Personal Financial Planning | Money Management | Investment Tips

Financial capability

noreply@blogger.com (admin) — Tue, 29 May 2012 01:47:00 +0000

Have you ever felt your salary is not enough even increased every year? Are you sometimes feeling disappointed because of you are not able to buy your desired products? Why does this situation come? There are two causes.

1. Limited salary.

Your salary is fixed every month, while your needs and wants are unlimited. For example, your salary is now 2000, you certainly cannot buy a house in installments where the monthly installment amounting to 3000.

If you want to force to buy a house, you have two choices; first, you have to look for additional income. Or the second way, you are looking for a house with smaller installments than your salary.

2. Expenses exceed the salary.

You already know that the amount of your salary is 2000. Then, you have to think and try hard to manage the salary to pay all cost of your needs and wants. Set aside 15% of your salary for future investment funds (Future First), the rest of it may be used to pay all expenses including the various debts that you have created.

Never spend money for the cost of living exceed your salary, due to a deficit that could deplete your savings or investments.

The main thing is how you live below your financial capability, maximum of 85% (because you have set aside 15% for independent and prosperous future).

Good luck!

[image taken from: www.deborah-s-hildebrand.suite101.com]

How to make holiday budget?

noreply@blogger.com (admin) — Fri, 18 May 2012 03:11:00 +0000

When we create our family financial planning, recreation or holiday allocation should be included in the list of needs. In fact, the frequency of family recreation can be more than once a year. Of course, every family should be looked in the ability of each pocket. Before meeting the needs for recreation, the family must have basic needs, like food, clothing, shelter, health, and education.

Moreover, beside the basic needs, there is still another important need to be fulfilled first, which is charity, debt repayment, insurance, and investment. Then, the last one is entertainment, including holiday.

Although recreation is at the last priority list of family needs, financial planners believe, every member of the family can meet these needs. Condition is the cash flows have to be healthy. Debts should not more than 30% of income and there are budgets for investment of at least 10%. It would be better if the family already has insurance protection, at least for the householder. Insurance is important, especially for families who do not have many assets.

How to keep your costs reasonable?

1. Installment financing

Recreation usually needs large enough money. Therefore, we have to prepare the funds well-planned. How? Set aside some money every month. Regarding the amount, there is no standard benchmark. Approximately 10% of your total income can be put for holiday.

Regarding the investment product, the selected investment product is based on the character of the short-term investments, such as savings, deposits, money market mutual funds and fixed income funds.

2. Price surveys

While preparing funds, you can use the time to survey what kind of rates and facilities most appropriate to the condition of your finances.

Once you confident with the choice of transportation and accommodation, advanced booking will also allow you to save on your expenses. Airfare or hotel rates are often cheaper than when you buy it at the day of your departure.

3. Take advantage of promo.

You can use a number of promotional programs related to holiday needs, such as promotion of a cheap tickets or lodging. You can also use a credit card promotional program. Only do not forget to pay off bills when its due date.

You can ask here and there, or try looking site that offers a variety of discount coupons on the internet.

4. Breakdown the list of needs

Once you set goals, time and cost assumption of your holiday, do not forget to make a detailed list of your needs for recreation. This is necessary so that when leisure, you and your family do not come up short on the road or even a debt due to lack of funds.

Some need to be specified, such as the cost of lodging, transportation, meals, and buy souvenirs. Beyond these costs, it is good to overestimate money needs by 10% -15% for unexpected costs for recreation.

Well, congratulations to plan a fun vacation!

(image taken from: visitwhitby.com)

Prepare the Social Fund budget

noreply@blogger.com (admin) — Fri, 27 Apr 2012 04:25:00 +0000

Frequently, we are not aware of hidden expenses. One of these expenses is for social purposes such as attending a friend's wedding, buy a present for a cousin's birthday, to visit sick colleagues, and others.

If these funds are not well calculated and managed, these funds could make your wallet empty! As a precaution, we need to allocate in the budget every month at least 5% of income or depending on ability. Remember that the more friends, the greater the social fund will be spent.

However, avoid taking funds that has been set aside to savings for this purpose. If the budget is quite tight, thoroughly check the financial for unnecessary expenses and can be removed so it can be allocated to the social fund. Do not also interfere with the social fund that has been set aside for other purposes. Although there are no events of this month that require you to use it, next month there might be events that have been waiting for.

Buying a Long Term Care Insurance (LTCI)

noreply@blogger.com (admin) — Fri, 20 Apr 2012 14:13:00 +0000

What is long term care insurance (LTC)? Some financial planners might be arguing that this product is suitable to answer the need for treatment and care for someone who has lost the ability to do basic things such as the elderly.

LTC is not only intended for the elderly, but for anyone who has begun to lose the ability to perform basic activities. Basic activities are eating, bathing, wearing clothes, and walking. These kinds of needs would not be covered by the health insurance or critical illness insurance.

The health insurance only accept a claim from the policyholder if the person is doing inpatient and outpatient care. Likewise, critical illness insurance that provides replacement cost when a patient is already ill. While LTC perform the replacement cost for someone who started to be physically limited person, even he is not currently sick.

Treatment for Long Term Care Insurance policyholders could resemble the hospital as well. For example, providing a special room, special toilets, and wheelchairs, also put the nurse to help the policyholders who are not able to do some basic activities.

To get the benefits of LTC, surely there should be a bigger cost than if you buy health insurance or critical illness insurance. In Boston, U.S, cost of care for LTC policyholders in a year could reach U.S. $ 40,000-US $ 100,000.

The size of the premium to be able to get the benefits are varies. Just like insurance, the profile and health levels of the policyholder will determine the calculation of the premiums by the insurance company. Including what kind of treatment desired.

Because it is expensive, only certain people can and deserve to buy LTC insurance. You must have adequate financial capability. For those who have a risk of genetic diseases, such as stroke, cancer, obesity, and Parkinson, it is more worth to buy this product because of a similar disease potential is huge.

LTC products are already widespread and commonly offered in the United States (U.S.), United Kingdom, and Canada. Some insurance companies are known to offer LTC products, such as John Hancock Life Insurance, Prudential Financial and Sun Life Financial.

From the simulation results of premium on the website of John Hancock, a 30 year old person and living in Texas must pay an annual premium of U.S. $ 2,280 or a monthly premium of U.S. $ 205.2. The amount of the premium is for U.S. $ 547,500 insurance money with a five-year period of insurance and a daily benefit of $ 300.

(image taken from:a-life-insurance-website.co.uk)

Are You Financially Healthy?

noreply@blogger.com (admin) — Fri, 13 Apr 2012 13:19:00 +0000

It is already 90 days since the New Year, what have you done to your finances? Evaluate the financial health is the most fundamental things you must do before investing.

Someone who is financially healthy, generally know the condition of assets and debts, able to always pay the mortgage debt on time, and know how to use the assets and cash flows to achieve life's wishes. How about you?

The easiest way to find out the financial health is to do a financial check-up. This process can be done alone or in consultation with a financial planner. You will be invited to recalculate the amount of assets and the amount of debt currently held. In addition, you will also be required to inform the amount of your income each month and where the money goes.

There are five areas you should look to determine how healthy your finances, and how close you are to achieve your life wishes.

First is the emergency fund. Every person shall have an emergency fund at least 3 times the monthly expenses.

This emergency fund should be in liquid form of assets and the value is not decreased, such as savings, deposits, and money market mutual funds. If you currently do not have an emergency fund, start setting aside 10% of income, until the ideal is achieved.

Second is debt. Summarize the minimum payment on all your debts. These include credit cards, car loans, housing loans, and other loans. Total payments of all your debt repayments should not exceed 35% of monthly income.

Do not forget to diversify

Third is pension funds. Prepare your future by starting to invest for retirement. Try to set aside 10% of income to the appropriate investment products for pension funds.

Fourth is insurance. Protect the asset value and economic value of your soul is very important. Evaluate your protection needs, and make sure you have insurance that is really needed by your family.

Fifth is wealth diversification. Having assets that spread across three different allocations is a wise thing. Combinations that must exist: a stable liquid assets (savings deposits), physical investment assets (precious metals, property), and investment asset in the stock market (mutual funds, government bonds, stock).

For each category, you can select one. Consider your financial goals, your current situation, and how much time you have to achieve your goals and wishes.

Financially healthy is the first step towards the financial freedom stage. Like the human body, the financial health must be achieved and maintained.

Live a beautiful life!

(image taken from:www.ffrcollects.com)

Managing Your Salary

noreply@blogger.com (admin) — Fri, 16 Mar 2012 13:58:00 +0000

There is a man receiving USD 10,000 per month as a general manager in his company, but almost 60 percent of his salary used to pay his debts. At the same time, there is an ordinary staff whose salary is not that big, but he has assets with a value continues to increase. How should we manage our salary?

Someone called the rich is not determined from the amount of money raised each month, but of how a person manages his salary.

There are people with high salary, but always run out their money every end of month due to their consumptive attitude. How can a man, as a manager, receive USD20, 000/month, run out of money to pay debts which are 60 percents of his salary? It is because of his 76 kinds of expenses. The manager spends his salary to participate in golf club, gym, spa and the other.

There are four things to consider in order to properly managing your salary. Consumption, debt, investment, and protection.

Make a priority
In the consumption items, we have to make priorities, ranging from social expense, debt repayment, investment, and the life needs. The life needs, such as daily needs, are unlimited. Therefore, the expense for life needs must be spent wisely.

Spending has no limits, but you have limited income. Therefore, we have to allocate appropriately.

Can I owe?
Debt is always a problem. Someone who has a credit card should pay the bill in full before the due date because if you only pay the minimum amount, your debt will increases more and more.

We may take a debt if in emergency situation or to buy a productive asset. The productive assets such as property or gold bar are having good value and continue to grow.

The key of investment
The importance of investing is to ensure your financial in the future. If you invest your money, the amount and value will increase higher than inflation rate.
Then what is the key of investment? First, you should have an investment goal. Second, adjust your goal with the risk profile. Third, choose the right investment product; this is often not considered properly.

Protection
To protect yourself and your family, have you take an insurance? Life insurance should be able to replace at least 100 months of monthly expenses.

But for health insurance, if your company could cover your health costs, does it still need to take health insurance? Buy what you need, not what offered to you.

(image taken from: itsaboutthemoney.net)

8 Common Mistakes in Property Investing

noreply@blogger.com (admin) — Fri, 09 Mar 2012 14:23:00 +0000

In the previous article, we have been talking about how to start a property investment. Also, in the next article, discussed how to do successful investing in property, and how to buy a house for your investment purpose.

Well, before you really start to put your money in property investing, it is worth to read this article and think before you start.

Here are 8 Common Mistakes in Property Investing:

1. There are no clear goals and plans.
This is the most important of whatever we do. If we do not have any clear goals, the results will be not clear as well. It is good to have a clear goal in an investment. It is necessary and good to write down your clear goal, so it is easy to remember. For example, I want to have one unit of apartment to be rented out in 2013 and give me a passive income around USD1000/month.

2. Not seek for advice from property expert or a successful property investor.
This is usually neglected. But, if we do not get feedback or input from expert people who are already have much experience, most likely we will make mistakes which should be avoided.

3. Buying a home as an investment that did not generate positive cash flow.
Indeed, often, the first time we buy a house usually does not for investment, but if we want to buy a first home to invest as well, then you should pay attention to how the actual cash flows. Or, if the cash flow is not your investment goal, then the capital gain is the thing to be noticed.

4. Buying your own property and not see the potential buyer in the future.
Often we are only concerned with good design, interior, but the location, for example, this property is very difficult for people to reach. Of course this will be a problem if you are going to sell it or rent out to prospective customer.

5. Buy a cheap property ,but in the wrong location.
When you buy a property, do not get stuck on price only if the location of the property is not so good. This will make it difficult to sell, even though the price below the market price.

6. Buying a dream house and then making an excess renovation.
Usually for the first-time buying, people are tend to re-design his home based on his expectation. But what happened next? The time will come when you feel difficult to pay the mortgage and it seems quite a burden. Especially if it's the fact that his house is not in a good location and at a good price to buy, it is clear that would be very difficult to be an investment.

7. Buying a home beyond the financial capabilities.
We have to consider our financial capability. We have to consider the costs such as sales tax, insurance, monthly installments, operating costs, and also some renovation needed at an early time.

8. You still pay the mortgage until you retire.
You were thinking about buying a small house with small start-up costs. But it turns out that the mortgage was taken for very long time until you retire, you still have to pay the mortgage. Unless it is for rented house and provide a positive cash flow, so that mortgage payment is not a problem.

Well, try to look at and consider the above things before we took the decision to invest in property, so that we could avoid the common errors. And create a better personal financial planning.

Tips for Choosing a Unit Link

noreply@blogger.com (admin) — Wed, 29 Feb 2012 13:54:00 +0000

Carefully first before you choose a unit linked investment products. If you are not careful, instead of having a profit, you could lose because you do not careful and do not understand. On the other hand, if you invest in unit link in the right place, you can get a very satisfaction return on investment (gain).

To avoid losses in the future and get the optimal investment, there are a few tips that can help you:

1. Company Data
Start by collecting data of insurance companies who sell the unit-linked products. Then, find as much as possible the information about this product and company's background.

2. Choose a healthy company
After collecting data and information on the unit link insurance companies, drop your choice to a healthy company. All can be seen through its financial statements.

3. Find out the placement of investments
Before determining the type of unit linked to one company, you better to know about the policy of the placement of your investment, whether in bonds, leading stocks, and so forth.

4. Look for the professional unit link marketing agency
If you want to be safe, avoid transactions with the insurance agents who are not active and not professional. You can identify this by looking at the identity card (certified or not), work (achievement), or company's contact.

5. Study the illustrations
Learn and understand the illustrations of the unit-linked product offered from an agent (salesperson) of a life insurance company.

5. Learn the benefits
Learn the benefits of unit-linked products and the policy provisions in a few insurance companies.

6. Consider the cost
Consider the costs charged to the product such as a monthly administrative fee, transaction fees, the cost of premiums, and others. Sometimes there is an illustration of insurance that do not include these costs. Ask to your insurance sales agent.

7. Customize with your financial situation
Customize with your financial condition if the source of income can be budgeted to meet the responsibility to pay premiums.

(image taken from: www.etencatnagar.com)

5 Financial Priorities for young people

noreply@blogger.com (admin) — Fri, 24 Feb 2012 14:03:00 +0000

Priority means putting the primary needs in top priority compared to other needs. Usually these primary needs are precarious and cannot be postponed. In priority, most of young people still tend to be against the rules and want to prioritize what they want.

Hundreds of items, hang out places, socialite activities style, and all of which require money are usually on top of their shopping list. Instead of saving money, young people usually tend to spend money. Especially, for those who just have a job and can make money for the very first time.

Here are five priorities that should be implemented since the first time of young people to work or receive income:

1. Emergency funds
Collect the saving funds for some 3-6 times of your monthly income. The purpose is to anticipate the possibility of temporary interruption of income due to termination of employment. If young people can allocate 50% of his income to establish an emergency fund then within 6-12 months will reach its quota.

2. Funds for marriage
Collect the saving fund for 6-12 times of the monthly income. This is to anticipate the possibility of getting married at any time. If young people can allocate 50% of his income to establish a marriage fund then within 1-2 years will reach its quota. Do this after the emergency funds collected.

3. Home
Collect your earning for 24-36 times of your monthly earning. The goal is to pay a down payment and other costs. The assumption is that most people cannot afford the cash to his home, then take out a loan (mortgage) at banks. If young people can allocate 50% of his income for a house down payment, within 4-6 years will reach its quota.

4. Retirement
Follow a pension program that can debit your earning on a certain percentage of 5% -10% of income per month since the first time you work and continue until age of 55 years when you are entering retirement. Accumulation of these period will generate millions, even billions of dollars for your retirement living.

5.Health
Buy a health insurance-only if your company does not reimburse the cost or does not have any hospital care program. This is especially for professionals and businessmen who bear his own costs of health. Allocate 5% -10% of annual income to pay health insurance premiums.

By implementing the five priorities above, young man is automatically prepare his old age pension fund and to be able to anticipate the financial risks with emergency funds and health insurance. Inability of financial concerns that often lead to delays in marriage can be avoided.

(image taken from:ncbm.org)

How to shop smartly in the Supermarket?

noreply@blogger.com (admin) — Wed, 22 Feb 2012 13:10:00 +0000

There are a lot of housewives who cannot control her desire when she was shopping for daily needs at the supermarket. Even with a prepared shopping list on your hand, but the temptation to buy other items still tease you.

Then, how to shop effectively in the supermarket and does not exceed your budget? The following tips might be helping you to figure it out.

1. Shopping for foods only once a week.
Attach a note on your fridge magnetic, also provide a pen nearby. When you are currently out of stock of food and drinks in the freezer, immediately write down the items on the notes.

This habit has a big impact on your household budget. It is because without a shopping list, you are likely to going back to the nearest supermarket. This method is inefficient, both for your financial and your time.

When you come into the supermarket at so many times, you may be tempted by the offer of discounts or other items you do not actually need.

Instead, take time once a week to spend for the needs of food and drink. Make sure to bring along with you the shopping list when you go to the supermarket.

2. No need to use the shopping cart
If you go to the supermarket to buy a bottle of water, no need to use a cart. When you are going to buy some items, more than three items, for example, select the basket instead of trolleys. Your initial plan is just to buy a few things. When you are using a cart or trolley, you tend to be impulsive shoppers to buy goods that are actually not included in your shopping list.

3. Write down the price of 12 products.
Beside the shopping list, you also need a record of the price lists of 12 essential daily needs. Check your refrigerator and your kitchen, what are the 12 essential daily needs. Usually milk and bread are on the list.

Bring this note every time you shop at the supermarket. Then, write down the price of each product, including when the supermarket have a discount program on that such products. Check also the price after discount. You can also compare prices from one supermarket to another supermarket. The price difference can save the family finances, is not it?

4. Make sure the correct price at checkout.
The cashier did not always follow the update price of the product or products on sale. Make sure the price you see on the shelf is same with the price when you checkout at cashier machine. If the price is wrong, you are entitled to complain.

5. Use the discount card as well.
The supermarkets usually offer you a discount card to purchase a particular product. Ensure the discount card function properly and you really get a discount from the discount card.

6. Do not be tempted to the packaging.
For example when you are buying salad, you had better choose a variety of salad ingredients on your own instead of choosing a salad that has been packaged neatly. For example, when you buy a packaged salad, the price is certainly different when you choose the contents one by one then put together in a bowl. You can save money by ignore the convenience.

(image taken from: guardian.co.uk)

Prepare your retirement funds

noreply@blogger.com (admin) — Fri, 17 Feb 2012 13:43:00 +0000

After working hard for decades to make money, someone who enters retirement period will want to enjoy life in peace. Surely you would be happy if you can still be financially independent. Therefore, thinking and preparing for your retirement funds is essential.

The sooner you allocate your money for retirement funds, the amount of monthly installment payment would be smaller. But the collected funds are potentially bigger. You are also having the bigger opportunity to gain the compounding return (accumulated profits). So you should start planning to collect your retirement funds as soon as you work and earn income.

It is better for you to not only rely on the pension funds managed by the agency or company where you work for. It is because usually this pension funds agency only places the funds on a conservative investment instruments with low return.

Select the more aggressive investment product

In fact, preparing the retirement funds may need up to decades time of investment. A small return of investment probably will not cover the inflation. Therefore, you suggested to allocate yourself a retirement funds to the investment product with bigger potential return. On the other hand, do not need to worry about the investment risk because the long-range of investment can minimize the risk.

The amount of money to set aside for establishes this retirement fund is relative. There are many factors that affect, such as current salary, income expectations and future lifestyle at retirement, your investment character, and how much time you need to prepare this retirement funds.

Well, here are some investment tool you could use to establish and preparing your retirement funds.

Stock or equity mutual fund
There are at least two advantages to be gained from investing in stock mutual fund, the potential return of the stock price and ease of investing.

The potential return is large enough, can be up to 30% per year. But, there is risk of your investment may go down because of price fluctuations of stock in your portfolios.

Stock investment
Besides enjoying the rise in stock prices, investors can enjoy the company's net profits or dividends. However, it takes careful analysis to not select the wrong stocks. You can select stocks with good fundamental performance, such as large company stocks or blue chips.

However, blue chip stock prices, generally, expensive. So, you could buy the second-tier stocks that have the potential to have good long-term growth.

Bond
Bond with the long-term period over 15 years can also be an option. Just like stocks, you should keep this for long-term, even to its maturity.

You can gain a benefit of the coupons interest or price increases. To reduce risks, financial planners recommend that you choose the government bonds more than corporate bonds.

Property investment
Property can be a source of retirement funds. However, selling the property is the final choice. Except the price is not cheap, selling the property is not easy. So, it is better to rent out your property to get passive income.

The selection of the type and location of the property becomes a crucial factor because it determines the rate of price increases and rental demand.

Well, let us prepare our old age period.
Let us prepare the retirement funds! Make a better personal financial planning!

7 Habits to Improve Personal Finance

noreply@blogger.com (admin) — Tue, 14 Feb 2012 13:36:00 +0000

Habits that you run every day will determine your future. No exception in financial condition. Try to observe your habits and how to manage money. If you are facing situation where you cannot enjoy your regular monthly income, having deficits in the end of each month, it's time for introspection.

Find out the cause of your ‘messy’ financial condition. You probably do not run a good financial habit. There are seven good financial habits of personal finance that could make you a positive person.

1. Saving.
Only by saving, your life can be more peaceful. You will be comfortable because your future spending is already on the savings.

2. Smart shopping.
You are aware of and had the habit of avoiding excessive spending. You simply shop according to your needs and budget. That way, you can save more so that there is enough excess money to invest.

3. Record all transaction.
This is a simple method that can be applied to anyone. The goal is in order to more easily control your spending. You can see more details of each financial turnaround. But do not just record it. Make this note as a reference to make changes and improve the bad financial planning.

4. Avoid debt.
Debt, especially consumer debt, is very high interest and burdensome. Credit card interest that you frequently use to shopping, for example three percent per month or 36 percent a year, is higher than deposits or even higher than capital market investment. Debt must be controlled to achieve good financial planning.

5. Controlling expenses.
Various ways can be done by keeping track of spending. For example, using the 'envelope system' that can help you limit spending and more disciplined. With the envelope system, you are "forced" to use funds already budgeted through the envelope system.

6. Maintain the financial security of families.
It can be done by applying the purchase of insurance such as life insurance and health insurance. Life insurance serves to protect families from losing their living source of income from a person who becomes a mainstay of the family when he died.

7. Investing.
There are many options to invest. You could buy precious gold metals, saving money on deposit, buy mutual funds and stocks. Each of investment tools has various advantages and disadvantages, and risks, so depending on your profile as an investor.

5 Financial Planning Tips for a Widow

noreply@blogger.com (admin) — Fri, 10 Feb 2012 13:27:00 +0000

Acknowledged, it is not easy to decide a divorce. Many things must be considered, from the psychological, mentally, and also about financial. Especially for a woman as a wife who relies on the income of her husband during marriage.

Well, here are tips on managing finances for a woman who had just divorced.

1. Have your own source of income
After a divorce you need to have your own income, even if the court decides you will get allowance or any other money from ex-husband. Why? Quite simply because this benefit is generally a fixed amount, while the prices of goods and services out there are usually always go up every year.

Is that it? Any other reason? Prestige! You must show to your ex-husband that you also could be independent and not necessarily have to depend to him all the time. Is not it?

2. Prioritize Needs
Divorced is a sad moment. Eventually it is the time to you to rearrange your life.
When rearranging this, what you should do is to try to meet your basic needs first.

For example, if you do have your own source of income, do not directly used to buy your desires. Prioritize your needs first, then the rest, if any, use it to buy other things that you really want.

Remember that you recently divorced. Well, if you do not meet your needs first, while you've bought other things that are not necessarily need, you will lose your income quickly.

3. Look after your Insurance
The next thing you should do is to re-evaluate the insurance programs that you have taken. What needs to be changed? Or do you need to take a new one?

Consider if you need to take insurance on behalf of yourself with your child as beneficiary. It is suggested that you do not rely on the insurance program that had taken by your husband when your family is still intact.

4. Saving, saving, and saving
Remember that when you are recently divorced, many of you may not bring the wealth at all. Or, if there is the split of wealth, the amount may not much enough. In fact, anything can happen in the future. It could be you are not able to work and earn money, you could be laid off (if indeed you decide to work again), and so on.
This is important reason of why you have to saving.

5. Decide carefully when it is about financial problem
Now, you are alone. You are also as head of the family. Therefore, try to be careful of the financial decisions you take.

If you want to buy a car, think carefully about what the effect to your financial planning. If you decide to run a business, think also whether your business is really going to run well because if not running seriously, it will be bad consequences. So be careful.

Hopefully the above suggestions can help you to better manage your finances after a divorce.

7 sources of wasted money

noreply@blogger.com (admin) — Tue, 07 Feb 2012 12:54:00 +0000

Without realizing it, we do every day waste. Identify the little things that could potentially spend the money in your pocket and could impact your personal financial planning.

1. Late of paying bills.
A fine with a small number of impressions is often neglected. But after a long time, it would be a lot of money. Try to always on time in paying electricity bills, telephone, internet, or your credit card. Use the calendar reminder feature on the phone, if you are forgetful type. If the bill is yet to come and bill deadline is near, you should contact the company to determine the amount of the bill, especially for credit cards. Late of payment means not only pay the penalty, but also have to pay the interest.

2. Nonsense purchase.
Sometimes when we buy clothes, actually we do not need it. We buy clothes just because the model is nice and new. Yet, in the end we only wear it once or twice only, or even never at all and just kept in the closet.

3. Too often to eat in restaurants.
This is a hidden waste that is not felt. It is not mean that you are prohibited to have eating out or having coffee with friends after work. But you have to know your limits and if it exceeds the monthly allocation, no other ways except compensate by reducing other expenditures. For example, try to occasionally bringing your own lunch from home, made by your wife or yourself.

4. ATM fees.
You often faced with a situation that there is no ATM of your bank and you have to withdraw money from ATM of other bank with charged. Don't get used to it. Try as much as possible to withdraw money at no cost. Learn the offers from your bank. Some banks offer free transactions with certain conditions.

5. Impulsive buying.
Discounts or credit card promotions are often the weak point of a woman when shopping. Promotion of buy one get one, extra discounts when shopping for a certain amount, or a special gift with special expenditures are often an irresistible offer. It sounds like a classic, but are you really need it? Imagine how many items in your closet that have not been used, even once.

6. Use a car for a short distance.
Go to the supermarket that is only two blocks from home would not need to use a car. Try to walk or ride a bicycle to get to a place that is still accessible and need affordable energy. Besides saving, you also help reduce pollution from car exhaust.

7. Waste of power.
Turn off electrical appliances or lights when not in use. This sounds trivial, but it will feel when you pay your electric bill.

Financial tips for fresh graduate

noreply@blogger.com (admin) — Fri, 03 Feb 2012 14:05:00 +0000

After completing studies for four years, many hours studying until late at night, then it's time you face the real world. When you moved to the adult phase of life, make sure you are able to handle the financial situation.

While you are still young, you have to learn about money management. Here are financial tips for fresh graduate:

1. Make a health care coverage
When you are entering the workforce, your health care dependents of your parents will probably end up in line with your graduation. So you must need an individual health insurance plan.

2. Save money for the future
Try to join the pension plan at your workplace. If you are still young and the company offers the plan, take the chance. You also need to manage your savings before you have a lot of financial obligations such as children and home.

3. Allocate for emergency funds.
Allocate part of your new job salaries to build a saving account to serve the emergency fund.

4. Learn about tax.
Educate yourself about tax cuts make you aware of the tax bill.

5. Handle your credit cards wisely.
Use your credit cards carefully and always pay the balance on time each month.

6. Create a saving goal.
After you earn a salary, you need to make retrenchment. As a recent graduate you may want to focus on retirement planning or advance funds for a house.

Successful investing in property

noreply@blogger.com (admin) — Wed, 01 Feb 2012 13:42:00 +0000

Property can serve us as a place of living. At the same time, it is also one of investment product.

Property can be utilized as an investment because in the future there is a possibility of price will go up. Property prices will rise in future due to amount of available land becomes more scarce.

On the one hand, as other investment products, property also contains risk that price does not rise or even fall. If that land is limited, then there is a possibility of price drops? Imagine if when you buy a property, whether land or buildings, it turns out there is content of nuclear radiation in the area. Surely people will think twice to buy property in the area, and makes the demand and property prices to fall.

Between price, location and purchasing power

Three important points to consider when buying property is location, location, and location. You must have often heard about this. And, in fact, that's what it is. Location is the important key in the selection of properties.

In considering the location, there is a good idea to do a small survey first. Try to visit these properties area during weekdays, during holidays, or even during the rainy season. Some property developers say that property they offer only a few minutes from downtown. Why don't you try to do a survey to prove that statement?

Make productive assets

Investing in property, tend to require a high enough money, either in the form of land or houses. This makes the property not easy to be accessed as an investment. To invest in property, you can take advantage of mortgage facilities.

Investing in property by utilizing a mortgage will be better if the property becomes a productive asset. The meaning of productive asset is it could give you a regular source of passive income every month higher than mortgage installments. For example, if you rent a property, the rental income per month can be used to cover mortgage.

So, in the end your property can be utilized as a vehicle for investing. But, because the price is expensive and limited, it will require your attention so that you are not wrong when buying it. You can use your property as a producer of passive income, and no need to wait the price increase in the future.

Lastly, if you want to buy it with a mortgage facility, make sure that the mortgage can be accommodated by your financial health.

Successful investing in property!

Optimizing short-term funding needs

noreply@blogger.com (admin) — Thu, 26 Jan 2012 13:40:00 +0000

Actually, besides the savings, there are some other product to deposit your money for short-term needs. There are deposits, and money market mutual funds. However, each product has different characteristics. Thus, the selection of the products must be tailored to the needs of your financial planning.

There are three things that must be understood, the term compliance with needs, liquidity, and its potential return.

Distinguish between routine and non-routine needs

In financial planning, short-term funding needs are less than one year. That means, these funds should be placed on products that have high liquidity. That is, the product allows the owner to disburse funds with ease, whenever he needed.

However, we have to adjust every product that we choose with our needs. In fact, your short-term needs can still be divided into routine needs and the needs that are not routine.

Routine needs consist of expenditure items that are routinely issued every month. Usually, even though it is not always the same amount, it is still can be estimated and relatively unchanged over time. For examples: monthly household expenditure, payment of electricity bills, phone bills and internet, as well as car repair.
Meanwhile, non-routine monthly needs, such as home renovation, holiday fund, or property tax payments.

Well, after we know the various types of our short-term needs, we can just adjust it to a suitable investment product. In terms of liquidity, no doubt, the savings is the most liquid product among any other type of short-term investment product.

However, this high liquidity factor can also be a drawback, especially for those who are less able to control his spending. Moreover, in terms of return, the interest rate of a saving product is very small.

So, saving is suitable to store your money for short-term needs which are routines and emergency funds. But remember, the emergency funds account must be separated from the account for routine household needs.

Cannot expect a high return

Meanwhile, deposits and money market mutual funds could be utilized for the needs of under one year of non-routine monthly.

In terms of liquidity, money market mutual funds can indeed be taken at any time. However, the disbursement is troublesome because of the administration process usually takes time. While deposits cannot be liquidated prior to maturity.

In terms of returns, deposits and money market mutual funds can offer higher returns than savings. Historically, these two products produce a return above 5% per year. So, slightly above the inflation rate (inflation rate assumed 4%).

However, investors cannot expect a high return for the investment of less than a year. Short-term investments are not for speculation and not expect for high interest.

How to make safe investment?

noreply@blogger.com (admin) — Mon, 23 Jan 2012 13:09:00 +0000

Rise and fall in your investment value throughout 2011 surely provoke anxiety for many investors who had just started to put money into the capital markets as well as precious metals. Thus, one question that inevitably arise is "what is the most secure investment for me?"

Talking about risk, I am convinced, surely there is always a risk contained in every investment product. For all investment options, you will definitely be dealing with three types of risk: loss of capital, the difficulty of converting to cash, and the loss of purchasing power due to inflation. Among all three of these risks, I am sure most of the young investors or newbie investors will definitely put the risk of capital loss as the greatest risk.

To me, a safe investment must be adjusted to our financial goals. The term 'high risk, high return' should be changed to 'highest possible return with calculated risk'. We must look for an investment product that can produce the highest potential yield for all our financial goals.

First, for financial goal under a year period. Holiday fund for the preparation of Christmas 2012 is an example of short-time financial goal. For this, you cannot tolerate the risk of capital loss due to the arrival needs is certainly in the short term. Therefore, the choice of your investment is savings, deposits, and money market mutual funds.

Second, for the purpose of emergency funds. Emergency funds are only used for unexpected purposes, such as hospital costs, the cost of replacing damaged refrigerator, put into this category. The risk is that we cannot withdraw the investment cash immediately. It would be very scary. Bank saving account is the best place to store the emergency funds. The next option is a money market mutual funds because it can be withdrawn at any time without penalty. But for bank deposits, if you withdraw before its due date, it means you will pay a penalty.

Third, for the financial goal of above one year. College education fund for seven years old children, your pension fund, or funds to purchase a second home, are including into this category. You cannot still use savings or deposits for this purpose.

If your savings just give you 2% a year, while the inflation rate reached 6% a year, then you actually lose 4% of the money. So, although your initial money may be secured, you are losing the purchasing power more than half.

Looking for a balanced combination of financial planning for your financial goals is an art in making an investment portfolio that is "safe" for you. Whatever your life situation, I recommend that you save money on products that the risk of capital loss and liquidity risk is low, a minimum number of 3-month expenditures.

The more risky your job, due to unfavorable business situation or choice of working as a freelancer, then you should enlarge the amount of funds placed in this product.

Along with investing experience, you will understand the performance of various investment assets and risks that may occur. Most importantly, you still feel safe and comfortable in investing to achieve a prosperous life.

Live a beautiful life!

Investing in 2012

noreply@blogger.com (admin) — Thu, 19 Jan 2012 13:08:00 +0000

Talking about investment, this word has been heard often enough. A lot of people or friends who do not really understand what investment is and desperate to start investing without knowing the contents of their investments. Be careful. You may experience losses instead of profits.

Investment is a concept that is commonly done in the financial world in order to develop the value of money. Development is represented in the form of return or interest.

A good investment product is a product that suits your needs and your character. Not all of investment products are suitable and necessary need all at once. You have to understand of how the product will deliver the maximum benefit and what risks that may arise.

Banks Deposit Account.

Deposit account is commonly used by people who have a certain risk-tend is more conservative or safe (with fixed interest and protect the initial) as compared with other investment products. The period is very diverse, typically 3, 6, or 12 months. If you try to withdraw before its due date, you will be penalized.

Although this type of investment is less able to compensate for the inflation rate, the deposit is still required and can be utilized in the process of financial planning. This product is suitable for storing the funds that will be required within one year.

Gold - Precious Metals

There are gold bullion and jewelry. The difference is, when buying gold jewelry; you buy a gram of gold plus the difficulty of manufacture. When you are willing to sell it back, the ‘difficulty value’ is not counted. Thus, for investment purpose, certified gold bullion is much better.

Property

Property investment has been recognized for long. Currently, the attraction of property is not only land, but also houses, townhouses, apartments, villas, and other residential properties. The most crucial thing when investing in property is the location.

Stock

When deciding to begin to invest in stocks, you must commit to have it in the long term, 5 years-10 years. If you only intend to purchase in the short term and make a profit on the price difference, then you are not investors, but a trader or broker.

Stock investment is more suitable for those in young age, young investor. Why? It is because the stock is an investment product for the long term. Stocks often need more time to develop.

This investment has the principle of high risk, high return. Perform an analysis of companies with the potential to continue to grow in the future.

Mutual Funds

There are four conventional mutual fund products: money market funds, fixed income funds, mixed funds, and stock or equity funds.

Mutual funds help the investors, especially beginners, who have limited funds, time, and knowledge to investing directly into stock. Noteworthy is the suitability of types of mutual funds with a risk profile and your financial planning goals.

Have a successful investing in 2012! Have fun with your money!

5 common mistakes of young investor

noreply@blogger.com (admin) — Wed, 11 Jan 2012 12:59:00 +0000

When we are learning something, it would be easier if we are still young. The existence of small errors in learning is a natural thing. But, if the error is related to money, then the consequences will be massive.

Beginner investors are usually easier to make mistakes, but also easy to bounce back and take lessons from past mistakes. However, you can be much more successful if you learn from other people's mistakes while avoiding the mistakes occur to yourself.

The following are common mistakes that typical young investor. Hopefully these errors can give knowledge to you so you can avoid it:

1. Putting off plans to invest.

Procrastination is not a good thing, especially in terms of investing because the market situation is rapidly changing. A very appropriate time to start investing is very difficult to determine. After much research, usually ideas and time to start investing like it just showed up.

You should be more ready to act before the market situation turned around, so you do not need to depend on market situation. Usually, due to lack of experience, newbie investors are sometimes not confident with his decision in investing.

2. Speculate rather than invest.

A young man had plenty of opportunities to invest in his life. An early age usually affects the risk he could take. Thus, young investors are more likely to take high-risk investments, but with high returns as well. Why?

It is because when young investors lost a lot of money, he still had plenty of time to start investing again from scratch. So do not spend time just to speculate, but immediately invest.

Speculation is usually done by young investors because of the lack of information or do not understand correctly about investment options. This is dangerous because there are many senior investors can take advantage from these young investors.

Instead of having to speculate or gamble, young investors should do lots of research, or looking for high-risk enterprise, but with the potential income is also high for the long-term. Take advantage of your young age to take risks because the result will be worth it.

3. Too much spending money.

Investing in large quantities can be a double-edged sword. As mentioned earlier, if a young investor suffers losses, he had plenty of time to get up and start investing again. However, similar to speculate, too much spending money without enough information can destroying the portfolio.

4. Less asking.

If the stock market is falling, young investors are usually optimistic about situation. They believe that it will soon improve in the near future. What happens next is usually the opposite. One important factor in making decisions in this kind of situation is to ask 'why'. Do not just stay silent. Young investors should be able to maintain and responsible for a good portfolio.

Do not be ashamed to seek input from senior investors because they know more about what happens in the market. Do not take bad decisions in the uncertain market situation.

5. Not invest the money.

As mentioned earlier, investors have an advantage to see a high yield in the middle of the high risk of long-term basis. Younger people will have more opportunities to bypassed risk while still young.

A young person is usually having less experience in money management. They think that the money should be spent right away, without looking at the long-term. Spending money without thinking about retirement saving or deposits can hurt you.

Conclusion:
Young investors should take advantage of his youth age to seek for experiences as many as he take the risk. Early learning of investment can help you in designing a solid portfolio. Indeed, there are many risks to face. But, at least, risks and mistakes can help young investors to gather such a valuable experience.

Stock mutual funds in foreign currency

noreply@blogger.com (admin) — Mon, 09 Jan 2012 12:53:00 +0000

You would often hear the proverb 'high risk high return' in the investment world. Among the types of mutual funds, stock mutual fund is an investment tool that refers to that proverb. Potential costs and benefits derived from the rising and falling of stock prices. If the stock price tends to increase, the net asset value (NAV) goes up, vice versa.

For long-term

Mutual fund investment is the best used as a long term investment. With a longer time to manage investments, normally the investment manager can provide a positive return to the maximum.

For the stock mutual fund denominated in foreign currency, there are two potential advantages: the increase price of underlying asset and the strengthening of the exchange rate. Therefore, this type mutual fund can also be a means of foreign exchange hedging against exchange rate fluctuations.

Conversely, the risk is also double, i.e. when the underlying asset price falls and the exchange rate weakened. Clearly, foreign currency mutual funds can be used to meet foreign exchange needs in the future.

However, investors should not be hasty to choose the mutual fund products. The exchange rates are always changing. Investment manager's profile is more important as a consideration in choosing a product. From this it can be seen the performance of historical returns (products) that they manage.

Investment allocation that managed by the investment manager must also be the concern of investors. Check whether the Investment Manager invest in liquid stocks or not. Sometimes the investment manager also allocates investment in overseas stock markets.

Who is interested?

Wise use of credit cards

noreply@blogger.com (admin) — Fri, 06 Jan 2012 14:59:00 +0000

With so many credit card offers and the ease of applying credit card applications make people want to have a credit card. However, someone who has a credit card should have been familiar with the rights and obligations as the holder of a credit card.

Some of the benefits or rights for credit cardholders:

1. Discounts at certain merchants;
2. 0% of interest to purchase certain goods or services;
3. No need to carry cash in large amount;
4. Knowing of the credit card's interest for any purchases 3.25% - 3.5% per month (39% -42% per year) and withdrawal rates of 4% per month or 48% per year;
5. Obtain the billing information in complete, accurate, on time and informative.

While the obligation of credit cardholders are:

1. Pay the annual fee;
2. Pay off bills before its due date;
3. Pay the interest on credit card if the customer does not pay the bills before maturity;
4. Pay interest on the cost of stamp duty;
5. Pay the late fees or penalties.

If clients know their rights and obligations as cardholders, surely customers will not experience difficulty in paying their credit card bills.

Make sure you have the funds

Credit card is a high-risk loan because it is not through the usual lending requirements application, such as have no collateral and an easy process. Therefore, the banks charge high enough interest to compensate in case of write-off due to failure to pay.

Card issuers are sometimes not transparent for the imposition of interest rate of credit card; even the bank can apply the method of compounding interest calculation. Eventually, that is why the customer will have greater debt balance.

To prevent you from having problems in using your credit cards, here are the things you should look:

1. Make sure if using a credit card, you already have a sufficient balance to make credit card purchases. Do not force yourself to spending by using credit cards while you actually do not have the money.

2. Make sure you pay bills in full before the due date. That way, you will not get interest on your bill.

3. If you are unable to pay off some credit card bills, you should stop using the credit card. Furthermore, quickly pay off or pay the bills gradually start from card with the highest interest or the biggest bill if the interests are the same. Please note, this payment must be above the minimum payment and at the same amount for each month until paid off.

Still thinking of debt? Use your debt for productive things.

6 Fatal Mistakes in Trading

noreply@blogger.com (admin) — Tue, 03 Jan 2012 13:23:00 +0000

Continuing the series of Forex trading articles, this time we will discuss six fatal mistakes in trading because if you do the following errors, it can be sure you are a failure as a trader.

Well, let's see what are the six fatal errors:

1. Does not have a trading system

Does not have a trading system is the first fatal error. If you do not have a trading system, it means that you will tend to trading based on approaches that could be said messy. How can you expect the success of the messy method?

Instead, having a trading system means that you have the guidelines, objectives, and also how to achieve the clear objectives in trading. Having a trading system increases the chances for success because you have the guidelines for entry, exit the market or standing aside. In other words, you are definitely on track to achieve your goals.

2. No discipline

Even if you have a trading system, but if you do not discipline in following the system that you specify, it means you made a second fatal mistake.

Many traders declare that they have a trading system, but in practice, they keep trading impulsively regardless the system that has appointed by themselves. So the trading system would create such a display function only!

3. Not learn

Admitted as a trader, but never try to always be up-dated of technical ability, never follow the news in connection with forex, never read a book about forex, never join the forex seminars and not join the community of forex traders.

Well, there are many ways to always learn. You do not have to always follow the existing forex seminar. But at least you are always trying to improve your skills in trading. Involve in informal discussions with fellow traders, or just monitoring the news, or just read a book or e-book related to forex.

4. Do not care about money management

Money management aims so that you can control the risks and losses. So if you do not care about money management, it means you let your money to vanish without a clear purpose.

5. Ignoring psychological aspect when trading.

A trader who is able to control his emotions in trading will be able to understand that not all positions must generate profits to get a positive capital growth. Occasional loss does not make them become "irritated" and then take revenge. After all, the possibility of loss is already factored into trading plan.

Okay. Above statements can be said to be a major cause of our failure in the world of forex trading. Do you want to be a successful trader? So please do not do the above mistakes.

So, let us try to always survive and enliven the market! See you on the market!

Happy trading!

Effective Ways to Learn Forex

noreply@blogger.com (admin) — Wed, 21 Dec 2011 13:40:00 +0000

You want to learn forex trading, but you don't know where to start and where to go? Beginner traders are commonly experiencing difficulties in the first trying to understand what and how the forex trading is.

So, how to learn trading in the most effective way?

Stage 1: Learn the basics of the theory from web

According to some experienced traders; the most effective way to learn is by your own. This means that you can learn on your own with the help of web. There are a lot of webs offering explanations or free forex education programs.

Do not worry. Usually they are presenting the learning system stages and are easy to follow with easily understood language and making it more attractive to read. You can choose web with the language you feel more acquainted with you, local language or English.

It would be better if you have a friend (trader) who has more experiences to serve you as mentor. The function of mentor here is as a place to ask and consultation on issues that you face in learning and later in practicing forex trading.

Stage 2: Learning the practice of trading (with virtual account)

The 2nd stage of this can be done while learning the theory, of course, after you possess the most basic knowledge first, for example how to use trading platform. We can learn from web while opening trading platform so we can just try the theory that we read. Obviously we use the virtual account first, so that not too many unnecessary losses.

Stage 3: Constructing trading system (Which is considered the most suitable)

Once you try a variety of indicator, various kinds of system you may read, eventually you will find trading system that you feel the most appropriate. Whether appropriate with psychological condition, financial condition or state of the background of your activities, such as how much time you can spend to do trading without interrupting your regular activities.

All you have to remember is that a trading system will not always suitable for all traders. So you should not imitate someone’s trading system, although the system has been proven to work well. You still have to make adjustments in order to make the system more fitting for you.

Phase 4: Perform trade with live account

Once you find appropriate trading system, start doing trading with live account. At this stage we would start to have in mind, "how much does it take to make a deposit?"

Well, in my opinion, the standard for making a deposit: deposit only on the amount that you prepared to lose. Never make a deposit with funds that actually already designated for another thing.

Stage 5: Continue to learn

Although you have learned and previous success with virtual account, it is not a guarantee that you will be immediately successful also in live account. However, experience is very influential in trading skills, especially to form the mental and positive psychology to be a reliable trader.

Keep learning, trying, and learn ... and so on. And certainly, do not give up!
Join with the trader community where its members can provide mutual support, both spirit support as well as sharing the technical problems so that you feel "a friend" for discussion. In the community, you will be expected to re-learn and try enthusiastically.

Happy Learning & Trading

Between Saving And Investment

noreply@blogger.com (admin) — Sun, 18 Dec 2011 13:55:00 +0000

It is better to know in advance the difference between saving and investing. Saving money means we put aside money without expecting an increase of the value of the money we save. By saving money in the bank, at least we know that the money would be safer than if we put it under the pillow. Indeed, if we see at a glance, a wide range of savings, the bank offers savings rate of 1-3% annually. However, if we look, every year, the prices of goods are always increasing with the percentage that far exceeds the interest savings that we get. If we are aware, we have reduced the actual cash value.

While if we invest, we expect an increase of the value of money over time, so it will give us benefits. The money is expected to deliver increased value of investment called an asset.

Types of Assets
In investing, where there are two kinds of assets, i.e. real assets and financial assets, which both can be considered as an investment vehicle in order to achieve your financial goals. In investing, you should remember that there are always risks of losing your money. Therefore, you must really know the assets which would you choose to invest.

Real Assets
Real assets are assets that have the form. For examples: land, houses, gold and other precious metals. This is a common investment way. For example, you buy a house, and then rent it so you get a monthly earning. When the house was finished hired and the price goes up, you can sell and earn profits. You will get many advantages of investing in real assets, because even if the price can go up and down, but in the long term will likely continue to rise in value.

Financial Assets
Financial asset is an asset that its form is not visible, but still has a very high value. Generally these assets are financial assets in the banking sector and also on the capital market (stock exchanges). Some examples of financial assets are money market instruments, bonds, stocks, and mutual funds.

Choosing the type of investment that suits your choice
Once you learn the types of investment above, then the steps you should do is figure out the benefits of any type of investment. Each type of investment has some special characteristics, namely the potential yield obtained, the level of investment risk, ideal investment period, and the amount of money needed.

For long-term needs, it would be great if you pick stocks and property that is the appropriate type of investment, because it provides the potential for high growth in investment return.

While bonds are appropriate investment for your medium-term needs because it gives you coupons periodically. Meanwhile, for the short-term investments, products such as bank saving is the most appropriate financial products.

Once you can understand the benefits of each type of investment, choose one that best suits your needs, the length of time and finances you have. In addition, you should also consider other criteria that make you confident to invest.