Crucial Views
The 3 Stages of a Financial Journey
Income From Your Assets < The Cost Of Your Liabilities
Income From Your Assets = The Cost Of Your Liabilities
Income From Your Assets > The Cost Of Your Liabilities
Retirement
At Crucial Concepts we don’t believe retirement is supposed to be at 62. We believe in giving people the option to retire which is when their income from their assets surpass the cost of their liabilities and give them the life they want. We aim to guide you to that point of your financial journey.
Most people’s current savings will not be enough to live a “comfortable” lifestyle in retirement.
In fact most people contribute more to social security than in their personal retirement. Leaving their retirement reliant on the government. Currently the social security fund is struggling.
DEBT
Always explore your options before making big financial decisions
Credit Cards
It will be extremely hard to get ahead in life if you are paying interest on credit cards. The goal is to always pay you credit card in full. Paying 16-30% interest on purchases will make life hard on anyone. Especially if you have the money to pay. Many people will say I like to have money in the bank but how useful is it if you’re basically paying 16-30% interest to someone else on money you already have.
AUTO LOANS
For the typical consumer auto loans are bad purchases. Mainly because cars are depreciating assets meaning as time goes on they lose value. The Reason for this is that car makers come out with new cars every year with new technology and features. The more miles and wear and tear you put on a car the more the value typically drops as well. Aside from the overall purchase there are other expenses to owning a car let alone financing a car such as the loan + interest, gas, insurance, maintenance, tolls, taxes, parking, etc.
MORTGAGES
Personal Mortgages can be great instruments if used correctly. But that takes us back to the should I buy or should I rent question. It actually varies based on the situation. A good rule of thumb is if you plan on staying for more than 7 years you should buy. Anything under that it's typically better rent.
STUDENT LOANS
Student Loans are one of the only things you cannot file bankruptcy on. If you choose to take out student loans make sure to do this responsibly and have a plan to repay them. Try to get as much assistance and scholarships as possible when going to school. Making sure that your loans don’t exceed your estimated first year salary is a good rule.
PESONAL LOANS
Personal loans could be a great alternative to using credit cards for a big purchase if their interest rate is lower. But just like any loan with over 5% interest make sure that it is for something absolutely necessary or something that will yield you a higher return than the total cost of the loan.
Giving back
As you strive for new heights in your financial situation don’t forget about those who were just like you before you got to your financial abundance state. Please look at all opportunities to give back whether be monetary or mentorship. We must look to bring one another up as we are all human and did not choose the hand we were dealt.