Money Questions and Answers

Could Your Personal Finances Affect Your Job?

Bad credit can affect you getting a job – can your bad credit and personal finances affect your job search? The answer may surprise you when applying for a job.

A recent survey of 35-54 year olds published by the National Financial Education Council found that over 25% of respondents were subjected to a financial background check (or credit check) as a condition for their eligibility to get hired or promoted. Additionally, almost 30% of respondents in the survey were reportedly unsure if their employer performed a financial check beforehand, and 5% of respondents said that they were turned down for a job or promotion as a result of one of these checks (18% were unsure).

With these survey findings in mind, it’s important to understand the implications of your financial situation in regards to either your favorability as a potential employee or your chances at scoring that big promotion. If you’re trying to

Bad Credit and Getting a Job

If you’re trying to compete in the current job market, consider these ways that your personal finances might affect your employability:

Money-Related Stress Affecting Job Performance

Empirical studies have found that money-related stress can distract employees from their jobs and make them late or absent more often than employees who aren’t struggling financially. Understandably, it’s incredibly difficult to ignore thoughts of impending bill due dates, skyrocketing credit card debt, debt collectors harassing you, and even the possibility foreclosure or bankruptcy lingering in the back of your mind while you try to go about your daily professional life.

You’re not alone, however. A large survey conducted by the American Psychological Association in 2014 found that money was the #1 stressor among adults, with 72% of Americans reportedly feeling stressed about money just in the last month, and 22% of Americans feeling extreme levels of stress when it comes to money. Stress is inherent to almost any job, but when your personal stress follows you into the workplace, it can negatively impact your job performance if left unchecked.

According to the NFEC, over 25% of job applicants are subjected to a financial background check.Click To Tweet

Geopolitical Risk In Your Investment Portfolio – Investing in a President Trump World

by Guest Contributor

The following is a guest post by Lars Kroijer, who used to run a hedge fund in London and wrote the book, “Investing Demystified: How to Invest Without Speculation and Sleepless Nights“. If you’d like to guest post on Money Q&A, check out the site’s guest posting guidelines.

With President Donald Trump making headlines on an hourly basis and our social media accounts going crazy with comments on his presidency, we are left asking ourselves: Should we perhaps change our investment strategy as a result?

In short, the answer is yes but perhaps not how you think.

In earlier blogs, I have outlined how I consider it highly unlikely for the vast majority of investors that they can beat the markets themselves through active stock selection, market timing, or via picking the one out of ten actively investment funds that may do so over a ten-year period.

And, for your equity exposure, you should pick as broad and cheap an index tracking exposure as you can get your hands on, namely a world equity index tracker. Just because Donald Trump is now President of the United States, that is no less true. You most likely couldn’t beat the markets before November and still can’t.

Editor’s Note – You may also like to see five things you can learn about personal finance from President Trump!

What you perhaps can expect is to make 4-5% above inflation. This is based on over 200 years of history of equity returns in many states of the world. And, you can expect that return to range from lottery type winnings to desperate failures – can also reasonably expect to be compensated in higher risk periods with commensurate higher expected returns, but there are no guarantees obviously.

Editor’s Note – I think you can squeeze out a 10% return on your investments. Be sure to check out how.

So, even in a President Trump world, we haven’t found a crystal ball. So, what can we do?

In my view, there are two main things we main things we should focus on.

Evaluate if the risk of the markets has changed enough that we should re-evaluate the risk levels of our portfolio.
We should consider if the sudden change in the political landscape has changed our overall economic life enough that our risk profile should change as a result.

Market Risk

Below is a graph of the expected future risk of the US stock market. Without being too technical, it measures the expected standard deviation six months into the future. Since the index value is based on the implied volatility of equity options, it is a market price.

If you think you know the future volatility of the market better than this chart, you can get rich trading it (many try!). There are many issues with this kind of chart, including that the value itself is very volatile. So, the risk changes a lot.

The volatility doesn’t capture “fat tails”, the fact that unlikely events happen far more than predicted by the normal distribution assumption of the standard deviation. And, that it is only six months into the future. That all said, the chart gives a good idea of future expected risk. You can also find it on cboe.com.

Increasing Home Value with Your Children – Projects and Funding Options

by Guest Contributor

DIY Ideas for Home Improvements - Building with Your Children

The following is a guest post by Hank McKinsey, a stay-at-home-dad and home blogger at homebyhank.com. If you’d like to find out more about guest posting on Money Q&A, please read our Guest Posting Guidelines. Your home is more than a just a place to live. It is a financial investment. It’s easy to forget that any home project, from changing the wall color to installing new cabinets, can alter your home’s value. Ideally, each upgrade should increase the value and make your home more marketable. Three fun and ‘kid friendly’ projects that can add to your home’s value and help you save money are: starting a garden, updating your doors and windows, and adding a reading or office nook to a … Read more

Good, Fast, or Cheap – How the Three Legged Stool Analogy Impacts Your Finances

by Hank Coleman

Is the three legged stool concept a myth?

Most of us have heard the old adage about the three legged stool analogy. It’s often referred to when buying products, both large and small.

You can only get two out of three attributes in almost all cases. Good, fast, and cheap – you can only have two.

So, you have to pick. You have to compromise sometimes.

For example, you can buy an item that is made with great quality parts, and the company can ship it to you fast. But, it won’t come cheap!

Look at the way the US government buys big pieces of military hardware. They often accept the lowest bidder to build the gear. They’ve got the cost part of the equation down, but you must choose between getting it fast or having a lower quality product with parts that may go bad very quickly. You almost always can’t have all three.

Wal-Mart vs. Firestone Tires and a Mother

The other day a friend of mine told me that she broke down in the middle of Wal-Mart. She’s a single mother of a toddler and was feeling stressed.

She said that she originally had a coupon to save $30 on new a set of new car tires at Firestone. She desperately needed new tires.

But, she knew that if she went to Firestone to make the purchase and put the tires on, her toddler wouldn’t have much to keep him occupied for the hour or two while they repaired the car. And, anyone with small children knows how quickly a toddler’s attention span can run out.

So, my friend made the conscious choice to get her tires replaced at Wal-Mart while she shopped even though it would be at a higher price – believe it or not Wal-Mart isn’t ALWAYS the lowest price in town.

She also needed groceries and other household items anyway, and she could knock out two birds with one stone while Wal-Mart repaired her car.

But, while she was there, she couldn’t get the thought out of her head that she was spending more by taking the path of least resistance. She chose the quality of her hour or two of her life keeping her son calm at Wal-Mart moving around and looking at toys and groceries over the instead of the lower cost at Firestone.

You may also like to check out my review of Jet.com. You should also check to see if wholesale clubs are right for you and your family.

You Are Missing Several Key Assets When Tracking Your Net Worth

by Hank Coleman

You’re missing a key part in your net worth calculations! You’re richer than you think you are. I’ve been critical of J Money’s monthly net worth updates for years now. Every month, he keeps us up-to-date on his net worth increases on his popular personal finance blog, Budgets Are Sexy. It makes me depressed about my own lack of large numbers when it comes to my net worth.

Don’t get me wrong. I’m not mad, and I know that I shouldn’t be comparing myself to others. We’re all in separate places with different goals and situations in life. But, I can’t help but continue to dwell on J Money’s net worth updates when he posts them every month.

But, this time, I think I’m onto something. I think that he’s forgetting something, and subsequently so am I. We all might be forgetting something in our calculations. We all might be richer than we realize! Are you making this key mistake when you calculate your net worth? I bet you are, and you’re not alone.

Maybe there is more to these net worth numbers and the simple calculations of our assets and liabilities. I think J Money is unrepresenting his net worth and leaving money on the table. I think we all are. Our net worth numbers can be even larger, and maybe some of us are closer to J Money than we think.

You’re Leaving Out a Few Assets

Where do you draw the line on what is an asset? We all understand thanks to J and his posts that to calculate your net worth, you simply subtract all of your debts from a list of assets like your home, investments, and your cars.

But, we are leaving out key assets to our calculations. It struck me when I had an argument with my friend Blake a few months ago whether or not your cars deserve to be included in your net worth as an asset. It does! I agree with J in that respect. My friend was leaving out his cars as an asset, but he was surely including his car loans in the list of liabilities. This greatly underestimated his net worth.

So, that got me thinking about other assets that we typically do not include in our net worth calculations. I think that we are a little better off in our wealth than we all think.

7 Ways to Control of Your Own Thoughts from Says Who by Ora Nadrich

by Hank Coleman

The following is a guest post by Ora Nadrich, who is the author of Says Who? How One Simple Question Can Change The Way You Think Forever. If you’d like to guest post on Money Q&A, check out the site’s guest posting guidelines.

I can’t, I won’t ever — these are but two examples of the thousands of negative thoughts that race through our minds in many situations. They’re so loud we can’t hear ourselves above them. They hold us hostage in a whirlwind of doubt and worry. But they don’t have to. Whenever a negative thought takes hold in your mind, challenge it. Just like a trespasser, you can chase it away.

It starts by immediately questioning the thought as it enters your head, using the Says Who? Method. In my book, Says Who? How One Simple Question Can Change The Way You Think Forever, I lay out the seven questions that can banish those inner bullies. You are the creator and master of your internal dialogue, which creates your reality. So now, time to show your mind who’s boss.

Here are the 7 Says Who? questions:

Says Who?

Whenever a negative though pops into your head, ask it: Says Who? The question exposes a negative thought for exactly what it is: a doubt that can disrupt your life and damage your sense of well-being.

Have I heard someone say this thought before?

So many of the voices in our head are actually echoes. They’re old words we heard someone else say to us, such as a parent, spouse, or boss. By identifying the originator of the thought, you can find out if it really belongs to you. Many times, it doesn’t.