Top 10 Habits That Will Help You Become Wealthy

Many like to think that wealthy people “had it easy” when they made their money, or that it was given to them by their family, but the fact is that the majority of wealthy people worked hard and did the right things with their money to build their wealth over time.

In effect, what wealthy people have done is make a habit out of certain financial aspects of their lives so that they would build wealth constantly, as well as spend less and adopt other habits that help them to amass a large amount of money. If you’d like to do the same, it would behoove you to copy these habits yourself. To that end, we put together a list of the Top 10 Habits that wealthy people have used to make money and that you can use to do the same. Enjoy.

 

1.       Wealthy people are Patient. In order to build wealth you definitely need patience, like being able to hold onto stocks for many years, keep your automobile as long as possible and purchase things that you’ve saved for rather than buying them impulsively. In fact, the big difference between a wealthy person and someone in debt can simply be that they had the patience to wait for things rather than simply rushing out to buy the newest gadget, automobile or piece of clothing.

 

2.       Wealthy people have a high Satisfaction level. Have you ever watched a TV commercial for, say, a new automobile? Advertisers rely on the human flaw of envy to create an unnecessary “need” in people’s minds with those commercials. Wealthy people are satisfied with what they have and don’t need to spend money on things that aren’t essential. While those commercials might try to convince you that buying their product will make you happy, they won’t.

 

3.       Wealthy people are Organized. If you’re constantly forgetting to pay bills and having to pay late fees you’re probably not organized. That lack of organization can lead to a lot of money going down the drain, not just in late fees but also in higher interest rates because your credit is poor. Being organized in how you handle your money can save you a lot of it in the long run.

 

4.       Wealthy people are Disciplined. Simply put, in order to put money away on a regular basis it takes discipline, something that wealthy people have in abundance and others, well, don’t.  If you can’t be disciplined enough to put money aside on your own, you might consider having it automatically taken out of your check and deposited into an IRA, 401(k) or other savings vehicle.

 

5.       Wealthy people are Reflective. Everyone makes mistakes. Wealthy people learn from those mistakes and don’t repeat them. Being able to reflect on decisions you’ve made and realize which ones actually were mistakes is the key.

 

6.       Wealthy people are very Creative. Sometimes things don’t go as planned (especially with the stock market, for example). When they don’t, wealthy people have the creativity to work around them, like holding on to stocks longer, juggling finances to stay out of debt and finding cheaper alternatives when their finances are “tight”. Being able to get creative rather than simply purchasing things on credit is an excellent habit that wealthy people have used for a long time.

 

7.       Wealthy people are Curious. Building wealth, unfortunately, isn’t as easy as just making a lot of money. It’s the curiosity to want to find out more about how to make your money work for you, where to invest it so that it makes the most money and so forth. Wealthy people are curious about these things and that curiosity helps them build their wealth.

 

8.       Wealthy people are willing to Take Risks. Investing can be risky, no doubt. Wealthy people are willing to take risks, with the caveat that they are calculated risks. For example, although investing in the stock market definitely is risky, history shows that it has always provided good returns, in the long run, on wise investments.

 

9.       Wealthy people are Goal Oriented. Goal setting, especially when it comes to finances and building wealth, is one of the most important habits that wealthy people have. Simply put, if you don’t have a goal that shows you where you want to be in the future, it’s going to be hard to do things in the present to get you there. Think of goal setting as a roadmap to wealth. Without it, you’ll likely end up lost along the way and not wealthy.

 

10.    Wealthy people are Hardworking and also Work Smart. This last habit is the most important. Sitting around hoping that things will change, or that you’ll win the lottery, is a fool’s dream. Working hard, educating yourself, and adopting the habits above won’t be particularly easy, but it is possible and will help you to one day be a wealthy person.

Do You Really Need Long-Term Care Insurance?

While most people believe the biggest threat to a person’s retirement funds are a stock market crash, the reality is that a dire illness, one that requires 24-hour care, is actually a bigger danger.

Indeed, the statistics that help insurance salesman to sell long-term-care, that it costs approximately $81,000 a year to put someone in a nursing home and, for 24 hour in-home care, a whopping $184,000 a year, are enough to scare most consumers.

But here’s the thing; past research actually shows that the vast majority of consumers who purchase long-term care insurance never use it and, even more, a recent study actually suggests that the average consumer should skip long-term-care insurance completely.

Performed by the Center for Retirement Research at Boston College, the new study focused on single Americans, now the majority of people. It found, among other things, that only the richest 20% to 30% of them should actually purchase long-term care insurance and that, for the rest, it simply doesn’t make sense.

What the study says is that, for the rest, using Medicaid and spending down assets is a much more practical answer.

What’s new about this new study?

What Boston College did differently is more accurately estimate the length of time that the typical American consumer stays in a nursing home. Instead of using annual numbers they used monthly data and found that the average consumer stayed in a nursing home 30% less than what was previously thought. For men that equals just under 12 months and for women approximately 17 months. The study also found that 45% say for 3 months or less.

The majority of short nursing home stays end in death and the majority of those stays are covered by Medicare, which takes care of nursing home stays up to 100 days in length. In fact, spending less time in a nursing home means that a person will actually have less of a chance of the worst scenario for their finances, a long-term, expensive illness.

In effect, this new study shows that rather than paying for long-term care insurance, it makes more sense to just rely on Medicaid.

The study found that 33% less single men, and 41% less single women than previously estimated should purchase the insurance. That equates to 19% and 31% respectively. Interestingly, these new numbers don’t even take into account some of the other reasons that consumers might be wary of purchasing long-term care insurance, including the fact that premiums for existing policyholders have sharply increased in the last few years.

The study does have its detractors, not surprisingly in the insurance industry. For example, Jesse Slome, the executive director of the American Association for Long Term Care Insurance, says that the new study doesn’t take into account some of the benefits of long-term care insurance.

Slome believes that long-term-care insurance is a way to avoid having to be placed in a nursing home, and that many Americans “want to remain in their own home” instead. He also argues that this type of insurance was actually never meant to be universal.

While his opinion might be valid, it still is only valid for the most wealthy singles. The study even goes so far as to say that, for married couples, long-term-care insurance makes even less sense.

It’s interesting information to say the least and, for many Americans, should definitely be considered.

Money isn’t the Only Factor Necessary for a Successful Retirement

Talk to a financial advisor (or read our blog on a regular basis) and you’ll find that one of the things they talk about most is preparing yourself financially for retirement. Basically, that means putting aside as much money as possible so that, once you are working days end, you have enough money to continue living the lifestyle that you’ve become accustomed to.

The fact is however that a successful retirement not only means having enough money but also a number of other factors that have nothing to do with money at all. Those factors are below and, if you’re nearing retirement and planning to make it a good one, keeping these factors in mind is vitally important. Enjoy.

Factor 1: Good Health. Frankly, none of us is going to live forever. That being said, having all the money in the world during retirement won’t help you very much if you’re sitting in a wheelchair or, even worse, trapped in bed because your body isn’t functioning.

Of course some people simply have bad luck when it comes to health but, for the majority of Americans, staying healthy through retirement means being healthy now, eating the right foods now and getting enough exercise now.

A key to getting enough exercise is doing something you really enjoy and, if possible, doing it with other people. Walking with a group, playing golf or going to a gym and doing aerobics with other people is a great way to not only stay in shape and keep your health at its peak but also stay socially active.

Basically, if you’re healthy now there’s a darn good chance that you’ll be healthy during retirement.

Factor 2: Friendships and Family. Study after study has found that being socially isolated can cause a lot of problems, both physically and psychologically. What that means is that people who live alone usually don’t live long, healthy lives in retirement. This doesn’t necessarily mean that you have to be married, but just that friendships on a deep level, and close ties to your family, are vitally important.

Interestingly, a study performed at Harvard University found that people with an active social life as they get older also have less problems with memory loss and a slower rate of intellectual decline. Basically, being involved with other people and part of a community helps a person to stay engaged, stimulated and challenged, all of which will lead to a better retirement.

Factor 3: A Sense of Purpose. Having a connection to something “larger than yourself”, whether it’s to a volunteer group, a part-time job or any kind of charitable cause, has been shown to have excellent health benefits as a person gets older, including helping to protect them against memory loss and a decline in mental ability.

In the end, the challenge of retirement is not just to have enough money to pay your bills but also to be involved in some type of community, keep developing your personal and relationship skills and keep your mind and body occupied. By giving yourself a reason to get up every day your retirement will be much more fulfilling, your health will benefit and your days will be much more joyful.

Looking for a Prepaid Credit Card? Consumer Reports Just Ranked the Best and Worst

It used to be that prepaid credit cards were known for one thing; having an awful lot of fees. These days however, more and more companies are offering prepaid cards and recently, just ahead of the Consumer Financial Protection Bureau laying down new industry rules, consumer advocate magazine Consumer Reports gave their opinion as to the best and worst prepaid cards.

Christina Tetreault, an attorney for Consumers Union, says that “Competition has helped bring down fees, and many prepaid cards offer an attractive option for managing your money,” but she goes on to warn that “some cards come with costly fees that aren’t always disclosed early, and prepaid cards still lack the same legal protections consumers get with debit cards.” Obviously those new rules are needed.

Reloadable credit cards have surged in popularity as an alternative way to handle money instead of a traditional bank. Some consumers use them in their budgeting efforts, which makes sense when you consider that, with the prepaid card, you can only spend what you actually load onto the card itself.

For their rankings, Consumer Reports considered a number of factors, including the cost of using prepaid card, the amount of convenience it gave the consumer, the level of protection that it offered and lastly the transparency of fees that the card came with. They also used 2 specific categories; the first when the prepaid card is used as a substitute for traditional banking, and the second when it was used as a supplemental card only.

Their Top 3 Prepaid Cards in terms of Supplemental use included:

  1. The Bluebird card from American Express and Walmart. Consumer Reports said that they liked that the fees are easy to understand with this card, as well as the act that it comes with no monthly fee.
  2. The Emerald Prepaid MasterCard from H&R Block, which like the Bluebird card has no monthly fees, has no purchase fees either.
  3. The Liquid Visa card from Chase was third because it has free ATM access and has fee disclosures that are easy to understand.

At the bottom of the list for Prepaid cards being used as a financial supplement were:

  1. The American Express card for Target. With no FDIC insurance, Consumer Reports wasn’t very keen on this card.
  2. The NetSpend Prepaid Visa Fee Advantage Plan card, the NetSpend Prepaid Visa Pay-as-You-Go Plan and the AccountNow Gold Visa Prepaid Card. Consumer Reports found that all three of these cards have very high monthly fees and also that the Pay-as-You-Go Plan has a $1 or $2 charge for every purchase, which is ridiculous.

Consumer Report’s Top 3 prepaid cards used as a substitute for traditional banking included:

  1. The Bluebird card from American Express and Walmart (again). The reason it made number one again was that with the Bluebird card there are no monthly fees and also no fees for basic services. Consumer Reports also says that it has a nice bill paying feature.
  2. The Case Liquid Visa was ranked second because of all the features it offers cardholders.
  3. Both the American Express Serve and the prepaid Visa RushCard Rush Unlimited Plan were also ranked highly because Consumer Reports found that they had excellent value as well as a wide range of features.

At the bottom of the list for prepaid cards used as a substitute for traditional banking Consumer Reports listed:

  1. The NetSpend Prepaid Visa Fee Advantage Plan card, the NetSpend Prepaid Visa Pay-as-You-Go Plan and the AccountNow Gold Visa Prepaid Card. All three of these cards have no a network ATM access meaning that, when consumers need to get cash, they get all sorts of extra fees tacked on as well.
  2. Without FDI insurance, the American Express for Target card was also considered the worst.

As Americans head into the holiday shopping season, having this information about prepaid cards handy, and knowing which will have the most free services and least amount of extra fees, is timely information indeed.