Kenneth Rogoff’s war on cash: is he right to call cash a "curse"?

Economist Kenneth Rogoff published in 2016 a book, named “The curse of cash”, pointing at the numerous societal woes he attributes to hard currency, and praising its disappearance in favor of digital money. Despite an obvious desire to adopt a balanced and reasonable stance, several of the points made within the pamphlet reveal links to the partisan war on cash and misrepresent the role of cash in our societies.

war on cash

In Rogoff’s defense, several good points are made in his new book, “The curse of cash”. The Yale economist assesses, for instance, the Indian cash ban as brutal in its implementation and disastrous in its effects, a point of view shared by just about every observer in the world, save prime minister Narendra Modi, who made the decision. But, all in all, Kenneth Rogoff doesn’t beat around the bush in revealing his opinion: cash is evil and should be replaced. In his introduction, he writes “Cash is becoming increasingly marginalized in the legal economy, but there is a record amount of it in circulation—$1.4 trillion in U.S. dollars alone, or $4,200 for every American, mostly in $100 bills—and most of it is used to finance tax evasion, corruption, terrorism, the drug trade, human trafficking, and the rest of a massive global underground economy.” Also, he concedes that a total destruction of cash currency would have massive and irreversible consequences on the individual freedoms and civil rights, giving unlimited monitoring power to governments who wish to track their citizens. Here again, a vast majority of observers around the world agree with him, as a simple Google search on cashless societies will result in hundreds of bells, alarms and flags warning of the dystopian and Orwellian society which would arise.

Considering that the war on cash has a better chance of succeeding by being waged discreetly, Rogoff advocates for a stealthy, divisional approach; a strategy shared with most of the anti-cash lobby: mainly banks and governments. Investigative reporter Brett Scott writes for the Guardian: “we see an alignment between government and financial institutions. The Treasury recently held a public consultation on cash and digital payments in the new economy. It presented itself as attempting to strike a balance, noting that cash was still important. But years of subtle lobbying by the financial industry have clearly paid off. The call for evidence repeatedly notes the negative elements of cash – associating it with crime and tax evasion – but barely mentions the negative implications of digital payments.” Banks are generally favorable to Rogoff’s views, because cash represents the least convenient form of money for them, and also because cash can leave the banking circuit through withdrawals. If societies were to become cashless, the entire economy would be trapped within the banking world. Banks, like any other business, wish to keep the money close, hence their support of Rogoff. Governments, also, support these views, for two main purposes. The first is to tighten their grip on their own economies. When macro-economic decisions are made, central banks and survey institutes can accurately measure results through banking movements - whereas the cash portion of the economy is much harder to track and assess. Also, governments tend to hate cash because they consider it a preferred means for criminals, traffickers and, of course, tax evaders - although ample evidence shows that the crime world has long moved on from the “dollar suitcase era” and invaded the digital world.

Indeed, financial analyst Stephen Platt writes: “Unlike suitcases full of cash, credit and charge cards are mobile. They cross borders without arousing suspicion. They can be utilised anywhere in the world not only in financial institutions but in retail outlets, hotels, restaurants, travel agents, and money service businesses. In short, armed with a credit card you can pretty well go wherever you want and provided the credit limit is high enough, do whatever you please”, revealing that cash was abandoned in large part by the mob when mobile and digital solutions offered a far safer alternative. While one might imagine indeed that criminals would make substantially larger incomes than regular citizens, it is hard to take the volumes involved by Rogoff at face value and admit that dollars are now owned by criminals instead of honest citizens. According to his assessments, and that of the US government, virtually every single dollar in circulation in the United States would be in criminal coffers and used to finance criminal transactions. It is far more realistic to consider that each bill is used for a hundred legitimate reasons between each unlawful payment. Gainsayers of Mr Rogoff consider cash, not a curse, but the most valuable form of money: flexible, environmentally friendly, safe, symbolic of national unity, socially inclusive, technologically immune and, most of all, private - that last quality gets double points from the civil liberties watch dogs who have been blowing whistles for years.

The thoroughness of the work provided by Kenneth Rogoff can hardly be called into question. As a Yale graduate, and one of the few economists to focus on the war on cash, his data-crunching and analysis is respected, and respectable. However, a clearly biased, anti-cash, pro-bank and pro-government drift can be sensed in the “curse of cash”, if only in the title. The figures used, namely, to size the underground economy, come from… the IRS. Until now, banks and governments have been slowly putting the squeeze on cash while assuring that they are not. Ken Rogoff lending the movement his voice marks a new turn in the war on cash.

Quick Tips for Getting Out of Debt Faster

When you're struggling to make ends meet from one payday to another, money can start to become a stressful topic for you and your family. If you're careful, you might be able to plan how you're going to use every penny you earn from your income in advance. However, usually, this means that you'll need to compromise on a lot of things, including how much you can devote to your debt repayments.

Even if you compared your loan providers before taking out a cash advance and made sure that you were getting a deal from the company with the best interest rates, you might find it challenging to give the lender more than the "minimum" at the end of each month.

Getting Out of Debt

Fortunately, if you're looking to get out of debt as quickly as possible, and start thriving financially, there are a few things you can do to improve your chances of success.

1. Find Out What your Biggest Issue Is

If you've chosen the best possible lender for your needs, then your issues with debt come from one of two sources. Either you don't make enough money each month to deal with everything you have to pay for, or your budget isn't up to snuff. Some people suffer with a little of both issues. 

If your issue is that you're not earning enough, you can start applying for extra jobs on the side to upgrade the amount of money you earn. There are plenty of freelance positions available today that allow you to earn money online on a schedule that suits you. If your problem is with your budget, then you need to sit down as a family and figure out where you can reduce your outgoing costs.

Either way, you'll need to look at your bills and incoming cash and start by figuring out where the bulk of your problems lie.

2. Look for Ways to Reduce Spending

Even if you're struggling with a low income, reducing spending is always a good way to get yourself out of debt faster. Most people focus all of their attention on cutting luxury items out of their budget. However, there are other big costs that you might be able to reduce too. 

For instance, if you're spending too much on your car, could you sell your vehicle and use public transport instead? If your insurance provider is costing you a fortune, would it be a good idea to switch to another company?

Depending on how severe your situation is, you might even decide that it's time to move to a smaller apartment or start sharing your home with a room-mate. 

3. Make Being Frugal Part of your Personality

Usually, when people are facing financial problems, they assume that only huge changes can make a difference to their future. However, the truth is that you can accomplish a great deal by taking small, frugal steps every day. For instance, whenever you go out grocery shopping, make sure that you take a list with you that will guide you to only buying the things that you need. This will reduce your chances of impulse spending. 

Additionally, when you're buying something new, make sure that you take the time to compare the prices you can get from other stores and providers online before you commit to anything. This simple extra step could save you a fortune over time. 

4. Make An Emergency Fund a Priority

While your main focus right now might be getting out of debt as quickly as possible, that doesn't mean that you should open yourself up to disaster whenever something unexpected happens in your life. An emergency fund is a great way to make sure that you're not going to end up in more debt when you're living from paycheck to paycheck. 

At first, it's going to be difficult to put any money aside each month. However, even if you can only spare $10 a month, you'll have a small amount of cash that you can tap into when something happens that you haven't planned for - like a flat tire or a broken dishwasher. 

5. Keep Adapting and Evolving

Finally, once you've finished working on your budget, and you think you're placing as much of your available cash into paying off your debts as possible, don't just forget about your spending for another year. Every couple of months, come back to your financial plan and ask yourself if there's anything you can do differently. 

Your budget and finances will change all of the time. Make sure you're not missing out on any useful opportunities to save more money. 

Electronic payment solutions – How they help your business flourish?

Are you a small business owner? If answered yes, you will most likely find technology to be both a curse and a blessing. It is indeed frustrating to upgrade software and change programs as it take lot of technical know-how and mental energy to keep up with everything. Till now, you must have held off the thought of accepting online payments but did you know that electronic payment solutions like HPS Worldwide can give you valuable and effective insights on how you could grow and flourish your business. 

Electronic payment solutions

These days, consumers are always watching out for convenience and this is one of the biggest reasons behind the gaining momentum of online shopping. E-commerce is increasing by 25% every year and the young generation spend a total of 6 hours per week in shopping online. So, if you want to know how your business will benefit by allowing electronic payments, here are few things to take note of. 

Your company gets a wider reach

When your company accepts electronic payments, it gives your company an expanded reach. Though you may be a local business, yet accepting online payments can be appealing to people who would rather wish to pay online. The clients who have heard about your business through the social media will patronize your business. Especially those companies which have niche products will find a huge gain in momentum throughout the globe.

Consumer’s security expectations are met

The customers these days expect a minimum security level while providing you with their credit or debit card details during a purchase. You have to keep in mind that security shouldn’t be an obstacle while buying something. Although the customers are aware of the rules that are in place yet they don’t prefer going to dozen steps before making a small purchase. This is when you should cater to the needs and wants of your customers by investing in the smartest electronic payment solution. 

Subscription and loyalty programs count

When you have an electronic payment system in your company, this might also help you when you implement subscription and loyalty programs. Due to the fact that you have enabled electronic payment, you can auto-charge the customer for a service that continues every month. Not only that, you can even gather data which gives insight into the ways in which you can expand your business. As you get electronic payment data at hand, you’re also able to promote packaged deals and other programs which can be promoted to various groups of people. 

User-friendly in nature

We know that each service is designed keeping in mind a wide reach of audience and hence it has got the most understandable UI or User Interface. Moreover, you also get a chance to ask your queries to the support team which works throughout the day. You can keep checking the forums for the answers. 

Therefore, now that you know the benefits of electronic payment solutions, what are you waiting for? Visit your nearest bank and get one for your company to reap the above benefits.

Credit Card Debt: Proven Ways to Prevent It

Having a credit card is good for you since it is very convenient on top of boosting your credit score when managed well. People who have more than one credit card may be in an even better position. Alternatively, credit cards can be a pain if they are not managed well. Credit card debt can start piling high, which could cause difficulties when paying bills. So, you need to prevent this from happening by following the tips below.

Credit Card Debt

Have a Financial Goal

Being led by a goal is the beginning of responsible financial management. Ensure that you have a monthly budget to guide you. The big question to ask is whether or not a purchase is necessary. The good thing with a financial goal is the ability to scrape off the unnecessary expenditures. Some can wait anyway. Therefore, the credit card debt will not be as high as it would have been without the financial goal.

Always Check the Credit Card Balance

One thing to know is that the credit card balance is different from the limit. People focus on the limit and continue spending in a given month. If you go this way, you will always find yourself stopping just before the limit. But if you check the balance, you will know the amount that you have spent, which will reduce your spending if it is going beyond your financial goal. The credit card limit may not change, but the balance should change depending on the budget.

Buy Only What Is Necessary

It is tempting to pay anything using a credit card if you still have available credit. But this habit is highly discouraged by financial advisors. If you read tips from Boostcredit101, they encourage all people to use credit cards on things that are necessary. If you had planned to purchase something with a credit card, then this is fine. But all things that were not planned purchases should be discouraged. This is the only way to succeed in avoiding unnecessary debt on your credit card.

Multiple Credit Cards Can Encourage Spending

If you have more than one credit card, there is a lot of money you can spend before reaching their credit limits. Each card is an opportunity to purchase. Research has shown that people with multiple credit cards spend more than those with one. However, this will pile on the debt at the end of the month. This can be avoided by using these cards carefully. Make use of the tips that we have discussed above to manage credit cards well. The good news is that multiple credit cards play a role in building a better credit score if they are handled responsibly.

Take Advantage of Promotions and Discounts

When purchasing, always look for different promotions and discounts. This means that you will pay less for the same items. If this becomes a habit, your credit card debt will significantly decrease. Make sure that all the items bought are necessary and would have been purchased anyway.

Managing Finances When Money is Tight

The way a person manages their household finances can have a deep impact on their life. Unfortunately, money managing skills are not something that most people are taught as they grow up. Managing money is less a matter of mastering paperwork and numbers and more about psychology. It has to do with the mindset a person has toward money. This mindset is what allows a person to successfully manage their household finances, even when money is tight. The following are a few tips that could make managing a tight budget easier. 

Take Advantage of Available Resources 

Going into debt temporarily may be less expensive in the long run than giving up equity. This means that managing household finances could involve temporarily borrowing money to be able to keep up with car payments, mortgage payments, or cover small business expenses. 

Managing money

Short-term quick personal loans are a useful resource that allows borrowers to cover immediate household expenses and allow some breathing room to make better long-term decisions. In many cases, these loans are preferable to racking up credit card debt.

Other available resources could include friends and family members who are able to provide temporary financial assistance. Another option is looking at programs offered by governmental agencies to provide temporary financial assistance to help cover living expenses. 

The Importance of Setting Goals 

When finances are tight, thinking about setting financial goals may be the farthest thing from your mind. However, if you do not have goals, you will never go anywhere. When going through financial difficulties, it is especially important to set short-term goals as well as long-term goals. Short-term goals may mean determining which items are considered necessities and which ones are luxuries. You can then prioritize your financial decisions based on this. 

Likely, your most pressing financial goal is to cover your current expenses. This would include things like your mortgage or rent, your car payment, your food, your cell phone, and household supplies. Long-range goals would include things like paying off debt, retirement savings, investments, and charitable donations. 

Make Small Cuts Across the Board for a Large Impact 

You know you need to cut expenses from your budget if you’re going to be able to stay afloat. During a financial crisis, you've likely gotten rid of your cable television, your gym membership, and extra entertainment. But there’s still more that you can do. 

Look at the items that you have budgeted as essential, such as food, gasoline, and utilities. It is likely that you can shave off between $5 and $10 off of each category per month. At the grocery store, it can be something as simple as taking one item out of your cart. With your car, it may mean conserving fuel and driving one or two fewer places. With your utilities, it could be something as simple as slightly lowering the temperature on the thermostat. Doing this could mean saving between $15 and $30 a month. Put this money into your savings or invest it. You will be surprised at how big of an impact the small cuts will have over a longer period of time. 

Get a Side Hustle 

Maybe you have cut every which way you can and just can’t cut out anymore. Still, it seems like you can’t make ends meet. Now might be the time for you to join the gig economy. Start a side hustle for a source of income outside of your primary job. 

A lot of side gigs can be performed at home in your spare time. Think about the type of employment you’re already doing. Think about your hobbies and the things that you enjoy doing. Now ask yourself, how can I monetize these? Some popular forms of gig employment include data entry, graphic design, and freelance writing. 

Managing your household finances, especially when money is tight, is a challenge, but it can be done. It is imperative that you identify your priorities and then use those priorities to create a value-based spending plan and a value-based savings plan. This will make you savvier with how you spend your money and will allow you to save more.

How Can You Obtain a Low Down Payment Home Loan?

Purchasing a home is one of the biggest milestones in your life. Unfortunately, it can take years to save up for the required down payment – experts suggest that you have at least 20% of your home’s purchase price prior to beginning your house search. This number is inaccessible to many people, especially a first-time home buyer or return buyers still paying off the mortgage on their current home. Soaring home prices across the country also make it difficult for prospective homeowners to meet the 20% mark.

Home Loan

Despite these conditions, there is hope for prospective homeowners throughout Washington. Many mortgage providers offer options with low down payments for first-time and return buyers. Mortgages with low down payments can give home buyers a bit of wiggle room when they are saving up for their first or second home mortgage.

What Is a Down Payment?

If you are a first-time home buyer, you may not be familiar with how down payments work in the housing market. Simply put, a down payment is the cash money you will need to pay to the home seller to secure your purchase. Mortgage loans will pay for the remaining cash needed to cover the entire purchase price.

Mortgage lenders calculate down payments as a percentage of the entire house price. Generally, the higher the down payment you make, the lower your monthly mortgage payments will be. However, the standard 20% down payment that many housing experts recommend is not attainable for many homeowners.

For a $900,000 home, which is the average home price in Bellevue, Washington, that means you will need to save $180,000 before beginning the house search. This amount can take years to save and is not as accessible as a 5% or even 10% down payment. In contrast, you will only have to save $90,000 for a 10% down payment and $45,000 for a 5% down payment.

Down payments are important. They show the seller that you have the funds to purchase a home and show the mortgage lender that you have a significant investment in the property. In addition, the down payment also determines the “loan-to-value” ratio of your home. This ratio impacts the mortgage lender’s decision to give you a loan. Lenders calculate this ratio by dividing the mortgage loan amount by the value of the home.

For example, if you make an $80,000 down payment on an $800,000 home, the amount you will borrow will be $720,000. Your loan-to-value ratio will be 90%.

Understanding Mortgage Basics

Before we discuss the low down payment options for home buyers, we first need to understand the basics of choosing a mortgage. Selecting a mortgage that works best for you, your family, and your wallet is key to securing a low down payment.

The first decision you will have to make in choosing a mortgage is the decision between a fixed-rate loan and an adjustable-rate loan. These terms refer to the interest rate you will pay on your mortgage over time.
  • Fixed-rate mortgages have the same interest rate for the entire repayment period. Each month, your mortgage payment will remain the same. If you are secure with your payment amounts and do not anticipate any drastic changes in income, a fixed-rate mortgage would work best for you.
  • Adjustable-rate mortgages have interest rates that adjust after a certain period of time. Usually, you will retain a fixed interest rate for a short period of time. Often, the fixed period lasts a few years. After this period is over, the mortgage provider will usually adjust the interest rate annually. If you cannot afford the fixed-rate payment now but could in the future, an adjustable-rate mortgage would work best for you.
Next, you will have to choose between a conventional and government-insured loan. Conventional loans are not insured or guaranteed by the government; instead, private entities control these loans. Government-insured loans receive funding from various government agencies, including the Federal Housing Authority and the Department of Veterans’ Affairs.

Finally, you will have to choose between a jumbo loan or a conforming loan. Government-controlled corporations called Fannie Mae and Freddie Mac determine the size guidelines for your mortgage. Jumbo loans exceed the limits established by these agencies, while conforming loans fall within their requirements. Jumbo loans typically have higher interest rates than conforming loans due to their size.

Mortgage Options with Low Down Payments

Many conventional and government-controlled loans have options for low down payments. Government-controlled loans can have down payments as low as 3.5%. Conventional bank loans can provide down payments as low as 5%. Additional programs from Freddie Mac and Fannie Mae may also offer low down payment mortgage options. Sammamish Mortgage can pair you with a mortgage option that works best for you.
  • The Piggy-Back Mortgage allows you to combine two mortgages to borrow up to 90% of a home’s purchase price. You provide a 10% down payment and receive two mortgages to avoid mortgage insurance costs. You receive one conventional loan and a home equity line of credit.
  • Fannie Mae offers the HomeReady Mortgage, which allows for a 3% down payment. However, you must own a home in one of the approved areas, which are usually low-income, have a high minority population, or are affected by natural disasters.
  • Freddie Mac offers the Home Possible mortgage, offering a 3% down payment option for those in certain areas similar to the HomeReady mortgage. 
  • Conventional 97 loans offer a 3% down payment under the Federal Housing Finance Agency. This mortgage amount can only be as high as $484,350.
  • Federal Housing Authority (FHA) loans provide 3.5% down payments for prospective home buyers with lower credit scores. An FHA loan is government-controlled. You will have to pay additional insurance premiums if you opt for this mortgage option.
  • The Department of Veterans’ Affairs also offers loan options. You must meet eligibility criteria to receive a VA loan.
Risks of Government-Controlled Loans

Some of the lowest down payments in the mortgage market are available through government-controlled loans. These low down payments can easily sway prospective homeowners. As a result, these buyers do not critically examine the drawbacks of government-controlled mortgage options.

FHA loans offer down payments as little as 3.5%. In addition, borrowers with a poor credit history can receive loans with FHA support. However, the low down payment can lead you to make a poor purchasing decision – while achieving a low down payment is ideal, you should not put a payment down on a home you cannot afford in the long run. Down payment rates that are too low can make your repayment plan longer and increase the amount of interest you pay over time.

The FHA’s low down payment will require you to pay upfront insurance each month. You may not have this amount in your budget and may be surprised with a higher upfront cost than you could receive with a conventional loan. FHA loans also come with certain regulations regarding the quality of your home – if the home is in poor condition, the FHA may not approve your mortgage application.

Many sellers hesitate when selling a home to potential buyers who have an FHA loan. These loans do not signal a strong credit history, and FHA loans often require sellers to meet very strict requirements. It may be a better decision to focus on building your credit history to qualify for a conventional loan with a low down payment than to rush into an FHA loan with higher payments and lower selling rates.

Tips for Obtaining a Low Down Payment

Obtaining a low down payment requires a good deal of outside research, a solid credit history, and an understanding of your financial limits. There are a few solid tips you can follow to increase your chance for mortgage approval and secure a lower down payment.
  • Build your credit history. If you do not have good credit, you will not receive a mortgage from a majority of lenders. Many private entities require a minimum credit score of 680. If you have a lower score, focus on building and strengthening your credit before you apply for a mortgage.
         Making on-time payments, lowering existing debt, and regularly checking your credit report to improve your credit score will increase the likelihood of you getting the loan you want.
  • Save as much cash as you can. While a 20% down payment is quite high, you should aim to save at least 8% of your potential home purchase price. You will also need to save additional cash for closing costs, inspections, application fees, and other unexpected expenses. For a $900,000 property, you should aim to save $72,000 or more prior to your house hunt.
  • Understand your budget. Evaluating your monthly expenses can help you come up with a down payment savings plan. In addition, you can assess how much you could comfortably afford for your monthly mortgage payment.
You will also need to factor in additional costs to your monthly budget if you are a first-time home buyer, such as insurance premiums and property taxes. This exercise will also keep you from a too-low down payment swaying you into purchasing a home you cannot afford.

Are you in the market for a second home mortgage? There are additional factors you may have to consider before applying for another loan. While you could obtain another low down payment, you will have to prepare for higher interest rates overall. You will need to focus on improving your credit history and prove to the banks that you can comfortably afford both of your mortgage payments each month.

Benefits of Paying a Higher Down Payment

While you may want to strive for a lower down payment, you should still attempt to save as much cash as you can. Paying a higher down payment upfront can help reduce your costs in the long run. While the 20% figure may not be possible for your budget, a 10% or 15% down payment can provide more benefits than a 3% or 5% payment could.
  • You will pay less for your home in the long run. A higher down payment upfront will reduce the amount you have to pay on your mortgage loan, along with your overall interest costs.
  • You may receive a lower interest rate with a higher down payment. Since a larger payment signals financial strength, banks are more willing to offer a lower interest option to you.
  • You will beat out other prospective buyers for your dream home. Home sellers prefer buyers who can make higher down payments because they signal financial strength and a high chance of mortgage approval. If you’re up against another buyer making a 5% down payment, a 10% down payment can give you an edge in negotiations.
Obtain the Services of a Mortgage Provider

To find the best mortgage rates and down payment options for your house search, obtain the services of a trusted mortgage lender. These services allow you to learn about different mortgage rates in your area, find a loan program that works best for your financial needs, and assess your financial situation to find the best mortgage for your budget. Mortgage lenders can guide you through the confusing loan process and help you make smart, measured decisions for your financial future.

Sammamish Mortgage is a family-owned and operated mortgage lender assisting Kirkland, Seattle, and Bellevue residents with the mortgage process since 1992. We strive to maintain transparency and ease of access to assist our clients with all their mortgage needs.

With Sammamish Mortgage service, you receive:
  • Free pre-approvals without any application fees
  • Custom, accurate, and timely mortgage quotes
  • Technology to help you price your own loan
  • The ability to track and compare mortgage rates
  • An online digital mortgage process for ultimate accessibility
  • A free home valuation report
  • The ability to refinance or purchase your dream home
Sammamish Mortgage is proud to provide mortgages for properties throughout Washington state. We also provide mortgage services in all of Oregon, Idaho, and Colorado. Our award-winning professionals are ready to help you obtain the best mortgage for your financial situation.

Contact Sammamish Mortgage today to learn more about Sammamish Mortgage’s services and to receive your free mortgage quote.

What Lessons Should We Learn from the "No-Gifts" Royal Party?

Over the centuries, there are lots of proper “do’s” and “don’ts” that can be learned from the royal family. Whether you love the English throne and all of the rules and regulations that come with it, or you relish in watching the old traditions morph into newer, more with the times rules, then the “no-gifts” royal wedding can teach us a thing or two about change!

"No-Gifts" Royal Party

When Prince Harry and Meghan Markle tied the knot, it was not only an historical moment, but it was also gateway to change! Here are just a few things that we can take away from the royal wedding’s “no-gifts” policy and how we can implement change in our own lives! 

All the Parties

When you, or your friends, become parents, your child (and you, of course) are going to be invited to a LOT of children’s parties. Your group of friends is all having kids, and that means several kid’s presents every year. From your wallet, to your friends’ kids. 

If you’re a first time budgeter, you can start to budget all of those presents into your monthly budget. OR, you can set an example with your child and your family. When it comes time for your child’s birthday, you can advertise “no gifts please” on each and every invitation. 

By not having gifts to distract all the children, your child won’t end up with a room filled with things, but instead, can focus on something new. Their guests. The party. And even setting goals! This also breaks up the cycle of you buying gift after gift, year after year! 

Goal Setting

Something else we can learn from the royal party is that we can do something else with our important gatherings other than get presents. We can set goals, we can accomplish them with the help of our friends and family, and we can change the way we operate simply by saying “no gifts please”!

Here are a few things you can accomplish beyond receiving gifts at your next big gathering:
  • Donate. Instead of receiving presents for yourself, your child, or your new spouse, you can collect donations to the charity of your choice. Set a fund raising goal, then instead of gifts, you can ask your guests to donate to a good cause. 
  • Reduce Waste. More and more, individuals are trying to cut down on their wastefulness. Presents, plastic gifts, and wrapping paper can all add up to a lot of useless waste. Not opting for gifts can help you achieve your goal of trying to add less trash to our planet!
  • Focus. Receiving and giving gifts is a time honored way to show someone else that you care about them. This year, however, you can show you care by giving something more valuable. Your time. Your focus. Your love. Using action as a way to spread joy!
By separating yourself from the idea that parties, gatherings, and big events SHOULD include gift giving, then you can clearly start to make a difference. Whether you’re making a difference for yourself, your family, or a close friend, you can start to change expectations surrounding parties. 


If you want to achieve financial freedom, you have to learn where you can cut costs, where you can save more, and you will learn some harsh lessons along the way. Removing the expectations of gifts can teach us the real reason why we have asked all of our closest friends and family to be with us!

If you have children, then this may be an extremely important life lesson for them, if not for yourself. By asking for donations, or having your guests actively set a goal with your child in lieu of presents, then you are teaching yourself and your family about the importance of ACTION. 

For Instance, if your child wants a trampoline, then instead of presents or just GIVING your child a trampoline, your child can actively save up to achieve that goal! Using their chores, their party, and all of your collective resources to earn that trampoline. This instills action, goal setting, working for their achievements, and so much more!

All the Lessons We Can Take Away from the “No-Gifts” Royal Party

There are lots of truly important things we can learn from the royal “no-gifts” party. Whether we want our children to learn about setting and achieving goals, whether we want to reduce senseless waste, or whether we want to save money and break the gift cycle, there are so many things we can start to change! All it takes is action.

Lending Club Returns

Many peer to peer loan investors count on clear and accurate reporting from the P2P platform to validate their P2P investing strategies. In this post, I would like to discuss Lending Clubs rate of return reporting, how investors should interpret this piece of data and how it is useful in assessing the success or failure of your investment strategy. If you are a Lending Club investor then this is certainly something that you want to be familiar with and monitor on a regular basis. 

Lending Club calculates what they call Net Annualized Return for all investor accounts. They define this as “an annualized measure of the rate of return on the principal invested over the life of an investment”. In layman’s terms, this means the rate of return on an annual basis of the account balance. If the actual return is 10% in 6 months, then the annual return would be 20%. If the actual return is 30% over two years, then the annual return would be 15%. 


Since loans are always being added or paid down, and interest is received, the calculation can be very complicated. Annualized figures are normally based on average daily value of and account. Therefore, it is very good for every Lending Club investor that this information is provided. Having to do these calculations oneself would be a very difficult and time-consuming part of lending club strategies

Rate of return is also impacted (usually very significantly) by loans that default. Since the remaining principal is lost, the effect on rate of return is large. Loans generally default before most of the payments have been made so investors need to be aware of this possibility.

One way Lending Club has of help investors recognize the potential impact of loan defaults is a piece of data called Adjusted Net Annualized Return (ANAR). ANAR projects loan defaults and determines what the rate of return will be if those loans actually do default. To understand how this is determined, you must know that Lending Club tracks loans by status: Current, Grace Period, Late 16 to 30 Days, Late 31 to 120 Days. For each of these categories Lending Club has determined the likelihood of the loan defaulting. This is based on all previous loans that have been in those categories. When calculating ANAR, these percentages are included, thus adjusting the ANAR. 

For newer portfolios the ANAR can be significantly impacted by loans in any of these categories, even Grace Period. While the risk of default is low (about 25%), if the account has not had a lot of repayments then losing even 25% or the principal of one loan can make a difference. Fortunately, the investor can adjust the amount deducted from the balance in the calculation of ANAR. They do not need to use the default experience values provided by Lending Club. Many investors adjust these values and make changes over time.

Want to know more about investing on Lending Club and how to be successful? There is a wealth of information available on their site for new and experienced investors. In addition, you can learn more about P2P lending investing from Peer Loan Advisor. They are a team of professionals who are highly experienced in this type of investment. 

Can You Afford To Start Your Own Business?

If your current salary just isn't enough, it can be tempting to think that starting your own business and reaping the full rewards is all it will take to lead the lifestyle you want. However, before you make the big leap into going from being employed to being self-employed, it’s important to know whether your finances will allow for it. Here are some things to check before you begin. 

Have You Got Savings? 

No matter what type of business you want to start up, having money in your personal savings account is crucial. Even if you don’t need it to fund the business itself, you might need it to fund your own day to day living; there’s not many businesses that can make money right from day one – it often takes a little time (and in many cases a lot of time) to become established enough to provide a salary.

Start up business 

Have enough savings for a number of months (six would be ideal) so that your personal finances won’t suffer. You should also have enough saved to cover key upstart costs. Getting a professional website set up and marketing costs money you will need to pay out of pocket or through a loan.

What many people do to minimize costs which works rather well, is to start their new business as a ‘side hustle’. This way they still have their regular income, but they can also work on their new business in the evenings, early mornings, or at weekends. Once the new company is more established and making money, they quit their first job and work on their new one full time. It’s hard work, but it means you are financially secure. 

What Do You Need? 

If you've got the financial backup to start, or you’re happy to work two jobs at once, then you need to look into what your business is going to need. Computing equipment is always going to be important, but you might be able to utilize what you already have at home. 

Other equipment that is more specialist will involve an investment, of course. However, if you take your time and do your research well, you should be able to find low cost options that work wonderfully for you. If you need tools to create circuit boards, for example, you’ll find that you can get them at a great price from Altium without compromising quality. Use forums, reading reviews, and ask questions to ensure you don’t spend more than you need to for the best on the market.

What Do You Know? 

When you start your own business it’s crucial that you sell products or services that you are an expert in. That way, you can become more established more quickly, since you can prove that you are an expert in your field to potential customers or clients. You will also save money this way since you won’t have to pay for any additional training or a higher education course. Instead, you can wow your clients with your resume, and build an effective brand for yourself from day one.

5 essential money podcasts to listen to in 2019

By now you've probably heard about the phenomenon that is podcasts, even if you haven’t become a podcast addict yourself just yet. From politics to true crime and even comedy, there’s an endless span of topics for listeners to choose from. 

But what about podcasts for anyone wanting to delve into personal finance? Unsurprisingly, there’s no lack of listening options. Tom Watson, Money Writer over at, has shared five of his top money podcast picks you’ll want to tune in to this year.  

Planet Money 

Length: 20 minutes 

If you’re already immersed in the world of podcasts, chances are you've come across one of NPR’s (National Public Radio) shows. And for anyone with an interest in money and the economy, Planet Money is the pick of the lot. 

money podcasts

The twice-weekly podcast takes listeners into the wider world of economics, with a variety of wacky and interesting topics including a glimpse into espionage and collusion in the raisin farming industry and a history of the minimum wage. Trust me, they’re both excellent! 

This is a great podcast to pique your interest in the way money permeates so many parts of life, plus at 20 minutes long each episode can be easily digested during your commute. 

Breaking Banks 

Length: 55 minutes 

Open banking, blockchain, digital wallets. Don’t worry if these terms mean nothing to you, because the Breaking Banks fintech podcast will bring you up to speed in no time. 

The weekly podcast runs through the latest and most interesting developments in the world of banking and financial technology, and is essential listening for any banking and fintech junkies. But if you’re just getting started, don’t worry, it’s equally digestible for anyone curious about the future of banking and finance. 

Stacking Benjamins

Length: 70 minutes 

Money and personal finance can be subjects many people just don’t want to think about, let alone listen to an hour-long podcast on. But there’s one show that makes these topics not only light-hearted, but often laugh-out-loud funny - Stacking Benjamins. 

With a new episode every Monday, Wednesday and Friday, hosts Joe and OG take listeners through issues such as retirement, real estate and managing debt in a way that makes it feel like you’re just listening to friends - while you’re actually learning about personal finance! 

The Dave Ramsey Show

Length: 40 minutes

Hosted by businessman and author Dave Ramsey, this podcast tackles the practical personal finance topics that crop up in everyday life, such as setting up a budget and saving up for a car. 

Dave takes calls from listeners with real questions about their financial lives and dishes out straightforward advice to help them get back on track. And with new episodes almost every day, it’s easy to pick and choose the topics that interest you the most. 

Freakonomics Radio 

Length: 55 minutes

You may recognise the name - that’s because Freakonomics Radio is from the same guys who wrote the best-selling 2005 book Freakonomics. Like Planet Money, this is a podcast aimed at providing a deep dive into socio economic issues you’d likely never think about yourself. 

With topics such as ‘How to be happy’ and ‘The stupidest thing you can do with your money’, host Stephen Dubner takes listeners on a different 55 minute journey each week with commentary from a range of experts and academics. 

About the writer: Tom Watson is a Money Writer and banking expert at financial comparison website A self-confessed podcast lover, Tom is passionate about sharing tools and information with others to help kick start their own personal finance journeys.

How to slash your food budget

While it is agreed that food is a basic need, data from the Food and Agriculture organization shows a third of what gets produced is wasted. It is likely that you are contributing to this waste meaning that you are losing money. One way to help cement your decision to cut your food budget to perhaps even more than half is getting a reality check. Every food item that ends up in your bin is you throwing money in the bin. That is money that could go into savings, or pay for that thing you've been saying you’re too broke to purchase.

food budget

Once the truth hits home, consider adopting the below steps to help spend less on food monthly.

Create a meal plan

Not having a meal plan in mind could be the reason you’re wasting money. Going grocery shopping and purchase food both perishable and packaged based on what you think you might want to eat leads to waste. Consider how many times you've had to bin veggies and fruits because you didn't get round to using them? However, with a meal plan, you know exactly what you need and the quantities to prepare the meals. Also, don’t forget the snacks. Done weekly or monthly, you’ll immediately notice the savings and reduction in food waste. 

Go back to basics

Choosing between making a fancy meal and doing the old feels like a child custody mediation process; which one will land on your plate? There’s an easy way. There are myriads of sites and apps that show you how to make tasty meals with five or fewer ingredients you can find on your pantry at any one time. You can still be gourmet on a budget and stick to dishes with multiple components for special occasions. 

Have a grocery list

From the meal plan, you will know what to purchase. However, some things stay on the shelf longer, and you’re likely to forget if you don’t make a note. Apart from what your recipes require, keep a list on the kitchen counter top or a fridge magnet to write down what’s depleted. When you go shopping, that means you won’t have to guess what’s left and what isn't to avoid having excess food at any given time.

Eat before heading out

When you’re hungry, quick meals and snacks seem like a great idea. During this time you’ll convince yourself that the extra-large bag of pretzels will make a perfect snack for days you equally feel hungry. We often go into an entire rationalization process that has us purchasing more than we need. You don’t need that extra chocolate bar.