Blog Archive

Tuesday, June 25, 2013

The Personal Finance Quiz That 86% Of Americans Failed

Turns out that people are just about as likely to overestimate their financial savviness as they are their good looks. 

A new survey by the FINRA Investor Education Foundation found that 75% of U.S. adults say they're pros at managing their finances, but only 14% could ace a five-question quiz on basic financial concepts.

This was no small study sample size either. A whopping 25,000 consumers took the quiz.

Think you can do a better job? Take the FINRA quiz below, then click http://www.usfinancialcapability.org/quiz.php to see explanations for the answers.

Take the FINRA Financial Literacy Quiz

Question 1
Suppose you have $100 in a savings account earning 2 percent interest a year. After five years, how much would you have?
More than $102
Exactly $102
Less than $102

Question 2
Imagine that the interest rate on your savings account is 1 percent a year and inflation is 2 percent a year. After one year, would the money in the account buy more than it does today, exactly the same or less than today?
More
Less
Same

Question 3
If interest rates rise, what will typically happen to bond prices? Rise, fall, stay the same, or is there no relationship?
Rise
Fall
Stay the same
There's no relationship to bond price and interest rates.

Question 4
True or false: A 15-year mortgage typically requires higher monthly payments than a 30-year mortgage but the total interest over the life of the loan will be less.
True
False

Question 5
True or false: Buying a single company's stock usually provides a safer return than a stock mutual fund.
True
False

Go to http://www.usfinancialcapability.org/quiz.php to do the quiz online and get an explanation of the answers.

If you were one of the 86% who struggled with this financial literacy test, visit us at moneyforlife.com.au.

Tuesday, June 11, 2013

The 4 Smartest Things You Can Do Every Morning

These down-to-earth tips will help get you going in the morning, and keep you productive all day.
Does this sound like you? You roll out of bed exhausted every morning. Your brain was going like gangbusters all night, keeping you awake with thoughts and plans about your business.
Now you’re ready to execute—if you could just find the shirt you were planning to wear to that important client meeting. Where’s the address again? Uh-oh, your phone isn’t charged, so you go on the computer to look up the location.
Next thing you know, you’re sucked into emails. You look up, still in your bathrobe, and an hour has passed. Where did the morning go? Now you’re going to be late—and your phone still isn’t charged.
Four simple morning habits can change you from a harried slob in a bathrobe to a paragon of productivity.
1. Check your to-do list. You do have one, right? Okay, this habit really starts the night before, when you make a to-do list before going to bed. “Dumping” your to-do’s onto paper (or digital calendar) helps you clear your mind so you’ll sleep better (no worries about forgetting stuff).
Before you dive into your day, take a moment to glance at your schedule. If you’re like many people, your to-do list might have a dozen or more items on it.
Figure out which are the must-do’s.
These are typically things that involve other people (like travel, meetings or sales calls) or deliverables with firm deadlines (a big order has to ship today; a project is due). Unless you see a lot of down time, resist the urge to pack your to-do list with “just a few more things.” It’s important to leave some buffer time to deal with all the emergencies that inevitably come up when you’re running a small business.
2. Do something for yourself. Whether it’s exercising, meditating or even just taking a really long, energizing shower, some type of activity that feeds you and centres you is a smart way to start the day.
Any of these activities can help you get in touch with your subconscious—it’s amazing how solutions to problems that seemed insurmountable when you’re sitting at your desk can suddenly present themselves when you’re not thinking about them. (One of my business partners swears she gets most of her best ideas while running.)
I know—maybe you barely have time to take a quick shower, much less take a long one, work out or meditate in the morning. All I’ll say is this: Everyone I know who makes time to do it says it pays off.
Another colleague of mine skipped his morning workout for a week, trying to give himself an extra half an hour a day to work on a big project. He ended up wasting more than half an hour a day because he hit the 3:00 slump every afternoon and was no use to anyone.
3. Have a routineI’ve observed a lot of people who are quite organised, and they have one thing in common: a routine. Hey, it’s morning, your coffee hasn’t kicked in yet, you’re not thinking totally clearly and you need to get things done without really thinking about them.
Having a routine helps you auto-pilot yourself through the basic tasks of the morning (what to eat, what to wear) before you really dig into the tough stuff.
President Obama famously told Vanity Fair he only wears blue or gray suits. Why? It saves time and energy—instead of making decisions about what to wear and what tie goes with what, he saves his brainpower for important decisions. Routinizing your morning can help you be more productive, too.
4. Start with something big … or smallThere are two schools of thought about getting started on your to-do list in the morning. One approach says start with the biggest, most important must-do of the day. The other advises you to start with a few quick tasks you can quickly check off your list to gain a feeling of accomplishment.
Personally, I like to mix it up depending on how I feel that morning. No matter how I’m feeling, I start my day with my email (ignoring the “rules” of time management). If I feel gung-ho and ready to go, then I tackle something big, putting aside distractions (phone calls, Twitter) for at least an hour while I work on it.
If I’m feeling slack and need a nudge, I move on to some easy to-do’s—maybe updating my calendar, proofreading an article or sending a follow-up email to a client. That gives me the push I need to keep moving on to bigger things.
However as a general rule, I try to do my least enjoyable tasks first, because then I get to reward myself with the enjoyable tasks and no longer have those unenjoyable tasks ahead of me.