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Money Talk
 Dear Readers,
Many experts seem to believe that the current financial crisis is in the process of improving. Do you agree? I question any economic improvement that fails to take into account the impact of a jobless recovery. If anything, perhaps the economy is headed toward a "remission" but as many Americans face losing their unemployement benefits in coming months and many continue to lose their jobs or to live in fear of losing their jobs, I don't see any real "cure" in sight.
With so much financial uncertainty nationally and internationally, feelings of fear and powerlessness are rampant, as people struggle to make sense of this new world order where the loss of a job, a home, a life's savings or retirement means the loss of hopes, dreams, goals, sense of self, self-esteem and so on. This combination of emotional and financial loss is incredibly overwhelming and debilitating.
With need so high and resources so low in this country, we at the Center continue to look for ways to maintain contact and continue conversations that help and support those who want to create sustainable long-term financial behavioral change and those working to help them to do so. In this effort we urge you to:
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Join the Financial Social Work social network where professionals can network and learn from each other, as well as ask/respond/comment to questions, blogs, discussions, etc., from others doing similar types of work. Look at some of the current topics and people already participating and JOIN. We believe this will be an important resource for everyone working with clients to reduce debt, increase assets and help men and women take control of their money and gain control of their lives.
The Center for Financial Social Work is dedicated to helping men and women to feel more hopeful about their personal and financial futures; to always be a TRUSTED RESOURCE which provides knowledgeable guidance and support and free and fee based materials that contribute to SUSTAINABLE LONG TERM FINANCIAL BEHAVIORAL CHANGE - because until and unless behavior changes - NOTHING changes!
Reeta
CLICK HERE to receive your own copy of this e-newsletter delivered to your inbox; be the first to learn about special events and special pricing packages.
Reeta Wolfsohn, CMSW, is the founder of Financial Social Work; she can be reached at 800.707.1002 or at
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News from the Center for Financial Social Work
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FSW Certification (for social workers and non-social workers)
Currently, Certified Financial Social Workers, Counselors and Educators/Coaches across the US (and in one foreign country) work with cancer patients, dialysis patients, HIV-AIDS clients, domestic violence, adolescent pregnancy, the EAP department of several national and international companies, the US military, veterans, schools, the elderly, families of autistic children, criminal justice, foster care, United Way, Goodwill, Departments of Social Services, the federal government, in private practice, etc.
We are happy to announce that the winner is:
PATTI WILLIFORD from the New Hampshire Housing Finance Authority
Harnessing the Most Powerful Force in the Universe
The most powerful force in the universe is compound interest. Albert Einstein
You don’t have to be a brilliant award-winning scientist with a bad hair day to appreciate the awesome power of this simple financial principle. The difference between simple interest and compound interest is, well – simple. With simple interest, the money we deposit earns interest on the principal (the amount we initially deposit). If we deposit $1,000 in an account earning 4% interest, at the end of the first year we will have earned $40 in interest ($1,000 X .04 = $40). With simple interest, it is as though we take the interest out of the account, such that the following year we start with the same $1,000.
Compound interest assumes that we leave the interest in the account, such that the first year we earn the same $40. But in the second year, we start the year with $1,040, and the cycle repeats, earning 4% on that balance, yielding interest of $41.60. Granted, that $1.60 in additional interest does not seem like much, until we consider that the following year the interest on the new balance will be $43.26, the following year $44.99, and so on; we see that our money is quite literally growing exponentially.
What if we can find an investment opportunity that earns a much higher rate of return, say 18% annually? The result is truly impressive. Beginning with the same $1,000, after one year we will have $1,180.00, after two years $1,392.40, and after 3 years $1,643.03, a gain of 64.3% on the original amount. Note that is much more than simply 3 X 18% = 54%. Why? It shows the tremendous value of compounding.
If you are new to finance, it is probably likely that you might not know an investment that can earn a safe 18% per year, compounded, right?. Well, guess what? Your credit card company does, and I am talking about YOU! Just as compound interest is the key to fighting our way out of debt and learning how to have our money work for us, so too is it our evil adversary that throws an ever-increasing shroud over our ability to see the light of a debt free future. Do you think your credit card company wants you to pay more than the minimum and eventually eliminate their 18% return?
An accredited investor and debt reduction strategist, Ron Cook is the Department Chair for the Entertainment Business Master of Science degree program at Full Sail University in Orlando, where he also teaches a course in finance. Ron is a frequent seminar lecturer, assisting students and others in developing a strategy for reducing their debts and creating an investment plan. His successful career in hospitality management and private equity investment allows him to do what he loves most – teaching.
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