Month : March 2015

Money Management

Vital financial tips for the financial poor – How you can be successful

Usually December is that time of the year when most people reflect on their past year’s mistakes and wonder what they can do differently in order to be successful in the coming year. But that doesn’t mean that you can’t ponder over your mistakes in the middle of a year. As we have passed through the first 3 months of 2015, there is still time to make some of the best financial decisions so as to emerge successful in this year. Wouldn’t it be great for you if you could get some of the expert advice from the financial experts who could just tell you what steps you have to follow? The concerns of this article will deal with some vital advice given by some of the best personal financial experts who have given their answers to the question, “What can Americans do in order to set themselves in the right path for achieving financial success?”

The answers of some of the most popular financial analysts

  1. Put an end to playing the role of a victim: Although the job market has improved than before, Americans still view themselves as victims of the job market and this is nothing but a negative tendency to continue playing the role of a victim. They even see themselves as victims to the sluggish economy and the uncertain future of programs like Medicare and Social Security. As per a successful entrepreneur named Robert Kiyosaki, this kind of mindset can have an adverse effect on your mind and prevent you from taking control of your finances. If you can’t find a job, challenge yourself and create a place for yourself.
  2. Save more and spend less: Apart from taking any other step, if you’re just trying to save more money throughout 2015, get back to the basics as it all comes down to the basic financial mantra of saving more and spending less. But this definitely doesn’t mean cutting down your expenses into half and living like a miser, it just means spending according to a frugal budget. It is not only the big savings that matters. First change your mindset and know that no savings small for you and it is the small savings that add up to create big savings fund.
  3. Look for ways to increase your income: One of the best and the most effective ways of boosting the chances of your financial success is by looking for ways to grow your income. It all depends on you to give yourself a rise that you’re worth in 2015. This might even mean mustering up the courage to speak up with your boss and ask him for a raise or starting a new business or looking for even a part-time job. Whatever you do, make sure it adds at least 5% of your entire income.
  4. Trigger off your high interest debts: When Dave Ramsey was asked for his advice for the financial poor who are looking for ways to become successful in 2015, he simply answered, “Pay off your debts”. According to Dave Ramsey’s financial philosophy, living without debts is the only way in which you can be financially successful. Make it a priority to repay all your outstanding debt in 2015 so that you can start off this year with a fresh new slate. If required, you can take help of a debt consolidation company that can help you with an alternative repayment plan.
  5. Set realistic financial goals: This is not an out-of-the-box advice but still there are so many Americans who don’t follow it. A personal finance journalist recommends people to be as specific and realistic as possible while setting your personal financial goals. If you’re planning to buy a home, don’t have any vague goal of saving an amount for down payment that you can’t end up saving. Instead some practical goal will work out in a better way. Try saving $250 every month which can be done by curbing your monthly expenses. Transfer this amount from your checking account to your savings account and don’t withdraw funds unless you reach your desired goal.
  6. Open a 401(k) or a Roth IRA: A senior financial correspondent says that if there is anything that you can do in order to change your fiscal situation, it is to save money in your Roth IRA accounts. Irrespective of which tax bracket you fall in, keep saving money in a Roth IRA and a 401(k). If your employer matches a contribution, it is even better for you and even if he doesn’t, you should still keep saving.

Therefore, when you’re someone who is planning to remain successful in 2015, both financially and physically, try to stay fit. Follow the effective strategies mentioned above to keep away from debts and stay on top of your finances.

Investing

Investing with Exchange-Traded Funds (ETFs)

Guest post by Ori Tal III. Check out the Ori Tal Flicker Account.

Exchange-traded funds, or ETFs, are a type of investment vehicle that capitalizes on the robustness of the stock market as a means of generating profit for investors. The popularity of the ETF stems from many advantages that are unique to these types of funds. Not surprisingly, it is these advantages which helped push ETFs into the mainstream as a viable investment asset allowing investors to further diversify their portfolios to manage risks without compromising profitability. 

At its core, an ETF is only slightly different from the conventional stock market asset in that it is still actively managed and traded throughout the trading day. What’s different, however, is that an ETF can be formed from a composite of other interrelated assets and not just based on one specific stock, bond or commodity. For example, an ETF can be formed by tracking the combined value of tech stocks so instead of just being dependent on, say Apple, the ETF price can also be buoyed by stocks from companies like Google, Facebook, Microsoft, Intel, and some others. 

From here, it is easy to see why investing with exchange-traded funds can be an attractive venture for many astute investors. First, the fact that it can be traded like stocks make it an active asset which can be bought and sold within a moment’s notice allowing investors to leverage price fluctuations to yield a profit. Second, the fact that it is based on a composite of assets and securities makes it less vulnerable to typical stock market issues that are prevalent with many stock prices. Third, government regulations have put a premium on investing in ETFs giving it considerable tax advantages over other types of investment. In many countries such as in the United States, the earnings from ETF investment are taxed at a lower rate than earnings from similar stock market assets. 

Moreover, the idea of the ETF being based on commodities opens up tremendous opportunities for investing in these “commodities” without having to buy the actual asset themselves. ETFs in the gold and silver sector, for example, are particularly attractive. Most gold and silver ETFs closely track the spot price of gold and silver – the ETF appreciates if gold goes up and depreciates if gold price comes down. This means that one can leverage the price movement of precious metals without actually having to buy these metals, store them, and sell them again when the price has appreciated. 

It also helps that most ETFs are priced lower than the per unit price of gold, silver, platinum, and palladium amongst others. Most gold ETFs trade in the $30 to $50 range while the price of gold is about $1,700 currently. If you don’t have thousands to invest in gold, the ETFs become a much-welcome substitute. 

All told, exchange-traded funds open up a new dimension in stock market investing previously not possible with just stocks or mutual funds. It opens the door for more diverse and versatile investment opportunities. Check it out to see if you can use it to grow your portfolio by taking advantage of the global economic recovery.

Money Management

Understanding What Short Term Loans Really Cost

short

If you are in some sort of financial difficulty, a short term loan may just be the helping hand you need. These types of loans are often easy to obtain, regardless of credit status and can, in the main, be arranged online. Hence, they are perfect for emergency situations. On the other hand, you have to be aware that these are often costly loans, so you do have to make sure you research all your options before putting in any kind of application. Hopefully, the following information will help you to make sure you actually get the best deal and understand what you are paying for.

The Application Fees

Most financial products have an application fee as standard. Interestingly, this is not always the case with short term loans, although it can be. Because you can’t know for certain whether or not there is an application fee until you actually look into the product, you need to shop around. Ideally, you will find a company that does not charge you a fee. If they do charge fees, it is generally to cover the charges of checking your credit file, which many short term lenders do not actually do.

The Finance Charges

All loans have finance charges, which you may know as the interest rate. This is your fee for actually borrowing the money and how the lender makes their money. Generally, you will find that short term loans have higher interest rates than other loans. However, there are huge differences between the various lenders, so you need to make sure that you shop around in order to find the one that offers the lowest finance charges. The lower the charge, the less you pay after all.

Payment Options

Most short term loans only run for one month. Many do offer you the option of rolling it over by one month, or more, in which case you only pay interest for that month. However, due to the incredibly high interest charges on these loans, this is a very bad idea. Do make sure you check whether there are any potential early repayment charges. If you can pay the loan back early and this means you also pay back less interest, then this would be a really good idea.

Alternatives

Borrowing money is always expensive. Hence, if there are any alternatives to turning towards a lender, you should consider it. Perhaps you can borrow money from someone you know, in which case repayment will be far more flexible and you may not have to pay any interest at all. Perhaps you have valuables that you could sell, such as a vehicle, antiques or jewelry. It is always a better financial decision to not borrow money, unless you are trying to rebuild credit and are simply applying for a loan to demonstrate that you will pay it back.

Hopefully, this information will have helped you to make a sound financial decision in terms of applying – or not applying – for a short term loan.

Retirement

How to maximise your funds during retirement

Many people live in fear that they won’t have enough money to get them through retirement. Instead of being a well-deserved break from the working world, it turns into an ocean of anxiety with fears that you won’t be able to make ends meet from one month to the next. Angela Swan, Brand Development Manager for Sell Pension, discusses how you can maximise your funds during retirement.

You’ve worked hard all your life and saved as much money as you could, and now you feel like you deserve a break and have earned the chance to spend a little bit more. While it’s true the end of your working life does save you some money – you don’t have to pay commuting costs anymore or those over-priced lunches – but will it really be enough to make you feel secure?

Sometimes your pension just doesn’t seem like it could last you through your entire retirement. Don’t worry, just because your salary has stopped rolling in, it doesn’t mean that there aren’t other ways to create new funds and supplement the earnings from your pension pot.

Relocate to a cheaper area

Retirement is a huge transition in anyone’s life, which can sometimes be difficult to adjust to. Use retirement as a fantastic opportunity to make a big change, for example if you’ve lived in the city for years to be closer to work, then perhaps you could relocate to the country or a completely different area. Relocating could reduce your outgoings by a huge amount, especially if you have a large house and are downsizing.

Turn your hobby into a business

Having a hobby throughout retirement is a great way to keep yourself busy and active, and there’s no reason why it can’t be turned into a lucrative business. Craft hobbies, such as cushion making, homemade decorations and furniture are a joy to make and have become increasingly popular.

Do your market research before making any big decisions and invest some savings into your venture slowly.

Put money aside for an emergency

There’s nothing worse than budgeting for a comfortable retirement, but not including emergencies into the budget and draining your remaining resources as a result.

Accidents can happen, whether it’s your home or a medical problem, sometimes an unexpected event can cause your savings to plummet. Ensure that if the worst does happen and you do need some extra cash, that you have already put some safely aside to cover any unfortunate events. If the money is never needed during your retirement, think of it as a nest egg that can go straight to your loved ones.

Money Management

The Necessity of Building Personal Savings

how to build personal savings

Savings are always necessary to solve any financial emergency you can face unexpectedly.

Unfortunately according to the recent survey more than 20 percent of all people have debts exceeding their savings, and approximately 13 percent have no emergency fund at all. Although the statistic is improving, we still have a lot of problems with personal financial management.

There can be a situation when you really need to use fast payday loans website to get a short-term credit, but it will not substitute the emergency fund you should always have. So let’s determine some useful steps to prepare for savings and building the necessary emergency fund.

Don’t rely on credits

Today you can easily use a credit card to afford any purchase or cover the necessary spending. However, this is not an emergency fund, but just a delay in payments. So it will not substitute your own saved money you can use with no consequences.

At first, any credit must be returned within some definite period and under certain conditions. In such a way, you can cover some expenses, but it will not help to deal with a mortgage or even car payments.

Moreover, when you borrow money, the lender expects definite interest rate to be paid. If you take short-term loans it can be higher due to more risks the lender takes. However, long-term obligations will also eat out more of your money eventually due to the growing price of the purchase you make. So you should understand that any credit means you will definitely pay this amount of money with additional covering of interest rates. So you will need to work and earn more.

Today your solvency is determined by the credit score you have. And the main factor is the difference between the credit card balances and limits. So if you use your credit card in a monetary emergency, your credit score will decrease. As a result, it will be more difficult to borrow a significant amount in future.

The amount of money you need

It’s not a fantastic number you can’t calculate. All your expenses can be noticed and summed up, so you will have definite amount of money. And when you have such calculations you can easily predict the necessary fund you need to create to secure yourself from the possible changes in your life.

However, not many people have ever thought about the necessary amount of money to cover their regular spending during six month. So when you want to calculate this number, you should consider the following expenses:

– house and car payments
– utilities and other recurring bills
– cable and internet
– groceries
– gas and maintenance of a car
– unpredictable expenses

At first you can be shocked with the result, but you have time to reach there. So you just need to start. It can be some dollars for the beginning that you will increase when you can. Also, you can reduce some spending in order to have this money saved.

In conclusion, we can say that any financial actions always require some knowledge and preparations. So it’s better to spend some time to get the necessary information and use the possible loopholes in financial laws that will help you to save enough money and use all benefits of your situation.