Investing in the stock market is one of the most profitable and the riskiest kind of investments. Nowadays, in most cases, investment allocation is a result of flowing cash to the assets where the current return and risk are satisfied a certain investor expectation. There are some differences between such participants on the stock market as investors and traders. However, a classical investor and trader are both aim at gaining money. History evidences the different cases, when an investor started with a small amount of money and eventually became very rich, or on the contrary, when a millionaire lost all investments on the stock market and became poor. What is the most important quality that separates the winners from the losers on the stock market? The answer is simple - it is knowledge in investing, either that is based on collected wisdom by other investors or gained through making own mistakes. Anyway, the following basic principles could be useful to remember:
Never invest all your money in the stock market, especially, if you are a beginner. Common recommended portion of invested money in stocks is from 25% to 50% of your total budget.
Never invest all money in one stock - always diversify among several stocks in different sectors.
Always watch closely general market conditions, especially, when bear market is about to start. Be prepared by selling most holdings in advance.
Never rush with investment solution. Carefully watch financial quarterly reports, news, and macroeconomics trends before making any decision.
Never let your emotions prevail over a rational disciplined approach.
To improve return/risk ratio, use reliable software tools that embody the investors' concentrated wisdom.
All stocks are volatile without exception. There will be always a certain probability that something suddenly will go wrong with any stock. Even the best stocks can depreciate.
USA recent researches show that an average investor has around $250,000 investment assets and more than half investors uses brokerage advices. Investing is popular for both genders almost equally. For the last decades, the expectation of most investors decreased from about 30% to about 10% of annual return on investment. Most investors prefer a long-term type of investments with less than five transactions per year. Not everyone is able to succeed in investing. Most losses in investing happen because of lack of knowledge, over-confidence, impatience, greed, fear, and different delusions. An experienced investor knows that there is a direct proportion between time spent to increase investing skills and return on investment.
Self-education can help to improve investment skills. Usually, after reading tens of books about investing, investors come to conclusion about importance of fundamental analysis and interpretation of technical analysis indicators. Also investors need to read quarterly financial reports, watch market conditions, try to predict macroeconomics trends, etc. How much time all these take? Fortunately, there is an optimized approach that allows investing time effectively to give a maximum return. As an example, to reach excellence in driving it is enough to read one book, get driving training, and regularly practice. Something similar is possible with investing skills, except that a few books will be required. The following books could be good for improving the investment competence:
Lessons from the Greatest Stock Traders of All Time by John Boik (good introduction in investing)
Stock Investing by Paul Mladjenovic (very useful and important to read book)
The following books by William J. O'Neil:
How to Make Money in Stocks
24 Essential Lessons for Investment Success
The Successful Investor
These books are easy and enjoyable to read. Some experts opinion can be contradictory. For example, some authors offer using such method as "averaging down". This is a method to reduce the cost of purchases. "Averaging down" means to buy more stock of a given issue at a price less than the last purchase successively as the price declines. However, other authors insist that such method is bad. They suggest sell any stock if the market price drops below around 8% - 10% of the purchase price. The problem of this contradiction is that averaging down works well in case if decreasing price is a temporal correction but not a sign of declining business and long-term dropping demand for the stocks. How to distinguish correction from alarming signal? The answer is - to evaluate exactly a real value of company and its stocks, as well as, understand current market condition and know macroeconomic trends.
Nevertheless, all books about investing are useful to a certain extent. The next important step is training. It can be done without money, in a simulation mode. Then it will be naturally to use real money for learning lessons more effectively. A regular practicing is important. However, it is hard to acquire good investing skills fast. One of the reasons is that the market is not always the same. It can be bull or bear market with different corrections. Some market cycles can be very long. For example, a real bear market happens seldom, around once in 12-14 years. Even so, it would be useful to experience a bear market, at least once.
The first step in investment analysis has to be fundamental analysis. The fundamental analysis allows predicting a long-term stock performance. It depends on many factors: company profitability and its growth, liquidity, market stock value relatively to earning, book value, and sales, etc. Stock price also depends on news, analysts opinions, and different ratings. Such factors can be many and it is clear that each of them differently exerts influence on stock performance. For example, statistical research of hundreds of companies for period of several years reveals that the more number of bad parameters belong to the company and its stock, the riskier investing in it. In general, any company and its stock can be considered as a system and the best model of such system quality is a combination of all influential factors with different weights.
Using technical analysis additionally to fundamental analysis can increase chances of successful investing. One of the best software tools to perform technical analysis is MetaStock www.metastock.com However, since there are hundreds of technical indicators with different interpretations for each of them, it is not easy to complete a full-scale technical analysis. Some investors use only some of indicators that are good from their point of view. In general, each indicator has its own ability to predict stock price. Ideally, it would be good to allow computer software to define the current ability of indicators in prediction of stocks prices and assign each of indicators corresponding weight. Then logically, to maximize accuracy of prediction it would be good to combine all signals from all indicators. Besides fundamental and technical analyses, it should be taken into consideration that price of any stock goes up and down depending on other many factors, including general market and sectors conditions. That means there should be an optimal time for buying stock (as well as for selling). Therefore, timing analysis is also important.
To summarize, it is better to use the software that takes into consideration fundamental, technical, and timing analyses together. One of the computer programs on the market with such capabilities is InvAn by Addaptron Software www.addaptron.com InvAn combines the results of fundamental, technical, and timing analyses into a single composite rating using a special algorithm. InvAn defines prediction ability of each technical indicator and then combines signals from all of them into technical analysis rating using Artificial Neural Networks. The main output is the composite rating, i.e., the list of stocks from the worst to the best. Due to a fast and automatic data processing, InvAn enables watching hundreds of stocks. It also has other useful features, such as, calculating optimal cash reserve depending on the market condition and forecasting stock price on the basis of Fourier spectrum analysis. You can find other software tools; the best way to choose the right one is to try their demo versions and read software descriptions (what data used and how they are processed).
If you have never invested in stocks before, consider this. Nowadays of technical progress, buying and selling stocks become very simple. To use the Internet for stock investing, all you need to do is just to open account with some Internet stock investing brokerage. The recommended minimum amount to invest in one stock can be $2000..3000. Using smaller amount may be unreasonable because of the commission to buy and then sell. Good luck!
By Alex Shmatov
Friday, January 18, 2008
Risks Related to Investment
Every investment option has certain risk associated with it which can lower the value of your investment. These risks can be:
1)Credit-Risk
It is the risk that a borrower will default i.e. it is not able to pay its debt. The borrower is an issuer of a particular bond, stock or other investment. The debt can be a principal amount or interest or both. This can happen if a company's market share suddenly decreases or it become bankrupt. This risk can be reduced by diversifying your investment i.e. invests your money in more than one company, than in a single company. No matter how good the company (in which you have invested) is doing, the value of your shares will go down if there is an overall decline in the stock market. This can happen in case of corporate bonds.
2) Liquidity-Risk
Liquidity is the ability of an investment to easily and quickly get converted into cash without incurring considerable losses. Any item that can be converted into cash is known as the asset. It can be a house, land, furniture, bonds, debentures, stocks etc. Liquidity-risk is the risk that an investment when prematurely converted into cash will incur considerable losses. To reduce this risk invests in those assets which are highly liquid like stock of a publicly traded company. The assets which are highly illiquid have high liquidity risks like house, commercial properties etc.
3) Market-Risk
It is the risk that value of stock prices will go down. It is also related with the volatility of an investment. Volatility means sudden rise or fall in value of an asset. The more volatile an investment is, more profit or loss you can make.This can happen due to change in interest rates, exchange rates and commodity rates; decline in economy, recession in a particular industry, decline in company's revenues and profits etc. To reduce market risks:
a) Diversify your investment- Invest your money in both fixed income assets and growth assets.
b) Periodically monitor and review your investment plan, ignore market ups and downs and focus on long term returns. These risks are generally related with stocks and mutual funds.
4) Interest-Rate-Risk
It is the risk that the change in interest rates will lower the value of investment. This risk is generally associated with fixed income assets.
5) Inflation-risk
It is the risk that rises in inflation rate will lower the value of your investment. Invest in growth assets like stocks to reduce this risk.
By Himanshu Sharma
1)Credit-Risk
It is the risk that a borrower will default i.e. it is not able to pay its debt. The borrower is an issuer of a particular bond, stock or other investment. The debt can be a principal amount or interest or both. This can happen if a company's market share suddenly decreases or it become bankrupt. This risk can be reduced by diversifying your investment i.e. invests your money in more than one company, than in a single company. No matter how good the company (in which you have invested) is doing, the value of your shares will go down if there is an overall decline in the stock market. This can happen in case of corporate bonds.
2) Liquidity-Risk
Liquidity is the ability of an investment to easily and quickly get converted into cash without incurring considerable losses. Any item that can be converted into cash is known as the asset. It can be a house, land, furniture, bonds, debentures, stocks etc. Liquidity-risk is the risk that an investment when prematurely converted into cash will incur considerable losses. To reduce this risk invests in those assets which are highly liquid like stock of a publicly traded company. The assets which are highly illiquid have high liquidity risks like house, commercial properties etc.
3) Market-Risk
It is the risk that value of stock prices will go down. It is also related with the volatility of an investment. Volatility means sudden rise or fall in value of an asset. The more volatile an investment is, more profit or loss you can make.This can happen due to change in interest rates, exchange rates and commodity rates; decline in economy, recession in a particular industry, decline in company's revenues and profits etc. To reduce market risks:
a) Diversify your investment- Invest your money in both fixed income assets and growth assets.
b) Periodically monitor and review your investment plan, ignore market ups and downs and focus on long term returns. These risks are generally related with stocks and mutual funds.
4) Interest-Rate-Risk
It is the risk that the change in interest rates will lower the value of investment. This risk is generally associated with fixed income assets.
5) Inflation-risk
It is the risk that rises in inflation rate will lower the value of your investment. Invest in growth assets like stocks to reduce this risk.
By Himanshu Sharma
5 Simple Tips For Successful Mutual Funds Investing
Investing in mutual funds is simple activity, but most investors still do it the wrong way. Have you heard the phrase "Mutual funds simply don't work!"?
So many times.
If you expect that just throwing few thousands into the best performing fund in your country will make you successful, then I am not surprised it doesn't work.
If you are willing to think and do some effort developing an investment strategy, then I am sure you will crack the market and earn double digit from mutual funds investing. Constantly, year after year.
Here are five simple tips which will help you do that:
1. Diversify within the markets and fund types
This is really simple. If you invest in 3 mutual funds, don't pick all the 3 within the same market. Better combine mutual funds which invest in different market niches, or different regions of the world. Don't put all your eggs in one basket.
Another thing to consider is mixing the types of the funds. Pick one general funds with moderate risk level. Pick one index fund. One more conservative mutual fund. One which invests only in startup companies... You got the idea. Mix those funds.
2. Buy at low times
Most people buy when the mutual fund prices have been raising up for long time. They sell with panic when the market goes way down. Most people lose or don't perform well with mutual funds or any other investments.
Don't be one of them.
Low times are good times to increase the size of your investment. You get shares at lower price and the prices are much more likely to raise than if you bought at high times. Of course there are tons of other factors to consider, but in general, low market is better for buying more shares.
3. Use signals
There are various services online who offer buy and sell signals for mutual funds. They will tell you when to sell or buy a given mutual fund and will help you to achieve much better results than with "buy and hold" strategy.
There are few disadvantages of these services - they cost money and not always perform so well. But with some research you can pick a winner. If your portfolio size is big enough - at least $10,000 - the monthly or yearly fees will probably be justified by the improved results of your investing.
4. Look outside your country
If you love your country, that's great, but hope you know its economy can't always grow with the highest rate in the world (even if it is doing that now). The good investor ought to look at different world regions for good mutual funds.
Right now Asia (India, China), East Europe (Bulgaria, Ukraine, Romania), Latin America (Brazil, Chile) are hot. It would be nice to pick mutual funds who play some of those markets. And a small hint - don't go with the biggest international players like Pioneer - they are too conservative. You'd better invest in local funds in the countries you target - provided they accept foreigners of course.
5. Be consistent
Mutual funds investing is not a get rich quick game. Putting few bucks once will not make you rich. Consistency will.
Invest part of your income each and every month. Even $50 makes wonder when done regularly, month after month, year after year.
By Tony Clifton
So many times.
If you expect that just throwing few thousands into the best performing fund in your country will make you successful, then I am not surprised it doesn't work.
If you are willing to think and do some effort developing an investment strategy, then I am sure you will crack the market and earn double digit from mutual funds investing. Constantly, year after year.
Here are five simple tips which will help you do that:
1. Diversify within the markets and fund types
This is really simple. If you invest in 3 mutual funds, don't pick all the 3 within the same market. Better combine mutual funds which invest in different market niches, or different regions of the world. Don't put all your eggs in one basket.
Another thing to consider is mixing the types of the funds. Pick one general funds with moderate risk level. Pick one index fund. One more conservative mutual fund. One which invests only in startup companies... You got the idea. Mix those funds.
2. Buy at low times
Most people buy when the mutual fund prices have been raising up for long time. They sell with panic when the market goes way down. Most people lose or don't perform well with mutual funds or any other investments.
Don't be one of them.
Low times are good times to increase the size of your investment. You get shares at lower price and the prices are much more likely to raise than if you bought at high times. Of course there are tons of other factors to consider, but in general, low market is better for buying more shares.
3. Use signals
There are various services online who offer buy and sell signals for mutual funds. They will tell you when to sell or buy a given mutual fund and will help you to achieve much better results than with "buy and hold" strategy.
There are few disadvantages of these services - they cost money and not always perform so well. But with some research you can pick a winner. If your portfolio size is big enough - at least $10,000 - the monthly or yearly fees will probably be justified by the improved results of your investing.
4. Look outside your country
If you love your country, that's great, but hope you know its economy can't always grow with the highest rate in the world (even if it is doing that now). The good investor ought to look at different world regions for good mutual funds.
Right now Asia (India, China), East Europe (Bulgaria, Ukraine, Romania), Latin America (Brazil, Chile) are hot. It would be nice to pick mutual funds who play some of those markets. And a small hint - don't go with the biggest international players like Pioneer - they are too conservative. You'd better invest in local funds in the countries you target - provided they accept foreigners of course.
5. Be consistent
Mutual funds investing is not a get rich quick game. Putting few bucks once will not make you rich. Consistency will.
Invest part of your income each and every month. Even $50 makes wonder when done regularly, month after month, year after year.
By Tony Clifton
Asset Allocation - Your Most Important Investing Decision
Two known facts about financial markets are 1) They're unpredictable - the movements of markets has been likened to a drunkard's attempts to find his way home (random walk theory), and 2) They're volatile - in The (Mis)Behavior of Markets Benoit Mandelbrot suggests markets are much more volatile than generally acknowledged by standard financial theories.
The corollary of all this is that 1) Mutual funds generally don't beat the market (in fact they generally underperform it after fees), and 2) The best safeguard against volatility is diversification, with the ultimate diversification being the purchase of index funds or ETFs.
Therefore the most important decision faced by investors is how to allocate their funds across the available categories / sub-categories of investment, the main ones being:
* Cash
* Stocks (domestic, international, blue chip, smaller companies, tech stocks, value stocks, income stocks, growth stocks...)
* Bonds (government issued, corporate, high-yield/high-risk/junk bonds)
* Index-linked funds
* Real estate (direct - buy/flip, rental units; indirect - REITs)
* Commodities
* Derivatives
* Specialist investments (antiques, art, wines...)
It's important to keep some easily accessible rainy-day money in the form of cash. But while your capital sum is (generally) safe its value is being eroded by inflation, ie $100 10 years ago would buy more than it does today.
Stocks have traditionally been the engine of growth returning in the region of 7%pa long term. But even within the broad realm of stocks there are numerous varieties as indicated above.
Bonds, especially government issues, are safer than stocks but unless they are help until maturity still carry some risk as their value rises and falls in the opposite direction to interest rates and expectations.
For the risk-averse the "safest" of the above is the index-linked fund, which guarantees your funds will keep their absolute purchasing power. However, you still run the risk that other investments will far outperform tame inflation trackers.
Index investing is the safest way to take advantage of market growth, but it can seem a little bland. You can spice up your portfolio by some direct investment in some personal choices, eg investing in your favorite store. You can do easily this through cheap execution-only online brokers. But don't place too much money in too few stocks.
So how do you determine the best allocation of your assets. There is no single right answer for all folks. The right balance for YOU depends on 1) YOUR personality, and 2) YOUR goals (and their timeframes).
Your personality determines the amount of risk you're comfortable with. The higher the risk, the higher the (expected long-term) returns. But if you can't sleep at night go for a safer, lower-yielding option. Your personality may also suggest some preferences that are close to your heart, eg you may have a love of Asia, or railroads, or... and want to feel you on a piece of the action. Just don't let your emotions overrule logic.
We all have financial goals - usually several of them - and each with its own timeframe and priority. Examples are a holiday, car, house deposit, kids' college fees, a passive income, a comfortable retirement...
Each goal contributes to how you distribute your assets in proportion to its importance and the size of sum required. Generally, the longer term the goal, the more you can afford to take risks. If you're 20 and building a retirement plan you can be quite aggressive. If you're saving for a holiday in 6 months time you're probably better off in cash. As retirement is one of the biggest goals for most people so portfolios tend to get less risky as the holder ages.
As well as the risk/reward profile of each portfolio element you should also consider how closely they are correlated with one another, ie how much they move together. The textbook example of negative correlation is the ice cream maker and the umbrella factory. If one's doing badly, chances are the other is doing well. EG Stocks and real estate often move independently of each other so together form a good mix.
Matching your investments to your goal can also provide a degree of hedging. If you're saving for a house deposit, REITs should move with overall real estate prices. If you're hoping to move to, say, Mexico, having some Mexican holdings will help your money maintain its value in your intended destination.
Over time your goals will change, some will be fulfilled or dropped, others will emerge. Also some assets will do better than others. Therefore you should re-assess your asset allocation every so often. Once or twice a year makes sense. However, avoid making lots of minor changes, you'll just spend a fortune in fees.
By J Finnis
The corollary of all this is that 1) Mutual funds generally don't beat the market (in fact they generally underperform it after fees), and 2) The best safeguard against volatility is diversification, with the ultimate diversification being the purchase of index funds or ETFs.
Therefore the most important decision faced by investors is how to allocate their funds across the available categories / sub-categories of investment, the main ones being:
* Cash
* Stocks (domestic, international, blue chip, smaller companies, tech stocks, value stocks, income stocks, growth stocks...)
* Bonds (government issued, corporate, high-yield/high-risk/junk bonds)
* Index-linked funds
* Real estate (direct - buy/flip, rental units; indirect - REITs)
* Commodities
* Derivatives
* Specialist investments (antiques, art, wines...)
It's important to keep some easily accessible rainy-day money in the form of cash. But while your capital sum is (generally) safe its value is being eroded by inflation, ie $100 10 years ago would buy more than it does today.
Stocks have traditionally been the engine of growth returning in the region of 7%pa long term. But even within the broad realm of stocks there are numerous varieties as indicated above.
Bonds, especially government issues, are safer than stocks but unless they are help until maturity still carry some risk as their value rises and falls in the opposite direction to interest rates and expectations.
For the risk-averse the "safest" of the above is the index-linked fund, which guarantees your funds will keep their absolute purchasing power. However, you still run the risk that other investments will far outperform tame inflation trackers.
Index investing is the safest way to take advantage of market growth, but it can seem a little bland. You can spice up your portfolio by some direct investment in some personal choices, eg investing in your favorite store. You can do easily this through cheap execution-only online brokers. But don't place too much money in too few stocks.
So how do you determine the best allocation of your assets. There is no single right answer for all folks. The right balance for YOU depends on 1) YOUR personality, and 2) YOUR goals (and their timeframes).
Your personality determines the amount of risk you're comfortable with. The higher the risk, the higher the (expected long-term) returns. But if you can't sleep at night go for a safer, lower-yielding option. Your personality may also suggest some preferences that are close to your heart, eg you may have a love of Asia, or railroads, or... and want to feel you on a piece of the action. Just don't let your emotions overrule logic.
We all have financial goals - usually several of them - and each with its own timeframe and priority. Examples are a holiday, car, house deposit, kids' college fees, a passive income, a comfortable retirement...
Each goal contributes to how you distribute your assets in proportion to its importance and the size of sum required. Generally, the longer term the goal, the more you can afford to take risks. If you're 20 and building a retirement plan you can be quite aggressive. If you're saving for a holiday in 6 months time you're probably better off in cash. As retirement is one of the biggest goals for most people so portfolios tend to get less risky as the holder ages.
As well as the risk/reward profile of each portfolio element you should also consider how closely they are correlated with one another, ie how much they move together. The textbook example of negative correlation is the ice cream maker and the umbrella factory. If one's doing badly, chances are the other is doing well. EG Stocks and real estate often move independently of each other so together form a good mix.
Matching your investments to your goal can also provide a degree of hedging. If you're saving for a house deposit, REITs should move with overall real estate prices. If you're hoping to move to, say, Mexico, having some Mexican holdings will help your money maintain its value in your intended destination.
Over time your goals will change, some will be fulfilled or dropped, others will emerge. Also some assets will do better than others. Therefore you should re-assess your asset allocation every so often. Once or twice a year makes sense. However, avoid making lots of minor changes, you'll just spend a fortune in fees.
By J Finnis
Would You Like To Become An Offshore Investor?
The main reason why people invest offshore is because this way they will pay a lot less in taxes.When an investor has his domicile in a country where he pays a lot of taxes which are most countries of course then the taxes will be minimum since only his dividend and interest will be taxed.
These offshore hedge funds have one very important things working for them which is the tax benefit,and this, the onshore hedge funds with the same returns don't have.Some of these funds offer regular banking services but they tend to focus on the investments for the most part.Most people now by know that these funds are easily accessible over the internet and that the offer a lot of different funds to participate in.
But, the advantages of mutual funds, offshore investment funds and even their onshore equivalents are multiple. They are committed to provide these offshore funds that are structured similar to onshore equivalent. But you can see that they are based offshore or outside taxation countries like US.
A wide variety of offshore investment are out there such as income, bond, capital, money, property, equity and rising market funds.All these different funds have a lot of benefits such as affordability, tax benefits, diversification, regulation, variety and professional management.
Most of these offshore funds carry a wide variety of commodities in their portfolio.Investors who are into currency trading will definitely like offshore investment funds.When investing in offshore funds you will have the possibility to spread your investment in such a way that you reduce your risk and and create the potential of making higher profits.When you are not an active trader the offshore investment funds offer managed and pooled accounts to invest in.
If you are an expatriate then holding your money offshore or even investing offshore is not really necessary but if you wish to pay as little as possible in taxes this is the best option available.When you have other priorities then keeping your taxes to a minimum then onshore hedge funds might be an other way to go.
Expatriate insurance and offshore funds are based on the same principle,they are both professionally managed and keep well diversified portfolios.
To be considered as an offshore fund the first thing that is needed is being incorporated in an offshore country and only except investors which do not live in that particular country.Most of these funds pay almost no taxes in there country of incorporation but they can receive dividends or interest on funds which are invested in their jurisdiction..
The last couple of years a lot of money has been invested offshore using pooled money which creates the opportunity to invest in a wider range of investments which are only open to large amounts of capital.
By John M Spencer
These offshore hedge funds have one very important things working for them which is the tax benefit,and this, the onshore hedge funds with the same returns don't have.Some of these funds offer regular banking services but they tend to focus on the investments for the most part.Most people now by know that these funds are easily accessible over the internet and that the offer a lot of different funds to participate in.
But, the advantages of mutual funds, offshore investment funds and even their onshore equivalents are multiple. They are committed to provide these offshore funds that are structured similar to onshore equivalent. But you can see that they are based offshore or outside taxation countries like US.
A wide variety of offshore investment are out there such as income, bond, capital, money, property, equity and rising market funds.All these different funds have a lot of benefits such as affordability, tax benefits, diversification, regulation, variety and professional management.
Most of these offshore funds carry a wide variety of commodities in their portfolio.Investors who are into currency trading will definitely like offshore investment funds.When investing in offshore funds you will have the possibility to spread your investment in such a way that you reduce your risk and and create the potential of making higher profits.When you are not an active trader the offshore investment funds offer managed and pooled accounts to invest in.
If you are an expatriate then holding your money offshore or even investing offshore is not really necessary but if you wish to pay as little as possible in taxes this is the best option available.When you have other priorities then keeping your taxes to a minimum then onshore hedge funds might be an other way to go.
Expatriate insurance and offshore funds are based on the same principle,they are both professionally managed and keep well diversified portfolios.
To be considered as an offshore fund the first thing that is needed is being incorporated in an offshore country and only except investors which do not live in that particular country.Most of these funds pay almost no taxes in there country of incorporation but they can receive dividends or interest on funds which are invested in their jurisdiction..
The last couple of years a lot of money has been invested offshore using pooled money which creates the opportunity to invest in a wider range of investments which are only open to large amounts of capital.
By John M Spencer
Estate Planning 101
An estate plan is one of those things that we all know we should have, but few of us actually ever get to. Like backing up our computers, we figure we’ll do it some day. But, because we procrastinate, we inevitably find ourselves in a situation where our hard drive is fried or a virus has wiped out all of our data. So too, is the situation with estate planning – sometimes we wait until it’s too late and our relatives or the courts decide how our belongings will be distributed.
So, what is an estate plan? Very simply, an estate plan is a compilation of the critical data necessary to ensure that your wishes are carried out after you pass. Wills and trusts are typical devices used in estate planning. Depending on the complexity of one’s estate and the magnitude of one’s belongings, the results of the estate planning process can range from a simple will to a complicated series of trusts and other tax-advantaged maneuvers to convey an interest in property upon one’s passing. While there are several books and software programs available out there to facilitate the data gathering required for estate planning, the following is a list of the kinds of information that will be required. Even if you choose to engage the services of your lawyer or financial planner to assist with your estate plan, (which you will definitely want to do!), gathering this data ahead of time will enable you to get through the process more quickly and will save you money.
Typical Data Used in an Estate Plan:
Detailed demographic information on all of your children and other beneficiaries including name, sex, social security number and birthday; don’t forget to include any charities that you wish to designate as beneficiaries
A listing of the person or persons that you desire to name as guardian for your children; the person or persons you wish to assume responsibility for your pets
A list of individuals specifically and intentionally excluded as beneficiaries
A detailed breakdown of your assets including;
Bank accounts, mortgages, notes, real estate (including your residence), stocks, stock options, business interests, bonds, mutual funds, life insurance policies, 401(k), IRA and other pension accounts
An inventory of all of your personal property; if you have completed a home inventory that includes photos, make/model/serial number, etc., of all of your possessions, it can also be used for this purpose. If you do not have a home inventory, now is a good time to complete one.
A listing of your liabilities including:
Any mortgages, credit cards, loans, etc.
A directory of all of your advisors including:
Accountant
Financial planner
Lawyer
Banking Relationship Manager
Executor
Trustees
A listing of the location of critical documents such as:
Deeds, auto titles, stock certificates, bonds, bank account registers, life insurance policies, will, home inventory, etc.
While the estate planning process can be detailed and cumbersome, you’ll sleep easier once it’s completed knowing that you’ve documented the information that will be required to ensure your last wishes are carried out after your passing.
By Derek Lee
So, what is an estate plan? Very simply, an estate plan is a compilation of the critical data necessary to ensure that your wishes are carried out after you pass. Wills and trusts are typical devices used in estate planning. Depending on the complexity of one’s estate and the magnitude of one’s belongings, the results of the estate planning process can range from a simple will to a complicated series of trusts and other tax-advantaged maneuvers to convey an interest in property upon one’s passing. While there are several books and software programs available out there to facilitate the data gathering required for estate planning, the following is a list of the kinds of information that will be required. Even if you choose to engage the services of your lawyer or financial planner to assist with your estate plan, (which you will definitely want to do!), gathering this data ahead of time will enable you to get through the process more quickly and will save you money.
Typical Data Used in an Estate Plan:
Detailed demographic information on all of your children and other beneficiaries including name, sex, social security number and birthday; don’t forget to include any charities that you wish to designate as beneficiaries
A listing of the person or persons that you desire to name as guardian for your children; the person or persons you wish to assume responsibility for your pets
A list of individuals specifically and intentionally excluded as beneficiaries
A detailed breakdown of your assets including;
Bank accounts, mortgages, notes, real estate (including your residence), stocks, stock options, business interests, bonds, mutual funds, life insurance policies, 401(k), IRA and other pension accounts
An inventory of all of your personal property; if you have completed a home inventory that includes photos, make/model/serial number, etc., of all of your possessions, it can also be used for this purpose. If you do not have a home inventory, now is a good time to complete one.
A listing of your liabilities including:
Any mortgages, credit cards, loans, etc.
A directory of all of your advisors including:
Accountant
Financial planner
Lawyer
Banking Relationship Manager
Executor
Trustees
A listing of the location of critical documents such as:
Deeds, auto titles, stock certificates, bonds, bank account registers, life insurance policies, will, home inventory, etc.
While the estate planning process can be detailed and cumbersome, you’ll sleep easier once it’s completed knowing that you’ve documented the information that will be required to ensure your last wishes are carried out after your passing.
By Derek Lee
Estate Planning Tips
Estate planning is really more about making decisions and being organized than it is anything else. Once you undertake the process decisions need to be made and once that is decided obtain the plan and materials necessary becomes a simple process. Here are a few things to be aware of and a list of items to consider.
Make and execute a will: A will is merely directions left by you for how, when and where you want your assets transferred after your death. Your will call also include special instructions regarding your "personal" goals. It can also leave instruction for minor children and the naming of a guardian.
Revocable living trusts: It may make sense to consider the use of a trust if you own real estate or other assets that would need a new title or deed. Trusts can help avoid the need of probate and often can reduce costs.
Health care directives: these directives will allow your heirs and caretakers to fully understand your wishes in regards to assets and end of life care. The term "living will" is often used as a health care directive as can "power of attorney." A general "power of attorney" is often to allow a trusted person to conduct and maintain your financial estate.
Assets that avoid probate: Anything that a beneficiary can be named to can avoid probate. These can include bank accounts, stock brokerage accounts, life insurance, annuities and retirement accounts such as an IRA.
Calculate estate taxes and probate costs. Many estates will be liable for estates taxes (death taxes) and this may result in needing to liquidate assets to comply with the liability. Make certain you fully understand these potential liabilities. Often life insurance is used to provide liquidity to solve the problem.
Funeral costs: Many people pre-pay estate taxes and leave behind specific instruction for a final service. These instructions are often hand written and a nice place to keep them is with your will. It is a good idea to inform a child or a close friend of their existence.
Safe storage: Your health directives and your power of attorney should be kept safe and trusted friends or children should know their location. Other items to keep safe could be deeds, brokerage account information, IRA information, funeral plans, general financial information and tax returns.
By Bill Broich
Make and execute a will: A will is merely directions left by you for how, when and where you want your assets transferred after your death. Your will call also include special instructions regarding your "personal" goals. It can also leave instruction for minor children and the naming of a guardian.
Revocable living trusts: It may make sense to consider the use of a trust if you own real estate or other assets that would need a new title or deed. Trusts can help avoid the need of probate and often can reduce costs.
Health care directives: these directives will allow your heirs and caretakers to fully understand your wishes in regards to assets and end of life care. The term "living will" is often used as a health care directive as can "power of attorney." A general "power of attorney" is often to allow a trusted person to conduct and maintain your financial estate.
Assets that avoid probate: Anything that a beneficiary can be named to can avoid probate. These can include bank accounts, stock brokerage accounts, life insurance, annuities and retirement accounts such as an IRA.
Calculate estate taxes and probate costs. Many estates will be liable for estates taxes (death taxes) and this may result in needing to liquidate assets to comply with the liability. Make certain you fully understand these potential liabilities. Often life insurance is used to provide liquidity to solve the problem.
Funeral costs: Many people pre-pay estate taxes and leave behind specific instruction for a final service. These instructions are often hand written and a nice place to keep them is with your will. It is a good idea to inform a child or a close friend of their existence.
Safe storage: Your health directives and your power of attorney should be kept safe and trusted friends or children should know their location. Other items to keep safe could be deeds, brokerage account information, IRA information, funeral plans, general financial information and tax returns.
By Bill Broich
Tips for Success in Stock Trading
Stock trading was considered a risky affair only a few years back. Some people even shunned it as an avoidable gamble. More than any other business, stock trading is now a surer route to financial prosperity. Even though the stock market experts are never tired of saying that stock markets remain mostly volatile and unpredictable, yet there are people who always earn to deal with the fluctuations.
When you search the market for hot stocks, you come across numerous hot stocks almost every day. Most of these stocks may appear promising, but the fact remains that some of them may be extremely risky. It is, therefore, important to learn how to differentiate between a good and a risky stock.
The most important factor that makes you a winner in this game is the vigilance over the stock market scenario, more especially about the stocks, which you are trading. It is imperative that you keep yourself updated with the latest information about the stock market.
Update yourself with daily news flashes
Your stock broker will provide the latest news flashes on his website. These news relate to the current financial environment in the country, the government policies and political decisions that are likely to influence the stock market, board meetings of the companies whose stocks you are trading, the periodic financial reports, financial decisions, balance sheets, orders and supply position, sales, new acquisitions, expansion programs and so on. The financial news flashes on any day can provide important inputs to the stock trader about which stocks to sell and which to buy. For example, you have the following news items:
"Two biotech names are outperformers. Osiris Therapeutics (OSIR +10%) won a $224.7 million contract from the DOD. Human Genonme Sciences (HGSI +4%) was called Citigroup's Top Pick for 2008. Lagging groups include the economically-sensitive Consumer Cyclicals (XLY -2.8%), Materials (XLB -2.4%), Technology (XLK -3.2%) and Energy (-2.2%)".
"The economically sensitive technology and consumer discretionary sectors are poised to lead the market's decline, continuing their recent pattern. Chipmakers (SOX -1.4%) dropped to a new 52-week low, while homebuilders (XHB) plunged 4%.
U.S. oil inventories fell more than expected but crude is little changed. Seed maker Monsanto (MON) blew away sales and EPS expectations. The results helped rekindle the ag trade. Fertilizer producers (AGU, CF, MOS, POT, TNH, TRA) and tractor makers (AG, CNH, DE) are notably higher."
The above news items provide sufficient data about which stocks should be bought or avoided. You may think of buying biotech out-performers, Osiris Therapeutics and Human Genome Sciences cited by the Citygroup as the top picks for 2008. You also know you have to avoid the laggards such as Consumer Cyclicals, Technology, Energy stocks.
Suppose you find that a company has strong fundamentals, but is not performing due to certain transient market conditions, you may buy the stock of that company when you find it to a new 52-weak low and save it till the stock takes an upward turn.
As a shrewd investor, you should not be satisfied with these reports. You should search the financials of the company whose stock appears promising to you, or, those that should be sold out. As the time passes, you may evolve an intuition, a gut feeling about the consequences of the given financial scenario and act accordingly.
Perseverance is the Key
Stock markets often remain unpredictable despite the most scholarly analyses of the experts. If they were predictable, every body would become rich. Loss is an inherent ingredient of every trade. Only those who persevere are the ultimate winners. Losses only wake you up about your mistakes. Learning in any field, or, for that matter in stocks, cannot happen overnight. It takes time, diligence and effort to learn. Experience is a great teacher.
Don't buy in a hurry and sell in panic
Some people are carried away by big names and get emotionally involved with them. And when the price of their stock falls, they panic and sell it off only to find that the price rises the next day. There are others who just fall in love with a stock and continue to hold it hoping it would touch the skies, even though it may have risen substantially from their buy price. These are not sound economic decisions.
By Amit Malhotra
When you search the market for hot stocks, you come across numerous hot stocks almost every day. Most of these stocks may appear promising, but the fact remains that some of them may be extremely risky. It is, therefore, important to learn how to differentiate between a good and a risky stock.
The most important factor that makes you a winner in this game is the vigilance over the stock market scenario, more especially about the stocks, which you are trading. It is imperative that you keep yourself updated with the latest information about the stock market.
Update yourself with daily news flashes
Your stock broker will provide the latest news flashes on his website. These news relate to the current financial environment in the country, the government policies and political decisions that are likely to influence the stock market, board meetings of the companies whose stocks you are trading, the periodic financial reports, financial decisions, balance sheets, orders and supply position, sales, new acquisitions, expansion programs and so on. The financial news flashes on any day can provide important inputs to the stock trader about which stocks to sell and which to buy. For example, you have the following news items:
"Two biotech names are outperformers. Osiris Therapeutics (OSIR +10%) won a $224.7 million contract from the DOD. Human Genonme Sciences (HGSI +4%) was called Citigroup's Top Pick for 2008. Lagging groups include the economically-sensitive Consumer Cyclicals (XLY -2.8%), Materials (XLB -2.4%), Technology (XLK -3.2%) and Energy (-2.2%)".
"The economically sensitive technology and consumer discretionary sectors are poised to lead the market's decline, continuing their recent pattern. Chipmakers (SOX -1.4%) dropped to a new 52-week low, while homebuilders (XHB) plunged 4%.
U.S. oil inventories fell more than expected but crude is little changed. Seed maker Monsanto (MON) blew away sales and EPS expectations. The results helped rekindle the ag trade. Fertilizer producers (AGU, CF, MOS, POT, TNH, TRA) and tractor makers (AG, CNH, DE) are notably higher."
The above news items provide sufficient data about which stocks should be bought or avoided. You may think of buying biotech out-performers, Osiris Therapeutics and Human Genome Sciences cited by the Citygroup as the top picks for 2008. You also know you have to avoid the laggards such as Consumer Cyclicals, Technology, Energy stocks.
Suppose you find that a company has strong fundamentals, but is not performing due to certain transient market conditions, you may buy the stock of that company when you find it to a new 52-weak low and save it till the stock takes an upward turn.
As a shrewd investor, you should not be satisfied with these reports. You should search the financials of the company whose stock appears promising to you, or, those that should be sold out. As the time passes, you may evolve an intuition, a gut feeling about the consequences of the given financial scenario and act accordingly.
Perseverance is the Key
Stock markets often remain unpredictable despite the most scholarly analyses of the experts. If they were predictable, every body would become rich. Loss is an inherent ingredient of every trade. Only those who persevere are the ultimate winners. Losses only wake you up about your mistakes. Learning in any field, or, for that matter in stocks, cannot happen overnight. It takes time, diligence and effort to learn. Experience is a great teacher.
Don't buy in a hurry and sell in panic
Some people are carried away by big names and get emotionally involved with them. And when the price of their stock falls, they panic and sell it off only to find that the price rises the next day. There are others who just fall in love with a stock and continue to hold it hoping it would touch the skies, even though it may have risen substantially from their buy price. These are not sound economic decisions.
By Amit Malhotra
So What Is The Stock Market Going To Do?
What is the stock market going to do now? Continue downwards or start to recover and go upwards again? Its anybody's guess as to what is going to happen. But there are a few clues which can tell us when and if it's the right time to renter the market or not.
Firstly we can take a look at past history. We have had quite a few previous downturns, (call them corrections if you prefer.) Only to see the market to rebound and hit even higher levels than before.
Is there any guarantee that this will happen again? Given the laws of probability history says it will. But perhaps the higher the rise the bigger the fall next time.
Emotions play a vital part in the behavior of the market. Fear and Greed are always the most predominant emotions at any given point in time. At this particular time Fear is running rampant through the market with all eyes on the USA worrying about the possibility of a recession.
While here in Australia the economy is doing the exact opposite with interest rates probably due to rise soon to slow the economy down. But no one is taking any notice of that at all. Remember Fear invariably causes the market to go down while Greed has the opposite effect which can cause the market to rise.
Timing in the market is important particularly if you want to reinvest in the market after bailing out. But be aware that no one can pick the exact bottom or top of the market and if they happen to do so it is just pure luck and nothing else.
It never ceases to amaze me how quickly investors can forget the painful lessons learnt the minute the stock market begins to rise again and caution goes out the window. Fear takes a back seat once Greed gets hold of the steering wheel.
So what is the first thing to look for prior to re entering the stock market? Quite simply when prices stop going downwards, they start to begin to see saw up and down slightly and then begin to rise. There are no hard and fast rules which apply to this situation. I personally use a system which comprises of three things.
Firstly I use a trading plan which I stick to religiously. (See previous articles on this.)
The second thing I look for are peaks higher and troughs higher. I shall explain this further. The first is that the peak you see now is higher than the preceding one and also that one is higher than the one before that. In other words three high peaks in a row. Each one higher than the one previous.
The same rule applies to troughs. Each trough is actually higher than the previous one. Again I look for three in a row. By seeing three of each in a row this confirms that the stock is in an upwards trend.
Of course sometimes there are no troughs at all, with the share price just going straight upwards. But be wary these "Shooting Stars" can reverse just as quickly as profit takers move in. Secondly I use the law of probability.
When a share price is heading downwards there is a 70% chance of continuing downwards, 20% of going sideways and a 10% chance of it going upwards.
When a stock is tracking sideways I use 50% chance of staying the same a 25% chance of going downwards and a 25% of the stock going upwards.
For a stock in an upward trend I use the percentages of 70% continuing upwards, 15% chance of going sideways and 15% chance of the stock going downwards.
These percentages are what I use, but of course they are adaptable to suit yourself.
There is no right or wrong time to enter the stock market. The systems I use just put the odds in my favor a little. But the one thing that I always do is to "Buy in gloom and sell in Boom."
It works for me.
By Christopher Strudwick
Firstly we can take a look at past history. We have had quite a few previous downturns, (call them corrections if you prefer.) Only to see the market to rebound and hit even higher levels than before.
Is there any guarantee that this will happen again? Given the laws of probability history says it will. But perhaps the higher the rise the bigger the fall next time.
Emotions play a vital part in the behavior of the market. Fear and Greed are always the most predominant emotions at any given point in time. At this particular time Fear is running rampant through the market with all eyes on the USA worrying about the possibility of a recession.
While here in Australia the economy is doing the exact opposite with interest rates probably due to rise soon to slow the economy down. But no one is taking any notice of that at all. Remember Fear invariably causes the market to go down while Greed has the opposite effect which can cause the market to rise.
Timing in the market is important particularly if you want to reinvest in the market after bailing out. But be aware that no one can pick the exact bottom or top of the market and if they happen to do so it is just pure luck and nothing else.
It never ceases to amaze me how quickly investors can forget the painful lessons learnt the minute the stock market begins to rise again and caution goes out the window. Fear takes a back seat once Greed gets hold of the steering wheel.
So what is the first thing to look for prior to re entering the stock market? Quite simply when prices stop going downwards, they start to begin to see saw up and down slightly and then begin to rise. There are no hard and fast rules which apply to this situation. I personally use a system which comprises of three things.
Firstly I use a trading plan which I stick to religiously. (See previous articles on this.)
The second thing I look for are peaks higher and troughs higher. I shall explain this further. The first is that the peak you see now is higher than the preceding one and also that one is higher than the one before that. In other words three high peaks in a row. Each one higher than the one previous.
The same rule applies to troughs. Each trough is actually higher than the previous one. Again I look for three in a row. By seeing three of each in a row this confirms that the stock is in an upwards trend.
Of course sometimes there are no troughs at all, with the share price just going straight upwards. But be wary these "Shooting Stars" can reverse just as quickly as profit takers move in. Secondly I use the law of probability.
When a share price is heading downwards there is a 70% chance of continuing downwards, 20% of going sideways and a 10% chance of it going upwards.
When a stock is tracking sideways I use 50% chance of staying the same a 25% chance of going downwards and a 25% of the stock going upwards.
For a stock in an upward trend I use the percentages of 70% continuing upwards, 15% chance of going sideways and 15% chance of the stock going downwards.
These percentages are what I use, but of course they are adaptable to suit yourself.
There is no right or wrong time to enter the stock market. The systems I use just put the odds in my favor a little. But the one thing that I always do is to "Buy in gloom and sell in Boom."
It works for me.
By Christopher Strudwick
Four Practical Military Money Tips
In an age when foreclosures are at a record pace, credit card debt is hitting new highs and personal savings are at an all time low, thousands of America's military are worried about their financial future as they defend our Country. Many turn to payday lenders with high fees and interest rates to solve their immediate financial needs.
Financial education - a skill young people desperately need - isn't taught in high schools. So for many military personnel, they enter the military without any knowledge on how to handle their finances. This can lead to financial problems and military debt since it's the first time many of them have to make financial decisions for themselves.
This lack of financial education is evident in a recent Associated Press report stating that thousands of U.S. troops are being banned from serving overseas because they are deep in debt. Because of this high level of debt they are considered security risks. On top of that, many unscrupulous payday lenders are taking unfair advantage of many members of the military by charging them fees and interest rates that make it almost impossible for them to get out of the hole.
You can become financially secure in the military with some simple steps. The tips below will put you on the path to financial freedom.
1. Cut your expenses. To afford the items you would like to purchase, start by listing everything that you want to buy in the order you want to buy them. This will help you focus your spending on the things you want the most.
To avoid wasting money, keep track of your daily expenses for a month. Find out where you spend your money by writing down everything you purchase. If you're spending four dollars on a cup of coffee during the week that adds up to more that $1,000 a year. You'll find out quickly that those small purchase add up fast.
Develop a military budget by writing down your take home pay and listing your current expenses. If you're spending more than you make, it's time to cut those expenses or work extra hard to get that promotion.
2. Create a savings plan. The average American spends more than they earn, so become a money rebel and save money. With a simple investment plan, just by saving $250 a month starting at age 18, you could reach millionaire status by age 40.
Get in the habit of paying yourself first. Have your bank automatically transfer a portion of your money from a checking account to a savings account or start an allotment directly to your savings account. Each time you deposit your paycheck, money is automatically transferred into your savings before you have a chance to spend it. That way you'll have military money set aside for the long-term and available for the things you want to buy now.
Many of you are serving the country overseas now in hostile territory and earning hostile fire and imminent danger pay. You'll find this is an ideal way to keep more money in your pocket. Take advantage of the military programs such as TSP (Thrift Savings Plan) and SDP (Savings Deposit Program) that allow you to save military money and earn a higher return when compared with most civilian savings accounts. By simply setting that military money aside, it will help you to have money in the bank and a way to treat yourself when your return for a job well done.
3. Have the government buy your home. You can become a homeowner using the benefits the military offers. VA loans allow you to borrow 100% of the purchase price which means you won't need money for a down payment in most cases. Combine that with BAH (Basic Allowance for Housing) for civilian housing and you can have your mortgage payments paid for.
This is a huge benefit because you purchase a $100,000 home your property could be valued at over $570,000 in 30 years. The best part is using BAH you could of not even made a payment with your own money.
4. Invest in yourself. The military offers education benefits through the G.I. Bill, VEAP (Veterans Educational Assistance Program), LRP (Loan Repayment Programs) and TA (Tuition Assistance) may all help you to get a higher education. Just like in the civilian world the higher education you receive the more likely you are to get promoted and paid more.
You defend this country to protect the freedom of all American's; and you deserve to be financially free to live the lifestyle you want without having to worry about military debt. The tips above will help you avoid the shackles of life long debt and put you on the road to financial freedom.
By Vince Shorb
Financial education - a skill young people desperately need - isn't taught in high schools. So for many military personnel, they enter the military without any knowledge on how to handle their finances. This can lead to financial problems and military debt since it's the first time many of them have to make financial decisions for themselves.
This lack of financial education is evident in a recent Associated Press report stating that thousands of U.S. troops are being banned from serving overseas because they are deep in debt. Because of this high level of debt they are considered security risks. On top of that, many unscrupulous payday lenders are taking unfair advantage of many members of the military by charging them fees and interest rates that make it almost impossible for them to get out of the hole.
You can become financially secure in the military with some simple steps. The tips below will put you on the path to financial freedom.
1. Cut your expenses. To afford the items you would like to purchase, start by listing everything that you want to buy in the order you want to buy them. This will help you focus your spending on the things you want the most.
To avoid wasting money, keep track of your daily expenses for a month. Find out where you spend your money by writing down everything you purchase. If you're spending four dollars on a cup of coffee during the week that adds up to more that $1,000 a year. You'll find out quickly that those small purchase add up fast.
Develop a military budget by writing down your take home pay and listing your current expenses. If you're spending more than you make, it's time to cut those expenses or work extra hard to get that promotion.
2. Create a savings plan. The average American spends more than they earn, so become a money rebel and save money. With a simple investment plan, just by saving $250 a month starting at age 18, you could reach millionaire status by age 40.
Get in the habit of paying yourself first. Have your bank automatically transfer a portion of your money from a checking account to a savings account or start an allotment directly to your savings account. Each time you deposit your paycheck, money is automatically transferred into your savings before you have a chance to spend it. That way you'll have military money set aside for the long-term and available for the things you want to buy now.
Many of you are serving the country overseas now in hostile territory and earning hostile fire and imminent danger pay. You'll find this is an ideal way to keep more money in your pocket. Take advantage of the military programs such as TSP (Thrift Savings Plan) and SDP (Savings Deposit Program) that allow you to save military money and earn a higher return when compared with most civilian savings accounts. By simply setting that military money aside, it will help you to have money in the bank and a way to treat yourself when your return for a job well done.
3. Have the government buy your home. You can become a homeowner using the benefits the military offers. VA loans allow you to borrow 100% of the purchase price which means you won't need money for a down payment in most cases. Combine that with BAH (Basic Allowance for Housing) for civilian housing and you can have your mortgage payments paid for.
This is a huge benefit because you purchase a $100,000 home your property could be valued at over $570,000 in 30 years. The best part is using BAH you could of not even made a payment with your own money.
4. Invest in yourself. The military offers education benefits through the G.I. Bill, VEAP (Veterans Educational Assistance Program), LRP (Loan Repayment Programs) and TA (Tuition Assistance) may all help you to get a higher education. Just like in the civilian world the higher education you receive the more likely you are to get promoted and paid more.
You defend this country to protect the freedom of all American's; and you deserve to be financially free to live the lifestyle you want without having to worry about military debt. The tips above will help you avoid the shackles of life long debt and put you on the road to financial freedom.
By Vince Shorb
Using Network Marketing to Get the Year Started
Now that we have gotten settled into 2008, let's take a look at some of the New Year's resolutions some of us have all made for this year. Getting in shape? Me too. Dedicating yourself to improving your skills at work? Great plan. Working on furthering your education? Excellent! But I suggest taking that goal one step further: make it a life-long goal to increase your financial education. Start here with a financial game plan for 2008.
1. Get real with yourself. Take a good hard look at your finances and choose to manage your debt. As Robert Kiyosaki says, there is good debt and bad debt. Get out of the bad debt, or debt that generated from credit cards, consumer debt (aka, debt that doesn't pay itself off). And maximize your good debt or debt that has the potential to put money back into your pocket like Real Estate or building a business. First things first, you need to ask yourself the tough questions like, how much do I owe? What are the interest rates? Am I in debt to the IRS? After all, the only way to get to where you want to be is to know from where you are starting.
2. Start to minimize your taxes to the greatest extent possible. The worst way to do this is by remaining an employee. I say just because there are ways for employees to minimize their taxes and put one foot into the world of the wealthy. This is by starting a home-based business or owning your own business. Other than that, there is little to nothing that a person who earns a living as an Employee can legally do to minimize their taxable income.
3. Create a savings and emergency funds for security when "life happens" because it happens to us all, whether we're rich or poor. Create a buffer between the things that come up in life and reduce the stress of when they do. Put away at least 10% of what you earn into this account and breathe easier. This account should hold up to 3-6 months of your monthly expenses.
4. Build your financial fortress to withstand any storm. In our litigious society today, no one is immune from those who want to work less and take your wealth from you. Ensure you, your family and your assets are protected with the proper legal entity (i.e. NOT just in a family trust). Seek out legal professionals who will help you set this up for your business. This is NOT a place you want to cut corners just to save a buck... Your family and your dreams will appreciate it in the long run.
5. Build a legacy for yourself and your family. Start investing like the ultra wealthy and well connected. If you don't know where to go with your money, don't get lulled into the security of a "financial advisor", but rather do some due diligence and find a company that will educate you on wealth-building investments.
6. And perhaps most importantly, enjoy the time and money freedom you have earned for yourself and your family. After all the previous steps are complete, you are truly an enlightened wealthy person.
Donate extra time and money along the way and feed your spirit and soul. But most of all find experts and mentors along the way to help the journey be a little less tumultuous. Build a team of professionals who are good at what they do and you will be well on your way to building a long-term legacy for generations to come. Take the steps in 2008 to start your new financial future. It's as easy as steps 1-6.
By Jt Debolt
1. Get real with yourself. Take a good hard look at your finances and choose to manage your debt. As Robert Kiyosaki says, there is good debt and bad debt. Get out of the bad debt, or debt that generated from credit cards, consumer debt (aka, debt that doesn't pay itself off). And maximize your good debt or debt that has the potential to put money back into your pocket like Real Estate or building a business. First things first, you need to ask yourself the tough questions like, how much do I owe? What are the interest rates? Am I in debt to the IRS? After all, the only way to get to where you want to be is to know from where you are starting.
2. Start to minimize your taxes to the greatest extent possible. The worst way to do this is by remaining an employee. I say just because there are ways for employees to minimize their taxes and put one foot into the world of the wealthy. This is by starting a home-based business or owning your own business. Other than that, there is little to nothing that a person who earns a living as an Employee can legally do to minimize their taxable income.
3. Create a savings and emergency funds for security when "life happens" because it happens to us all, whether we're rich or poor. Create a buffer between the things that come up in life and reduce the stress of when they do. Put away at least 10% of what you earn into this account and breathe easier. This account should hold up to 3-6 months of your monthly expenses.
4. Build your financial fortress to withstand any storm. In our litigious society today, no one is immune from those who want to work less and take your wealth from you. Ensure you, your family and your assets are protected with the proper legal entity (i.e. NOT just in a family trust). Seek out legal professionals who will help you set this up for your business. This is NOT a place you want to cut corners just to save a buck... Your family and your dreams will appreciate it in the long run.
5. Build a legacy for yourself and your family. Start investing like the ultra wealthy and well connected. If you don't know where to go with your money, don't get lulled into the security of a "financial advisor", but rather do some due diligence and find a company that will educate you on wealth-building investments.
6. And perhaps most importantly, enjoy the time and money freedom you have earned for yourself and your family. After all the previous steps are complete, you are truly an enlightened wealthy person.
Donate extra time and money along the way and feed your spirit and soul. But most of all find experts and mentors along the way to help the journey be a little less tumultuous. Build a team of professionals who are good at what they do and you will be well on your way to building a long-term legacy for generations to come. Take the steps in 2008 to start your new financial future. It's as easy as steps 1-6.
By Jt Debolt
Ways To Save Money
Are you looking for simple and effective ways to save money? Look no further!
Plan Out Meals
Food can eat away at ones ability to save money, but this does not need to happen. Planning out menus in advance and sticking to them can be one of the most effective ways to save money and also has the advantage of saving time on last minute grocery runs and frantic searches for something to fix for dinner. When planning out meals it is often a good idea to plan the menu for an entire week at one time.
While doing the planning keep in mind what seasonal fruits and vegetables are available and how to incorporate the same food into several meals, for example buying a large bag of potatoes and using them for hash browns one morning, scalloped potatoes that night, and baked potatoes for lunch the next day. The whole family can be involved in this by assigning each family member a night where they get to choose the meal, and if old enough, do the cooking.
Ask About Upcoming Sales
If you find something in a store you really want, then ask the cashier if there is going to be a sale soon. Sometimes they will let you know, but if not you can ask how often they have sales and what they typically involve. Taking into account how badly you want the item, as well as how many of them are available, you can decide to hold out for a sale and check back every few days. An added benefit to doing this is that you can often avoid impulse purchases since once you are at home you may decide you really don't need that item after all.
Buy Presents Throughout The Year
Setting aside a space in a closet for storing presents throughout the year is the first step. Then keep an eye out for sales on items that would be good for gift giving. Since you still want the presents to be quality gifts, you may want to make a list of ideas for the people in your life and only purchase items on this list. Some general ideas are to look for photo frames or albums on sale, where you can insert pictures taken or prints purchased, candles and candle holders, warm fleece blankets, or family board games. Purchasing your items in advance allows you plenty of time to find sales and find the items you want without settling for something else.
Give Yourself A Gift Card
There are many ways to save money, but one of my favorite is to purchase a gift card at the locations where I do my grocery shopping and purchase fuel. I figure out how much I have to spend for the month at these locations and then purchase a gift card for that amount. Now I know that I will not spend too much money for the month on these items as long as I do not spend more than is on the gift card.
Finding ways to save money can be rewarding. Using the above tips will help to increase your savings and decrease your spending without feeling a pinch.
By Sarah J Holt
Plan Out Meals
Food can eat away at ones ability to save money, but this does not need to happen. Planning out menus in advance and sticking to them can be one of the most effective ways to save money and also has the advantage of saving time on last minute grocery runs and frantic searches for something to fix for dinner. When planning out meals it is often a good idea to plan the menu for an entire week at one time.
While doing the planning keep in mind what seasonal fruits and vegetables are available and how to incorporate the same food into several meals, for example buying a large bag of potatoes and using them for hash browns one morning, scalloped potatoes that night, and baked potatoes for lunch the next day. The whole family can be involved in this by assigning each family member a night where they get to choose the meal, and if old enough, do the cooking.
Ask About Upcoming Sales
If you find something in a store you really want, then ask the cashier if there is going to be a sale soon. Sometimes they will let you know, but if not you can ask how often they have sales and what they typically involve. Taking into account how badly you want the item, as well as how many of them are available, you can decide to hold out for a sale and check back every few days. An added benefit to doing this is that you can often avoid impulse purchases since once you are at home you may decide you really don't need that item after all.
Buy Presents Throughout The Year
Setting aside a space in a closet for storing presents throughout the year is the first step. Then keep an eye out for sales on items that would be good for gift giving. Since you still want the presents to be quality gifts, you may want to make a list of ideas for the people in your life and only purchase items on this list. Some general ideas are to look for photo frames or albums on sale, where you can insert pictures taken or prints purchased, candles and candle holders, warm fleece blankets, or family board games. Purchasing your items in advance allows you plenty of time to find sales and find the items you want without settling for something else.
Give Yourself A Gift Card
There are many ways to save money, but one of my favorite is to purchase a gift card at the locations where I do my grocery shopping and purchase fuel. I figure out how much I have to spend for the month at these locations and then purchase a gift card for that amount. Now I know that I will not spend too much money for the month on these items as long as I do not spend more than is on the gift card.
Finding ways to save money can be rewarding. Using the above tips will help to increase your savings and decrease your spending without feeling a pinch.
By Sarah J Holt
3 Quick Cash Loan Tips You Must Know
Quick cash loans or payday cash advance loans are not evil - all by themselves.
They're not cheap either, of course.
What IS critical is that you understand the potential high cost of not paying these loans back on time and the financial impact of rolling the loan over (basically extending the loan terms).
You MUST pay these loans back on time or face ridiculously high fees.
For example if you borrow $300 at $15 (per each $100) due in 14 days you will owe the quick cash loan provider a total of $345 in 2 weeks. Tolerable in an emergency.
However many of these loans come with a rollover option, which allows you to pay the funds back in 28 days.
This is where you start really racking up the fees...
You will now need to payback the original $300 PLUS $90. The fee has doubled because of the rollover option. OUCH!!
Here are 3 Tips that will keep you out of trouble if you are considering a quick cash loan:
Only use Payday Loans for an Emergency
Buying a Mocha Latte is not an emergency.
Neither is buying flowers for your girlfriend or boyfriend.
Prescriptions for your kids strep throat is however critical and urgent. So is a car repair, so you can get to your job, go to the store and transport your kids to school.
When you have no other payment alternative to cover a basic human need, these funds are totally justified.
Use a Quick Cash Loan Instead of Paying Overdrafts
The average overdraft at your bank costs about $35.
In the unfortunate situation when you know you will be writing many checks or using your debit card and your account is hovering at ZERO a payday loan can solve the problem.
For example, if you know you need to make 5 withdrawals and your checking balance is $0, you could be charged $175 on those 5 overdrafts.
If each debit was $20 you just ended up paying more for the overdraft than the withdrawal amounts.
The cost of borrowing $100 from a quick cash payday loan store would have only cost you $15 to $25 - a much better option.
Choose Wisely - Never Apply to an unsolicited email Ad
If you must resort to a payday advance loan make sure you do a little research. Never sign up with a company that originates from an unsolicited email - delete these!
Choose a reputable online loan provider ( see links at the bottom of page), that will safeguard your personal information.
The consequences of applying with just any payday loan company could be disasterous. As many of these are fronts for "phishing" and identity scams.
The Bottom Line
If you need quick cash it can be available in 24 hours. If you don't make these loans a habit they can solve critical cash emergencies - Just make sure you pay back the loan in 14 days.
by Leslie Collins
They're not cheap either, of course.
What IS critical is that you understand the potential high cost of not paying these loans back on time and the financial impact of rolling the loan over (basically extending the loan terms).
You MUST pay these loans back on time or face ridiculously high fees.
For example if you borrow $300 at $15 (per each $100) due in 14 days you will owe the quick cash loan provider a total of $345 in 2 weeks. Tolerable in an emergency.
However many of these loans come with a rollover option, which allows you to pay the funds back in 28 days.
This is where you start really racking up the fees...
You will now need to payback the original $300 PLUS $90. The fee has doubled because of the rollover option. OUCH!!
Here are 3 Tips that will keep you out of trouble if you are considering a quick cash loan:
Only use Payday Loans for an Emergency
Buying a Mocha Latte is not an emergency.
Neither is buying flowers for your girlfriend or boyfriend.
Prescriptions for your kids strep throat is however critical and urgent. So is a car repair, so you can get to your job, go to the store and transport your kids to school.
When you have no other payment alternative to cover a basic human need, these funds are totally justified.
Use a Quick Cash Loan Instead of Paying Overdrafts
The average overdraft at your bank costs about $35.
In the unfortunate situation when you know you will be writing many checks or using your debit card and your account is hovering at ZERO a payday loan can solve the problem.
For example, if you know you need to make 5 withdrawals and your checking balance is $0, you could be charged $175 on those 5 overdrafts.
If each debit was $20 you just ended up paying more for the overdraft than the withdrawal amounts.
The cost of borrowing $100 from a quick cash payday loan store would have only cost you $15 to $25 - a much better option.
Choose Wisely - Never Apply to an unsolicited email Ad
If you must resort to a payday advance loan make sure you do a little research. Never sign up with a company that originates from an unsolicited email - delete these!
Choose a reputable online loan provider ( see links at the bottom of page), that will safeguard your personal information.
The consequences of applying with just any payday loan company could be disasterous. As many of these are fronts for "phishing" and identity scams.
The Bottom Line
If you need quick cash it can be available in 24 hours. If you don't make these loans a habit they can solve critical cash emergencies - Just make sure you pay back the loan in 14 days.
by Leslie Collins
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