Step #1: Determine the Total Amount of Out-of-Pocket Costs

Multiply the term of your lease agreement by the payment on the lease that’s made each month. In other words, to figure out the total amount of the out-of-pocket costs, you will need to multiply the number of months that the property, vehicle, or other item will be leased by the monthly payment that is agreed upon in the rental agreement.

Step #2: Establish the Total Finance Charge

You can determine the total finance change of your lease agreement by subtracting the amount of money that has been financed from the total amount of out-of-pocket costs that you determined in Step 1.

Step #3: Figure Out the Yearly Finance Charge

That brings us to a complex part of lease accounting. To determine what your annual finance charge will be, first take the total finance charge figure from Step #2. Then, divide it by the term (the number of years).

Step #4: Determine the Annual Lease Rate

Alright, now to get the final figure in this puzzle, you can get the annual lease rate by dividing the yearly finance charge figure from Step #3 by the financed amount. There you should have your annual lease rate.

Pro Tip: Don’t forget that a security deposit is also an important mercenary part of lease agreements. If the tenant damages or otherwise violates the term of their rental agreement, landlords will be able to keep the security deposit. The rules are usually created to benefit the landlords.

Finally, keep in mind that lease accounting is best left to the professionals. While it is good to educate yourself as much as you can on the standards and laws of lease accounting, protect your business and your own financial health by relying on professionals to make sure that all is up to the standards of the Financial Account Standards Board and beyond. 

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Setting Goals

The first thing that should concern you is what your financial goals are. Do you want to save enough to purchase a home? Do you want to ensure your family’s security after you die? It is wise to get exceedingly clear about what your goals are so that you can take the right action. If you are hoping to buy a home this year for example, you might not decide to invest in volatile penny stocks. If you want to save for your retirement and have some extra money, those kinds of stocks might make more sense for you.

Lowering Taxes

As you start to accumulate various stocks, bonds, cash and other assets, it is natural that you would be surprised at how much money in taxes you may owe; not only Luckily, there are a number of ways that you may be able to lower your tax burden. Charitable contributions, investing in individual retirement accounts and other choices are available to you, but in order to find out what the best choices are, it is vital to enlist the help of a reputable financial planner or accountant. They can give you solutions that are applicable to your personal financial situation.

Growing Your Financial Assets through Multiple Streams of Income

While planning for your financial future, you may notice that in order to meet your goals, you need to increase your income. This can be done in a number of ways. Using the money you have now, you can build your individual fortune through investment in land, houses, mutual funds and stocks. Your financial planner can help you devise an investment plan that makes the most sense for you.

There are a additional ways for you to build more income streams. You might decide to do some freelance work, for instance. You may choose to start your own business, which can also bring in more money. Such a business doesn’t have to be full-time in order to make a positive impact on your finances.

For guidance, seek out a firm that specializes in private wealth management. With the help of professionals, you can feel more confident that you and your family’s financial needs are provided for.

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Formalize Partnerships

Many times, investors will go in together on a variety of investment opportunities. This is not at all uncommon in the world of film investment. Many investors will partner together to fund certain projects. The problem arises when those partnerships are not formalized. If you decide to work with a friend to see a project through, your portion of the investment could be at risk should that friend get sued in any fashion. Avoid this by creating a formal partnership that protects your interests.

Shield Assets Though Incorporation

To create a formalized partnership with one or more people, you will need to form a corporation or other business entity to shield your assets. This should also be done even if you are not partnered with anyone, as it can protect you should something catastrophic happen. Unincorporated assets are at risk for garnishment from a personal lawsuit against you, should you find yourself in that situation. By placing your interests into a LLC or corporation, your wealth will be its own entity and cannot be collected as a form of legal payment.

Diversify Your Portfolio

All investors must be certain that their portfolio is diversified. Placing all of your eggs in one basket is asking for disaster. Keep a mix of traditional retirement accounts, mutual funds, stocks, and other funds so that they can all act as backup in the event something happens to the market that causes your assets to shrink. Earning passive income through angel investing is another great way to mix up your investments. This is an ideal option for investors who wish to grow their wealth.

Protect Joint Accounts

If you hold a number of accounts with someone else, whether it is spouse, child, or business partner, it is important to review those on a regular basis to ensure everything is on the up-and-up. Any money deposited can be at risk should one of the account owners find themselves in a legal or financial mess, including tax liens, lawsuit judgments, or a partner filing for divorce. Try to avoid investing too much money with someone else in order to safeguard your wealth.

Purchase Liability Insurance

If you are not currently carrying liability insurance, do so immediately. If you are carrying liability insurance, make sure you have a limit that is proportionate to your net-worth. This is especially important for those who suddenly have a windfall of money earned from passive. Liability insurance acts as your safety net from litigation. Take a few moments to call your insurance broker or financial consultant, like Alpha Squared, to either increase your coverage or to open a policy.

Protecting your wealth is one of the most important things you can do for yourself, your business partners, and your family. By taking these simple steps, you and other investors can protect your assets, from traditional to those earned through passive income.

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Rearranging Your Monthly Budget Is Vital

As soon as you and your spouse learn you are expecting a baby, sitting down together and taking a close look at your budget is a good idea. Consider the expenses you currently have going out each month that will not apply to you and your little family after the baby is born. After your little one arrives, you may think about cutting out expenses like:

• Sports club memberships: If you or your spouse (or both of you) enjoy being a member of clubs like those for tennis or bowling, you need to remember the time you will have for these activities after the baby is born will be limited. If you are worried about saving money, you should also think about the money you would have to spend on child care while you spend time at the sports club.

• Clothing: Being a married couple without children can mean you have more cash to spend on designer clothing and accessories. However, after your baby is born, you should make sure to spend only on the clothing you will need and get can get by with. You should know the money you spend on designer garments will be good for buying a child new clothes because he or she can grow out of an entire wardrobe in just a few months.

• Nights out on the town: If you and your spouse have been used to going on on the town on the weekends, you might consider cutting back to a night out every month or few weeks. The money you save for the movie theater or dining out can be put into a savings account for baby’s needs later on.

When you are financially ready for your new baby, you can spend more time enjoying your new little one without worrying about how to buy diapers or other basic needs for him or her. Taking the time to financially plan for your new little family can help you have more of the things you may need later on.

If you need help getting your finances in order before your little bundle of joy arrives, visit a financial planner as soon as possible.

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You Can’t Seem to Kick That Daily Coffee Habit 

If you stop every day on your way to work for your morning pick me up, you may not realize just how much you’re spending.  

Let’s break it down:  

$2.25 x 5 days per week = $11.25 

$11.25 x 4 weeks = $45  

$45 x 12 months = $540  

While $540 may only seem like a drop in the bucket, it’s still enough to help you when you’re in a financial pickle. That $540 could pay for a medical bill or a car repair bill, both of which can pop up unexpectedly and leave you scrambling.  

You Think Credit Cards are Bad 

With a little bit of self-restraint, a credit card can be used to build up your emergency fund, and here’s how: 

If you apply for a card that offers 1.5% cash back on all purchases and then use that card to pay for your regular monthly necessities, such as groceries and gas, you could use the cash back you receive to pad your savings. Of course, you’d have to be sure to pay the card off every month, but if you’ll be spending that money anyways, why not use the card?  

For example, say your groceries and gas purchases each month are $500 total. $500 x 1.5% = $7.50. In one year, you’ll have earned $90 just for spending your own money. Sure, it’s not enough to fund your future, but it’s just one more little way that you can contribute to the bigger goal.  

You See Your Monthly Savings Goal As an Option, Not an Obligation 

If you’ve set up a monthly savings goal, great! Now, it’s time to set a plan in motion that will result in your goal being reached. One way to sabotage your goal is by seeing it as an option, not an obligation.  

Say you make $500 per week and have a goal of saving $50 per week, so $200 per month. Instead of allowing that $50 to sit in your account all week, why not have it automatically transferred to your savings account? This is one way to make your savings seen as more of an obligation than an option – it’s almost as if you have a $50 bill each week, and your savings account just happens to be the payee of that bill. Remember, you’re saving for your future self.  

An emergency savings fund can be the difference between scraping by and financially thriving. To learn more about building up your emergency fund and securing your future, consult with a financial adviser today.  

For financial advisers, contact a company such as Family Focus Financial Group.

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Advantages of annuities

1. A fixed, reliable income. The chief benefit of investing in annuities is that you know exactly how much money you will be getting every month, quarter or year. Unlike income from dividends and interest, annuity income won’t vary depending on market fluctuations and the health of a particular company.

2. Less room for squandering. An annuity can be a good choice for a person who suddenly comes into a great deal of money via an inheritance or winning the lottery. By investing in an annuity, you can guarantee your future income and, essentially, protect yourself from spending all of your money quickly and having nothing left in a few years.

3. Deferred taxes. Buying an annuity doesn’t eliminate your taxes in the future. However, since a portion of your income is considered principal, your taxes will generally be lower than if you earned that same amount as earned income or interest.

Things to consider before purchasing an annuity

1. Fixed interest rate. Knowing exactly how much you’ll receive each period in income from your annuity has a down side. Although you’ll be protected if interest rates fall after you buy your annuity,  you won’t be able to benefit from rising interest rates as you would with other types of investment products.

2. Fees for withdrawing money. When you buy an annuity, you’ll be required to leave the money in for a fixed period of time, usually six to eight years. If you withdraw your funds earlier, you’ll be charged a significant fee.

3. The annuity company could go out of business. When you invest in an annuity, you are vulnerable to the company who holds your annuity going out of business and stopping your payments abruptly.

While purchasing an annuity can provide the peace of mind that comes with knowing exactly how much money you’ll have each month for the rest of your life and deterring you from squandering a windfall, it’s important to weigh the pros and the cons of annuities carefully before investing your money.  

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Look at the exchange rate history

If you are still at least one decade out from retirement, there is a high likelihood that the exchange rates will be different than their current amounts. Get together with your financial planner and go over the exchange rates for the country and the United States over the course of history. Looking at long-term exchange rates can give you a good idea of just what type of income you may be looking at and how long money will stretch. 

Work on property purchase immediately

If you wish to retire in a country different than your home country, you may have to jump through hoops to purchase real estate. Instead of waiting, you should start meeting the proper country standards in order to make a real estate purchase. You should consider the purchase of your home to be a part of retirement investing. This being purchased and paid off will make retiring much easier. 

Figure out where you should hold money

Depending on which country you move to, you may want to have a bank in the country or you may want to continue to utilize your bank in the United States and just use cash and cards in your new country. Determine how and if you will lose money due to the exchange rate when holding your money in the country versus the United States. To preserve your hard worked for retirement gains, keep the money where it will stretch the furthest. 

Consider two investment firms

No one knows the landscape of a country’s economy better than the finance people who live there. Consider having two investment portfolios, one in the country where you will retire and another in the country that you currently live. If diversification gives a better chance of success, diversifying in two countries will give you an even bigger chance of more retirement funds. 

For retirement solutions, click the link or do an online search. 

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Annuities. Purchasing an annuity is a means to convert a chunk of savings into a reliable monthly paycheck — usually for the rest of your life. At retirement, you can purchase an immediate annuity with a portion of your overall savings. Choices include a fixed amount or an annuity that varies depending on inflation, and you may be able to buy a joint or survivor annuity to cover both spouses. The downside to annuities, of course, is that you can’t reverse course once you’ve decided to buy into one. 

Ladders. Investment ladders, or buckets, are a way of staggering payments and risk during retirement. A ladder usually involves investing in similar things (such as CDs and/or bonds) that mature at different rates. You could place money in 1-month, 3-month, 6-month, and 12-month CDs, for example, then take the earnings as they each mature while reinvesting in the original amount. Bonds are a more long-term ladder and can be used to generate income later in the process. This income method is often the most liquid and most easily reversible in the event of a change in your plans. 

Assets. Using some of your retirement savings to purchase an income-producing asset is a plan for those who want to remain actively involved in making their money work. This type of asset generally means a rental unit, but it can also mean investing in some or all of a business. If you decide to do this, it’s important that you first determine how involved you want to be in the management of the investment, what you will do when you no longer want to do so and how much risk is involved. It’s also a good idea to avoid tying up all your savings in such a purchase — both for liquidity purposes and to manage risk. 

These three basic methods for designing your own income stream can be combined with other strategies or with each other. In fact, it’s generally recommended to diversify your investments, risk and income sources. By doing so, you can know where your money will be coming from no matter what the climate of the economy — local, global or industry-specific — is. 

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Maintain Focus and Value

Trying to find a buyer for your business and then entering into the negotiations process can be quite time consuming. It could take weeks or months to find a buyer, and during that time, you will be distracted and might not be put as much focus into your business as you normally do. When you go to a potential buyer, you want to be able to give positive, up-to-date numbers for your revenue and customer base. Hiring a broker will allow you to stay focused on maintaining your business’ value so you can maximize your return during the sale.

Confidential

If some of your customers or clients were to find out that you are looking to sell, it could affect their interactions and ongoing business with your company. By hiring a business broker, you will be able to protect the identity of the company until you are sure you have found the right buyer. Business brokers can send out a blind profile to potential buyers describing the company without actually giving away any sensitive information.

Reach More Potential Buyers

Business brokers have a database filled with potential buyers for all kinds of businesses. When you hire a broker, you are in effect getting access to all of their tools and knowledge that can lead to getting you a better deal. A business broker is also adept at marketing companies like yours and will know just how to position it to attract as large an audience as possible.

If you are looking to sell your business, you should look into hiring a business broker to handle the transaction for you. Having a business broker on your side will allow you to stay focused on maintaining your company’s value ahead of the sale while the broker does all the actual work of finding a buyer. Business brokers can also help you find a bigger potential pool of buyers and have tools available to protect your company’s identity if necessary. Reach out to a business broker like those at RLS Associates today for more information.

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As a financial advisor, your day will consist of meeting with clients, asking them about their financial goals, and discussing how they might reach those goals. You may also spend time writing financial plans, which are reports that show how much a client may need to save for a certain goal, or how much they might need for retirement. You will also need to educate yourself on current investment products and trends in the business.

Education and Licensing

You do not need a degree in finance to become a financial advisor, but it helps to have some business courses under your belt. In fact, a college degree is not required to become a financial advisor, but many companies require that you have one in order to be hired.

If you want to sell or recommend securities (stocks, bonds, mutual funds, etc.) you will need FINRA Series 7 and 63 licenses. These are the national and state securities broker licenses. If you want to sell insurance and annuities, you will also need to be licensed for that in your state.

Joining a Broker/Dealer

As a newly licensed advisor, you may choose to go to work for a broker/dealer which will provide training on their products and procedures. They may also pay for your licenses.

Your firm will also provide training on how to build your practice. The ability to prospect for new clients may be the single biggest factor in whether or not you will be successful as a financial advisor. When you’re just starting out, you will need to pick up the phone and call people you know and ask them for business. You will need to ask friends, family members, college classmates, neighbors and everyone else you know to give you their business and to refer people they know to you.

Once you have started working with clients, be sure to ask them for referrals. The best way to get new clients is to have your existing clients send them to you.

Financial Planning Designations

There are several certifications that you can get that indicate you have specialized education in financial planning. Once you have secured your Series 7 and 63 licenses, you may want to pursue additional certifications.

The Certified Financial Planner, or CFP, designation is the granddaddy of them all. To get it, you’ll need to take six courses in various aspects of planning. Then you need to sit for a two-day, 10-hour exam. You also need three years of experience working for a financial planning firm.

Commission-based or Fee-based?

Financial advisors, even those who work for a large broker/dealer, typically have their own practice. They usually get a percentage of the commission on each sale they make, after the broker/dealer takes their piece. This percentage increases as the individual advisor’s sales increase.

Some financial advisors start their own firms on a fee-only basis. This means that they collect a fee for offering advice, and they do not get commission on the investments they sell. They will make general recommendations to clients, but will not sell stocks, mutual funds, insurance or any other products. These advisors are typically CFPs.

Financial advisors provide a much-needed service by sharing their knowledge of financial products and services. They can also make a very good living in the process.

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