There has been plenty of discussion lately about personal finances. Maybe it made me wonder where people get their money using habits and I started to go back in time. So, while traveling back from work today I tried to find out important factors from my past.

My parents have a big role here. They are entrepreneurs and I have been following closely ups and downs of their small business. Now they are retiring and I think they made a good choice when they decided to start it over 30 years ago. There were times when the company was highly profitable and times when it barely profited enough money for food. And everything between those extremes. From this I think I learnt to have some buffer funds and not to consume everything as the income level can be volatile.

In addition of the business knowhow I learnt how to plan my money usage. I had my weekly allowance but it was not too big. Sometimes I could get some extra by lawn mowing and similar tasks. I also learnt how nasty feeling it is to lose money by playing a slot machine, by breaking a lamp of my brother's bike or by other stupid things. Most of my income ended up in my piggy bank. Those savings in my piggy were taken regularly to the bank and I was following my progress from my account book (time before online banking). I learnt what is interest and some other basic knowledge related to money.

Eventually I gathered enough money to buy something more expensive. My parents usually funded half of the purchase if it was sensible otherwise. But this way I had to plan before hand what do I want and is it really worth of it. And it kept me away from buying sweets all the time.

While I got older I was able to get my first summer job in a garage. The job was really boring and I had to bike 10 km to get there. It lasted a little bit over one month but it was long enough to gather money for a 28.8 Kbit modem. After that summer I worked almost every year, mostly in local post office, until my university studies. Just before finishing my high school studies I experienced my first scam.

This event took place next to a gas station where a man approached me and my friend. He asked whether we were interested to check some loudspeakers. Every guy in high school was interested in hifi so we took a look. He was selling a pair of speakers which were left overs from an order. And of course he could sell those to me with nice price. Unfortunately I got greedy and I did not check things carefully enough - even though I did not believe his well practiced marketing speech. I ended up thinking that I am about to make a very good deal with those Acoustic Response 707 speakers. I think I paid something like over 200 euros for those. The real value was closer to 40 euros and the worst thing was, that there was an article about those scam speakers in next hifi magazine. That ruined my chances to sell them to some other fool and also the whole school knew about my great purchase.

During my university studies I did not want to take study loan so I tried to cope with standard government student support and summer jobs. I also tried to avoid asking anything from my parents as I wanted to be on my own as much as possible. But that changed when I moved together with my ex-girlfriend. I was not anymore only one deciding how to spent money and that caused a lot of conflicts and tensions.

Today I am working full time and I am curious about finance and economy sector. Most of the time excess money is sitting in a time deposit so I am not investing aggressively. I think over my purchases carefully and I buy everything with cash or direct debit. I am also rather skeptical when someone is offering me opportunity to get rich with some strange scheme. I think this behavior is sum of many events and contributors from my past and very likely it will remain similar.

I have seen loan advertisements everywhere in Budapest lately. Especially television advertisements annoy me. The show a man who is sad because he cannot buy a new microwave oven, car or holiday for the family. But then the loan fairy comes and gives him bunch of 20 000 Forint notes. Just call this number and you too can become rich.

Wrong. The yearly interest (THM) is mentioned in the advertisements and it is from 200% to over 400%. Almost free money, right? If you are mathematically illiterate you do not see how much such loans cost you. A loan of 100 000 HUF for three months, so in 200% case you would pay 50 000 HUF extra. Pretty insane.

I have read that in Finland these quick loans are the last action to push a person in a economical catastrophe. Sometimes they are used to cover payments of bills or other loan. They are the last possible loan to get because all other sources are used already. A person who has already plenty of problems with money can mess up his finances for good with such loan.

But some people will always find ways to end up in a trouble and without money. No matter if such loans exists or not.

As I have made clear previously I am pretty much against network marketing schemes. But passive income can be also totally legal and wont create conflicts with your friends. A very nice blog - www.jarkkolaine.com - has now third post about alternative incomes which can be regarded as passive.

The ways he lists are pretty much web related. Monetizing blog, selling merchandise, independent software development and photo stocks. But there are bunch of traditional sources for passive income. Unfortunately they need some capital to get them started. Investing in stocks, property or funds can be exciting and depending on how much risk you are ready to bear you can receive nice gains while traditional high interest bank deposit provide steady stream of extra.

This actually leads to my own experiments with foreign currency exchange. As traditional stock markets was a little bit boring to follow I decided to take a look at forex. I have been following EUR/HUF since 2005 and I have been interested in finance markets for some time. But forex is not that common in Finland. I got this conclusion when I searched Kauppalehti's (Finnish business news) discussion forum. I also got the conclusion that I should practice with a game account beforehand.

I searched a little bit to find suitable trading provider and I chose OANDA FXTrade. They have a Java based client which I have been using two days now. Success is still to come, so far I have managed to lose 10% of my initial deposit. Luckily it is just play money...