Many Businesses Will Automatically Reduce Their Payroll Expense When They Have To Increase The Profit Line

Category: Finance, Financial Planning.

The report card for any business is its profit and loss statement and in order for the business to succeed, profit is determined by two categories, income and expenses. Some businesses make the mistake when they are reducing their expenses of eliminating costs in some of the wrong areas.

As all business owners know it is easier to adjust expenses than it is to increase income but for profits to show a significant rise, income should go up while expenses go down. Typically, one of the biggest items on any business expense sheet is payroll, often times making up 60 percent or more of the businesss expense line. This may be a short term solution but it can cause long term ramifications. Many businesses will automatically reduce their payroll expense when they have to increase the profit line. When a business has to layoff employees due to the lack of business, the employee suffers personally and the business suffers because the remaining employees have to pick up the slack. Businesses are advised that while it may provide the quickest reduction in expenses, cutting payroll should only be the last resort. Cutting an employees pay typically is never discussed, as this will not only ruin relations with that employee it can affect the morale of everyone else on staff.

There are going to be several line items in the controllable expanse account that can trim some debits off the account before sending people home. Even if you do not have the money to go out and buy energy saving light bulbs and appliances provided in the business, there are some ways to trim a few cents a day off the utility cost. Consider utility costs, as electricity and, for example natural gas prices have risen significantly over the past few years. If you have unused areas in your facility, only provide enough heat to protect anything in the room and then close it down. Maintaining your facility for the comfort of yourself, your employees and customers if applicable can help improve morale and the customer experience, but if you are closed at night, turn the thermostat down. Make sure all the lights are turned off in every unused room and keep watch for light bulb sizes that can drink electricity like water which are not necessary. If you can find it in your budget, buy and install a computer operated thermostat and set it to a lower temperature when no one will be in the building and turn it back up before opening the next day.

Use it when it is needed, but turn it off when it is not. Use the same common sense with the air conditioning. Your business rent is probably a fixed amount with little room for improvement, but utilities can save a little and office equipment and supplies can eat up cash that you might be able to use to avoid layoffs. Ordering from a catalog and having all your stuff delivered to the door may be convenient, but it is also going to be expensive.

Maybe You Are An Expert On" Green" Funds

Category: Finance, Financial Planning.

How are you marketing your financial business, when financial advisers are commodities? We all sell them for the same price.

We all sell the same products. We all offer our clients good service. So how do we get a prospect to choose us over someone else? We all have a good handle on how to help our clients best. How to Get Prospects to Choose You. All the way up to 2002, pomegranates were rarely eaten in the US.

Well, we can all take a great lesson from how billionaires Stewart and Lynda Resnick marketed over hundred acres of unwanted pomegranates. Less than one in 20 had ever bought a pomegranate, and most of those people use them for decorations instead of eating them. They had lots of a fruit that very few people wanted. So the Resnick s had a problem. So what did they do? Five years ago, they began selling their pomegranates as juice in unique double bulb bottles, at four dollars a bottle. They created a fantastic USP.

It was a smash hit! How? They took a fruit from utter obscurity to charging four dollars a bottle and have people buying it by the case. They simply did their homework. I don t know if you ve tasted it, but the stuff is awful. They framed the pomegranate juice as the healthiest drink available to the US public.

The Resnick s flooded the market with information about how healthy pomegranate juice was. You name it. It cures heart disease, ED and more. Pomegranate cured it. So what can you learn from this example? It became the new, must have" super food" . Go out and give advice that is the completely opposite of what everyone else is providing in your industry?

Unfortunately, that is probably not an option. Yes, if you can. The advice the financial industry gives, is generally very good advice. All fruits are good for you. But let s think about this for a second. You can find the" super food" characteristics in any type of fruit. So, here s what you should be doing now.

All the Resnicks did with pomegranate, was showcase pomegranate s particular attributes, versus trying to be the" me too" of fruits. How to Find Your Unique Selling Proposition. Maybe you are an expert on" green" funds. You need to find the thing that makes you better than your competitors. Maybe you re an expert on the stocks of companies run by women. Maybe you are an expert on the retirement plans of a large corporation in your city.

Maybe you understand the need for financial planning for families with special needs. Maybe you re an expert on Medicare part D. You may not require a whole heck of a lot more research than you ve already done. There s a high likelihood, you are already an expert on a particular topic. Sit down and figure out what it is that you know more about, than your competition. Write articles and submit them to targeted print and online publication. It doesn t matter what it is, just become an expert. 3 Ways to Become an Expert and Gain Instant Celebrity Status.

For submitting articles to the top websites, ezines and article directories, I recommend using PR Leads Article Marketing Experts. BroadcastYourArticles. com. They also have a great A to Z product that will teach you how to write articles at www. Issue press releases to your local paper, radio and TV stations. Make sure groups that may be interested in your expertise know that you and your expertise exists. You can also submit press releases online using services like PublicRelationsSoftware. com.

By being the expert on any issue, you tell your prospects that you are different from your competition. Your Next Steps. You give both your clients and prospects something to hold onto, a handhold that describes who you are as a financial planner. Take a hard look at your practice and ask yourself the question, "Why would someone work with me, versus my competitor? " If you don t have a very specific answer to this question, you are doomed to mediocrity. You re always going to be spending money on marketing. You are always going to be looking for your next client.

You re always going to be losing some of your clients to competitors. When you are an expert people seek you out, rather than you endlessly seeking them out. The only way off, the gerbil wheel is to become an expert. Don t you think, it s time to make yourself into an expert so you can lock- in your difference and bury your competition?

Read more...

However, If You Decide To Quit Your Policy, Your Cash Value Can Be Paid In Cash Or Paid Up Insurance - Finance and Financial Planning:

Whole life insurance, also known as cash value insurance is a basic and consistent type of permanent life insurance which remains in effect your entire life at a level premium. A portion of your premium goes into a reserve fund called cash value that builds up over the years your policy is in affect.

A Credit Card Interest Calculator Will Make This Step Easier - Michele Strandberg's Finance and Financial Planning blog:

Bad credit card debt can make your life miserable with worry and telephone calls from collectors.

There Are Two Negative Reactions To The Sudden Shift Of Lifestyle In Retirement

Category: Finance, Financial Planning.

Then when the kids get there and see that Mickey Mouse is a guy in a suit and that the rides are about the same as the local Six Flags, an inevitable let down and disappointment sets in. But sometimes even adults can be guilty of letting dreams and images of a golden time ahead get the best of us.

And that is no fun for the parents on the trip home when all of those expectations did not come to pass when the kids came face to face with reality which did not line up with their dreams and hopes. We often develop a mythology of how retirement will be when we get there and when that retired life actually starts, there are some real, down to earth adjustments that need to be made. There are two negative reactions to the sudden shift of lifestyle in retirement. So if you can know some of the hidden dangers of retirement in advance, it is so much better to go into retirement with your eyes open and have realistic expectations. They are loneliness and boredom. For men especially the feeling of boredom can also set in pretty fast when the challenge of the work world goes away.

Even if you are going to be home all the time, there is no question that once you stop going to an office or having regular responsibilities, you can often feel a sense of loss and grief because you miss the people, the regular human contact and the fun of being out and that can result in loneliness that can get pretty chronic. In a lot of cases, men live for their jobs and when that world goes away, there is a sense of disorientation and not knowing what to do with themselves that is disconcerting for the family and for the retired man himself. Both of these problems can be addressed by not letting your retirement life be to idle, at least not at first. You may have been looking forward to a less stressful life only to find that it was the stress that makes you tick and without it, you feel adrift in life with no direction or goals. You can fill your life up with volunteering, getting busy with family or by getting involved socially with other retired people. Both retired married partners can find ways to pitch in and it gets you out with people doing things that are worthwhile. One area of volunteering that can go a long way to replace the gratification of the work place is to work with habitat for humanity to help build homes for people who cannot afford a home any other way.

Give yourself time to get used to the idea of retirement and to the new lifestyle. Be aware that if you and your spouse are suddenly around each other every day and every hour of the day, that is going to create new stresses which can also qualify as a hidden danger of retirement. It should be a simpler lifestyle because your responsibilities are reduced and you have more time on your hands. By being aware that this is not the fault of either spouse but a natural reaction. There will be a natural down time when you first retire and treat the first month like vacation. The best response is just to get out and do things separately and create that natural space you are both used to more often.

But do not stay on vacation. It will be fun and exciting to see where it takes you and that is what retirement is all about. Let your ambition and zeal for life find new outlets.

Read more...

Once You See What You Want, You Can Even Buy It Over The Internet - James Geraghty about Finance and Financial Planning:

Throughout the ages, people of all races have desired, luxury, and searched for. The desire for luxury is entirely natural, and people have found hundreds of different ways to pursue it.

Like Traditional Mutual Funds, ETFs Contain Many Securities, Or Stocks And Bonds - Finance and Financial Planning Articles:

Mutual funds are a traditional component of most investors portfolios, but exchanged traded funds, have been gaining, or ETFs popularity over the past decade as well. The security, as well as the traditional aspect of mutual funds, and their stable reputation, still carry a, however wide appeal for many investors.

These Will Only Give Back A Small Amount Of Interest - Monique Lansford's Finance and Financial Planning blog:

Few families pass on actual knowledge about wealth building to their children.

Step 3: Check Your Insurance Needs

Category: Finance, Financial Planning.

With the beginning of a new year, it seems everywhere you turn you hear something about self- improvement. What about your finances?

There are plans for weight loss, quitting smoking, exercise regimens, going green and more. Even if you think your finances are in" good shape" , everyone could use a little" tune up" to make sure everything is running smoothly. There are some very simple steps you can take that can make a world of difference. And it s not as hard to do as you think. Step 1: Check your beneficiaries. all of them. Assets with beneficiaries include life insurance policies, retirement accounts and annuities.

A beneficiary is simply who will receive a given asset when you die. Even bank and brokerage accounts have a feature called P. D. or T. Many people forget who they listed as beneficiaries, and when they check, are often shocked to find ex- spouses, deceased relatives or estranged family members listed. D. , which stands for payable( or transfer) on death. Do yourself and your loved ones a favor and make sure your beneficiaries reflect your current wishes.

If you don t have any plan in place for distributing your assets at your death, by all means put one in place now. Step 2: Check your Living Trust and/ or Will. If you have a plan, make sure it s up to date. For instance, have you purchased a vehicle recently, or maybe a vacation home or time share? One of the biggest mistakes those with Living Trusts make is forgetting to keep all their assets in their trust. Made any new investments? Whether you have a Living Trust or a will, be sure there aren t changes you need to make.

If so, be sure they are registered under the name of your trust. Perhaps you have new grandchildren or there has been a divorce in the family. Powers of Attorney might not be up to date. Your designated executor might no longer be the one you desire. Step 3: Check your insurance needs. If you ve recently been blessed with children and/ or your once income- earning spouse is now home with the kids, you might need increased income replacement.

Our needs change through life and our insurance needs change along with it. On the other hand, if you re newly retired, you might not need as much life insurance as before. Liability coverage might need to increase. You might need more homeowner s insurance if you ve built an addition or have valuable belongings. Your auto insurance might have little uninsured motorist coverage. By raising your deductibles on your home, car and health insurance, you might be able to save some serious dollars.

Step 4: Check your insurance deductibles. And don t be afraid to shop around for better rates. Step 5: Tune up your company retirement plans. With the internet, getting insurance quotes is easier than ever. Are you putting all you can into your 401( k) , 403( b) , etc. ? You should also review and update your portfolio allocation. Are there any company- matching funds you aren t benefiting from?

Is it all in company stock? (Not a good idea! ) Are your funds allocated too conservatively or too aggressively? Step 6: Tune up investment portfolio. And don t forget to check out those beneficiaries while you re at it. The economic climate this year will probably be considerably different than last year. Depending on your needs and your tolerance level you may need to move more money to international or more money out of the markets and into fixed. That means that you may need to adjust how your portfolio is allocated.

Asset allocation isn t something that you want to set and forget. For instance, if you are recently widowed and your spouse handled the finances, maybe you want to enlist the help of one of your adult children. You may also want to consider who you need to share your financial and estate plans with. If you ve named someone as your successor trustee or your medical power of attorney, you might want to discuss your desires. And while our new weight- loss diets might be hard to maintain over time, these financial tune- up steps usually only need to be done once a year. These are by no means the only ways to tune up your finances, but doing even just one of them can make a positive impact.

Read more...

Brokerage Houses Generally Have Subprime And Private Equity Exposure, As Discussed Above - Finance and Financial Planning Articles:

The stock market is gyrating like a yoyo, and with each down stroke it s heading lower.

Be Careful With Your Money - Finance and Financial Planning:

Ten dollars is ten dollars. Not really.

Their Attorney Was A Generalist - Finance and Financial Planning Articles:

Ned almost lost the farm that had been in his family for 8 generations! Make sure you don t make the same mistake Ned did.

The Financial Statement Summarizes A Company S Assets

Category: Finance, Financial Planning.

Accounting has been defined as, by Professor of Accounting at the University of Michigan William A Paton as having one basic function: "facilitating the administration of economic activity. And 2) communicating the results of this process to interested parties. " As an example, a company s accountants periodically measure the profit and loss for a month, a quarter or a fiscal year and publish these results in a statement of profit and loss that s called an income statement.

This function has two closely related phases: 1) measuring and arraying economic data. These statements include elements such as accounts receivable( what s owed to the company) and accounts payable( what the company owes) . This at the higher levels of accounting and in the organization. It can also get pretty complicated with subjects like retained earnings and accelerated depreciation. Much of accounting though, is also concerned with basic bookkeeping. Every bill paid, every dollar and, every dime owed cent spent and accumulated.

This is the process that records every transaction. But the owners of the company, which can be individual owners or millions of shareholders are most concerned with the summaries of these transactions, contained in the financial statement. A value of an asset is what it cost when it was first acquired. The financial statement summarizes a company s assets. The financial statement also records what the sources of the assets were. Profits are also an asset of the business. Some assets are in the form of loans that have to be paid back.

In what s called double- entry bookkeeping, the liabilities are also summarized. The management of these two elements is the essence of accounting. Obviously, a company wants to show a higher amount of assets to offset the liabilities and show a profit. There is a system for doing this. The result would be chaos! Not every company or individual can devise their own systems for accounting.

Read more...

The Way In Which Asset Allocation Dovetails With Ancient Wisdom Is That It Turns Our Focus Inward Rather Than Outward - Graciela Dino about Finance and Financial Planning:

Advances in investment theory have dovetailed nicely with ancient wisdom to present investors with a new and exciting paradigm for investing. Markowitz.

Do Not Rely On Brokers Words

Category: Finance, Financial Planning.

Forex trading broker is a person assisting you to trade in foreign currencies and accountable to give all relevant market information. Forex trading brokers are normally regulated by government.

It is not obligatory to have a forex broker, but in order to trade efficiently you will need one. Only a regulated broker will make sure reliability and flexibility of your trade. Some brokers in the present day ask for the a small percentage from your bid/ ask spread, those brokers do not have commission or fees system. These Forex brokers work on the commission or charge basis. An individual may be interested in executing their trade without the help of forex broker, but a normal trader with less market information, putting an effort to trade in online forex market is simple like chasing a grizzly bear with bisque spoon. These forex brokers are not centralized unlike other kinds of trading.

As the market is competitive, your chance of success will be low with our adequate broker. In fact you will come across thousands of broker that put their own currency spreads, margins and prices. It is 24 hour market and you might not be able to handle it alone. If you want to deal with online forex trading market, it is must to have a forex broker. Your forex broker will offer you 24 hour support. It is understood that choosing a forex broker is indispensable, but be careful while choosing one. It is simple- you may carry out trade at 4am in the morning, but that might be the time of good trading and he may support you simultaneously.

Do not be in a hurry, check out few options around. There are few factors to be considered when choosing forex broker and they are as followed: Consider broker only with the required qualification. It is good to have a demo account opened at first to confirm on the working of forex broker and foreign exchange market as well. Do not forget to check all his degrees well in advance. Choose forex broker that offers low spread trade, as broker charge their fee depends upon the spread so better to have broker with lower spread. In you are in United States then avoid not registered broker. Good to go with fixed spreads.

Broker must have up- to- date information on the market structure and should be willing to work with on the flexible timing. Ask the broker if he is willing to provide technical comments, and able to, financial calendar do market research. Must have complete knowledge about margin and spreads- go with some experienced person. So with low leverage you will have low risk in this market. Go with the brokers that offer lower leverages, it is the amount of bucks that he would lend you to trade forex. How much margin is he willing to offer you?

Check out the client history and evidence. Do a careful research of the broker, avoid if he is involved in any blacklist or other delegations. Have a complete talk on the commission system, better to have a written agreement. Your forex broker must know the rules and regulation of the government. Must have good reputation within the forex industry. Ask all the questions well in advance if you have any to avoid frauds. Best is to go with the references, check out with your office colleagues or friends and relative if they know some honest forex trading broker.

Do some of the paper work and research how your broker works in the running market. Do not rely on brokers words. Ask for the references where he has by now worked.

Read more...

One Spouse Cannot Make Financial Decisions For The Other Spouse - Dianna Pouncy's Finance and Financial Planning blog:

Are you a gambler?

Also, Your Joint Tenancy With Another Person May Prevent Your Children From Inheriting Such Joint Assets - Finance and Financial Planning:

If you are a woman, and have assets, are financially secure that you expect to pass on to people you love and care for, you must make a suitable estate plan.

This Is How You Can Find The Best Estate- Planning Attorney For Your Family - Finance and Financial Planning Articles:

Finding a good estate- planning attorney is vital for the success of your estate plan.

That Problem Was With Jim

Category: Finance, Financial Planning.

When people inherit money, they face unique challenges. On the financial side, the inheritor must learn how to preserve and grow his or her wealth.

These challenges generally come under two distinct categories: financial and emotional. On the emotional side, the inheritor must learn how to keep his or her life on track, deal with friends and family s reactions to the inheritance and manage with the impact of money on one s life. Jim grew up as an only child in a wealthy family. Inheriting money is often a mixed blessing, but with good support and consultation, inheritors can create a workable and balanced approach: being smart about the money while good care of themselves. On his father s side, the family had been landowners in California s Sacramento Valley for four generations. Jim s father was an influential attorney. The family had multiple real estate holdings throughout Northern California.

He represented wealthy, landed interests in his community. There was only one problem with this well laid plan for Jim s life. The expectations of Jim s family were that Jim would either go into law or business and take control of the family s holdings. That problem was with Jim. As a teenager, Jim discovered that he had a gift for music. His interests were not with the family business at all.

He started with the piano at age 12, and he never looked back. When he finished high school, Jim moved to Los Angeles, and began a career in music. He devoted himself to the piano, songwriting and to, to singing performing. Jim s dad was not happy with this turn of events. They fought about it frequently. Not only did he think his son s choice of career was trivial, he considered it a slap in the face that his oldest son would turn away from the family business. The rift between them only deepened when at age 25, Jim came out to his father and introduced his male partner to the family.

At age 25, Jim came into a large inheritance per the terms of the trust. The bulk of the family money was in a trust created by Jim s grandfather many years ago. At this point, Jim called on a consultant to help him deal with his relationship with his Dad. His goals for consultation were to: 1) Sort through his own feelings about his relationship with his father. 2) Work through a negative self- image and low self- esteem that had developed in relation to his Dad. 3) Work through his feelings about his inheritance and his new status as a" moneyed" person. 4) Invest his newly inherited money wisely. 5) Become better informed about how to deal with money. Jim asked that his father attend the consultation, so Jim came, but he declined to the consultant on his own. The consultation began with the psychological issues. Jim developed new insights and understandings about his Dad.

They worked on Jim s relationship with his dad. He came to understand some of the pressures his Dad was under and developed a more compassionate understanding of his Dad and his Dad s approach to money. Jim found that he had internalized a lot of his father s negativity about who he is in the world. The next step was working on Jim s relationship to himself. While the father considered music a frivolous pursuit, Jim learned how to deeply value his own commitment to music. Learning to separate his father s attitudes from how he sees himself helped Jim to feel more comfortable in his own skin. While his father was prejudiced and closed minded about Jim being gay, Jim learned to see himself in a healthy and positive light.

Having sorted through many of the relationship dynamics with his Dad, dealing with the money issues became much less loaded for Jim. While at first it had felt like a terrible weight and burden, he began to really think about how the money could support him in developing himself further and in living more authentically. He started with unpacking the meaning in his life of having this family money handed down to him. He decided to invest in himself by going back to school for a degree in music composition. Although this was rocky going for a time in the relationship, they sorted the financial issues in the relationship out in a way that felt good to both of them. He also sorted through some issues with his partner Dan, explaining to Dan that he was not going to support him financially even though he now had the means to do so. The next issue he dealt with in consultation was implementing a financial plan.

His financial planner helped him find a CPA who helped him reduce his taxes. Now that Jim was responsible for a large sum of money, he worked out an asset allocation with his financial advisor that was designed for both growth and income. He met with an estate- planning attorney who helped Jim deal with plans for his estate and leaving a bequest for Dan. He did this by taking the inheritance issues seriously, and tackling head on both the psychological and financial issues involved. Jim succeeded in using his inheritance to create a more balanced and rich life for himself. He now feels that the inheritance was more than just a financial gift, it also provided a catalyst to help him grow and develop himself in many ways.

Read more...

You May Still Be Subject To State Gift Taxes - Finance and Financial Planning Articles:

Doris from Minnesota is considering transferring her assets to her son so they won t be lost to Medicaid should she need assisted- living or nursing home care. One of the greatest financial risks seniors face is the rising cost of healthcare, including the cost of custodial care in an assisted- living facility or nursing home.

Communicate The Fund Raising Idea - Finance and Financial Planning:

In the next few minutes, you are going to learn the steps to implement a fund raising idea that can raise significant cash within a very short time frame.

Their Attorney Was A Generalist - Tara Mayne about Finance and Financial Planning:

Ned almost lost the farm that had been in his family for 8 generations! Make sure you don t make the same mistake Ned did.

Allocation Of Assets Can Be Considered A Key To Financial Success

Category: Finance, Financial Planning.

Everyone wants to have more money. Why do people desire money success?

Moreover, people want to achieve that state of financial freedom that describes a level of success that could be described as" financial independence. " Some say that the wealthiest 5% of individuals have more than the 95% put together between them in terms of financial net worth. There are too many reasons to list here. Writing 100 reasons why to decide to be wealthy is a valuable exercise taught in many financial success seminars. Perhaps you could make a list yourself. Allocation of assets can be considered a key to financial success. And what is its cause and effect relationship in the building of wealth and the creation of financial success?

But what exactly is asset allovation? There are are large number of assets that can be invested in. Simply put, an asset is something that probably cost you money and either makes money or increases in value. Firstly lets make the distinction between asset and liability. A liability is something that costs money and decreases in value. Although a motor vehicle is an" asset" in that it has its benefits, in terms of financial key to asset allocation, a car decreases in value and keeps costing you money at the same time( usually, unless it is a classic car for example- but then you wouldn t want to drive it too much to keep the mileage low) .

A car is a good example of a liability. Similarly" toy" such as electronic goods are usually liabilities. The same is true of a successful business. A house can be an asset, because after you buy it, after you have made renovations or improvements along with the historical evidence of supply and demand action in the market, the value can go up. You channel money in to a business first and after establishing the business it can pay for many years to come. With many investment opportunities available to the person with virtually any amount of capital, it is a challenge to find the right opportunity and to correctly allocate financial assets in order for their continued growth and your increasing wealth. Allocation of liquid assets is what we are considering here.

A portfolio of stocks is one possibility. Nowadays there are also managed mutual funds( investment funds) whose managers are professionals at asset allocation in the stock market. For the person with a higher risk appetite and some skill and training in creating a portfolio, managing losses and finding the best stocks, this way has made many an American very wealthy. This is lower risk than individual stock investing, but still carries a risk. Trading the foreign exchange market is a possibility also( forex) again with high risk associated and industry warnings attached. Some funds have very good returns, but it is worth always looking at the performance in the long term( ie 5- 10 years) and many other factors, such as manager s historical performance, sector and country etc. "Always consult your financial advisor before taking a decision" is the forewarning when mentioning anything like this, and applies here to. The advantage of funds over a stock portfolio is that you get automatic diversification within the portfolio but without having to do the research on each of the companies yourself.

Online information is quite good and often free if you look in the right places for fund performance histories, portfolios and management. Instead you are delegating a professional money manager to do that for you. A lower risk alternative to stock markets are the market in government bonds. A bond will pay a fixed return over a time( long term) . Over the long term, bonds do not compare so highly to equities markets as regards to returns. Diversification is key. The chances are that if you spread your investment, there will be more likelihood in the event of one investment heading south, that another will either hedge or outperform the unsuccessful in overall profitability.

Starting a business, investing in equities capital markets, real estate and long term safer investments will create balance in your portfolio and help you to achieve financial independence with less stress and worry. Research, professional advice from someone who is practicing what they are preaching as well as keeping a close management eye on your portfolio will hekp identify strengths and weaknesses in the portfolio and allow the investor to change, or increase investment, sell where and when appropriate to do so.

Federal Loans Are In Great Demand In The US

Category: Finance, Financial Planning.

No student in modern times is unaware of the benefit of student loan consolidation. Even if you belong to the second category, do not despair.

There so much information available in books and on the internet that only a blind person would still be oblivious to its advantages. If you cannot look up to your parents for financial help, there are scores of lending companies who are willing to extend a helping hand. You can get financial aid in school, college and even after you have left college for higher studies. All you have to do is reach out. All these loans will drag you neck deep in loans. Available Benefits Of Consolidation.

Now you need the process of resurrection that comes in the form of student debt consolidation. With the help of student loans consolidation program, you can decrease your monthly installment by a staggering 50% . This simply means that now you have half the installment amount in your hand as cash. This is a very good margin indeed. You can utilize this amount towards your other payments like car, medical, insurance, household, electricity and taxes to name a few. You can further reduce the monthly consolidated installment by increasing the term of the loan by up to 30 years.

With additional finance in your hand, you can even strive to improve your falling credit and bring it above 600 once again. If you invest wisely, you can even add to your savings every month by investing the savings on installment and receiving interest over the investment. It is always advisable for students to take a student federal loan consolidation program or loans that come under the federal direct student loans and qualify for federal consolidation. Look For A Federal Program. Federal loans are in great demand in the US. You have to pass an eligibility test to qualify for federal consolidation. Most of the lenders are willing to disburse loans under a federal scheme due to its multi benefits.

You can check your eligibility status on the internet. Federal loans make you eligible for a lock in lower interest rate. If you qualify for federal loans consolidation, there are many additional benefits in store for you. This lock- in rate is a shield against inflation for the students. In addition to the above, all federal programs used for student loans consolidation are free from any fees and credit checks. The interest rate for your loan after student loans consolidation remains constant, even if there is inflation and increase in rates of interest.

This means that students with bad credit can avail a federal loan. Therefore, do not wait any more, start hunting for the best student loans consolidation scheme, and apply immediately.

Greater Income( Return) , Always Entails Greater Risk

Category: Finance, Financial Planning.

There s an old adage in the brokerage community that you should speculate for growth, not for income. The point is that you should take risk with investments which you expect to increase in value, i. e. , stocks, but not with investments made to generate current income, i. e. , fixed income securities.

Speculation isn t the right word, but the broker who coined it( pun intended) probably wasn t an English major( most brokers aren t) . This is an essential maxim if you are dependent on that income. It s the way the world works. Greater income( return) , always entails greater risk. One rule of thumb is to compare your investment to others in the same class. The same is true for any bond fund. There s a reason a money market fund has a higher yield than its peers- it s taking more risk.

A second rule of thumb is to stick with quality. If you invest in long term bond funds, they will fluctuate in price due to changes in interest rates, credit spreads and the yield curve, but you will not run the risk of serious loss of income or principal. Buy funds which invest in government securities or investment grade bonds. Anyone who stuck to investment grade bonds came through the recent/ continuing mortgage debacle relatively unscathed. Funds that invest in bank loans, and other low, junk bonds- rated or unrated debt instruments, or employ leverage to enhance their returns are too risky for the average investor. If you owned funds invested in US Treasures, you actually made money.

These investments need to be watched and analyzed similar to your equity investments and are not for investors who need a reliable income stream. There are many dividend paying stocks which are relatively safe, and a portfolio of these would be safer than, a portfolio of, for example subprime mortgages. The above rules of thumb apply to equities as well as to debt. I ve been watching a mortgage REIT with a 20% current yield. Good investment? It doesn t have subprime exposure, has taken its write- downs and appears to have good liquidity. Maybe, but I d buy it because I thought the stock would appreciate as the mortgage market returns to normal.

I expect the dividend will be cut because no stock can yield 20% for long. I wouldn t buy it for its dividend. Carry this thought through to the equity income funds you own or are considering and remember: the higher the current income, the greater the risk that it s unlikely to continue. "Speculate" might not be the right word when talking about reaching for income, but it gets the point across. Take your risks in the stock market and don t stretch for higher income because you might end up with none.

Nobody Likes To Pay Taxes

Category: Finance, Financial Planning.

Nobody likes to pay taxes. Knowing some simple rules will reduce your tax bill and allow you to keep more of what you inherit.

If done incorrectly, the way you, though inherit an asset can result in you needlessly paying tens of thousands of dollars in taxes. And it will also keep you from creating tax headaches for loved ones to whom you wish to gift assets. And that tax is figured using cost basis. Whenever an asset is sold, Uncle Sam wants to collect capital gains tax. Cost basis refers to how much money you invested in a given asset. Your amount of gain or loss then determines how much you will pay in capital gains tax.

When sold, the cost basis is subtracted from the amount received to determine the gain or loss. If you buy an asset for$ 10, 000 and sell it for$ 25, 000, your cost basis is$ 10, 000 and the taxable gain is$ 15, 00Currently, the highest capital gains tax rate is 15% , which means you' d owe capital gains tax of$ 2, 25Losses can be used to offset other gains, but we won' t get into that in this article. If you buy an asset and add money to it, your cost basis increases. Determining the cost basis can get complicated. If it's a mutual fund and you have the dividends reinvested, that adds to your cost basis. This means that it is important to keep track of the amounts you paid and received on all of your assets. If you sell a portion, that affects your cost basis as well.

An asset can be many things, not only stocks and bonds but also houses, jewelry, property, coins, etc, artwork. In fact, 1099's are issued whenever investments like real estate, bonds, stocks, and mutual funds are sold. Legally, you are required to pay capital gains tax whenever an asset is sold at a profit. Here's where people lose thousands of dollars. So if mom gives you$ 10, 000 of stock that she's owned for years, you inherit her cost basis and are responsible for paying the capital gains tax on it when you sell it. If someone gives you an asset, you' inherit' the giver's cost basis in that asset. If she only paid$ 1, 000 for that stock and you sell it for$ 10, 000 then you will owe taxes on the$ 9, 000 gain.

Then your cost- basis would be the stock's market value at that time. On the other hand, let's say you inherited that stock from mom after her death( through her estate) . This is called'stepped- up basis' . You just legally avoided the Tax Man! So, even if mom only paid$ 1, 000 for the stock, if it is valued at$ 10, 000 when you inherit it you can sell it and not owe any capital gains tax. This stepped- up basis is the government's way of making up for people having to pay taxes on the transfer of their wealth.

Under current regulation, the stepped- up basis disappears in 201However, there's some talk in Congress of doing away with stepped- up basis altogether, especially since the death tax only affects estates that are larger than$ 1, 500, if Congress ends, 00Most likely the estate tax for all but the largest estates, they will collect revenues from smaller estates by abolishing stepped- up basis. But estate tax laws are in a state of flux. There are situations where it is better to have an asset given to you instead of it being inherited. Death taxes range from 37% to 50% , while capital gains tax rates are capped at 15% . It all depends on the size of the estate. So if an estate is going to be worth less than$ 1, 500, 000 then there will be less tax paid by inheriting an appreciated asset through the estate. I' ll provide several examples in my next article that will clearly illustrate real- life situations.

If an estate will be worth more than$ 1, 500, 000 then less tax will be paid on that appreciated asset if gifted to you prior to death. That way, you will be able to more easily determine which course of action you should take and can save thousands of dollars in the process! There's no reason to pay tax when you don' t have to!

Why Seniors Don' T Buy Long Term Care

In the next few minutes you will learn about a new insurance industry product that provides long term care insurance coverage if you ever need it, but requires no policy, premiums or health qualifications. In my experience, over half the people who shun long term care insurance do so because they feel they will never need it.

Why Seniors Don' t Buy Long Term Care. It is difficult to visualize going to a nursing home. However, there are a number of scenarios where the person may need some kind of assistance but never see the front door of a nursing home. Statistically, half of these people will be right. In fact, most people who need long term care can receive care without ever leaving their home. This can be costly and possibly devastating. When you stop and think about it, the decision not to buy long term care insurance is a decision to self insure.

The average cost of a nursing home today is$ 80, 000 per year and rising. If both the husband and wife need nursing home care, the time to dissipate an estate is cut in half. At that rate, it doesn' t take but a few years to grind through a modest estate. A person can spend 40 years in a career building a retirement nest egg. If they need to go into a nursing home during the last five years of their life, it all could be gone quickly. They spend another 40+ years conservatively managing their money while trying to keep up with inflation. It doesn' t have to be that way as you will soon see.

They may be right. Many people think long term care insurance is too expensive. If a person waits too long to apply, they may have sticker shock. However, long term care comes with a lot of bells and whistles. The rates are based on age. When you strip away some of the options that may be nice to have, the premium is, but not essential a lot lower.

This takes care of the 50% who never will need to go into a nursing home. If a person looks at a plan that covers home health care only, the premium is lower yet. The only thing better is coverage without a premium, which I will get to in a minute. If a person waits to apply for long term care insurance until they are experiencing health problems, any long term care insurance plan may be prohibitively expensive or altogether unavailable. Most people react to a problem only when the problem surfaces. The Solution: The Long Term Care Insurance That is Not a Policy. This very competition engenders new thinking and creative policies.

The insurance industry is very competitive. Enter" Long Term Care Annuities. " There are only a few companies offering this product and the structure differs from company to company. Check with your financial planner for all the options. To give you a general overview of the concept and mechanics, I am going to describe the main aspects of one carrier's contract. The underlying base of an" LTC annuity" is an annuity. Annuities have been around for a hundred years.

Nothing new here. They are safe, the funds accrue at a competitive interest rate, and the account grows tax- deferred. There is no premium. To form an LTC annuity, the insurance company has built in a" long term care option. " It is not a rider. It is simply an option you elect if long term care is ever needed. To qualify, a person only needs to lose two of six ADLs( activities of daily living) . Sweet.

ADLs are insurance companies' method of determining the qualification for levels of care. The person doesn' t have to be in a nursing home. They are eating, dressing, bathing, toileting, transferring( walking) and continence. They simply need to have demonstrated the inability to perform two of the six ADLs to qualify to put the long term care option in their annuity in action. If a male, places, age 60$ 200, 000 into an LTC annuity, assuming a conservative interest rate, the policy would grow to$ 300, 000 in ten years. An Example. If the$ 300, 000 were converted into a life income, the person would receive$ 2, 200 per month for the balance of their life.

Not too bad, considering it is guaranteed no matter what. An 8% return. If this person needs long term care at age 70 by virtue of losing two of six ADLs and elected the long term care option, the life income would jump to$ 4, 500 a month. These new products, long term care annuities, provide the option to receive long term care benefits only if they are needed. Conclusion. There is no separate long term care insurance policy, no premiums and generally little or no underwriting. Those who feel they will never need long term care will simply never exercise their LTC option.

Now there are no excuses. Those who find long term care too expensive have an alternative with no premiums. Moreover, those who have health issues can obtain long term care benefits, as underwriting is simplified or non- existent.