MONEY

How to Boost Your Cash Reserve

noreply@blogger.com (Unknown) — Tue, 23 Aug 2011 16:23:00 +0000

Are you financially fragile? Would you be able to come up with, say $2,000, if you suddenly had to repair your car or fix a leaky roof? If you answered no, you're not alone. Nearly half of Americans say they'd more than likely have a hard time coming up with a couple thousand dollars for unexpected costs, according to a study by the National Bureau of Economic Research.

Beyond that $2,000, it's important to accumulate at least an eigh- or nine-month rainy day liquid account, enough to pay your bills and maintain the roof over your head, in case of the unexpected. After all, the average length of unemployment in the U.S. now stands at 38 weeks, or roughly nine months.

Easier said than done, of course. Beyond the traditional advice of "save automatically" and "cut spending," consider these out-of-the-box ways to boost your personal cash reserve to ensure you never fall short on a rainy day.

Keep the Bills — Not Just the Change

At the end of the day, get in the routine of taking your dollar bills out of your wallet and storing them in your own personal piggy bank, or any device where you can't very easily retrieve your money. At just two bucks a day, that stash can easily grow to $700 by the end of the year.

Open a Hard-to-Reach Savings Account

In addition to an instant access savings account, try opening a separate savings account that isn't linked to a checking account. This way, you won't be able to access the account via an ATM. If you want to make withdrawals, you may have to visit your local bank — which adds an inconvenient step. Short-term certificates of deposit or CDs, which encourage you to keep your money in the account until a maturity date, are helpful for the same reason. Because your cash won't be as easy to access, it'll be relatively safe from any impulse spending.

Tip Yourself

Pay yourself every time you do something worthy of reward. For example, when you do a service you'd ordinarily pay someone else for, such as laundry, salon services or cleaning your house — tip yourself, anywhere from $5 to $10. You'll save not only what you would have spent on the service, but also a bonus for doing it yourself. Doing your own bimonthly manicure and pedicure, for example, could save you $60 a month. Tip yourself $10 each time, and you can save yourself close to $1,000 a year.

Save the Savings

Finally, while it feels great to buy that dress on sale for $50 after you budgeted to pay $100, you're not really saving unless you bank the difference, right? Instead of spending the savings on the pair of dress shoes to match, benefit from the sale by actually putting that money away. How? Hop online immediately when you arrive home and shift that savings from your checking account into a savings account.

To help keep track of the things you don't buy, try a free service like PiggyMojo.com. Just text PiggyMojo or send it free, direct message via Twitter each time you avoid spending money on things you don't need (but want). It keeps track of all the money that you're theoretically saving. The average savings for a PiggyMojo user is about $15 per "save," according to the company.

Entrepreneurship: Nothing to Lose and Everything to Gain

noreply@blogger.com (Unknown) — Thu, 11 Aug 2011 22:19:00 +0000

Provided by

by Dan Schawbel, contributor

I recently caught up with Ryan Blair, who is a serial entrepreneur and author of the new book "Nothing to Lose, Everything to Gain." Ryan established his first company, 24-7 Tech when he was only twenty-one years old. Since then, he has created and actively invested in multiple start-ups and has become a self-made multimillionaire. After he sold his company ViSalus Sciences to Blyth in early 2008, the global recession took the company to the brink of failure resulting in a complete write off of the stock and near bankruptcy. Ryan as CEO went "all in" betting his last million dollars on its potential and turned the company around from the edge of failure to more than $150,000,000 a year in revenue in only 16 months winning the coveted DSN Global Turn Around Award in 2010. In this interview, Ryan talks about how he re-branded himself after being in a gang, the issues with the education system, and more.

How did you shake your criminal record and re-brand yourself?

I remember when I was working my way up in the first company that employed me, I used to have nightmares that one day they'd find out about that I had been in a gang, call me into the office, and fire me. In the beginning I didn't talk much about what I'd been through. But eventually when I got to a point where I had established myself as a professional entrepreneur, I embraced my past, used it as part of my branding, and crossed over.

Ryan Blair

In this day and age people want authenticity. Now that the world is social, people know all about you. Assuming you decided to join humanity, that is. It turned out that as I started showing my true identity, so did the rest of the world. One of the reasons my company ViSalus is one of the fastest growing companies in the industry today is because we share our good, bad, and ugly. Like sharing a video of me playing a practical joke on one of my employees, for instance. As a result of embracing authenticity, I turned the company around from near bankruptcy to over $15 million a month today. Unlike our competitors, our distributors and customers know exactly who we are, and I'd say that corporate America has a lot of catching up to do.

What's your take on the educational system? Will a college degree help or hurt your chances at starting a successful business?

As a product of Los Angeles's public school system, in a state with the highest dropout rate in the nation (about 20 percent), I can tell you from personal experience that some of our brightest minds are being misidentified because of a one-size-fits-all learning environment. Because I had ADD and dyslexia I never got past the 9th grade.

I recall sitting with a career counselor in continuation high school, being told that I didn't have the intellect or aptitude to become a doctor or a lawyer. They suggested a trade school, construction, something where I'd be working with my hands.

The irony is that today I employ plenty of doctors and lawyers. Would you rather be a doctor or a lawyer, or a guy who writes a check to doctors and lawyers?

If President Obama phoned me today and told me he was appointing me Educational Czar, I'd turn education into a business, a capitalistic, revenue driven system, creating a competitive environment where each school is trying to attract customers, based on quality of customer experience.

As an entrepreneur, having a college degree or getting classroom training won't hurt your chances for starting a successful business, but it's ultimately not necessary. In Malcolm Gladwell's book "Outliers," he makes a point that it takes approximately 10,000 hours to master a skill set at a professional level. That means experience, over traditional education.

What three business lessons did you learn from juvenile detention?

I learned a lot about business and life from my time spent incarcerated. I like to call these pieces of wisdom my Philosophies from the Jail Cell to the Boardroom. One of the biggest lessons I learned was that in Juvenile Hall, new guys always get tested. When I went in the first time, I was just a skinny little white kid and I had to learn fast. People will be bumping into you on the basketball court, or asking you for things, testing to see if you're tough.

And everyone knew that if a guy let someone take their milk during lunchtime, they weren't as tough as they looked. Soon you'd be taking their milk everyday, and so would everyone else. It's the same for business, if you give people the impression that you can be taken, you will be.

Also, adaptation is the key to survival. In jail the guy who rises to power isn't always the strongest or the smartest. As prisoners come and go, he's the one that adapts to the changing environment, while influencing the right people. You can use this in business, staying abreast of market trends, changing your game plan as technology shifts, and adapting our strategy around your company's strongest competitive advantages. Darwin was absolutely right — survival is a matter of how you respond to change.

The last lesson I got from jail is that you have to learn how to read people. You don't know who to trust. It's the same for business because a lot of people come into my office with a front. I have to figure out quickly who is the real deal and who isn't. Based on that fact, I developed an HR system that I use when interviewing potential new hires that I call the Connect Four Technique. Yep, you guessed it. I make my future employees — and I have hundreds of them — play me in Connect Four.

Can everyone be an entrepreneur? Can it be learned or do you have to be born with a special gene?

No. Not everyone can be an entrepreneur. There are two types of people in the world, domesticated and undomesticated. Some people are so domesticated through their social programming and belief system, so employee minded, that they could never be entrepreneurs. And they shouldn't even bother trying. The irony is that this is coming from a guy who teaches millions of people how to become entrepreneurs. I'm literally selling a book about becoming an entrepreneur, telling you that not everyone should read it.

To be an entrepreneur, you have to have fighting instincts. Are instincts genetic? I don't think so, but you 'inherit' them from your upbringing. Now, if you're smart you can reprogram your beliefs. But there are still some people that would rather watch other people be entrepreneurs, like the people in the Forbes "richest celebrity list" than take the time to reprogram themselves, and live their lives like rock stars, too.

Is there a need for business plans these days?

When you've really got the entrepreneurial bug, the last thing you want to do is sit down and write a business plan. It's the equivalent of writing a book about playing the guitar before actually knowing how to play the guitar. You don't know what your new business is going to be like. And just like a guitar, a business will have to be tweaked and tuned multiple times, and you'll need long practice sessions and repetition, before you can get even one successful song out of it.

In my book "Nothing to Lose, Everything to Gain," I actually included a chapter called "I Hate Business Plans" where I talk about this. Most business plans that get sent to me, I close within seconds of opening them up because they are full of fluff and hype. A business plan should be simple, something you could scribble on a scratch pad. No more than three pages of your business objectives, expected results, and the strategy to get there. But the best business plan is one built from a business that is already up and running and that matches the business's actual results.

The point is that you should be so obsessed with your business that you can't sleep at night because that's all you can think about. And that's your ultimate "business plan."

Dan Schawbel is the Managing Partner of Millennial Branding, LLC, a full-service personal branding agency, and author of "Me 2.0: 4 Steps to Building Your Future."

An Introduction to Saving Money

noreply@blogger.com (Unknown) — Sat, 13 Mar 2010 18:30:00 +0000

The ability to save money is the cornerstone of building wealth. In order to save money, you need to spend less than you earn. This is often easier said than done, but there are plenty of ways to help you begin saving money on even the tightest budget.

1. The Importance of an Emergency Fund

The first, and probably most important savings goal should be building up an emergency fund. We can't always predict what life has in store for us, so it is best to be prepared for the unexpected with some emergency savings set aside.

2. Where to Keep Your Savings

Once you've decided to save some money, how do you know where you should keep it? From savings accounts to certificates of deposit, find out what's right for you.

3. Make Saving Automatic

With so many bills, expenses, and day-to-day expenses to take care of, saving money can seem nearly impossible. One of the best ways to get into the habit of saving money is to create an automatic savings plan.

4. The Difference Between APR and APY

When you're saving money, one of the things you want to consider is how much interest it is earning. Your money should be working for you. Two of the most common terms that are used to discuss interest rates are APR and APY.

5. Cut Spending Leaks

Even if you are saving money, you can always find ways to save more. Sometimes it is simply the little things that add up. Find out what your spending leaks are and learn how to trim those expenses so you can save even more money.

Discipline Money

noreply@blogger.com (Unknown) — Sat, 13 Mar 2010 07:02:00 +0000

What trigger your spending? When you are sad, depressed, angry, excited or lonely? I use to spend more money when I feel bored or carrying a lot of cash in my pocket. That's why I don't carry much cash myself to avoid temptation to spend. Having to identify the way to trigger my spending, I have been very caution to avoid and control them. I find it challenge to disciplined myself and it takes time to learns discipline money.

It is very hard for you to have the temptation not to buy when the stuff you have been thinking to buy are on sales, 50%, 60% or 70% discount. You feel disturb and your subconcious mind keep asking yourself, "buy or not buy?", "sales now, great deals!", "I can swipe first and pay later since it's on sales, I can save a lot." and many more which you are convincing yourself to buy, you are finding a good reason to buy so that you can buy comfortably and feel better in spending, I think many of us have such thought before, self talking to yourself buy or not buy. However, it's good to practices evaluating before taking action to purchase, instead of convincing youself, why not you evaluate why you need the stuff, it is necessary? do I have more than enough? do I have budget for this? If the answer is NO, then just stay away and hang in there for awhile, you may notice your temptation to buy will fade away and you may even forgotten about it after 2 to 3 days. I know the feeling is sucks, whenever the feeling slip through, shift your thought to think positively, think about another fews more digit in your bank account or stay out of debts, it will makes you feel better.

Discipline Money require self-discipline, it is a key to reduce debts and increase savings, if you practice it in long run, it will also improve your standard of living. Undiscipline person normally does not have discipline in money, if you notices yourself working day and night for money and the money just slip away easily, it is time for you to review your spending habits and time for money management lesson.

Discipline Money require a lot of self-discipline, it is easy when you come to think of fantastic rewards to reach financial stability that you hopes for. Take each step forward in controlling your spending habits with bit of imagination and just little creativity to put your hard-earned money on lock.

Our Money Our Rights

noreply@blogger.com (Unknown) — Sat, 13 Mar 2010 05:55:00 +0000

Nearly 50 per cent of credit card holders declared bankrupt were under 30 years of age, according to figures from Bank Negara Malaysia (BNM).

Also, a study conducted on those who had defaulted on their debt payment or had difficulty in servicing their debt found that 22 per cent of the respondents attributed their predicament to poor financial planning.

The study conducted by the Credit Counseling And Debt Management Agency (AKPK), a wholly owned subsidiary of BNM, also found that some 27 per cent of the respondents cited that they lost control on usage of their credit cards.

Another survey conducted by Citibank showed 37 per cent of the respondents were worried about their financial future and on average Malaysians had savings that could last only 11 weeks.

The survey findings also showed that only 28 per cent kept to their budgets and that only 22 per cent have a clear retirement plan.

Datuk N.Marimuthu, president of the Federation of Malaysian Consumers Association (Fomca) shared the above startling findings with Bernama as he spoke in conjunction with World Consumer Rights Day to be celebrated on March 15.

The theme for this year is "Our Money Our Rights".

FINANCIAL PLANNING

According to Marimuthu, another study carried out by CIMB found that 93 per cent of the respondents indicated that they were aware that they need financial planning.

Personal financial planning where budgeting is the key component should be at the back of everyone's mind but judging by the findings of various studies, very few Malaysians can actually adopt one.

In the 2010 Budget, the government announced an annual service tax of RM50 will be imposed for each principal credit card and RM25 for each supplementary card in an effort to encourage prudent spending.

SET TARGET

"Thus our first focus in conjunction with World Consumer Rights Day is to further enhance financial skills and to instill financial responsibility in all consumers. Our particular focus is children and youths," Marimuthu told Bernama.

The reason being, as aptly put by the Fomca president, consumers must be trained early to acquire good consumption and financial habits.

"Once they acquire bad spending habits, it becomes extremely difficult to change.

"Our ultimate aim is to enhance financial literacy skills including skills in financial planning, budgeting, retirement planning, and mindful consumption," he elaborated.

MEDIA LITERACY

Educating youths to better understand how media can influence their consumption is part of Fomca's mission to help consumers.

According to Marimuthu some youths were so taken by deceptive advertising tactics that they were pushed to the edge of incurring excessive expenditure.

Youths, he said are also easy prey for junk and unhealthy food promotions, leaving more and more youngsters to deal with issues of overweight and obesity.

"Through better media literacy, youths can be better armed to some extent to minimise impact of media on their values, personal self-esteem and their consumption behaviours," said the Fomca president.

FINANCIAL INSTITUTIONS

In line with the "Our Money Our Rights" theme, Fomca also wants banks and other financial institutions to increase their quality of service to the consumers.

In 2008, the National Consumer Complaints Centre (NCCC) received 1,354 complaints against banks and financial institutions.

This was an increase of 67 per cent from the year 2006.

Marimuthu who is also the Chairman of Board of Directors of the NCCC said complaints received include misleading advertisements, excessive interest, charges and penalties besides one-sided agreement with the consumers finding themselves at a disadvantage.

Another complaint received by the NCCC centred on aggressive debt collection tactics.

"Consumers want banks especially to be more caring and responsible in dealing with them.

"Bank Negara as the regulator of the financial services should take concrete measures to efficiently and effectively regulate the banks to better protect the interests and welfare of the consumers," said Marimuthu.

MORE FOR THE POOR

The poor and the weaker segments of the community must also have access to financial services.

The Fomca president proposed micro-credit and special credit schemes to be made available to the poor especially in helping them to get out of the clutches of poverty through small business ventures.

Skill development and entrepreneurship training should be undertaken to empower them to break away from poverty.

Additionally, there should be access to loans or small grants to enable them to start their own business, said Marimuthu.

Personal finance

noreply@blogger.com (Unknown) — Sat, 13 Mar 2010 05:37:00 +0000

Personal finance is the application of the principles of finance to the monetary decisions of an individual or family unit. It addresses the ways in which individuals or families obtain, budget, save, and spend monetary resources over time, taking into account various financial risks and future life events. Components of personal finance might include checking and savings accounts, credit cards and consumer loans, investments in the stock market, retirement plans, social security benefits, insurance policies, and income tax management.

Personal financial planning

A key component of personal finance is financial planning, a dynamic process that requires regular monitoring and reevaluation. In general, it has five steps:

Assessment: One's personal financial situation can be assessed by compiling simplified versions of financial balance sheets and income statements. A personal balance sheet lists the values of personal assets (e.g., car, house, clothes, stocks, bank account), along with personal liabilities (e.g., credit card debt, bank loan, mortgage). A personal income statement lists personal income and expenses.
Setting goals: Two examples are "retire at age 65 with a personal net worth of $1,000,000" and "buy a house in 3 years paying a monthly mortgage servicing cost that is no more than 25% of my gross income". It is not uncommon to have several goals, some short term and some long term. Setting financial goals helps direct financial planning.
Creating a plan: The financial plan details how to accomplish your goals. It could include, for example, reducing unnecessary expenses, increasing one's employment income, or investing in the stock market.
Execution: Execution of one's personal financial plan often requires discipline and perseverance. Many people obtain assistance from professionals such as accountants, financial planners, investment advisers, and lawyers.
Monitoring and reassessment: As time passes, one's personal financial plan must be monitored for possible adjustments or reassessments.

Typical goals most adults have are paying off credit card and or student loan debt, retirement, college costs for children, medical expenses, and estate planning.^{[citation needed]}

The six key areas of personal financial planning, as suggested by the Financial Planning Standards Board, are:

1 - Financial Position: this area is concerned with understanding the personal resources available by examining net worth and household cash flow. Net worth is a person's balance sheet, calculated by adding up all assets under that person's control, minus all liabilities of the household, at one point in time. Household cash flow totals up all the expected sources of income within a year, minus all expected expenses within the same year. From this analysis, the financial planner can determine to what degree and in what time the personal goals can be accomplished.

2 - Adequate Protection: the analysis of how to protect a household from unforeseen risks. These risks can be divided into liability, property, death, disability, health and long term care. Some of these risks may be self-insurable, while most will require the purchase of an insurance contract. Determining how much insurance to get, at the most cost effective terms requires knowledge of the market for personal insurance. Business owners, professionals, athletes and entertainers require specialized insurance professionals to adequately protect themselves. Since insurance also enjoys some tax benefits, utilizing insurance investment products may be a critical piece of the overall investment planning.

3 - Tax Planning: typically the income tax is the single largest expense in a household. Managing taxes is not a question of if you will pay taxes, but when and how much. Government gives many incentives in the form of tax deductions and credits, which can be used to reduce the lifetime tax burden. Most modern governments use a progressive tax. Typically, as your income grows, you pay a higher marginal rate of tax. Understanding how to take advantage of the myriad tax breaks when planning your personal finances can make a significant impact upon your success.

4 - Investment and Accumulation Goals: planning how to accumulate enough money to acquire items with a high price is what most people consider to be financial planning. The major reasons to accumulate assets is for the following: a - purchasing a house b - purchasing a car c - starting a business d - paying for education expenses e - accumulating money for retirement, to generate a stream of income to cover lifestyle expenses.

Achieving these goals requires projecting what they will cost, and when you need to withdraw funds. A major risk to the household in achieving their accumulation goal is the rate of price increases over time, or inflation. Using net present value calculators, the financial planner will suggest a combination of asset earmarking and regular savings to be invested in a variety of investments. In order to overcome the rate of inflation, the investment portfolio has to get a higher rate of return, which typically will subject the portfolio to a number of risks. Managing these portfolio risks is most often accomplished using asset allocation, which seeks to diversify investment risk and opportunity. This asset allocation will prescribe a percentage allocation to be invested in stocks, bonds, cash and alternative investments. The allocation should also take into consideration the personal risk profile of every investor, since risk attitudes vary from person to person.

5 - Retirement Planning: retirement planning is the process of understanding how much it costs to live at retirement, and coming up with a plan to distribute assets to meet any income shortfall.

6 - Estate Planning: involves planning for the disposition of your asset when you die. Typically, there is a tax due to the state or federal government at your death. Avoiding these taxes means that more of your assets will be distributed to your heirs. You can leave your assets to family, friends or charitable groups.