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Bucks Blog: Seeking College Application Essays About Money

January 4, 2013 by Leave a Comment

This weekend’s Your Money column includes a call for submissions from current high school seniors who have written their college application essays about money. We’ll read them all and publish the best here on Bucks. You can send us yours at moneyessays@nytimes.com.

Anything about affluence or lack thereof, social class, the economy, your family’s financial situation or paid work you’ve done is fair game here. If you’re in doubt, send it in anyway, as we intend to cast a wide net and define money pretty broadly.

This is open only to people who are applying to college this year. But if you took on similar issues in your application essay in the past, please post a comment about what you wrote (and whether you got in). And if you’re a high school guidance counselor or college admissions officer, please share memories of particularly good essays on money.

Article source: http://bucks.blogs.nytimes.com/2013/01/04/seeking-college-application-essays-about-money/?partner=rss&emc=rss

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Bucks Blog: Americans Feeling More Financially Secure

January 4, 2012 by Leave a Comment

At the end of last year, Americans said they were feeling more secure about their financial situation than they had in months — especially those under 30 and those who were more affluent.

Bankrate.com’s Financial Security Index for December jumped to 95.8, the highest since June’s 97.8.

Improvement was seen in every component of the index (job security, savings, debt, net worth and overall financial situation), but the biggest improvement was in job security, Bankrate said. Those who reported feeling less secure than a year earlier fell to 18 percent in December, from 28 percent in November. Meanwhile, 64 percent said they felt the same level of job security, which is the highest recorded since the polling began in December 2010.

The survey by Princeton Survey Research Associates International was done by telephone Dec. 1 to 4 with 1,008 adults. The margin of sampling error is 4 percentage points.

Still, even with the December improvement, the index is below 100, which indicates people are feeling less financially secure than a year ago. In short, 2011 “was not a year of progress” in terms of consumers’ financial security, Greg McBride, Bankrate.com’s senior financial analyst, said in a statement.

Those under age 30 feel more secure than people in other age groups, while those aged 50 to 64, as well as retirees, feel less secure.

How financially secure are you feeling?

Article source: http://feeds.nytimes.com/click.phdo?i=8ac5bdb813a158cc0105f0c4762d3841

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Hungary Passes Central Bank Rules Despite Risk to Bailout

December 30, 2011 by Leave a Comment

BUDAPEST — Hungary’s chances of obtaining a financial bailout receded Friday after lawmakers approved new central bank regulations that had prompted the International Monetary Fund and the European Union to break off talks this month.

The Parliament stripped the central bank president, Andras Simor, of his right to name deputies, expanded the rate-setting Monetary Council and created a position for a third vice president.

A separate law also approved Friday makes it possible to demote the central bank president if the institution is eventually combined with the financial regulator.

In the past few weeks, Hungary has had its sovereign credit rating downgraded to below investment grade by Standard and Poor’s and Moody’s Investors Service. The forint has fallen 15 percent against the euro since June 30, making it the world’s worst-performing currency in the period.

“The approval of the central bank law shows the government isn’t serious about obtaining an I.M.F. loan,” said Gabor Orban at Aegon Fund Management in Budapest. “The government is floating the possibility of an I.M.F. deal, but in reality it’s playing for time, hoping the global economy will improve and make a bailout unnecessary.”

The government had asked the I.M.F. for aid last month, as its financial situation worsened, to ensure financing for 2012.

On Thursday, Hungary raised less than half as much as planned at a debt auction as its borrowing costs surged to the highest levels in more than a year. The state rejected all bids for three-year notes. The yield on a bond due in 2022 was 9.7 percent.

In a statement Friday, the central bank said the new regulations would “seriously harm” the country’s national interest, allow for political intervention in monetary policy and threaten economic stability. It also blamed the laws for the “indefinite postponement” of talks on a financial aid package.

But during an interview with MR1 radio, Prime Minister Viktor Orban said that although an agreement with the I.M.F. and the European Union on an assistance package would raise investor confidence, the cabinet could do without it.

“If we have an I.M.F. safety net, then we face the coming period with greater self-confidence and greater security,” Mr. Orban said. “If we don’t reach an agreement, we’ll still stand on our own feet.”

According to a forecast by the European Commission on Nov. 10, Hungary will have the highest debt level and slowest economic growth among the E.U.’s eastern members next year.

Tamas Fellegi, the Hungarian minister in charge of negotiations on the bailout, will travel to Washington in the first half of January to hold “informal” talks with I.M.F. officials, including the managing director, Christine Lagarde, the news agency MTI reported.

Mr. Orban had shunned I.M.F. aid after taking office last year to protect what he called “unorthodox” measures from oversight. Those steps included the effective nationalization of $13 billion of private pension-fund assets and extraordinary industry taxes to control the soaring budget deficit.

Hungary also required banks to take losses on foreign-currency mortgages, repayment of which has become increasingly expensive as the forint has weakened.

S.P. warned in December that the measures could hinder economic growth and were “likely to depress investment and job creation in the short term.”

The I.M.F. and the Union have yet to make a decision on resuming talks with Hungary.

The European Commission president Jose Barroso plans to be “constructive and avoid any escalation of the situation,” a commission spokesman, Joe Hennon, said after the vote.

Mr. Barroso had sent a letter to Orban outlining the commission’s views, and the commission will continue its “in-depth” examination of the central bank law, Mr. Hennon said.

During his radio interview, Mr. Orban said the government is ready to contest the European Commission in the courts over differences on the new central bank regulation. He added that although Hungary had agreed to most of the changes demanded by the Union, differences remained on two points.

The government stuck to expanding the number of rate-setting council members to as many as nine from seven, and to increasing the number of vice presidents to three from two.

Mr. Orban has been reducing the power of independent institutions and asserting his influence since winning elections last year, bucking objections from the United States and the United Nations.

Lawmakers from his party have ousted the chief justice of the Supreme Court, narrowed the jurisdiction of the Constitutional Court, written a new Constitution, replaced an independent Fiscal Council with one dominated by the prime minister’s allies, created a media regulator led by ruling-party appointees and chose a party member to lead the State Audit Office.

In another change, a single judge, Tunde Hando, the wife of a ruling party member, will be responsible for naming all new judges, including replacements for dozens who will be forced into retirement at the end of this year.

“We have significant and well-founded concerns,” the U.S. Secretary of State, Hillary Rodham Clinton, wrote in a letter dated Dec. 23 to Mr. Orban, according to the Nepszabadsag newspaper, which published the letter in Hungarian on Friday.

Mrs. Clinton called on Mr. Orban to protect individual liberties and institutional checks and balances, Nepszabadsag said.

Article source: http://www.nytimes.com/2011/12/31/business/global/hungary-passes-central-bank-rules-despite-risk-to-bailout.html?partner=rss&emc=rss

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Bucks: Forget Frugality, Focus on Earning More

April 27, 2011 by Leave a Comment

Ramit Sethi runs the Web site I Will Teach You to Be Rich.

Think of the last 10 pieces of personal finance advice you’ve read. Do any of these sound familiar?

  • Cut back on lattes!
  • The world’s top 10 coupons
  • Don’t go on vacation this year!

If you boil all the advice down, there are just two ways to improve your financial situation: earn more or cut costs. So why don’t more personal finance experts talk about earning more? Because most of them don’t know how.

And so we get lectures on frugality, giving us obscure advice like how to save on paper towels. With each tip, we get diminishing returns. And we start to believe that personal finance is about “No, No, No!” No, you can’t spend money on lattes. No, you can’t go on vacation. No, you can’t buy those jeans.

It’s no wonder that most Americans simply ignore their finances. We don’t want someone constantly lecturing us on what we can’t do.

I believe personal finance should be about saying “Yes.”

Yes, you can afford that extravagant coat, or iPhone or even a trip to the Bahamas. In fact, I believe in conscious spending, or spending extravagantly on the things you love — as long as you cut costs mercilessly on the things you don’t.

Once you’ve cut on the basics, the single best way to live a rich life is to earn more money.

The Myth of Frugality

Let’s take a look at a typical person who tries to cut back to save money.

Jack has to cut back on a lot of things in order to save significant amounts of money.

Not bad. $400 saved. But at what cost? Each morning, Jack has to decide if can buy that latte. He has to consciously cancel his cable. He has to decide if he can afford that dinner out. On and on — and he has to do this every month.

Jill can focus on one thing to get the same result:

Jill found something she was good at, turned it into a small side business, charged a reasonable amount and found a client willing to pay.

Cutting back may be easier for the first month. But it’s likely unsustainable. After all, there’s a limit to how much you can save. But there’s no limit to how much you can earn.

Earning More: The Numbers

Let’s consider three goals for your personal finances. If you could charge $25/hour for your services and work enough hours each month to generate an extra $500/month after taxes, what could that additional money do for you?

Let’s say you’re paying off a $10,000 credit card debt at 15 percent interest and want to add that $500 to your payment.

That’s over $10,000 in savings on interest alone.

Invest the Extra Money

When you earn more and invest the extra money, the results are incredibly powerful. Here’s what extra income can do for your investments.

Pay off a mortgage

Putting even $100 extra per month toward your mortgage can dramatically decrease the amount of time it will take you to pay it off.

*Based on a 5 percent, $300,000, 30-year fixed rate mortgage.

How to Earn More Money

The simplest way to earn money on the side is to turn your existing skills into side income. Nearly everyone has skills that others would pay for. Can you play an instrument? Consider being a music instructor. Are you obsessed with personal organizing? Hire your services out as a personal organizer. Do you have expertise in Excel, Web analytics or even free-lance writing? Many employers would love to hire you as a free-lancer.

This is a new way of thinking, and it makes many people uncomfortable. “That’s ridiculous,” they say. “Nobody would pay me $25 per hour.”

To them, I say two things:

1. You already pay service providers for things you could do yourself. Have you ever eaten at a restaurant? Changed oil? Gotten your hair cut? We all pay others for their services. Now, I want you to flip this around and charge for your own services. People will pay — as you already pay others.

2. You don’t know if your offer of services will work until you test it.

Twelve months ago, I declared it the year of earning more money and wrote a series of posts on the topic. I then launched an online course on earning money, in which I took hundreds of people from around the world and taught them how to turn their skills into side income.

Dean Soto was one of them. He has a wife, two children and a demanding full-time job. How could he find enough time to earn money on the side? Dean went through several exercises to determine which of his skills would be profitable. He realized that the information technology skills he used at his day job could also earn him money on the side — if he found the right clients. But his side income needed to be worth giving up his scarce time with his family.

Once he figured out a potential idea, he used his network to meet people and ask what their needs were. He found his first client by accident. When he heard Dean’s asking rate — $30/hour — he scoffed and insisted Dean charge more.

To account for his busy schedule, Dean used a clever retainer technique, which lets him work flexibly as long as he gets the work done. “I come home from work around 5 p.m.,” he said. “Then I spend time with my family until about 9 p.m. and spend about an hour a day on my side work.”

“I never thought I could do something like this,” he said. “Now I’m like a boxer, looking to take little jabs and see where there’s an opening.”

Last year, Dean earned $22,700 on the side. He raised his hourly rate from $30 to $60 and then $150 per hour. The best part? “My wife loves it,” he said. “She’s able to stay home, which is her dream, and my kids have their mother all day.”

There’s nothing unique about Dean. But he is remarkable for taking action instead of being blinded by the frugality brigade that so permeates personal finance.

Frugality is important — to a point. But after we cut back to a reasonable level, our biggest win will come from earning more money.

To hear an interview with Dean Soto on the techniques he used to earn thousands on the side, click here.

Article source: http://feeds.nytimes.com/click.phdo?i=4ccef076925a8e40fb4e983f2de45874

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