where the driver has not worn the seat belt. You need to convince the insurer that the injury was not caused due to non-wearing of the seat belt, which is a very difficult task.
If you are driving your car without wearing a seat belt and are caught by a law enforcement officer, then you may have to pay a fine. The insurance companies will increase your premium. If you are convicted of the same offence time and again, then you even lose your driver license.
3. Always read the "fine print" section of the contract minutely.
When you take out a new card from a company, make sure you read the fine print section of the contract in detail. You should give special attention to the fine print section of the contract. For example, you can know whether or not the credit card interest rate will be doubled or tripled in the event of loan default. You can also get to know if the card company is charging any extra fee. These kinds of fees are typed in the "fine print" section so that the consumers overlook them while signing the contract.
4. Fourth Law of Motion and universal law of investing: For investors as a whole, returns decrease as motion increases.
This is a famous quote by Warren Buffet. This quote has been inspired from famous quote of Sir Issac Newton. He had one said this line "I can calculate the movement of the stars, but not the madness of men" after incurring heavy loss in investment. Warren Buffet says that as the motion increases, the investment costs and taxes increases. This lowers the investment return.
5. Always borrow money from a pessimist, he doesn't expect to be paid back
It is said that pessimists have a bleak view of life. They always tend to look at the negative sides of life. They always expect the worst to happen with them. So, if you are planning to take out a loan, then you can borrow the money from a pessimist. It is expected that he/she will think that you won't return the money. He/she will give you a loan without expecting to get back the money. This means that the person is less likely to haunt you for the money in future. If you can't payback the money, then he/she won't be disappointed. If you can pay the money, then he/she will be extremely happy.
Nevertheless, this is just a quote. It is advisable to not take this tip too seriously. After all, the pessimists will hardly give you money in the first place. However, it would have definitely been better if such persons existed in reality.