Eroding Factor #9: Loans and Interest

In an ideal world, we would hope that we are earning more interest than we are paying out. Are we seeing that today? Let me put it this way, if you know of any savings vehicle that will earn more interest than than the interest being paid on any type of of lending product give me a call. Let me take you back to a time when there were interest rates around 15%. Sounds pretty good, right? Sure it does, but you were also paying about the same rate for your mortgage. Times sure have changed. The point is, we need to minimize the payment of excess interest if at all possible. The point of building wealth is earning money, not paying it out.

Eroding Factor #10: Lawsuits

Probably the most over looked factor, lawsuits can be devastating to a person’s financial plan. Lawsuits can erode away assets faster than any of the other eroding factors if they ever occur. The only way to minimize the effects of this money eroder is to fully protect yourself with the correct types of insurance.

Here’s an example of the effects of a lawsuit. Someone I know well was involved in an auto accident. It wasn’t anything major, rather was just a fender bender. A year and a half later, this person was served papers for a lawsuit that had been filed against him. The person that was rear ended had claimed whiplash and won the lawsuit for $500,000. Now, had the person being sued not had the correct protection his assets would have been the first to be seized.

We never know when something of this magnitude will happen. We must do our best to be fully protected against anything and everything that could erode our assets away. I hope that we have helped to make you more aware of the factors that erode your money. Thank you for reading and stay tuned for many other financial topics that affect all of us in today’s society.