With recent news overwhelmed by the financial difficulties of US state and national budget deficits, along with the continued financial difficulties in Europe there is a renewed focus on the impact of debt on national wellbeing.  This is especially important because most of the developed world is not far behind the major problems of these European nations.  The most important thing to understand about debt is exactly what it is, and by extension, what it is not.
What’s the Deal with Debt?
Fundamentally, debt is a financial magnifying glass.  It will amplify …

Throughout the lexicon of financial advice in the marketplace, there are many different views regarding the role of debt in our lives.  The traditional view is that debt causes us to make interest payments that deplete our wealth and erode our ability to build wealth.  In the case of the current mortgage crisis, many lending institutions and government agencies encouraged excessive lending to borrowers that were in very high risk of default.  This has even prompted some financial authors to proclaim that all debt is bad, regardless of what it …

Recent news of growth in the Gross Domestic product, and the appearance of home price stabilization have led many to proclaim that the economy has entered into the greatly desired ‘recovery’ that many in the government and news media are fancifully searching for.  This appraisal of the current economic situation is based on past experience with brief and shallow recessions that were immediately followed by a sharp recovery and expansion.  However, there is a fundamental difference between those events and the current situation.
The fundamentals of a market economy are based …

A survey of millionaires conducted by Thomas J. Stanley and William D. Danko for their book “The Millionaire Next Door” found that taxes are their single highest expense item.  Because of this, tax reduction is one of the highest impact items that can increase your net personal income.  It is also worth mentioning that taxes work differently for employees and business owners.
As an employee, you must pay taxes on my wages before you can spend them for the necessities and luxuries of life.  There are limited deductions and credits available …

Reading the headline for this article will probably make you think that I am referring to a drink that is served to the ultra wealthy at a luxurious resort.  Most of us think of the cost for an item as the amount that we pay at the time of purchase.  However, if the purchase is made with credit we must also account for the impact of compounded interest over time.
In this case, I am referring to a $3.50 cup of coffee purchased on a credit card at 20% interest, and …