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This 8 Ways Can Help You Stop Worrying About Money

2017-01-19T17:50:00.005+00:00

This 8 Ways Can Help You Stop Worrying About Money

When you’re worried about money, you think that your reality is real. You get really invested in the fact that your money troubles are really real. The truth is, everybody worries about financial decisions, indecisions or consequences. However, worrying won’t solve your money problems, though. In fact, it can lead to even more stress and mistakes. Here are eight ways that can help you to stop worrying about money and to get your finances on track.

1. Understand Your Money Situation

You can get a better understanding of your money situation by identifying what your assets, thus house, investments, savings are and what your liabilities, or debts. Once you know what you have and what you owe, you can identify what your biggest problem is, and assess what needs to change. For most, it’s too little savings and too much debt, he said.

Before you can stop worrying, you need to know where you stand financially and the best way to do that is to get a handle on or snapshot of your current situation.

2. Know Where Your Money Is Going

Once you know where you stand financially, you need to know how you got into that position. This means figuring out where your money goes each month. First, identify your necessary expenses which includes mortgage or rent, utilities, transportation and anything else you must pay for each month. Then, look at your bank and credit card statements from the past month to see how much you are spending on discretionary items, thus things you want but in actual fact you don’t need them.

If you’re spending say GHC1,000.00 on discretionary items, ask yourself what else you could do with that money. You might be worried about living paycheck to paycheck or not making ends meet, but tracking your spending might help you realize that you actually have the cash you need to boost savings, pay off debt or get ahead, if only you cut back on unnecessary expenses.

3. Get a Handle on Your Debt

If you have taken the first step to figure out your assets and liabilities, you should have an idea of how much you owe because it is important to see how much this debt is costing you, and draining your cash.

List your debts and the interest rate on each. You should focus on paying off your highest-rate debts first so you will pay less in interest over time. If you have taken the second step to figure out where your money is going, you should know what discretionary expenses can be cut so you can put more money toward your debt.

However, before you start paying down debt, experts advice that you understand why you have accumulated it. Was it because you had a major medical expense or borrowed heavily to cover the cost of education? Or are you simply using debt to cover your spending? If this is your normal way of living, it’s time to take stock and think about why. You might need to work with a counselor to figure out what is triggering your spending, and how to get it under control.

Check Also: 3 insurance moves to make immediately you are pregnant

4. Set Financial Goals

To stop worrying about your finances, it’s not enough to know where your money has been going. You need to give it a place to go, which means setting goals. Look at what must happen for you to feel like your finances are on track. It might mean being debt-free, having a certain amount in savings for retirement or building a college fund for a child.

In addition to covering your necessary expenses, your money should be spent on the basis of priority, thus your goals first before your wants. Then evaluate whether your career and other financial choices you have made will help you meet those goals.

Ask yourself this. What are your options if your current income won’t get you where you want to go?You might need to get a second job, go back to school or look for other sources of income to reach your goals.

5. Educate Yourself About Personal Finance

You might be worrying about money because you feel like you don’t know enough about personal finance. However, gaining mastery of your finances does not mean you need a degree in finance. But you do need to know what is creating fear or discomfort for you.

Perhaps you’re worried because you don’t understand how your credit score affects your ability to get credit. You can learn the basics online.

If you’re confused about how much to save for retirement, check with your employer to see if you have access to financial advice through your workplace retirement plan. Or visit one of the numerous personal finance websites to learn money basics.

6. Plan for the Unexpected

You can alleviate some of your financial worries by identifying your worst-case money scenarios, and preparing for them. For example, if you consider losing your job to be the worst thing that can happen financially to you, ask yourself what you should do to prepare for a job loss. Creating an emergency fund to cover expenses while you’re out of work is a good place to start.

If you have people who depend on you financially, you need to have enough life insurance to help support them when you die. If you become disabled, you need to make sure you have enough disability insurance coverage to replace your lost wages. Consider everything that could derail your aspirations, and cover all of your bases, experts say.

7. Stop Trying to Keep Up With Others

You need to be honest with yourself about whether your money woes stem from tying to keep up with what others have, thus whether you are spending to impress others or belong. Ask yourself what you’re working so hard for. Is it a label on a shirt, a certain watch, a vacation? Or are we working for something else?

To avoid falling into the trap of trying to keep up with others and worrying that you cannot, please make sure you write down what you care about. If you’re married or in a relationship, ask your partner to do the same. Then agree on what you both want and let those values guide your spending decisions.

8. Get Help From a Financial Advisor

If you’re worried about your health, you would likely visit a doctor. If it’s your financial health that has you concerned, you can get help from a professional, too. You can hire a financial planner to help you with any of the above steps. That is from understanding where you stand financially, to setting goals, and to creating a plan to reach those goals.

Always look for an advisor who will work in your best interest rather than one who will try to sell you financial products that might not meet your needs.

Credit: GOBankingRates

Check Out President Donald Trump’s Net Worth: See How Donald Trump Made Billions.

2017-01-18T10:47:00.001+00:00

Republican president-elect Donald Trump emerged as an unlikely victor in a grueling presidential contest against Democratic nominee Hillary Clinton. Over the months, the billionaire businessman, television star and politician beat out contenders in the polls, thrilling throngs of adoring fans.

On June 14, Trump celebrated his 70th birthday and, just a few months later, was elected president. Here’s a look at Trump’s businesses, presidential campaign, lavish lifestyle, family and net worth.

Donald Trump Net Worth: $4.5 Billion

Forbes puts Trump’s net worth at $4.5 billion. He is No. 324 on the worldwide list of billionaires and No. 113 in the United States. Early in his campaign, the Republican president-elect said he was worth in excess of $10 billion, and he reiterated that claim on May 17 when he submitted an updated financial disclosure to the Federal Election Commission.

Born into a wealthy family, Trump inherited about $40 million from his late father, real estate developer Fred Trump, reported Celebrity Net Worth, which tracks celebrity earnings. In 1971, Donald became head of what would later be known as The Trump Organization.

Donald Trump’s earnings and title have since helped him develop over 500 companies. The business mogul has his stake in casinos, skyscrapers, television shows, golf courses, books, merchandise and more.

Donald Trump’s Businesses

The only thing bigger than Trump’s personality is his business acumen. In the 1970s, he landed a deal with Hyatt, the city of New York and the unprofitable Commodore Hotel beside the Grand Central Station, earning the right to renovate and rebrand the ailing hotel into the Grand Hyatt. That hotel became an instant success, making Trump one of the best-known real estate developers in the area.

In 1984, Trump completed construction on the 68-story Trump Tower, the home of The Trump Organization. That building includes a 60-foot waterfall and, on opening day, had five levels of retail stores and restaurants known as a New York staple.

Trump has owned a slew of successful businesses and properties, among them Trump Place, a housing development project with 5,700 apartments across 18 buildings. The Trump International Hotel & Tower Chicago has a hotel, condos and numerous restaurants and shops. Wollman Rink, a Central Park staple that sees more than 5 million visitors each year, is also owned by Trump.

Donald Trump’s Failed Businesses

While Trump has major business wins to his name, so does he have losses.

In 1988, Trump spent $365 million on a fleet of Boeing 727s, plus landing facilities in Washington, D.C., New York City and Boston. He also bought the right to paint his name on a plane. Unfortunately, his attempt to build a luxury flying experience under the Trump Shuttle name failed — and the company was decommissioned.

In 1990, the banks that backed his investments provided him with a $65 million bailout in new loans and credit, reported Time. That bailout failed, leaving Trump nearly $4 billion in debt nine months later. That same year, his famous Taj Mahal casino in Atlanta City, N.J., filed for bankruptcy.

Trump Hotels & Casino Resorts went bankrupt in 2004. In 2009, the same company — now called Trump Entertainment Resorts — filed for bankruptcy again.

One of Trump’s highest-profile business failures is Trump University. The unaccredited online college was launched in 2005 and closed down in 2010. Three Trump University lawsuits plague the Republican nominee’s campaign. Those lawsuits allege Trump University was a scam that cost students tens of thousands of dollars.

Donald Trump Campaign Costs

The Washington Post called Donald Trump’s self-funded bid for the Oval Office history’s most cost-effective run for presidency. Unfortunately, Trump’s time at the podium has cost him a far bit more money than he might have expected. After a number of controversial and racially-charged remarks, NBC and Macy’s fired Trump, and Univision distanced itself from him.

The media-savvy Trump, however, is believed to have received $2 billion in free airtime by mid-June, according to an analysis of FEC spending data conducted by The Hill. One FCC report shows he spent just $33.4 million through February 2016. Hillary Clinton spent $129 million during the same period.

Donald Trump’s Lifestyle

Trump and wife Melania Trump live in a three-floor penthouse in Trump Tower in New York City. The luxuries they enjoy include an indoor fountain and a door encrusted with diamonds and gold.

Among his other properties is the private club Mar-a-Lago, which sits on 17 acres of valuable South Florida land. He bought the estate — which boasts 58 bedrooms, 33 bathrooms, 12 fireplaces and three bomb shelters — for the bargain price of $10 million in 1985. Today, it is a luxury club worth as much as $300 million.

He shuttles between campaign stops in his $100 million Boeing 757 adorned with gold seat belts. His fleet of luxury vehicles include a Rolls Royce, an electric blue 1997 Lamborghini Diablo and a Mercedes-Benz SLR McLaren.

Donald Trump’s Wife and Family

Trump is married to former supermodel Melania, his third wife and the mother of his youngest son, Barron Trump. Donald Trump Jr., Eric and Ivanka were born to his first wife, Ivana Trump. Tiffany was born to his second wife, Marla Maples.

At 70, the real estate baron celebrates this year as the Republican president-elect of 2016. One of the richest men in the world, Trump is a celebrity billionaire who continues to stir controversy, make money and entertain — and now, lead the U.S.

Source: msn.com

Check Out Barack Obama's Net Worth as He Leaves the White House

2017-01-18T10:28:00.000+00:00

On Jan. 20, Donald Trump will be sworn in as the 45th president of the United States and the Barack Obama era will officially come to an end. While his net worth is nowhere near that of his successor, Mr. Obama will leave office a very rich man.

Based on a recent study by American University in Washington, D.C., the Obamas could stand to make as much as $242 million once leaving the White House.

Here is a look at President Barack Obama as he turns over the presidency, his net worth and plans for the future.

President Barack Obama Net Worth: $12.2 Million

For his day job as president, Barack Obama earned $400,000 a year throughout his entire eight-year term — a salary that incoming president Trump has vowed to forgo. The president also receives a $50,000 annual expense account, a $100,000 nontaxable travel account and a $19,000 entertainment budget.

On April 15, 2016, President Obama released his 2015 tax returns, which showed that he and First Lady Michelle Obama filed jointly and reported an adjusted gross income of $436,065. They paid $81,472 in taxes according to their 18.7 percent tax rate. They also donated a total of $64,066 to more than 30 charities.

According to CelebrityNetWorth.com, Mr. Obama has a net worth of $12.2 million and First Lady Michelle Obama is not far behind with a net worth of $11.8 million.

See Also: Check Out President Donald Trump’s Net Worth: See How Donald Trump Made Billions.

A Timeline of Barack Obama’s Wealth

How exactly did Obama grow his fortune? Here’s a timeline of his earnings over the years, as Chronicled by Business Insider:

-2004: He earned a salary of $80,287 from the Illinois State Senate and $32,144 from the University of Chicago Law School, where he taught. The president also had assets in four financial funds worth between $50,000 and $100,000 each.

-2005: Obama signed a multi-book deal with Random House and received a $1.9 million advance for “The Audacity of Hope,” plus royalties, following his appearance at the 2004 Democratic National Convention. Also that year he earned just over $847,000 off another book advance, plus $378,000 off additional book royalties. Meanwhile, his investments grew with the addition of a Nuveen Floating Rate Income Fund valued between $50,000 and $100,000. He also reported deposit accounts valued between $150,000 and $350,000.

-2006: Obama reported book royalties of just under $150,000, plus $425,000 off an additional book advance. He also acquired publicly-traded assets worth tens of thousands, including funds with Goldman Sachs and Vanguard.

-2007: Obama earned $3.3 million off book royalties from Random House and $816,000 from Dystel & Goderich Literary Management. He acquired a Northern Municipal Money Market Fund valued between $1 million and $5 million, in addition to U.S. Treasury notes valued between $500,000 and $1 million. For his daughters, he invested in two 529 college savings plans valued around $200,000 each.

-2008: When Obama was selected as president, he owned somewhere between $1 million and $5.1 million in U.S. Treasury bills.

-2009: Obama won the Nobel Peace Prize, which came with a $1.4 million award. He donated it to an assortment of charities.

-2009-2015: Obama earned $400,000 a year as president and continued to earn book royalties, as well as interest on his investments.

Barack Obama: Life Beyond the Presidency

According to Time, the first thing Barack Obama plans to do after leaving the hardest job in the world is to “sleep for two weeks.”

The president is likely to return to his community activist roots — following his slumber, of course, according to USA Today. That will likely include work on issues that were important to him during his presidency, such as gun control, immigration, nuclear nonproliferation, race relations and criminal justice reform.

According to the 1958 Former Presidents Act, Obama will receive the salary of a Cabinet secretary for the rest of his life. Currently, that’s $205,700 a year. Among the other perks are health insurance and round-the-clock Secret Service protection until his death.

The costs of Secret Service protection are not made public, but Obama will also receive funds for an office, staff and related expenses, which George W. Bush took advantage of to the tune of $1.1 million in 2015.

Many presidents establish foundations and enjoy lucrative second careers as in-demand speakers and authors. Although there is no hard data on Obama’s previous speaking fees, past presidents such as George W. Bush have earned between $100,000 and $175,000 per engagement after they left the White House.

First off, money talks. According to CNN, former President Bill Clinton and his wife Hillary earned an average of $210,795 per speech in the 15 or so years since he left office. That totals approximately $153 million for 729 paid speaking engagements.

American University estimates that the Obamas could make as many as 50 speeches a year once he is out of office, earning “a conservative $200,000 apiece and you’re already close to $200 million before taxes,” the study found.

Mr. Obama has already proven to be an accomplished and popular author. Following the presidency, experts predict that he could earn about $30 million for his memoir, while Michelle Obama could garner an estimated $10 million for hers, according to the New York Times.

Either way, Obama will be the first president in nearly 100 years to remain in Washington, D.C., after leaving office. He and the family will remain in town so his youngest daughter, Sasha, can finish high school.

Their new Washington digs are located in the capitol’s posh Kalorama neighborhood, where first daughter Ivanka Trump also owns a home. The Obamas have leased an 8,200-square-foot, nine-bedroom mansion that was built in 1928. The spacious home last sold for $5.3 million in 2014 and is estimated to be worth $6.3 million today.

Barack Obama will leave office a very rich man. He and the first lady are likely to remain a visible Washington power couple after an even wealthier power broker takes his place in the Oval Office.

Source: msn.com

3 insurance moves to make immediately you are pregnant

2016-05-11T04:26:00.002+01:00

3 insurance moves to make immediately you are pregnant

There are few times in life more exciting -- and more nerve-wracking -- than the period before your child is born.

It's easy for subtle things, such as insurance, to get pushed aside during this hectic stretch. But when it comes to protecting your growing family in the event of an illness or calamity, having proper life, health and home insurance coverage is critical.

Here are three insurance moves you should make well before the big day arrives.

1. Buy life insurance -- or more of it

Life insurance should be at the top of your to-do list when your family is about to grow. As a woman, you may not think life insurance is a priority, but it should become one, especially when you have kids, says Jeanne Salvatore of the Insurance Information Institute.

A Pew Research Center analysis found that mothers are the sole or primary wage-earner in 40 percent of U.S. households. According to LIMRA, a life insurance and marketing research association, most U.S. households (70 percent) with children under 18 would have trouble meeting everyday living expenses within a few months if a primary wage earner were to die.

But you don't have to be the main breadwinner to need life insurance. Mothers contribute at least some income in 70 percent of married households with children under the age of 18 living at home, according to the Center for American Progress, and even a small loss of income can affect a family's finances.

Life insurance is also important for stay-at-home moms. If you're one of the 5 million women who have children and don't work outside of the home, your family would likely need to pay for childcare and for someone to do other household tasks if you were suddenly gone. Your life insurance policy would help cover those costs.

If you have a group life insurance policy through work, realize it may be limited and likely not sufficient to meet your dependents' needs. Parents normally need to supplement a group life policy with an individual life insurance policy.

Rechecking your needs is also a good idea if you already have an individual policy. The more children you have, the more money will be necessary to support them in your absence. If you're uncertain about your coverage, a life insurance calculator can help determine your needs.

If you're worried about costs, an individual life insurance policy may not be as expensive as you think. Life Happens, a non-profit organization dedicated to life insurance education, estimates a healthy 30-year-old woman (non-smoker) could get a $250,000, 20-year term life insurance policy for just 41 cents a day. There are simple ways you can save money each day to afford life insurance.

Barring any medical complications, you should be able to obtain a life insurance policy early in your pregnancy. If you wait until your third trimester, or if there are medical issues surrounding the pregnancy, you may have to wait until you child is born to obtain a policy.

A medical exam is required for term life insurance and most whole life insurance policies, so health concerns brought on by your pregnancy, such as increased weight or high cholesterol, could affect your rates. Some insurers waive charges associated with issues for which pregnancy is a contributing factor. If those charges aren't waived, find out if you can be rechecked after delivery and have your rates adjusted accordingly.

2. Realign your health insurance benefits

If you have health insurance, it likely covers your pregnancy and childbirth. Under the Affordable Care Act, maternity care and childbirth are among the 10 essential health benefits that all qualified health plans must cover. However, there are some exceptions.

One exception occurs if you have a "grandfathered" plan -- a policy that was in existence before March 23, 2010 and hasn't changed significantly since. Check with your insurance company to find out whether your plan is grandfathered and, if it is, whether it includes maternity care.

Another exception: if you're under age 26 and are covered under a parent's health insurance policy.

"Some large employers who are self-insured don't have to meet essential health requirements," says Karen Davenport, director of health policy for the National Women's Law Center in Washington, D.C. "They can exclude maternity coverage for dependents. It's always a good idea to double-check."

If you have health insurance that covers maternity care, check on the specifics. What's covered can vary from plan to plan. That's true whether you get insurance through your employer or buy it on your own.

Most plans cover the costs of delivery and aftercare, but you may need to pay part of the bill for your hospital stay. You may have lower copays if you choose a doctor and hospital that are part of your plan's network, so be sure to ask before seeking care.

Get a detailed list of your out-of-pocket expenses for the delivery and your hospital stay months ahead of your due date. Some hospitals require partial payment in advance. Plan ahead so you won't be stuck in the finance office when you should be in the delivery suite.

If you don't have health insurance, you can enroll only during an open enrollment period. If you're buying insurance on your own, open enrollment for 2017 runs from Nov. 1, 2016 to Jan. 31, 2017. If you want to get on your workplace health insurance plan, your employer can give you the dates of its open enrollment.

Pregnancy isn't considered a life-changing event that qualifies you for a special enrollment period, but the birth of the baby is. You will have 60 days from the birth to buy health insurance (for you and the baby) from a Marketplace, but only 30 days to be added to your employer or your partner's employer's job-based health plan.

If you already have insurance, this special enrollment period allows you to make changes to your existing plan, such as adding your child. This is an important step, and it doesn't happen automatically. If you wait past the special window that opens, you'll be out of luck until your next open enrollment period.

If you're still on a parent's policy when you deliver your bundle of joy, you won't be able to add your child to that policy. Your child is your dependent, not your parent's, meaning you will need to purchase a separate policy for your child within the special enrollment period.

"I highly recommend expectant parents to sit down with local experts who can help them find and understand the plan that is best for them," says Jessica Kendall, director of the Enrollment Assister Network for Families USA in Washington, D.C.

If you have a low income and qualify for Medicaid or the Children's Health Insurance Program (CHIP), you can sign up for these programs at any time, Kendall says. Most states have expanded their Medicaid coverage to pregnant women within certain income limits, but you should check whether yours does. If it does, determine the eligibility requirements since they can vary by state.

3. Reconsider your car and home insurance policies

A new addition to your family may require a new home or car -- or both.

If you're moving to a bigger home to accommodate the growing family, it's time to shop for homeowners insurance (or renters insurance, if you'll be renting). Your current insurer may not be the best one for your new residence. Shopping home insurance quotes can help ensure you're getting a fair price.

If instead of moving you're making major home improvements, like adding a bedroom or bathroom to your home, let your insurance company know and adjust your coverage accordingly. You don't want your new and improved home to be underinsured.

If your newborn child will inherit a family heirloom that has some significant value -- such as a great-great grandfather's gold pocket watch or a grandmother's diamond engagement ring -- talk to your agent about whether you need to schedule it separately on your home insurance policy, Salvatore advises.

All the paraphernalia that comes with a new baby -- cribs, dressers, changing tables, car seats, play pens and so on -- shouldn't affect your homeowner's policy. But you'll still want to inventory it and keep your personal belongings list up-to-date, so it's available should the unexpected happen and your home is damaged in a fire or storm or robbed, Salvatore says.

Having a baby won't get you a car insurance discount, but changing to a family vehicle might lower your rates. If you're going to trade that two-seater sports car for a family-friendly SUV or minivan, expect to pay less each month.

Still, some vehicles you're considering may have higher rates than others, so it's important to compare costs before you hit the showroom.

"We always recommend you look at the cost to insure something before you make the final purchase," Salvatore says. "With a new baby and new expenses, money can be tight. So you want the best deal you can get."

To compare rates between car models, you can use Insure.com's average insurance rates by model tool, which features rate data for more than 2,000 current-year vehicles.

Source: msn.com

10 Tips to Level the Field Between Retirement and Investment

2016-05-11T03:58:00.000+01:00

10 Tips to Level the Field Between Retirement and Investment

Can you balance your work schedule? Sure. Your checkbook? Might as well give it a shot. Now, how about your portfolio? Your 401k? Or for that matter, the rest of your life's financial priorities?

"The problem is that life gets in the way of retirement savings and investment," says Cary A. Guffey, a certified financial planner with PNC Investments in Birmingham, Alabama.

"Raising kids costs money – lots of it – and that's just for them to go to school and eat. You may need to take out a second mortgage just to pay for the extracurricular activities. I was complaining to a friend about the cost of my son's soccer when he educated me on the expense of dance for little girls, which made me feel better about cleats."

And as Guffey will tell you, investing in athletic shoes is one thing; buying stock in a company like Nike (NKE) another; and mastering the fancy footwork or retirement planning another still.

1. Before anything, retirement first.

Allocations within retirement accounts and the rest of a portfolio differ from person to person, couple to couple.
But as for priorities, "The only time one should reduce retirement investing is when the three basics of survival are at risk: food, shelter and water," says Lee Frush, a certified financial planner with Atlanta-based Cornerstone Financial Management. "Anything else isn't as important."

2. Healthcare next?

As Americans live longer, paying for health care in retirement has become an explosive issue.

Somewhere in the retirement picture, "Health savings accounts are a compelling long-term savings vehicle that offer greater tax advantages than even a 401k," says Steve Auerbach, CEO of Alegeus, a Massachusetts-based consumer-directed healthcare solutions provider.

"HSAs are triple tax advantaged, meaning they aren't taxed on contributions, earnings or withdrawals for qualified expenses."

3. Balance risks between accounts.

Getting aggressive on all fronts amounts to a perilous formula.

"The point is not to do one over the other – retirement versus other investments – but to understand the risks of each and balance them," says Josh Sailar, a financial advisor at Los Angeles-based Miracle Mile Advisors.

"An investor planning for retirement should only take the most amount of risk necessary in order to reach their goals. Actually, that's where other investments such as alternatives can really come into play. Alternative assets can help to mitigate the risks of a conventional retirement portfolio if used properly."

4. Diversify aggressiveness.

If any of your account isn't growing as planned, "First take a look at the underlying investments," says Timothy S. Koehl, director of financial planning at Bernhardt Wealth Management in McLean, Virginia.

"Before making a decision to concentrate an investment into just a few stocks, understand that this involves a tremendous amount of risk. A better approach to boost returns over time is to take on more risk in a diversified portfolio that has a better balance of risk versus return."

5. Don't get burned by the hot dot.

Think of it as the next big thing – and an even bigger temptation to try market timing.

"The hot dot can provide great returns for short periods of time or even years such as the tech rally in the late 1990s," says Ken Hoffman, managing director and partner with HSW Advisors in New York.

"But figuring out when that rally will come to an end is tough. And what's even tougher is hearing about all of the money your friends are making in the stock market – and you're not in those hot stocks. How do those people feel after watching Cisco (CSCO) hit 80 and then drop to 20?" (This happened between 2000 and 2001.)

6. Put your nest eggs in three baskets.

For anyone recently retired or retiring soon, "The objective is not to get rich quick: It's to keep from becoming poor," says Ken Moraif, CFP, host of "Money Matters with Ken Moraif" radio show and senior advisor at Money Matters in Dallas.

"One needs to look at short-term, medium and long-term goals. Allocating your money towards each of those goals is always a trade-off between what you want today and what you'll need in the future."

7. Don't be the 'buy high' guy.

Almost as bad as the hot dot is the hothead who makes snap decisions out of impatience. It's understandable, says Shankar Iyer, wealth management advisor and senior vice president of Verschuur/Iyer Group of Merrill Lynch in Chicago.

"Most stocks were negative or flat in 2014, while certain stocks roared ahead. The knee-jerk, emotional reaction is to buy what has just performed well. It's human nature to see a good thing of the moment as a sure thing for the future. We're simply wired that way. But I can't say this enough: The key to investment success boils down to discipline and time."

8. Save regardless.

While you could see high-flying stocks as an excuse to invest less in retirement, or save even less, be careful where you tread.

"The idea that anyone can reduce their savings by more aggressive investing might be analogous to paying your mortgage based on winning at poker," says Alan Vorchheimer, principal in the wealth practice at Xerox HR Services and based in New York.

"A very solid maxim I was taught is that you can save your way out of an investment problem but really can't invest your way out of a savings problem."

9. Consider above average as excellent.

Assuming you put your retirement plan on a smart, short-term autopilot, but manage your mutual funds yourself, pride can go before a portfolio fall.

"A big problem is that many people feel achieving market average returns is somehow un-American," says Robert Johnson, president and CEO of the American College of Financial services in Bryn Mawr, Pennsylvania.

He cites research from the market research firm DALBAR, which found that in 2014, the average equity mutual fund investor underperformed the Standard & Poor's 500 index by 4.66 percent annually over 20 years.

"In 2014 alone, the average equity mutual fund investor underperformed the S&P 500 by a whopping 8.19 percent."

10. Take time for timing.

What rings true for your portfolio and retirement assets today won't likely work tomorrow.

"The cost and timing of goals should drive asset allocation, so as retirement draws near, it's wise to rebalance your portfolio away from stocks and in favor of bonds," says Deiken Maloney, director of Goals Driven Investing at Northern Trust, headquartered in Chicago.

"Nearer term goals should have much less exposure to risk, as it's more important to have confidence in funding the goal than trying to squeeze out more return."

Sure, it's easy to get distracted. Guffey paints an all-too-common picture: "So now the kids are out of the house and you look at your retirement for the first time in years and realize you are impossibly behind. To take a line from 'The Hitchhiker's Guide to the Galaxy,' don't panic."

First, only cool heads can prevail. And as Guffey points out, "Panic leads you to doing something crazy, like putting all of your money in one stock."

Source: msn.com

The Greatest Investors: John (Jack) Bogle

2016-05-04T15:40:00.004+01:00

John (Jack) Bogle

Born:

Montclair, New Jersey, in 1929

Affiliations:

Wellington Management Company

Vanguard Group, Inc.

Vanguard Group\'s Bogle Financial Markets Research Center.

Most Famous For:

Bogle founded the Vanguard Group mutual fund company in 1974 and made it into one of the world\'s largest and most respected fund sponsors. Bogle pioneered the no-load mutual fund and championed low-cost index investing for millions of investors. He created and introduced the first index fund, Vanguard 500, in 1976. In 1999, Fortune Magazine named Bogle one of the four "investment giants" of the twentieth century. (For related reading, see Index Investing and The Lowdown On Index Funds.)

Personal Profile

Jack Bogle graduated magna cum laude with a degree in economics from Princeton University in 1951. He studied mutual funds in depth during his university days, which culminated in his senior-year economics thesis and laid the conceptual groundwork for the index mutual fund.

He learned the investment management business by working for financial advisor Wellington Management from 1951 to 1974 and founded Vanguard in the latter year, becoming its CEO and chairman before retiring in 1999 from an active role in the company. As president of Vanguard's Bogle Financial Markets Research Center, he continues to write and lecture on investment issues and is widely recognized as "the conscience" of the mutual fund industry. (For more insight, see Mutual Fund Basics and Picking The Right Mutual Fund.)

In "The Vanguard Experiment: John Bogle's Quest to Transform the Mutual Fund Industry" (1996), biographer Robert Slater describes Bogle's life as "evolutionary, iconoclastic and uncompromisingly committed to his founding principles of putting the interests of the investor first and constructively criticizing the fund industry for practices that run counter to low-cost, client-oriented mutual fund investing."

Investment Style

In simple terms, Jack Bogle's investing philosophy advocates capturing market returns by investing in broad-based index mutual funds that are characterized as no-load, low-cost, low-turnover and passively managed. He has consistently recommended that individual investors focus on the following themes:

The primacy of investing simplicity

Minimizing investment-related costs and expenses

The productive economics of a long-term investment horizon
A reliance on rational analysis and an avoidance of emotions in the investment decision-making process

The universality of index investing as an appropriate strategy for individual investors Super stock trader Jim Cramer (TheStreet.com and CNBC's "Mad Money") pays Bogle's investment style the ultimate compliment by going on record as saying that "After a lifetime of picking stocks, I have to admit that Bogle's arguments in favor of the index fund have me thinking of joining him rather than trying to beat him." (To read more about Jim Cramer, see Mad Money … Mad Market?)

Publications

"Bogle On Mutual Funds" by John C. Bogle (1994)
"Common Sense On Mutual Funds: New Imperatives For The Intelligent Investor" by John C. Bogle (1999)

"John Bogle On Investing: The First 50 Years" by John C. Bogle (2000)
"The Little Book Of Common Sense Investing: The Only Way To Guarantee Your Fair Share Of Stock Market Returns" by John C. Bogle (2007)
"The Vanguard Experiment: John Bogle's Quest To Transform The Mutual Fund Industry" by Robert Slater (1996)

Bogle Quotes:

"Time is your friend; impulse is your enemy."

"If you have trouble imaging a 20% loss in the stock market, you shouldn't be in stocks."
"When reward is at its pinnacle, risk is near at hand."

The Greatest Investors: Warren Buffett

2016-05-04T14:39:00.002+01:00

Warren Buffet

Born:

Omaha, Nebraska, in 1930

Affiliations:

Buffett-Falk & Company
Graham-Newman Corporation
Buffett Partnership, Ltd.
Berkshire Hathaway, Inc.

Most Famous For:

Referred to as the "Sage" or "Oracle" of Omaha, Warren Buffett is widely viewed as one of the most successful investors in history.

Following the principles set out by Benjamin Graham, he has amassed a personal multibillion dollar fortune mainly through investing in stocks and buying companies through Berkshire Hathaway. Shareholders in Berkshire Hathaway who invested $10,000 in the company in 1965 are above the $50 million mark today. Now in his 70s, Buffett has yet to write a single book, but among investment professionals and the investing public, there is no more respected voice. (To learn more, read Warren Buffett: How He Does It and What Is Warren Buffett\'s Investing Style?)

In 2006, Buffett announced that he would pledge much of his reported $44 billion in stock holdings to the Bill and Melinda Gates Foundation ($31 billion) and four other charities ($6 billion) started by members of his family. (For more insight, see The Christmas Saints Of Wall Street.)

Personal Profile

Warren Buffett graduated from the University of Nebraska in 1950 with a Bachelor of Science degree. After reading "The Intelligent Investor" by Benjamin Graham, he wanted to study under Graham, and did so at Columbia University, obtaining his Master of Science degree in business in 1951.

He then returned to Omaha and formed the investment firm of Buffett-Falk & Company, and worked as an investment salesman from 1951 to 1954. During this time, Buffett developed a close relationship with Graham, who was generous with his time and thoughts. This interaction between the former professor and student eventually landed Buffett a job with Graham's New York firm, Graham-Newman Corporation, where he worked as a security analyst from 1954 to 1956. These two years of working side-by-side with Graham and analyzing hundreds of companies were instructive years that formed the foundation for Buffett's approach to successful stock investing.

Wanting to work independently, Buffett returned home once again to Omaha and started a family investment partnership at age 25 with a starting capital base of $100,000. From 1956 to 1969, when the Buffett partnership was dissolved, investors, including Buffett, experienced a thirty-fold gain in their value per share. Prior to the final decision to liquidate the partnership, Buffett had acquired the unprofitable Berkshire Hathaway textile company in New Bedford, Massachusetts, in 1965. After acquiring Berkshire, Buffett effected a successful turnaround of the company, which focused on changing the company's financial framework. Berkshire kept its textile business, even in the face of mounting pressures, but also used the company as a holding company for other investments.

It was in the 1973-74 market collapse that Berkshire got the opportunity to purchase other companies at bargain prices. Buffett went on a buying spree, which included an investment in The Washington Post. The rest is history and today, Berkshire Hathaway is a massive holdings company for a variety of businesses with assets and sales totaling, approximately, $240 billion and $100 billion, respectively, for year-end 2006.

Investment Style

Warren Buffett's investing style of discipline, patience and value has consistently outperformed the market for decades.

John Train, author of "The Money Masters"(1980), provides us with a succinct description of Buffett's investment approach: "The essence of Warren's thinking is that the business world is divided into a tiny number of wonderful businesses – well worth investing in at a price – and a large number of bad or mediocre businesses that are not attractive as long-term investments. Most of the time, most businesses are not worth what they are selling for, but on rare occasions the wonderful businesses are almost given away. When that happens, buy boldly, paying no attention to current gloomy economic and stock market forecasts."

Buffett's criteria for "wonderful businesses" include, among others, the following:

They have a good return on capital without a lot of debt.
They are understandable.
They see their profits in cash flow.
They have strong franchises and, therefore, freedom to price.
They don't take a genius to run.
Their earnings are predictable.
The management is owner-oriented.

Publications Buffett has not, as yet, authored any books. However, his annual letters to the shareholders in Berkshire Hathaway's annual report are a suitable substitute. Back copies of these 20-page masterpieces of investing wisdom are available from 1977 through 2006 (updated annually) from Berkshire's Website.

"Buffett: The Making of an American Capitalist" by Roger Lowenstein (1996).
"Warren Buffett Speaks: Wit And Wisdom From The World's Greatest Investor" (1997)
"The Warren Buffett Way" by Robert G. Hagstrom (2005)

Quotes

"Rule No.1 is never lose money. Rule No.2 is never forget rule number one."
"Shares are not mere pieces of paper. They represent part ownership of a business. So, when contemplating an investment, think like a prospective owner."
"All there is to investing is picking good stocks at good times and staying with them as long as they remain good companies."
"Look at market fluctuations as your friend rather than your enemy. Profit from folly rather than participate in it."
"If, when making a stock investment, you're not considering holding it at least ten years, don't waste more than ten minutes considering it."

Strive Masiyiwa Writes__Protect the root of your business.

2016-02-05T17:46:00.000+00:00

Protect the root of your business

So I was on Facebook scrolling and reading some news feeds aside checking some pages to like and I came across this nice peace on the the official page of Strive Masiyiwa, the Executive Chairman & Founder of the Econet Group. I was so overwhelmed by his post, so I decided to share it on this blog. And he writes:

A young man and his father were watching a huge fire coming down from the hills towards their family vineyard. At first, the young man tried to organize buckets of water but it was clear that the fire would engulf everything and consume the vineyard. Then to his surprise he saw the old man pick up an axe and run towards the vines. Systematically he began to cut the vines, leaving only the roots.

"We must protect the root, my son. Do as I show you."

And with this they saved a business that was several generations old.

Every business has a root, and you must know that root. You must be able to protect that root, when things are tough. Sometimes protecting that root looks cruel, but you must protect it at all costs. Sometimes it can come down to reducing activity to the bare minimum, with just a handful of staff. Your most valuable resource will always be good people.

There's no successful entrepreneur who does not know what I'm talking about. It may well be one of the most difficult things you'll ever do.

# Stay very clear about who you are and what business you're in.

# Don’t underestimate the crisis.

# Make sure you’re looking at credible data.

# Manage with grace under pressure.

# Review and revise your game plan as needed, acknowledging which plans aren’t working.

# Decide what you need to do in order to get where you want to go.

# Tackle the problems systematically. Don’t throw kerosene onto a fire.

# Don’t get distracted; make the tough decisions that you need to, without delay. One bucket of water won’t save a hectare of crisis.

# Seek and value professional advice.

# Don’t be afraid to try something new. Crisis is often how great innovation begins. (When the going gets tough, don’t give up on new growth!)

# Lead with courage and vision, even if your heart is sad.

Don’t panic. Pray and plan.

Source: Strive Masiyiwa

Petra Trust MD urges workers to invest in 3rd tier pension schemes

2016-02-05T13:24:00.002+00:00

Kofi Fynn - Managing Director of Pensions Service Provider, Petra Trust

Endeavour to invest in the 3rd tier voluntary pension schemes if you want to enjoy the special incentives in the 3-tier Pension scheme, that is the advice to workers in both the formal and informal sectors by Kofi Fynn – the Managing Director of Pensions Service Provider, Petra Trust.

The 1st and 2nd tier schemes are patronised more because they are mandatory. But Mr. Fynn says workers need to add the 3rd tier to benefit from the pre-tax savings provision in the Pensions Law. He explained this to JOY BUSINESS at the launch of his company’s investment product called ‘Savings Booster’.

Most Ghanaians know about the tier 1, which is managed by SSNIT and tier 2 which is a contributory pension just as the tier 3.

However, the tier 3 products which are long-term savings products created under the Pension Act of 2008 (Act 766) is not known by many even though it has enormous benefits.

The most significant advantage of tier 3 he said is that it is tax-beneficial as well, just as Tier 1 and 2 but allows an individual to make contributions into a personal pension scheme without taxes being accessed on that contribution.

“In effect what the government is saying is that if you’re willing to even try to save for the long term we are not going to take taxes from you on that amount. Those taxes can be added to the savings thereby, boosting your returns hence, the name of our product which is ‘Savings Booster,’” he stressed.

He explained that when one makes a savings booster contribution and is from a payroll there are no taxes to it and so the money one would have paid as tax would then be added to that savings hence, putting the contributor ahead even before the investment begun. “If you made any other kind of investments what you are going to have to take is money that have already been taxed so for example if you are in the 20 percent tax bracket, and you wanted to invest a 100 Cedis, only 80 Cedis of that will be available for investment because the government takes 20 Cedis as tax, with Savings Booster all 100 can be invested so that even before you begin, you are ahead of other kinds of investment products” emphasized.

The 3rd tier voluntary pension scheme Mr. Fynn indicated is most secure given that it is regulated by the National Pensions Regulatory Authority and therefore, ensures a very high level of quality in the investments made, and a very high level of discipline that brings about safety to ensure that it is a good product for clients.

So we are talking here about high returns in the product itself, a boost that is coming from the additional tax savings, and proper regulation by the NPRA.

The instruments that we invest in are similar to what other investment vehicles would invest in, except that we are regulated by NPRA hence the quality levels of our investments is very high.

Source: My Joyonline

The Guy who bought Google.com from under Google's Nose - Google Paid $12,000.00 To Get It Back

2016-01-31T04:30:00.002+00:00

Sanmay Ved.

Google.com, one of the most valuable domains on the Internet, was mistakenly sold for $12 last fall.

Google paid $12,000 to get it back. The buyer was a former Googler, Sanmay Ved, who discovered Google.com on the list of domains available for sale on September 29. He bought it, charging the $12 fee to his Discover card, never really expecting the transaction to go through.

"I was hoping I would get an error at sometime saying transaction did not go through, but I was able to complete purchase, and my credit card was actually charged!" he wrote in a post on LinkedIn last fall.

He told CNNMoney he made the purchase simply out of curiosity. "I thought at some point in time it would block me out, but I wanted to see how far it would go," he said.

Google offered to pay $6,006.13 to Sanmay Ved, who bought the Google.com domain for $12. It ended up paying twice that amount to a charity he picked.

The transaction did go through - for about a minute. He said during that brief time he got a flood of information from Google users, though he was not able actually change the Google home page. Then he got an e-mail from Google canceling the transaction.

Ved worked for 5-1/2 years at Google, according to his LinkedIn page, and likes the company enough to have its logo as his profile picture on Facebook. He is now an MBA student at Babson College in suburban Boston.

Google (GOOGL, Tech30) admits Ved owned the domain, albeit very temporarily. The company said that it offered him $6006.13, which is a numerical version of the word Google. "Squint a little and you'll see it," the company said in blog post about the incident.

When Google learned that Ved didn't intend to keep the money but instead donate it to charity, the company doubled the reward. Ved, who is from India, directed that the money be given to the Art of Living India Foundation. The group runs free schools in parts of that country where poverty and child labor are widespread.

Google regularly pays people who discover security problems with its systems and notifies the company. It said the largest single award it paid last year was $37,500 to an Android security researcher. (We assume that's a human, not a humanoid robot who performs security research. But given how strange and quirky this entire story is, who knows).

Source: CNNMoney

4 Streams of Income to Look Out For When Purchasing a Real Property

2016-01-27T02:25:00.002+00:00

Streams of Income In Real Property

When you buy a piece of real estate, you should be concerned about the price at the time of purchase because price determines returns. There is an intrinsic value of a well-financed real estate investment, purchased at the right price and well-managed. As a real estate investor, this is what you are to invest for. You invest for increased value and cash flows. What you should be looking for when you purchase a property are the following four streams of income (or cash flow):

1. Income (cash flow)

This is hopefully called positive cash flow after all expenses are paid, including my mortgage payment and taxes.

2. Depreciation (phantom cash flow)

Depreciation appears as an expense when it really is income that comes from a tax break. This confuses many people who are new to investing in real estate. It is cash flow or income you do not see.

3. Amortization

This is income to you because your tenant is paying down your loan. When you pay the mortgage on your personal residence, this is not income to you but an expense. When your tenant pays your loan down, it is cash flow.

4. Appreciation

This is really inflation that appears as appreciation. If your rental income goes up, you as an investor can refinance and borrow your appreciation out as tax-free cash and have your tenant pay for the amortization of the new loan amount. In other words, it could be tax-free cash flow.

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10 Importance of Investing In Real Estate

2016-01-27T02:16:00.000+00:00

Importance of Investing In Real Estate

Real estate offers many great advantages. If a piece of real estate is purchased at the right price, is financed well, is in a good area and is well managed - then some of the advantages of real estate are the following:

1. Control

One major advantage of real estate investment is that it offers a great deal control. Many people feel investing is risky because they do not have control over the asset in which they invest. There is very little control over savings, stocks, bonds and mutual funds.

People worry about job security because they lack control over their job. Few employees have any control over the ownership of the company, how much they earn, how much they are taxed or the future of their job.

2. Cash flow

Checks come in every month.

3. Leverage

Bankers will line up to lend you money for investing in property. Ask your banker if he or she will lend you money to buy mutual funds.

4. Amortization

This is simply the gradual reduction of an amount over time. Tenants pay off the debt owed on your house over a time period without you working hard to pay off the debt.

5. Depreciation

The government offers tax breaks for real estate because it goes down in value. Real estate can go down in value, but it tends not to. In reality, the reason why governments offer depreciation incentives is because real estate investors provide housing.

Related: 4 Streams of Income to Look Out For When Purchasing a Real Property

6. Creativity

The value of the property improves through creativity. For example, if I buy a piece of raw land, I can change the zoning. Or I can buy an old house and fix it up. Or I can convert an apartment house to condominiums.

7. Expandability

Once you learn how to buy single-family homes, you can expand it into multiple units.

8. Predictability

It takes about a year after purchase to stabilize an apartment complex. After a year, the management is able to get rid of bad tenants, make the cosmetic repairs that good tenants want, and you can sometimes, slowly, raise the rents. Once a building is stabilized, the checks come in every month like clockwork. This certainly beats watching the ups and downs of the stock market -- feeling good when prices go up and feeling bad when prices come down. The key to good real estate is great management.

The reason many stock, bond and mutual fund investors do not do well in real estate is because they are either poor managers or do not want to be managers. Since management of real estate is the key to success, some of the best investment opportunities are buying properties that are owned by poor managers.

9. Tax-deferred Money

One of the great advantages of real estate is tax-deferred money. There are many ways a real estate investor can avoid paying taxes ever - legally. One way is known as the 1031 tax-deferred exchange. This tax-deferred treatment is not available for people who invest in stocks, bonds and mutual funds. You'd be surprised how fast you can get rich if you don't have to pay taxes.

10. Appreciation

Because the currency is going down in value, real estate tends to increase in value. Also, as our population increases, demand increases, which also drives up prices. Most investors invest for appreciation (capital gains).

In the stock market, most people invest low hoping to sell high. This is investing for capital gains. In real estate, these investors are known as flippers. Flippers also buy low and hope to sell high. The problem with a capital gains strategy is that the strategy generally only works in an up-trending market. If the market trends down also known as a bear market, many paper-asset investors and flippers are toast.

Investing for cash flow is better than investing for capital gains in real estate because the tax laws favor the cash-flow investor.

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Investment Banking Career Paths

2016-01-26T18:59:00.002+00:00

Investment Banking Career Paths

The career of an investment banker progresses along a fairly standard path. Investment banking positions from junior to senior:

Analyst (grunt)

Associate (glorified grunt)

Vice President (account manager)

Director (senior account manager, rainmaker in training)

Managing Director (rainmaker)

Some banks call certain investment banker positions different names or have added levels of hierarchy. For example, sometimes banks separate Senior Vice President from Vice President. Other times, Director is split up into Director and Executive Director (more senior). However, regardless of the names, the general job functions of each relative position tend to be consistent bank to bank.

If you are an undergraduate, you are applying to banks with the aim of landing an investment banking analyst position. Assuming you do well, have an interest in staying, and there is a need, some banks offer direct promotions from analyst to associate instead of requiring that you go back and get your MBA (typically called “A to A”). If you are an MBA student, you are applying to banks with the aim of landing an investment banking associate position and aspire to work up the ranks to Managing Director one day.

The Investment Banking Analyst

Investment banking analysts are typically men and women directly out of undergraduate institutions who join an investment bank for a two-year program.

After two years of working for the investment bank, top performing analysts are often offered the chance to stay for a third year, and the most successful analysts can be promoted after three years to investment banking associate. Analysts are the lowest in the hierarchy chain and therefore do the majority of the work. The work includes three primary tasks: presentations, analysis, and administrative.

Investment banking analysts spend a lot of time putting together PowerPoint presentations called pitch books. These pitch books get printed in color and are bound with professional looking covers (usually in-house at the bulge brackets) for meetings with clients and prospective clients. The process is very formatting intensive, attention to detail is critical, and many analysts find this part of the job to be the most mundane and frustrating.

The second task of an analyst is analytical work. Pretty much anything done in Excel is considered “analytical work.” Examples include entering historic company data from public documents, financial statement modeling, valuation, credit analysis, etc. Interview questions often focus on this part of the job.

The third main task is administrative work. Such a task involves scheduling, setting up conference calls and meetings, making travel arrangements and keeping an up-to-date working group list of deal team members. Lastly, if you are the sole analyst on the deal and it is sell-side (you’re advising a client on selling its business), you may have control of the virtual data room and will need to keep it organized so all parties have access to the information. It is an interesting experience in that there are several data room providers and many times they will try to win business by offering free sports tickets, etc. It gives you a chance to feel how your clients feel as you try to win their business.

The Investment Banking Associate

Investment banking associates are usually recruited directly out of MBA programs or analysts that have been promoted. Typically, bankers will be at the associate level for three and a half years before they are promoted to Vice President. Associates are also categorized into class years (i.e. First Year, Second Year and Third Year or say, Class of ‘05, ‘06 and ‘07). The number of years it takes for Associates to get promoted actually depends on the bank. Sometimes it could be more than three and a half years if there is not a need for another Vice President.

At that point, an associate should evaluate whether it makes sense to stay at the bank or try to move elsewhere to receive a promotion.

The investment banking associate’s role is similar to the analyst’s role, with the additional responsibility of serving as a liaison between junior and senior bankers, and in some instances, to work directly with clients.

How Analysts and Associates Work Together

Analysts and associates work very closely together. Associates check the work of analysts and assign them tasks. Checks could be in-depth where the Associate literally looks through models and checks inputs with filings or it could be much more high level where the Associate looks at an output and determines whether the numbers make sense.

The Senior Bankers (VPs and MDs)

Senior bankers primarily source deals and maintain relationships. Senior bankers have a wide variety of past backgrounds ranging from investment banking to corporate executive management.

Aside from relationships, senior bankers often understand their industry landscape at a very detailed level and can anticipate deals in the sector. As economic environments shift, they anticipate when companies will need to raise capital or when strategic discussions (M&A, LBO) are necessary. By anticipating such needs, Managing Directors can start crafting appropriate pitches early-on to clients with the aim of turning these pitches into live deals.

Source: Wall Street Prep

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4 Amazing Types Of Jobs In Investing

2016-01-26T18:03:00.000+00:00

Types Of Jobs In Investing

A degree in accounting or finance and various credentials can lead to a number of lucrative jobs in the investment field. Many certified financial planners work for themselves, while others with a financial background choose larger corporations that offer numerous opportunities.

You need to have a solid math background and a thorough knowledge of the stock market, bonds, real estate and other personal and business investment vehicles to thrive in the industry.

Financial Manager

If you’re willing to work long hours and develop a clientele of your own, you can work for yourself as a personal financial manager. In the position, you’ll work with individuals to advise them of the best investments and then manage their portfolios. In addition to a financial degree, you should earn a certified financial planner designation to increase your credibility. To take the CFP certification exam, you’ll need a few years’ experience, which you can gain working at a bank, investment brokerage or insurance company.

Broker

To break into the securities industry, you need to have at least a bachelor’s degree with a heavy emphasis on finance, business, economics and accounting. To advance in the field, you should consider pursuing a master's in business administration, even though a good portion of your education comes from working on the job. You’ll need to obtain a license from the Financial Industry Regulatory Authority of your country as well. As an investment broker, you’ll work with individuals and businesses to conduct stock trades and advise them of financial opportunities.

Actuary

An actuary works for insurance companies to analyze data to help businesses determine the risk of certain events and how they affect financial outcomes. Actuaries also are employed by large corporations to help determine appropriate risk levels for various investments. You’ll need a four-year degree with an emphasis in statistics, math and financial theory. You’ll also need certifications from either the Casual Actuarial Society or the Society of Actuaries. Both certifications increase your chances for advancement.

Banker

Investment bankers typically work for banks, managing company bond issuances and developing strategies for mergers and acquisitions. While you may start out as an analyst with a bachelor’s degree, you’ll need to earn an MBA to rise to the level of investment banker. You can expect to work long hours, up to 70 hours a week, doing work that includes regular travel to investigate investments and meet with clients.

15 Customer Service Skills that Every Employee Needs

2016-01-26T00:08:00.000+00:00

There are certain customer service skills that every employee must master if they are forward-facing with customers.

Without them, you run the risk of finding your business in an embarrassing customer service train-wreck, or you'll simply lose customers as your service continues to let people down.

Luckily, there are a few universal skills that every support member can master that will drastically improve their interactions with customers.

Below are 15 most-needed skills to master this incredibly important position.

The Customer Service Skills that Matter

When most business publications talk about customer service skills, things like "being a people person" tend to take the spotlight.

It's not that this trait is outright wrong, but it's so vague and generic that it is hardly a help to those looking to get involved in support positions within a company, and certainly doesn't help out entrepreneurs/founders who are looking for the right set of skills when hiring the all-important folks who will be taking care of their customers.

With that said, let's get into some specific skills that every support employee can master to "WOW" the customers that they interact with on a daily basis...

1. Patience

If you don't see this near the top of a customer service skills list, you should just stop reading.

Not only is patience important to customers, who often reach out to support when they are confused and frustrated, but it's also important to the business at large: we've shown you before that great service beats fast service every single time.

Yet patience shouldn't be used as an excuse for slothful service either!

Derek Sivers explained his view on "slower" service as being an interaction where the time spent with the customer was used to better understand their problems and needs from the company.

If you deal with customers on a daily basis, be sure to stay patient when they come to you stumped and frustrated, but also be sure to take the time to truly figure out what they want — they'd rather get competent service than be rushed out the door!

2. Attentiveness

The ability to really listen to customers is so crucial for providing great service for a number of reasons.

Not only is it important to pay attention to individual customer interactions (watching the language/terms that they use to describe their problems), but it's also important to be mindful and attentive to the feedback that you receive at large.

For instance, customers may not be saying it outright, but perhaps there is a pervasive feeling that your software's dashboard isn't laid out correctly. Customers aren't likely to say, "Please improve your UX!", but they may say things like, "I can never find the search feature," or, "Where is the _____ function at again?"

What are your customers telling you without saying it?

3. Clear Communication Skills

Make sure you're getting to the problem at hand quickly; customers don't need your life story or to hear about how your day is going.

More importantly, you need to be cautious about how some of your communication habits translate to customers, and it's best to err on the side of caution whenever you find yourself questioning a situation.

When it comes to important points that you need to relay clearly to customers, keep it simple and leave nothing to doubt.

4. Knowledge of the Product

The best forward-facing employees in your company will work on having a deep knowledge of how your product works.

It's not that every single team member should be able to build your product from scratch, but rather they should know the ins and outs of how your product works, just like a customer who uses it everyday would.

Without knowing your product from front-to-back, you won't know how to help customers when they run into problems.

5. Ability to Use "Positive Language"

Sounds like fluffy nonsense, but your ability to make minor changes in your conversational patterns can truly go a long way in creating happy customers.

Language is a very important part of persuasion, and people (especially customers) create perceptions about you and your company based off of the language that you use.

Here's an example: Let's say a customer contacts you with an interest in a particular product, but that product happens to be backordered until next month.

Small changes that utilize "positive language" can greatly affect how the customer hears your response...

Without positive language: "I can't get you that product until next month; it is back-ordered and unavailable at this time."

With positive language: "That product will be available next month. I can place the order for you right now and make sure that it is sent to you as soon as it reaches our warehouse."

The first example isn't negative by any means, but the tone that it conveys feels abrupt and impersonal, and can be taken the wrong way by customers.

Conversely, the second example is stating the same thing (the item is unavailable), but instead focuses on when/how the customer will get to their resolution rather than focusing on the negative.

6. Acting Skills

Sometimes you're going to come across people that you'll never be able to make happy.

Situations outside of your control (they had a terrible day, or they are just a natural-born complainer) will sometimes creep into your usual support routine, and you'll be greeted with those "barnacle" customers that seem to want nothing else but to pull you down.

Every great customer service representative will have those basic acting skills necessary to maintain their usual cheery persona in spite of dealing with people who may be just plain grumpy.

7. Time Management Skills

Hey, despite my many research-backed rants on why you should spend more time with customers, the bottom line is that there is a limit, and you need to be concerned with getting customers what they want in an efficient manner.

The trick here is that this should also be applied when realizing when you simply cannot help a customer. If you don't know the solution to a problem, the best kind of support member will get a customer over to someone who does.

Don't waste time trying to go above and beyond for a customer in an area where you will just end up wasting both of your time!

8. Ability to "Read" Customers

You won't always be able to see customers face-to-face, and in many instances (nowadays) you won't even hear a customer's voice!

That doesn't exempt you from understanding some basic principles of behavioral psychology and being able to "read" the customer's current emotional state.

This is an important part of the personalization process as well, because it takes knowing your customers to create a personal experience for them.

More importantly though, this skill is essential because you don't want to miss-read a customer and end up losing them due to confusion and miscommunication.

Look and listen for subtle clues about their current mood, patience level, personality, etc., and you'll go far in keeping your customer interactions positive.

9. A Calming Presence

There's a lot of metaphors for this type of personality: "keeps their cool," "staying cool under pressure," etc., but it all represents the same thing: the ability that some people have to stay calm and even influence others when things get a little hectic.

The best customer service representatives know that they cannot let a heated customer force them to lose their cool; in fact it is their job to try to be the "rock" for a customer who thinks the world is falling down due to their current problem.

10. Goal Oriented Focus
This may seem like a strange thing to list as a customer service skill, but I assure you that it is vitally important.

Many customer service experts have shown how giving employees unfettered power to "WOW" customers doesn't always generated the returns that many businesses expect to see.

That's because it leaves employees without goals, and business goals plus customer happiness can work hand-in-hand without resulting in poor service.

Relying on frameworks like the Net Promoter Score can help businesses come up with guidelines for their employees that allow plenty of freedom to handle customers on a case-to-case basis, but also leave them priority solutions and "go-to" fixes for common problems.

11. Ability to Handle Surprises

Sometimes the customer support world is going to throw you a curveball.

Maybe the problem you encounter isn't specifically covered in the company's guidelines, or maybe the customer isn't reacting how you thought they would.

Whatever the case, it's best to be able to think on your feet... but it's even better to create guidelines for yourself in these sorts of situations.

Let's say, for instance, you want to come up with a quick system for when you come across a customer who has a product problem you've never seen before...

Who? One thing you can decide right off the bat is who you should consider your "go-to" person when you don't know what to do. The CEO might be able to help you, but you can't go to them with every single question! Define a logical chain for yourself to use, then you won't be left wondering who you should forward the problem too.

What? When the problem is noticeably out of your league, what are you going to send to the people above? The full conversation, just the important parts, or maybe some highlights and an example of a similar ticket?

How? When it comes time to get someone else involved, how are you going to contact them? Some people prefer to solve small dilemmas over chat, and save bigger problems for email, keeping inbox clutter down to a minimum.

12. Persuasion Skills

This is one thing a lot of people didn't see coming!

Experienced customer support personnel know that oftentimes, you will get messages in your inbox that are more about the curiosity of your company's product, rather than having problems with it.

To truly take your customer service skills to the next level, you need to have some mastery of persuasion so that you can convince interested customers that your product is right for them (if it truly is).

It's not about making a sales pitch in each email, but it is about not letting potential customers slip away because you couldn't create a compelling message that your company's product is worth purchasing!

13. Tenacity

Call it what you want, but a great work ethic and a willingness to do what needs to be done (and not take shortcuts) is a key skill when providing the kind of service that people talk about.

The many memorable customer service stories out there (many of which had a huge impact on the business) were created by a single employee who refused to just do the "status quo" when it came to helping someone out.

Remembering that your customers are people too, and knowing that putting in the extra effort will come back to you ten-fold should be your driving motivation to never "cheat" your customers with lazy service.

14. Closing Ability

To be clear, this has nothing to do with "closing sales" or other related terms.

Being able to close with a customer means being able to end the conversation with confirmed satisfaction (or as close to it as you can achieve) and with the customer feeling that everything has been taken care of (or will be).

Getting booted after a customer service call or before all of their problems have been addressed is the last thing that customers want, so be sure to take the time to confirm with customers that each and every issue they had on deck has been entirely resolved.

Your willingness to do this shows the customer 3 very important things:

i. That you care about getting it right

ii. That you're willing to keep going until you get it right

iii. That the customer is the one who determines what "right" is. When you get a customer to, "Yes, I'm all set!" is when you know the conversation is over.

15. Willingness to Learn
If you came across this article and read all the way to the bottom, you likely already have this skill (nice!).

This is probably the most "general" skill on the list, but it's still necessary.

Those who don't seek to improve what they do, whether it's building products, marketing businesses, or helping customers, will get left behind by the people willing to invest in their skills.

Source: HelpScout

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7 Steps To Getting Your Financial Headway

2016-01-24T15:42:00.003+00:00

Steps To Getting Your Financial Headway

1. Minding your own business

Have you been working hard and making everyone else rich? Starting early in life, most people are programmed to mind other people’s businesses and make other people rich. It begins innocently enough with words of advice like these: “Go to school and get good grades so you can find a safe, secure job with good pay and excellent benefits”, “Work hard so you can buy the home of your dreams. After all, your home is an asset and your most important investment”, “Having a large mortgage is good because the government gives you a tax deduction for your interest payments”, “Buy now, pay later,” or “Low down payment, easy monthly payments,” or “Come in and save money.”

People who blindly follow these words of advice often become:

i. Employees, making their bosses and owners rich

ii. Debtors, making banks and money lenders rich

iii. Taxpayers, making the government rich

iv. Consumers, making many other businesses rich

Instead of finding their own financial Fast Track, they help everyone else find theirs. Instead of minding their own business, they work all their lives minding everyone else’s. We are programmed to mind everyone else’s business, and ignore our own.

For many people, their financial statements are not a pretty picture, simply because they’ve been misled into minding everyone else’s business instead of minding their own business. Follow these action steps to change all that:

Fill out your own personal financial statement: In order to get where you want to go, you need to know where you are. This is your first step to take control of your life and spend more time minding your own business.

Set financial goals: Set a long-term financial goal for where you want to be in five years, and a smaller, short-term financial goal for where you want to be in one year. Set goals that are realistic and attainable.

2. Taking control of your cash flow

Many people believe that simply making more money will solve their money problems. But, in most cases, it only causes bigger ones.

The primary reason most people have money problems is that they were never schooled in the science of cash-flow management. They were taught how to read, write, drive cars, and swim, but not how to manage their cash flow. Without this training, they wind up having money problems and then work harder with the belief that more money will solve the problem.

More money will not solve the problem if cash-flow management is the problem. In fact, more money makes most people poorer because they often increase their spending and get deeper into debt every time they get a pay raise.

The majority of people do not prepare personal financial statements. At most, they try to balance their checkbooks each month. Remember that, for every liability you have, you are somebody else’s asset. Every time you owe someone money, you become an employee of their money. For most every liability, there must be an asset, but they don’t appear on the same set of financial statements. For every expense, there must also be income, and again, they do not appear on the same set of financial statements.

You need to sit down and map out a plan to get control of your spending and minimize your debt and liabilities. Live within your means, before you start to expand your means. To get a head start, follow these;

i. Review your financial statements

ii. Determine which source you receive your income from today

iii. Determine which source you want to receive the bulk of your income from in five years.

iv. Begin your Cash-Flow Management Plan by paying yourself first, and focusing on reducing your personal consumer debt.

Don’t forget that, People who cannot control their cash flow work for those who can.

Check This Also: 6 Reasons Why You Need A Bank Savings Account

3. Knowing the difference between Risk and Risky

Business and investing are not risky, but being under-educated is. Proper cash-flow management begins with really knowing the difference between an asset and a liability.

People often say, “Investing is risky.” For these people, it is risky, but not because investing is risky. It is their lack of knowledge and formal financial training that makes investing risky.

Financial literacy is not simply looking at the numbers with your eyes, but also training your mind to tell you which way the cash is flowing. The direction of cash flow is everything. So a house could be an asset or a liability depending on the direction of the cash flow. If the cash flows into your pocket, it is an asset. If it flows out of your pocket, it is a liability.

Those who are financially intelligent are those with the ability to convert cash or labor into assets that provide cash flow. Spending your life working hard for money only to have it go out as fast as it comes in is not a sign of high intelligence.

Remember that a rich person focuses his or her efforts on acquiring assets, not working harder. Due to their lack of financial intelligence, many educated people put themselves into positions of high financial. This often called “the financial red line,” meaning income and expenses are nearly the same every month. These are the people who cling desperately to job security, are unable to change when the economy changes, and often destroy their health with stress and worry. And these are often the same people who say, “Business and investing are risky.”

Being misinformed is risky, and relying on a safe, secure job is the highest risk anyone can take. Buying an asset is not risky. Buying liabilities you have been told are assets is risky. Minding your own business is not risky.

Take the following action;

Define risk in your own words: Is relying on a paycheck risky to you? Is having debt to pay each month risky to you? Is owning an asset that generates cash flow each month risky to you? Is spending time to obtain financial education risky to you? Is spending time learning about different types of investments risky to you?

Commit five hours of your time each week to do one or more of the following: Read the business section of your newspaper. Listen to the financial news on television or radio. Read financial websites, magazines, and newsletters. Attend educational seminars on investing and financial education. Consider hiring a coach to help you work through the process of becoming financially free.

4. Deciding what kind of Investor you want to be

Start small, and learn to solve problems. Most people struggle financially because they avoid financial problems. One of the biggest secrets is that: If you want to acquire great wealth quickly, take on great financial problems.

There are basically three types of Investors. These are Investors who seek problems, Investors who seek answers and Investors who seek an “expert” to tell them what to do.

If you start small and learn to solve problems, you will gain immense wealth as you become better and better at solving problems.

For those who wish to acquire assets faster, it is important to first learn the skills of the Business owners and Investors. They need to learn how to build a business first because it provides vital educational experience, improves personal skills, provides cash flow to soften the ups and downs of the marketplace, and provides free time. Inside every problem lies an opportunity, and opportunities are what real investors are after.

To get on the financial Fast Track, become an expert at solving a certain type of problem. Become an expert at solving one type of problem, and people will come to you with money to invest. Then, if you’re good and trustworthy, you will reach your financial Fast Track more quickly. If you master solving business problems, you will have excess cash flow, and your knowledge of business will make you a much smarter investor.

It is highly recommend to become a Business owner first, before becoming an Investor. Many people want to become Investors hoping that investing will solve their financial problems. In most cases, it does not. Investing only makes their financial problems worse if they are not already sound business owners.

There is no scarcity of financial problems. In fact, there is one right around the corner from you, waiting to be solved.

Get educated in investing: Start small, and continue your education. Each week do at least two of the following:

Attend financial seminars and classes.

Look for For-Sale signs in your area. Call on three or four per week and ask the agent to tell you about the property. Ask questions like: Is it an investment property? Is it rented? What is the current rent? What is the vacancy rate? What are the average rents in that area? What are the maintenance costs? Is there deferred maintenance? Will the owner finance? What types of financing terms are available?

Practice calculating the monthly cash-flow statement for each property and then go over it with the real estate agent to see what you forgot. Each property is a unique business system and should be viewed as an individual business system.

Meet with several stockbrokers and listen to the companies they recommend for stock buys. Research those companies and consider opening a trading account and making some small investments.

Subscribe to investment newsletters and study them.

Continue to read, attend seminars, and watch financial TV programs.

Get educated in business: Meet with several business brokers to see what existing businesses are for sale in your area. It is amazing how much terminology you can learn by just asking questions and listening.

Attend a network-marketing seminar to learn about its business system.

Attend business-opportunity conventions or trade expos in your area to see what franchises or business systems are available.

Subscribe to business newspapers, magazines, and other types of communications.

Related: The 3 Types of Investors - Check Out Which Type You Are!

5. Seeking Your Own Mentors

A mentor is someone who tells you what is important and what is not important.

You need to ask yourself if there are good role models. If not, then you should spend more time with people who are heading in the same direction you are. If you cannot find them at work, look for them in investment clubs, network-marketing groups, and other business associations.

Choose your mentors wisely. Be careful from whom you take advice. If you want to go somewhere, it is best to find someone who has already taken the journey.

For example, if you decide to climb Mount Everest next year, obviously you would seek advice from someone who had climbed the mountain before. However, when it comes to climbing financial mountains, most people get advice from people who are stuck in financial swamps.

In most instances, it is hard to find mentors who are Business owners and Investors. Most people giving advice about business, investment and about money are people who actually are Employees and Self-Employed. Always have a coach or mentor. Professionals have coaches, Amateurs do not.

6. Making Investment disappointments your strength

Inside every disappointment lies a priceless gem of wisdom, just as inside every problem lies an opportunity.

When people are lame, they love to blame. The emotional pain from the disappointment is so strong that a person pushes the pain onto someone else through blame. In order to learn to sell, you had to face the pain of disappointment. But in the process of learning to sell, you will find a priceless lesson: how to turn disappointment into an asset rather than a liability.

For people who are afraid to try something new, in most cases the reason lies in their fear of being disappointed. They are afraid they might make a mistake or get rejected. If you are ready to start your journey to the financial Fast Track, you need to be prepared to be disappointed.

If you are prepared for disappointment, you can turn that disappointment into an asset. Most people turn disappointment into a liability, a long-term one. They often say things like “I will never do that again,” or “I should have known I would fail.”

The reason there are few self-made rich people is because few people can tolerate disappointment. Instead of learning to face disappointment, they spend their lives avoiding it. Disappointment is an important part of learning. Just as we learn from our mistakes, we gain character from our disappointments.

Also: 5 Good Ways To Make Saving and Investment Easier

7. Having the Power of Faith

The only person who determines the thoughts you choose to believe about yourself, is you.

In considering to embarking on your own financial Fast Track, you may have some doubts about your abilities. Trust that you have everything you need right now to be successful financially. All it takes to bring out your natural, God-given gifts is your desire, determination, and a deep faith that you have a genius and a gift that is unique.

Our thoughts or opinions are much more important than our outward appearance. Our deepest thoughts are often reflections of our souls. Thoughts are a reflection of our love for ourselves, our egos, our dislike of ourselves, how we treat ourselves, and our overall self-opinion. Money Doesn’t Stay with People Who Don’t Trust Themselves.

Personal truths are spoken at moments of peak emotion. All words are mirrors, for they reflect back some insight as to what people think about themselves, even though they may be speaking about someone else.

Personal Truths Are Also Personal Lies. If you lie to yourself, your journey will never be completed. You have to listen to your doubts, fears, and limiting thoughts, and then dig deeper for the real truth. If you say, “I’m tired, and I don’t want to learn something new,” that may be a truth, but it is also a lie.

The real truth may be, “If I don’t learn something new, I’ll be even more tired.” And even deeper than that, “The truth is, I love learning new things. I would love to learn something new and get excited about life again. Maybe whole new worlds would open to me.”

Once you can get to that point of the deeper truth, you may find a part of you that is powerful enough to help you change.

Know that the only person who determines the thoughts you choose to believe about yourself is you. The reward from your journey is not only the freedom that money buys, but the trust you gain in yourself. My best advice is to prepare daily to be bigger than your smallness.

The reason most people stop and turn back from their dreams is because the tiny person found inside each of us wields more power than our bigger person.

Even though you may not be good at everything, take time developing what you need to learn and your world will change rapidly. Never run from what you know you need to learn. Face your fears and doubts, and new worlds will open to you.

Always believe in yourself, and start today!

4 Ways To Making Investment disappointments your strength

2016-01-24T15:20:00.000+00:00

Making Investment disappointments your strength

Inside every disappointment lies a priceless gem of wisdom, just as inside every problem lies an opportunity.

1. Expect to be disappointed

It often said that only fools expect everything to go the way they want. Expecting to be disappointed does not mean being passive or a defeated loser. Expecting to be disappointed is a way of mentally and emotionally preparing yourself to be ready for surprises that you may not want. By being emotionally prepared, you can be calm and dignified when things do not go your way. When you are calm, you think better.

Many people who fail in something often think it is their idea even though it is good that didn’t work. It’s not the idea that didn’t work. It was disappointment that worked harder.

They allowed their impatience to turn into disappointment, and then they allowed the disappointment to defeat them. Many times this impatience is because they did not receive immediate financial reward.

Business owners and investors may wait years to see cash flow from a business or investment, but they go into it with the knowledge that success may take time. They also know that when success is achieved, the financial reward will be well worth the wait.

2. Always Have a mentor standing by

We can never know everything beforehand and by ourselves, and we often only learn things when we need to learn them. That it is recommend that you try new things and expect disappointment, but always have a mentor standing by to coach you through the experience. Many people never start projects simply because they don’t have all the answers. You will never have all the answers, but begin anyway. It said that “Many people will not head down the street until all the lights are green. That is why they don’t go anywhere.”

3. Be kind to yourself Always

One of the most painful aspects about making a mistake or failing at something is not what other people say about us, but how hard we are on ourselves. Most people who make a mistake beat themselves up far more than anyone else would.

People who are hard on themselves mentally and emotionally are often too cautious when it comes to taking risks, adopting new ideas, or attempting something new. It is hard to learn anything new if you punish yourself for your personal disappointments.

4. Tell the truth

Financially, there have been many times you could have run from your mistakes, but running away is taking the easy way out.

We all make mistakes. We all feel upset and disappointed when things don’t go our way. The difference lies in how we process that disappointment.

The size of your success is measured by the strength of your desire, the size of your dream, and how you handle disappointment along the way.

The people who are most in control of their emotions, who do not let their emotions hold them back, and who have the emotional maturity to learn new financial skills will flourish in the years ahead.

The future belongs to those who can change with the times and use personal disappointments as building blocks for the future.

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The 3 Types of Investors - Check Out Which Type You Are!

2016-01-24T14:35:00.000+00:00

Types of Investors

1. Investors who seek problems.

These are investors who look for problems. In particular, they look for problems caused by those who get into financial trouble. Investors who are good at solving problems expect to make returns of 25 percent to infinity on their money.

They are investors who typically have strong financial foundations. They possess the skills necessary to succeed as business owners and investors, and they use those skills to solve problems caused by people who lack such skills.

2. Investors who seek answers.

This type of investors seek answers. They often ask questions like: “What do you recommend I invest in?”, “Do you think I should buy real estate?”, “What stocks are good for me?”, “I talked to my broker, and he recommended I diversify.”, “My parents gave me a few shares of stock. Should I sell them?”

Investors should interview several tax advisors, attorneys, stock brokers and real estate agents, choose carefully and start implementing their advice. They should find advisors who practice what they preach and run fast from anyone who is selling investment advice and getting rich on commissions and fees alone. These investors should look for investment advisors who make money investing in the same investments they are selling.

Many high-income Employees and Self-Employed fall into this investor category because they are busy and have little time to look for investment opportunities or learn about Business ownership and Investment.

Hence, they want somebody to give them the answers instead of gaining knowledge for themselves.

This group often buys what is often calls “retail investments,” which are investments that have been packaged for sale to the masses.

3. Investors who seek an “expert” to tell them what to do

These investors are financially uneducated and look for people to tell them what to invest in. People who are Employees and Self-employed have been forced into the investing game because of changes in retirement plans.

They have little interest in investing in their education so they can become better investors. They know nothing, which means they have to rely on the advice of other so-called experts.

This investors have insignificant chance of getting rich. About as much chance as winning the lottery.

10 Investor Controls Every Investor Must Have

2016-01-22T16:18:00.002+00:00

10 Investor Controls Every Investor Must Have

To become a sophisticated investor, you need to understands each of the ten investor controls. It is important to understand that a sophisticated investor may choose not to become an inside investor or ultimate investor; rather, he or she understands the benefits of each control. The more controls these investors possess, the less risk they have in the investment.

This article takes you through each investor control so you get a better understanding of how a sophisticated investor thinks.

1. The Control over Yourself

The most important control you must have as an investor is control over yourself as it can determine your success as an investor. It is important to note that, it isn’t the investment that is risky, but rather it is the investor who is risky.

Most of us were taught in school to become employees. There was only one right answer, and making mistakes was horrible. In school, we were not taught financial literacy. It takes a lot of work and time to change your thinking and to become financially literate.

A sophisticated investor knows that there are multiple right answers, that the best learning comes through making mistakes, and that financial literacy is essential to be successful. They know their own financial statement, and they understand how each financial decision they make will ultimately impact their financial statement.

Always keep it in mind that, to become rich, you must teach yourself to think like a rich person.

2. The Control over Income/Expense and Asset/Liability Ratios

This control is developed through financial literacy. There are three cash flow patterns--the cash flow pattern of the poor, middle class, and the rich. You need to decide at an early stage the cash flow pattern of a rich person.

The cash flow pattern of the poor: The poor spend every penny they make--they have no assets and no debt.

The cash flow pattern of the middle class: Individuals in the middle class accumulate more debt as they become more successful. A pay raise qualifies them to borrow more money from the bank so they can buy personal items like bigger cars, vacation homes, boats, and motor homes. Their wage income comes in and is spent on current expenses and then on paying off this personal debt. As their income increases, so does their personal debt.

The cash flow pattern of the rich: The rich have their assets work for them. They have gained control over their expenses and focus on acquiring or building assets. Their businesses pay most of their expenses, and they have few, if any, personal liabilities. Sophisticated investors buy assets that put money in their pockets. It is just that simple.

You may have a cash flow pattern that is a combination of these three types. What story does your financial statement tell? Are you in control of your expenses?

3. The Control over the Management of the Investment

An inside investor who owns enough of an interest in the investment whereby he or she can control the management decisions has this investor control. It can be as a sole owner or where the investor owns enough of an interest that he or she is involved in the decision-making process. The skills learned through building a successful business are essential to this investor.

Once the investor possesses these skills, he or she is better able to analyze the effectiveness of the management of other potential investments. If the management appears competent and successful, the investor is more comfortable investing funds.

4. The Control over Taxes

The sophisticated investor has learned about the tax laws, either through formal study or by asking questions and listening to good advisors.

Sophisticated investors uses tax advantages acquired from being investors and business owners thoughtfully to minimize their taxes paid as well as to increase tax deferrals wherever possible. Most often, they enjoy many tax advantages that are not available to other people.

There are three specific advantages being enjoyed and they are:

i. Social insurance taxes do not apply to passive and portfolio income but do apply to earned income.

ii. It may be possible to defer payment of taxes, perhaps indefinitely, by using the laws available to you related to real estate and owning a company (an example would be a profit-sharing plan sponsored by your business corporation).

iii. Corporations may pay for a number of expenditures with pre-tax income that Employee income recipients must pay for with after-tax income.

Sophisticated investors recognize that each country, state, and province has difference tax laws, and they are prepared to move their business affairs to the place best suited for what they are doing.

Recognizing that taxes are the largest expense for Employees and Self-employed, sophisticated investors may well seek to reduce their income in order to reduce income taxes while increasing

funds for investment simultaneously.

5. The Control over When You Buy and When You Sell
The sophisticated investor knows how to make money in an up market as well as in a down market. In building a business, the sophisticated investor has great patience. This is sometimes referred to as “delayed gratification.”

A sophisticated investor understands that the true financial reward is after the investment, or business, becomes profitable and can be sold or taken public.

6. The Control over Brokerage Transactions

The sophisticated investor operating as an inside investor can direct how the investment is sold or expanded. As an outside investor in other companies, the sophisticated investor carefully tracks the performance of his or her investments and directs his or her broker to buy or sell.

Many investors today rely on their brokers to know when to buy and sell. These investors are not sophisticated.

7. The Control over the E-T-C (Entity, Timing, Characteristics)

Next to control over yourself, the control over the E-T-C is the most important control. To have control over the entity, timing, and characteristics of your income, you need to understand corporate, security, and tax law.

Sophisticated Investors truly understand the benefits offered through choosing the right entity, with the right year-end, and converting as much earned income into passive and portfolio income as possible. This, combined with the ability to read financial statements and “think in terms of financial statements,” helped this investors build their financial empire more quickly.

8. The Control over the Terms and Conditions of the Agreements

The sophisticated investor is in control over the terms and conditions of agreements when he or she is on the inside of the investment. It is critical that you understand the terms and conditions of any investment.

While legal advice is of paramount importance to ensure that any contract of investment is above board, you still need to know what is being asked of you so that you can decide whether such stipulations are acceptable or not.

Furthermore, showing that you have knowledge of such things will generate more confidence in you as an investor or a startup businessperson during negotiations.

9. The Control over Access to Information

As an inside investor, the sophisticated investor again has control over access to information. This is where the investor needs to understand the legal requirements of insiders imposed by the Securities and Exchange Commission.

10. The Control over Giving It Back, Philanthropy, Redistribution of Wealth

The sophisticated investor recognizes the social responsibility that comes with wealth and gives back to society. This may be through charitable giving and philanthropy. Some of it will be through capitalism, by creating jobs and expanding the economy.

The Decisions And Downfalls Of Entrepreneurs

2016-01-22T13:04:00.002+00:00

Decisions And Downfalls Of Entrepreneurship

Although Entrepreneurship happens to be an attractive career choice, often times many decisions have to be made before launching and managing a new business, no matter the size of the business. There are several questions that requires answers whenever the issue of decision making in entrepreneurship arises.

Few questions in this regard that need to be answered are as follows:

Does the individual truly want to be responsible for a business?

What product or service should be the basis of the business?

What is the market, and where should it be located?

Is the potential of the business enough to provide a living wage for its employees and the owner?

How can a person raise the capital to get started?

Should an individual work full or part time to start a new business?

Should the person start alone or with partners?

Answers to these questions are not empirically right or wrong. Rather, the answers will be based on each entrepreneur’s judgment. An entrepreneur gathers as much information and advice as possible before making these and other crucial decisions.

The entrepreneur’s challenge is to balance decisiveness with caution—to be a person of action who does not procrastinate before seizing an opportunity—and at the same time, to be ready for an opportunity by having done all the preparatory work possible to reduce the risks of the new endeavor.

Preparatory work includes evaluating the market opportunity, developing the product or service, preparing a good business plan, figuring out how much capital is needed, and making arrangements to obtain that capital.

Economists have identified key factors for up-and-coming business owners to consider closely through careful analysis of entrepreneurs’ successes and failures. Taking them into account can reduce risk. In contrast, paying them no attention can precipitate the downfall of a new enterprise.

Motivation

What is the incentive for starting a business? Is it money alone? True, many entrepreneurs achieve great wealth. However, money is almost always tight in the startup and early phases of a new business. Many entrepreneurs do not even take a salary until they can do so and still leave the firm with a positive cash flow.

Strategy

What is the strategy for distinguishing the product or service? Is the plan to compete solely on the basis of selling price? Price is important, but most economists agree that it is extremely risky to compete on price alone. Large firms that produce huge quantities have the advantage in lowering costs.

Realistic Vision

Is there a realistic vision of the enterprise’s potential? Insufficient operating funds are the cause of many failed businesses. Entrepreneurs often underestimate start-up costs and overestimate sales revenues in their business plans. Some analysts advise adding 50 percent to final cost estimates and reducing sales projections. Only then can the entrepreneur examine cash flow projections and decide if he or she is ready to launch a new business.

Styles Of Investment - Fundamental Vs Technical Investment

2016-01-16T23:54:00.000+00:00

Fundamental Vs Technical Investment

Fundamental investing

A fundamental investor reduces risk looking for value and growth by looking at the financials of the company. The most important consideration for selecting a good stock for investment is the future earnings potential of the company.

A fundamental investor carefully reviews the financial statements of any company before investing in it. The fundamental investor also takes into account the outlook for the economy as a whole as well as the specific industry in which the company is involved. The direction of interest rates is a very important factor in fundamental analysis.

Technical investing

A well-trained technical investor invests on the emotions of the market and invests with insurance from catastrophic loss. The most important consideration for selecting a good stock for investment is based on the supply of and demand for the company’s stock. The technical investor studies the patterns of the sales price of the company’s stock. Will the supply of the shares of stock being offered for sale be sufficient based on the expected demand for those shares?

The technical investor studies the pattern of the history of the company’s stock price. A true technical investor is not concerned with the internal operations of a company as a fundamental investor would be. The primary indicators the technical investor is concerned with are the mood of the market and the price of the stock.

One of the reasons so many people think the subject of investing is risky is because most people are technically operating as “technical investors” but don’t know the difference between a technical investor and a fundamental investor. The reason investing seems risky from the technical side is because stock prices fluctuate with market emotions.

The difference between the two investment styles is dramatic. The fundamental investor analyzes the company from its financial statements to assess the company’s strength and potential for future success. In addition, the fundamental investor tracks the economy and the industry of the company.

A technical investor invests from charts that track the price and volume trends and patterns of the company’s stock. The technical investor may review the put/call ratio for the stock as well as the short positions taken in the stock.

While both investors invest from the facts, they find their facts from different sources of data. Also, both types of investors require different skills and different vocabulary. The frightening thing is that most of today’s investors are investing without technical or fundamental investor skills. Most new investors today do not know the difference between a fundamental and technical investment.

The 5 Categories Of Investors

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Categories Of Investors

Investment is a broad concept and phenomenon such that no one person is abreast with it all. Investors all over are classified or categorized based on their level of investment, income or net worth, business ownership etc. In His Book "Rich Dad's Guide To Investing", Robert Kiyosaki outlined the following five (5) categories of Investors;

1. The Accredited Investor

The accredited investor is someone with high income or high net worth. A long-term investor who has chosen to invest for security and comfort may very well qualify as an accredited investor.

If you can qualify as an accredited investor, you will have access to investments that most people do not.

An accredited investor is simply a person who earns significantly more money than the average person. It does not necessarily mean the person is rich or knows anything about investing.

You may be an accredited investor, but you still may not get the opportunity to invest in the best investments. To do that requires a completely different type of investor with the right knowledge and access to the information about new investment opportunities.

An accredited investor, without financial education, has no investor control. This is because an accredited investor might have a lot of money but usually didn’t know what to do with it.

There are many highly paid Employees who qualify as accredited investors based on their income alone. To be successful in choosing your investments, however, you still need financial education. If you choose not to invest your time in your financial education, you should turn your money over to competent financial advisors who can assist you with your investment decisions.

2. The Qualified Investor

The qualified investor understands how to analyze publicly traded stock. This investor would be considered an “outside” investor as opposed to an “inside” investor. Generally, qualified investors include stock traders and analysts.

The qualified investor is a person who has money as well as some knowledge about investing. A qualified investor is usually an accredited investor who has also invested in financial education. As it relates to the stock market, for example, qualified investors would include most professional stock traders. Through their education, they have learned and understand the difference between fundamental investing and technical investing.

3. The Sophisticated Investor

The sophisticated investor typically has three main attributes, thus “ Excessive Cash, Education and Experience.” In addition, the sophisticated investor understands the world of investing. He or she utilizes the tax, corporate, and securities laws to maximize both earnings and to protect the underlying capital.

If you want to become a successful investor but do not wish to build your own business to do so, your goal should be to become a sophisticated investor.

From the sophisticated investor on, these investors know that there are two sides of the coin. They know that on one side of the coin, the world is a world of black and white and they also know that the other side of the coin is a world of different shades of gray. It is a world where you definitely do not want to do things on your own. On the black and white side of the coin, some investors can invest on their own. On the gray side of the coin, an investor must enter with their team.

The sophisticated investor knows as much as the qualified investor but has also studied the advantages available through the legal system. He/She knows what the qualified investor knows and is familiar with the following specialties of law:

i. Tax law

ii. Corporate law

iii. Securities law

While not a lawyer, the sophisticated investor may base as much of his or her investment strategy on the law as well as the investment product and potential returns. The sophisticated investor often gains higher returns with very low risk by using the different disciplines of law.

4. The Inside Investor

To build a successful business is the goal of the inside investor. The business may be a single piece of rental real estate or a multi-million-dollar retail company. A successful Business Owner knows how to create and build assets.

The inside investor is someone who is on the inside of the investment and has some degree of management control.

You don’t need to have a lot of income or net worth to be considered an inside investor. An officer, director, or owner of 10% or more of the outstanding shares of the corporation is an inside investor.

In the real world, there is legal inside investment activity as well as illegal insider activity. Inside investment is one very important way to reduce risk and increase returns. Someone with the financial education but not the financial resources of an accredited investor can still become an inside investor. This is where many people enter the world of investing today. By building their own companies, inside investors are building assets that they can run, sell, or take public.

The rich technically invent money. After you learn to make your first million, the next ten will be easy. A successful Business Owner will also learn the skills needed to analyze companies for investment from the outside. Therefore, a successful inside investor can learn to become a successful sophisticated investor.

5. The Ultimate Investor

To become the selling shareholder is the goal of the ultimate investor. The ultimate investor owns a successful business in which he or she sells ownership interest to the public; hence, he or she is a selling shareholder.

The ultimate investor is a person who creates an asset that becomes so valuable that the asset they created is worth literally billions of money to millions of people. These investors build giant companies that other investors want to invest in.

It is probably not likely that many of us will ever build such huge multi-million companies, but we all have the possibility of building a smaller business and becoming wealthy by selling it privately or selling it publicly.

Some people build houses to sell; others build cars, but the ultimate is to build a business that millions of people want to own a share of.

The Life Cycle of an Individual Investor

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The Life Cycle of an Individual Investor

The investment needs of an individual changes over a person’s life cycle. An investor has 4 main phases in his/her life cycle.

1. Accumulation Phase

Individuals in the early-to-middle years of their working careers are in the accumulation phase.
As the name implies, these individuals are attempting to accumulate assets to satisfy: Immediate needs such as down payment for a house
Longer term needs such as children’s college education, retirement etc.

As a result of their long investment time horizon and their future earnings ability, individuals in the accumulation phase are willing to make relatively high-risk investment in the hopes of making above-average returns over time.

2. Consolidation Phase

Individuals in the consolidation phase are typically past the midpoint of their careers, have paid off much or all of their outstanding debts and perhaps have paid or have the assets to pay their children’s college bills. (earnings exceed expenses)

Earnings exceed expenses, so the excess can be invested to provide for future retirement or estate planning needs.
The typical investment horizon for this phase is still long, so moderately high risk investments are attractive.

3. Spending Phase

The spending phase begins when individuals retire. Living expenses are covered by social security income, income from prior investments etc.

Because their earning years have ended, they seek greater protection of their capital. Their overall portfolio maybe less risky than in the consolidated phase.

4. Gifting Phase

The gifting phase is similar to the spending phase.

In this stage, individuals may believe they have sufficient income assets to cover their current and future expenses. Excess assets can be used to provide financial assistance to relatives, friends or to establish a charitable trust or fund.

5 Good Ways To Make Saving and Investment Easier

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Making Saving and Investment Easier

Thinking of how to achieve your financial goal through saving and investment of your income? What best methods and strategies must you adopt to ensure a sound financial independence?

Here are some important ways to make savings and investing easier for you.

1. Keeping Perspective

Your investments and savings are ultimately a means to an end. The value of your portfolio rests in the enjoyment and security it provides for your family. This is often the reason normally rational individuals behave irrationally when it comes to their stock holdings; they secretly view each up and down tick as feast or famine.

2. Get off the Consumption Treadmill

You will never experience financial freedom until you have stepped off the consumption treadmill. Once you slip into the habit of borrowing tomorrow’s income to pay for today’s expenditures, you will begin to loathe money and possibly even your job or occupation. Instead of viewing it as an outlet for your talents, gifts and ambitions, it becomes a series of endless tasks you must complete if you hope to break even at the end of each month.

3. Setup Auto-Withdrawals from Your Checking or Savings Account

Many brokerage firms allow you to set up regular deposits by electronically transferring money from your checking or savings account each week, month or quarter.

This is a very effective way to begin saving because you don’t actually see or miss the cash. On the same note, if your employer offers an automatic withdrawal option for your retirement account, you may want to consider joining.

4. Educate Your Mind

There are hundreds of excellent finance, investing, economics, accounting, business and management books in the world. A few hours of well-directed reading each week can have a fattening effect on your pocketbook as well as give you something to talk about at your next cocktail party.

5. Reward Yourself

Clipping coupons and reducing household expenditures does not mean you have to live the life of a miser. Set financial goals and reward yourself when you reach those goals. Positive economic incentives can do marvels for productivity, and you may not find it nearly as difficult forgoing current consumption if you know a new pair of Allen Edmonds is in your future. Besides, when you associate a luxury good with an accomplishment, it has much more meaning and value.

6 Reasons Why You Need A Bank Savings Account

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Importance Of Savings Account

A savings account is likely the simplest type of bank account available to consumers. It allows consumers to store excess cash in a secure location (an insured bank or credit union) all while earning interest on the balance.

A bank savings account is a type of account designed to simply hold money that you do not need immediate access to. When contrasted with checking accounts, bank savings accounts tend to pay a slightly higher rate.

The following are the important reasons why Bank Savings accounts are needed.

1. You Can Easily Access Your Money In A Bank Savings Account

Savings accounts offer easy access to your cash. In other words, your money becomes liquid in a bank savings account. This means that you can make a withdrawal easily and quickly.

Note that savings accounts are not as liquid as checking accounts, because you can get money from a checking account by simply writing a check.

2. You Get Peace Of Mind

There is a certain emotional satisfaction in having a few thousand dollars in the bank. If you get laid off, if your business goes under, if your bread-winning spouse leaves, you'll have something to cover your bills for a while, giving you time to plan.

3. Your Money Grow In Bank Savings Accounts

A percentage of the principal is paid as a fee over a certain period of time (typically one month or year) and this is called the interest rate. A bank deposit will earn interest because the bank is paying for the use of the deposited funds.

Whenever you have money in a bank savings account, your money earns interest.

Your bank savings account pays a rate of return on all the money in the account. That means that you get "paid" for keeping your money in the account. If you were not going to use the money anyway, then getting paid a little is better than nothing.

Bank savings accounts pay you more on your money than checking accounts.

4. Asset Protection

The returns associated with savings accounts historically have been lower than those of other investments, such as stocks, bonds and real estate. But tying up all your money in speculative or illiquid investments for the possibility of a higher return means you may be forced to sell at an inopportune time to take care of an unanticipated expense. Having a savings account can insulate your investment portfolio from loss through forced selling.

5. Your Money In A Bank Savings Account Is Relatively Safe

Bank savings accounts offer a safe place to keep your money.

Suppose that you have GHC 1,000.00 and you're not going to use the money for another 3 months. There are several things you could do with the money. You could either carry it around with you, you could put it under your mattress, or you could put it into a bank savings account.

The safest and the best thing to do with your money is to put it into a savings account.

You might encounter the risk of theft of your money or misplace it and lose it if you carry the money around with you, If the money is under your mattress, your house could burn down or be robbed.

However, if the money is in a bank savings account, your banking institution is responsible for the safekeeping of that money. If the bank burns down, your money won't go with it, and any reputable bank will not just lose your savings.

Furthermore, you earn interest on the money in a savings account. You don't earn interest on cash that is sitting under your mattress.

Imagine the consequences that will occur to you if you didn’t use a bank savings account. You could miss your mortgage payment, for example, or you could wind up having to work when you’re unable to work.

6. It Helps You In Leveraging On Opportunities

Having savings allows you to take advantage of potentially lucrative financial opportunities. If you stumble upon a once-in-a-lifetime business opportunity, you may lose out if you do not have adequate capital to invest.

Also, if you try to obtain credit with your bank for any reason, a robust savings account can enhance your prospects of success. A savings account can communicate stability and discipline to a loan representative.