Why Prepare For Retirement?

Time goes so fast that some people are caught unaware that life has caught up with them. These people have been very busy taking care of their families that they have forgotten how to prepare for their future especially when they become too old to work.

Every person should prepare for that time when they can just relax and enjoy the fruits of their labor. People who have spent their fruitful years working and supporting their families should be given a chance to lay back, do what they have long wanted to do and live life to the fullest without worrying about financial support.

Not everyone is given the opportunity to enjoy retirement without any worry about their finances. People who want to enjoy their retirement without all the worries should prepare for their retirement now, when they are still able to produce and to work hard.

The best time to prepare for retirement is when a person is still young enough to financially plan for that period in his life when he does not have to worry about work or earning more money. Every person should gift himself with a proper retirement package so that when that time comes, he will be able to go to places he wanted to visit before but did not have the time or resources. Or perhaps, do things that he was not able to do before because he was too busy fending for his family.

Planning for your own retirement should be treated the same way when planning to invest in a house or a car. Every person should set aside even a meager amount from his monthly earnings, to be saved and used for his retirement.

A retirement plan will mean you no longer have to worry whether you have a family to take care of you when you grow old. It means not having to get scared that your children may be so busy living their own lives they will place you in a home for the aged. Preparing for retirement means being secured in the knowledge that something is waiting for you, when you can no longer earn money the way you used to do.

Some people consider retirement as the best years of their life because during this time, they no longer have to worry about working hard and feeding their children. When retirement comes, it’s just you and your spouse and sometimes, the children who manage to take a break and visit you. For most people, retirement means being free form the hustle and bustle of the daily rat race called life.

Start planning for your retirement and look forward to a life worth living after you are out of the daily grind.

A perfect financial growth strategy in stock market

In the current financial world stock markets are the adventurous way to make financial progress. However the amount of efforts involved seem to be minimum, but there is a high degree of risk.

For a beginner it is essential to know about the basics of stock market before putting steps towards your financial success. The most important aspect is to have knowledge about the commonly used stock market terms. Day trading and settlement period are two of the most common terms in stock market terminology.

The knowledge of stock exchanges like NYSE and NASDAQ is also essential. The other major things to know about are brokers and brokerage. When you are just going to jump into the stock market, you are required to decide with what type of brokeres you want to deal with. There are two types of brokers full service brokers and discount brokers. The main difference between these two is that full service brokers will provide complete assistance and advice on investment and money management whereas the discount brokers will not give you any investment related advice. Obviously both of them have different fee structure. The first thing you are required to decide is your risk appetite and what kinds of risks you are ready to take. If you feel that you are not risk averse taking then lot of opportunities are available to you. On the other hand if you feel that you are more of a risk averse investor then you should invest only in safe stocks. It all depends upon the amount of spare money available with you and your risk taking capacity and you financial planning.

My serious advice to new investors is that it is better to invest small amounts in good select stocks and learn about the actual investment and trading. Gradually you can enhance your involvement taking into account all pros and cons of such investment and write your own financial growth story.

Managing money- when you change the job

If you are thinking of changing your job, you need to do more than manage your new career- you need to take quick financial decisions. Depending upon what these are, you need to chalk out a financial strategy for yourself and your family so that you can make further progress.

You need to begin with tracking your expenses for a few months. You may find that a new job and/or a bigger pay cheque can affect your spending. Check out what your gross pay is as opposed to your net pay. Net pay is your take home after taxes, and your spending pattern should be based on this as opposed to your gross pay.

When you change jobs, it is tempting to withdraw your provident fund. But, remember, any benefit of letting that money compound tax-deferred will vanish if you start at zero in your new job and hamper the path of progress. Worse, you will be tempted to spend the money on things that are unnecessary.

Think of insurance options. Find out the type of insurance cover being offered by the new employer. How does it compare with what you already have?

Go ahead and strike the best deal money wise.

Requirement of Good Financial Planning for Growth

You might have seen that many technically sound and economically viable projects failed simply because of poor financial planning. Therefore, it is an essential tool for any business undertaking.

Financial planning is deciding in advance the course of action for the future in respect to the financial management of a business enterprise. This involve following steps:

(i) Estimating the amount of finance or capital required.
(ii) Determining the forms and the proportionate amount of the securities to be issued

for raising the capital.
(iii) Laying down the policies as to the administration of the financial plan.

Why Financial Planning?

Financial planning is required not only in case of enterprises proposed to be set up, but is equally required for running enterprises as well. The requirement for financial planning arises for the following reasons:

Good financial planning:-

- Would ensure liquidity throughout the year.
- Would bring to light the surplus of funds available for expansion.
- Would contribute to rational utilization of the available resources to get the maximum benefit.
- Would make things easy for the management to function smoothly

Roadmap to retirement planning

Today I will discuss about the benefits of advance financial planning for retirement. It is better to start planning for your savings right at the start of your career. You may have heard about this. But if you are nearing your retirement, there are chances that you may have not heard about saving in the start of your career. This may be somewhat disadvantageous for those who are left with a few years to their retirement. Those who started saving ten or fifteen years ago, they may end up on a fixed budget well into their golden years.

I don’t mean that preparing for your retirement should be at the top of your list. But if you have children, a mortgage and some other bills to pay then you should start contributing towards your retirement plan and saving for future. However, it is up to you to decide how comfortable you want to be after your retirement. It will not be out of the ordinary to start taking extra work for those who still have a few years to their retirement. One option can be to do a part time job from your home. In this way you will be able to pay your bills and debts and save at the same time.

You may find a part time job that is fun and rewarding, depending upon your interests and skills. If you enjoy company of others then you may choose a job like sales representative. There are number of online business companies that require these types of positions filled to increase their sales and build a reputation for themselves. There are many online opportunities that can provide you with extra income and flexibility. There are freelance writing jobs and jobs like virtual assistants where you are supposed to do article writing, desktop publishing, legal transcription, internet research and other web applications.

It is important to consider all the options available to you when it comes to doing extra work before or after your retirement. Though, these works may not make you rich but you can comfortably live the rest of your life because you strived and prepared in advance for it. However there are less options for those who are very close to their retirement than those who are starting out, but do not lose hope there is still money to be made. Online and offline sales opportunities are available to you when you want to make more money. These jobs can be done in your spare time and are also less stressful. In addition to your retirement package, extra income can serve your financial requirements in a long way.

Budgeting – A roadmap to financial planning

The first step in financial planning is to ascertain the income & expenses then create and maintain a budget. Create a list of all your monthly income and also a list of your monthly expenses. When determining income, list all sources including wages, alimony, child support, side jobs, etc. In calculating expenses, be sure to include housing, food, transportation, utilities, entertainment, etc. Then compare your income to expenses.

Cut back on unnecessary spending

Live beneath your means. At first it may seem difficult to limit spending and stick to a budget, however there are a few changes that you can make everyday that will cut your spending more than you expect.
Start Saving

While configuring your budget, plan for your savings first. You will grow richer each month if you begin to pay yourself first. Before paying any bills, decide on a set amount that you will pay yourself first—maybe five or ten percent—or whatever you decide—of your paycheck. Then, deposit the amount into a savings account before paying any bills.

Advantages of Budgeting

There are several advantages to sticking to your budget. Firstly, most people have set financial goals that they would like to reach in the future. Sometimes it may be a trip, a brand new car, or a college education. A budget can help people save money to make these goals a reality. Additionally, many people are crushed under heavy consumer debt. Without a disciplined pattern of spending, it is virtually impossible to make much headway in reducing debt. A personal budget will provide the necessary framework to begin eliminating these inflated account balances.

If executed properly, a budget will allow a person to simultaneously meet their expenses, place money into savings, and pay back outstanding debts. Therefore, it is anyone’s best interest to create and implement a budget.

Remember that good money management is more than just a mathematical formula. It’s too closely tied with the ups and downs of living to be just that. Your money management plan is always subject to change if your life situation changes. The object of a good budget is to make your money go the farthest in helping you reach your goals, it is not there to force to you to abide by rules.

Do not get discouraged if the budget plan doesn’t work perfectly right away. It may involve some revising and editing until it fits your needs. Then, make sure to review it often, and be sure it is making the best use of every penny.

MODERN APPROACH TO FINANCIAL MANAGEMENT

Henry Ford has once remarked “Money is an arm or a leg; you either use it or loose it”. Though the above statement looks simple but it is quite meaningful. In the today’s money oriented economy finance is one of the basic foundations of all kinds of economic activities. Actually finance is the backbone of every business.

MEANING OF BUSINESS FINANCE

Business Finance is the business activity that is concerned with the acquisition and conservation of capital funds in meeting financial needs and overall objectives of a business enterprise. There are three A’s in Financial Management

- Anticipating Financial needs
- Acquiring Financial Resources
- Allocating funds in business

MANAGEMENT OF MONEY IN BUSINESS

Handling a business is similar to handling a home, with all the different expenses to consider preventing the business from going under with deficits and bankruptcy. A business has “children” in terms of all the employed workers working hand-in-hand and with utmost efficiency to make sure that the finances float above break even. There is one main focus for a business to thrive and exist in security and balance, and that is the knowledge of knowing how to manage money in business with the overhead and operation expenses.

THE RIGHT APPROACH

According to the modern approach the term financial management provides a conceptual and analytical framework for financial decision making. That means, the finance function covers both acquisition of funds as well as their allocation. This new approach views the term financial management in a broader sense. It is viewed as an integral part of overall management.

The modern approach of financial Management can be divided into four major decisions as function of finance:

- The investment decision
- The financial decision
- The dividend policy decision
- The funds requirement decision

INVESTMENT DECISIONS

This is concerned with the allocation of capital. It has to show the funds can be invested in assets which would yield benefit in future. This is a decision based on risk and uncertainty. Finance Manager has to evaluate the investment in relation to their expected results and risk to determine whether the investment is feasible or not.

FINANCIAL DECISIONS

This decision is concerned with the mobilization of finance for investment. The Finance Manager has to take the decisions regarding the acquisition of finance. Whether entire capital required should be raised in the form of equity capital or the amount should be borrowed totally or a balance should be struck between equity and borrowed capital has to be decided. Even the timing of acquisition of capital should also be perfectly made.

DIVIDEND DECISION

The dividend decision involves the determination of the percentage of profit earned by the enterprise which is paid to the shareholders. The dividend payout ratio must be evaluated in the light of the objective of maximizing shareholder’s wealth. Thus, the dividend decision has become a vital aspect of financial decision.

CURRENT ASSETS MANAGEMENT

The Finance Manager should also manage the current assets to have liquidity in the business. Investment of funds in current assets reduces the profitability of the firm. However the finance manager should also equally look after the current financial needs of the firm to maintain optimum production. While investing in current assets, he should see that proper trade off is maintained between the profitability and liquidity.

Money Management and Earning

Money Management is associated with saving, budgeting, investing and financial planning. However, the truth about managing money is that it is just a concept that encompasses a larger scheme of handling money. The way to manage money and earn more is more than just a single way concept. Not only does managing money mean being able to keep money per se, but also to be able to mobilize the money that we have to the direction in which we intend them to go. This includes financial management, investment, business ventures, and leisure activities.

More Saved, More Resources

Though it is quite confusing to understand how to make money and what are the ways to be able to earn more when one is saving more and not the other way around, the concept of the former dictates the effect. Being able to save more will give you more freedom to allocate the money in what business and endeavor one seeks to have. In conjunction with the previous statements, managing money does not only mean saving, but being able to have the resources to move about. You may take expert advice from financial service providers or money managers for investment in stocks etc. In this case, having more money in the bank or floatingly available enables you to use them for businesses or leisure. At the same time you should not ignore the insurance aspect.

The Power of Capital

Should you choose to invest your earnings and savings on a business venture, one thing that limits one’s capability to start off with the desired business is the capital needed. Though most business ideas require a substantial amount of money, these are the big establishments which require a corporation of several investors with investments in the millions. As a private businessman or entrepreneur, one may start with a personal business of a small nature such as handcrafted items or services, and work your way up from there. Once you start rolling in the Benjamins, you are on your way to choose your path to either retain your business or go higher up the economic chain. Capital and the way to manage money and earn more in the process is a tricky and risky thing to do though. Be prepared to accept a losing business as well. However, I suggest trying making money on internet as there are various ways to earn money online.

Wholesale Concept

Another concept which enables you to earn more is to keep a wholesale concept in mind at all times. This is simple defined as being able to see that the more you acquire in a single deal, the more you save, and the more you save, the more you are able to use that savings for other businesses or other requirements, therefore cutting down on the total projected expenses. It may not be always be the case for many, especially if one has a very limited capital to invest. Nevertheless, what is more important is that one is able to work efficiently in one’s own means of production and not depend on floating bonds and loans as these are the usual causes of a business to stay stagnant and not earn due to the interests. It is quite daunting to manage money and earn more, with the consistent juggling of resources and risks to achieve at something without foolproof success. However, a properly set management and a little bit of luck will definitely rake in big rewards to the whole process. Starting small and working up rather than starting with big things right away is crucial to the learning process and the tricks and trade as well in business handling. This is what will matter especially when the competition becomes tighter in the higher business environment.

Effective Ways To Manage Money

There are many ways and tips on effective ways to manage money in general. Technically, all these tipstalk about one thing: being able to have money when needed, where needed. A lack and wanting desire to acquire money when the call arises does not necessarily mean not being able to manage money effectively, but may just be an overshoot of unexpected events. Nevertheless, the person should be able to acquire and find ways to come up with the needed amount if ever there is a strapped budget from the unexpected event that needs to be complied.

Look At The Future Goals
One of the most important and progressive value of a person to have effective ways to manage money is to have a sense of foresight. This foresight pertains to the ability of a person to know what things are most probable going to happen to him in the future and be able to prepare beforehand with substantial amount of time. With this is a responsibility of being able to properly organize the timeline and the budget allocation of funding and financial allocation. Also in this regard, the consideration of all other fees, bills and payment allocations would have to be properly identified and included in the plan.
An option of having to put an allowance or extended goal would be beneficial to the planner to allow himself to adjust and be able to cope up with unexpected events with a bit more ease. In this manner, the one who manages the money is able to have an extra for a rainy season ahead.

Invest, Invest, Invest!
Another method to effectively manage money is to invest in progressive and productive endeavors which could be other sources of income. Instead of just allowing the savings to rest in a bank and earn a small amount of interest per year, it would be wise to allocate some of the money and other resources into a business. Of course it may prove unproductive and detrimental, but the allowance of such resources to different paths of productivity would widen the scope in which a person could determine and discover the best way to manage and have more money to alleviate the status in society.
Investing does not only mean having to go into a business venture but also in being able to become a stockholder, no matter how small into an existing business. Being a stockholder and becoming a part owner of a running business puts the self into a profit oriented state by having a percentage of the earnings that the said business generates. Nevertheless, the risk of losing the capital used for this investment is as great as having a self owned one.

The 3:3:4 Paradigm
This paradigm takes into account that all the other utilities and monthly bills have already been paid and the amount left is the extra money that is left floating. Most probably many would not be lucky enough to have this, or if possible just with a tiny amount. Still, no matter how small the amount is, it is a good start. The 3:3:4 paradigm means that 30% of the floating money is to be saved in the bank, 30% is then used to allocate for the investments of choice, and the remaining 40% is allocated to the leisure and luxury of the household. The last aspect is important to provide a sense of reward for the earner to clear the mind of burden and discouragement.
These aspects when combined together are more often than not effective ways to manage money and not be burdened of having to earn money to pay off a previous debt. This would be helpful to the earner to look forward in a progressive pace of living rather than retroactive maintenance.