Principle #11 from Chapter #3 The Cost of Making Minimum Monthly Payments:
Is crucial that this family understands that is crucial to pay the debts as fast as possible. Minimum payments increases the amount of interest payed and delay the debt in years to be extinct. There is no benefits at all in making minimum payments, it only makes the banks receive more money from us.
Principle #12 from Chapter #5 Use Credit Wisely:
Credit might be beneficial if used wisely, It can be used in emergencies in case of lack of cash for something that is needed, not wanted. But for using credit is crucial that this family keep the goal of eliminating the debt as fast as possible, pay the credit account each month, to decrease the amount of interest, and do all payments on time. Principle #13 from Chapter #6 Discipline: The use of credit must be accompanied with a high degree of personal discipline. Discipline is required to make credit work for you. Partial or missed payments will cause credit to work against them. I they don’t have the necessary discipline, my suggestion would be to cut up their charge cards, do not apply for new ones, and stop buying on credit. Principle #14 from Chapter #6 Vehicle Financing: He should save money from his part-time job and save as much money in order to put a down payment on his next car or pay cash as possible because the older car would need to be replaced and by Saving for the purchase of his new car can be a excellent strategy for financial planning and the best option for him. I also think this would be a great idea for him because he can earn interest on his savings and save a lot of money for Finance Interest Charges. Principle #15 from Chapter #6 Transportation Alternatives: Instead of using both cars, they could choose to use just one of them to save gas and walk, ride a bicycle or use public transportation when the use of the second car is not necessary. They could also trade their new car or an older one in order to minimize costs in insurance and payments. The trade-offs are significant as they’ll trade time, image, and convenience for cost. Principle #16 from Chapter #7 Using the Amortization Schedule: A very important component of increasing personal wealth is to purchase a home and then pay extra each month on your payment. This extra amount goes directly to reduce the principal and significantly decreases the cost of credit. Reducing some of their expenses would help them to do extra payments. A good tool to help them to analyze the benefit of payments over time is an amortization schedule. It can help to see the benefits of extra principal payments. Principle #17 from Chapter #7 Minimize the risk and being healthy: The cost of healthcare and the risk of major medical expenses are too great to be ignored and can be financially devastating. This risk can and should be reduced by living a healthy lifestyle. There are some ways to maintain a good health without spend money: Exercise …show more content…
But, they will be independently wealth when they have accumulated enough funds to live comfortably and no longer need to work for the rest of their lives. As they follow all the lessons discussed in this letter, they will have all their debts paid later. Then will be the time to prepare for the ultimate financial independence.
Principle #19 from Chapter #9 Planning for retirement: In order to plan for the ultimate financial independence, they need to plan in how much they need in their savings to retire comfortably. Also, How much do they need to save each working year or month between where they paid their debts and their retirement to accumulate enough savings.
Principle # 20 From Chapter #2 Financial Records:
With all the expenses this family has we would suggest they put together all their financial records such as budget and goals and financial statements by organizing it in a filing system so they can keep track for their records. However we also think it would be a good idea to do the same thing for their tax records so they can keep track of it for their records.
Principle #21 Chapter #8 Assume
Is crucial that this family understands that is crucial to pay the debts as fast as possible. Minimum payments increases the amount of interest payed and delay the debt in years to be extinct. There is no benefits at all in making minimum payments, it only makes the banks receive more money from us.
Principle #12 from Chapter #5 Use Credit Wisely:
Credit might be beneficial if used wisely, It can be used in emergencies in case of lack of cash for something that is needed, not wanted. But for using credit is crucial that this family keep the goal of eliminating the debt as fast as possible, pay the credit account each month, to decrease the amount of interest, and do all payments on time. Principle #13 from Chapter #6 Discipline: The use of credit must be accompanied with a high degree of personal discipline. Discipline is required to make credit work for you. Partial or missed payments will cause credit to work against them. I they don’t have the necessary discipline, my suggestion would be to cut up their charge cards, do not apply for new ones, and stop buying on credit. Principle #14 from Chapter #6 Vehicle Financing: He should save money from his part-time job and save as much money in order to put a down payment on his next car or pay cash as possible because the older car would need to be replaced and by Saving for the purchase of his new car can be a excellent strategy for financial planning and the best option for him. I also think this would be a great idea for him because he can earn interest on his savings and save a lot of money for Finance Interest Charges. Principle #15 from Chapter #6 Transportation Alternatives: Instead of using both cars, they could choose to use just one of them to save gas and walk, ride a bicycle or use public transportation when the use of the second car is not necessary. They could also trade their new car or an older one in order to minimize costs in insurance and payments. The trade-offs are significant as they’ll trade time, image, and convenience for cost. Principle #16 from Chapter #7 Using the Amortization Schedule: A very important component of increasing personal wealth is to purchase a home and then pay extra each month on your payment. This extra amount goes directly to reduce the principal and significantly decreases the cost of credit. Reducing some of their expenses would help them to do extra payments. A good tool to help them to analyze the benefit of payments over time is an amortization schedule. It can help to see the benefits of extra principal payments. Principle #17 from Chapter #7 Minimize the risk and being healthy: The cost of healthcare and the risk of major medical expenses are too great to be ignored and can be financially devastating. This risk can and should be reduced by living a healthy lifestyle. There are some ways to maintain a good health without spend money: Exercise …show more content…
But, they will be independently wealth when they have accumulated enough funds to live comfortably and no longer need to work for the rest of their lives. As they follow all the lessons discussed in this letter, they will have all their debts paid later. Then will be the time to prepare for the ultimate financial independence.
Principle #19 from Chapter #9 Planning for retirement: In order to plan for the ultimate financial independence, they need to plan in how much they need in their savings to retire comfortably. Also, How much do they need to save each working year or month between where they paid their debts and their retirement to accumulate enough savings.
Principle # 20 From Chapter #2 Financial Records:
With all the expenses this family has we would suggest they put together all their financial records such as budget and goals and financial statements by organizing it in a filing system so they can keep track for their records. However we also think it would be a good idea to do the same thing for their tax records so they can keep track of it for their records.
Principle #21 Chapter #8 Assume