Friday, September 21, 2007

Is Payday Loan –A Villain of your Financial Peace?

paydayloan trap

How many of you support its villainy? Then why all of you go for it when your cash fall short at the end of the month?

As because:

1) Its a easy way to get some fast cash,
2) Less formalities than other available sources,
3) Getting cash simply sitting at Home

May be there are more convenient factors.

But it’s still a villain. And, I hate it like you do. Why don’t you opt for some other means for cash? Or Isn’t it better to trouble yourself for few days than years? I have seen a lot people in the payday loans trap and find it hard to come out of this trap. But whoever got into it, was not able to get out of it. I will furnish some of the solutions over here and hope you will find it useful to sort out your payday loans issues.

Friday, September 14, 2007

Your Life’s Balance Sheet

life balance sheet
Check out, this could be your life's balance sheet.
Birth=Opening Balance
Death=Closing Balance
Brain= Fixed Deposit
Thinking=Current Account
Experience=Premium Account
Values & Behaviour =Goodwill
Patience=Interest Earned
Character & Morals =Stock-in-Trade
Heart=Current Assets
Soul=Fixed Assets
Friends=General Reserves
Love= Dividend
Children= Bonus Issues
Target =Tallying the Balance Sheet
Goal=Accounts Award

Wednesday, September 12, 2007

Plan for a better retirement life

better retirement plan

Why Retirement Planning?
Retirement planning is the real and urgent need for everyone. There are people out there, who hardly think about there retirement phase. Mostly young age group people live in the present. They do not care about the future. They spend most part of their earning in the latest mobile or car or the grand vacation to Europe. Sometimes people start planning lately when they are just a few years away from the retirement and I feel that would be too late. Its’ good to start saving for retirement at an earlier stage. As it will help in reducing financial pressure in old age and also enables to enjoy an ideal retirement, rather just a compromise.

Steps for a better retirement planning

# Plan for a better retirement life :
One should have a better plan for retirement before he/she invest for the retirement phase. Often people puzzle what to plan! Why to plan! And makes the thing complicated. But truly speaking Retirement Plan is nothing but your wish-list, how would you like to spend your retirement days.

Say for example, if you would like to spend your retirement days in a simple 2 bedroom flats with monthly expenses of Rs. 20,000 then you have to make a plan to save in that way from the beginning. When you plan for retirement, you must consider medical expenses and other contingencies and keep aside a part of money for those expenses too.

# Consult with a financial advisor :
Yeh, this part is very much essential while your retirement planning is rolling on the way. You should consult with a financial advisor and decide, how you are going to spend your life in retirement and for that how much you have to save now. Then your financial advisor will calculate and let you know, how much you need to save. Also tell you where to invest your savings so that you can achieve your retirement principal. He will chalk-out a plan and apply the same for you.

# Early beginner gains more :
Its universal truth and happens in retirement case as well. If people decide to contribute in retirement lately then there might be some initial resistance and protest. But whoever started early, would be enjoying contributing a small part of his earning with an aim to live worry free life in the old age. I know some people have some personal problems which hinder them to contribute in investments. But for the good future of your family and you, you have to sacrifice some part there.

Take an example of these three gentlemen John, Johny and Jhonson as follows

Present Age (yrs.)253035
Retirement Age (yrs.)606060
Investment duration (yrs.)353025
Monthly Investment (Rs.)500050005000
Returns per annum10%10%10%
Sum accumulated16,993,95510,314,2176,166,624

So, you can see after retirement John’s investment is much more than Johny and Johnson as he started 5 and 10 years earlier respectively. That’s not all, he also enjoyed all other benefits like reduces the tax to be paid out of income, reduce pension costs of employees, can be moved from one company’s plan to next.

# Avoid using your retirement investment :
Quite often people loose their control in financial emergencies either its small or big. They may have other ways to tackle that sort of situation but as I said people loose their control in emergencies and rush to withdraw from their retirement investments. If really there is no other option then definitely you can withdraw and solve the present problems. But you must try to deposit the amount you have used in your emergencies at the next opportunity.

# Follow-up your plan time to time :
Consulting with advisor, outlining and implementing the retirement plan, that’s not all. You should follow-up your plan from time to time to ensure that its on the right path, to meet your targeted return. And here your financial advisor plays an important role. He/She would observe all your investment status and put a stop on the investments that are not performing up to the mark and invest in alternative investments. With time as you grow closer to retirement the financial advisor starts decreasing the number of investments from risky assets like stocks and equity funds and invests into the fixed deposits.

It’s not that your income will be the same in your all working life. Suppose you start with Salary 50,000. After 5 years it will definitely go up to 75,000 to 90,000 depending on your experience. And you may start dreaming of a small Bunglow at the outskirts of the city instead of a 2 bedroom flat. Here also your financial advisor might come into play and have you change your investment plans based on any additional inputs you give him.

Useful Tips To Shape Up Your Financial Life

personal finance tips
Are you spending more? Good do it. But don’t over do it. Because I have seen many people, whoever did this, could not able to overcome the burden of due bills easily. They worked very hard to get out of such a mess. People have a habit of spending more, some of them do it consciously and some unconsciously. And this way they create problems in their Happy Life. Here are some useful tips to get stable financially.

1. Budgeting :
Most people do not make budget and invite troubles in their financial life. Budgeting is one the essential factor to keep control over your money matters. Until and unless you do not undertake, you won’t be able to understand where your money is going? How would you set expenses and saving goals if you don’t know where your money is going? You need to set a budget to enjoy worry free financial life, whether you earn thousands or millions a year.

2. Minimize the use of Credit Cards :
Credit cards another name is plastic money, the little pieces of plastic are easy to carry and use. People use it to pay for a purchase, whether it’s large or small randomly. Often unnecessary things are purchased which are not in the budget. And at some point of time they find themselves in the pile of credit card debt. And this would become one of the obstacles to getting ahead financially.

3. Saving Plans :
Saving is necessary to pass smooth life in later part of your life. Take my example - I used to save some amount after meeting all other financial obligations but hardly could save a sufficient amount. Then I change my thought and put budgeting in effect and set aside a minimum of 5% to 10% of my salary for savings before meeting all other financial obligations. So it would be better if the saving amount automatically deducted from your paycheck and deposited into a separate account.

4. Retirement Plan Contribution :
If you are a private sector organization employee then you must be heard of 401(k) plan. This plan is sponsored by an employer. The employer acts as a fiduciary. If your employer has this plan, try not turning your head out of this, simply sign up and contribute to it. It has some benefits, which you enjoy in the following like reduces the tax to be paid out of income, reduce pension costs of employees, can be moved from one company’s plan to next. There may be some more. If your employer doesn’t offer a retirement plan, you can consider an IRA.

5. Use Employment Benefits :
Use of every possible employment benefits that you have in your hand. There are several benefits your organization may offer like a 401(k) plan, medical and dental insurance, flexible spending accounts, etc. And I am sure all these options can definitely help you to save some money by reducing taxes or out-of-pocket expenses.
I know these are not enough to handle any financial issues. But atleast these would help to some extent to manage your money matters smoothly. And I know some of you have some better experience, which you are free to share right at my blog.

Personal Finances

personal finance
Personal finance is the process of managing money properly. People would often get confused or face trouble while pursuing with personal financial matters. But there is a way to avoid such financial hazards. Having enough money to achieve your financial goals is not beyond your reach!

At some point of time, people would definitely need to take control of their money. So it will be much better, if they start at the earliest. Coz if you fall in the crisis-trap then it will be a little hard to get out of that situation. So, here begins your financial management practice today. Hence, keep yourself free from unforeseen worries!

You can have a sound sleep at night when you have sufficient amount in your bank account, to cover the several bills payment either its phone, university fees or shopping through credit card. You would truly feel proud and happy when you see your kids going to attend a university. It feels nice to pat yourself, when you buy your dream car with the ‘cash’. Some uncertain events like one of your loved ones may fall ill, but you would be relieved to know that you can afford the best treatment without keeping your house as a pledge – in a life cycle these are obvious circumstances which might happen with everyone.

Here are some excellent personal finance questions:

So, keep your eyes on my blog to get the information you need and manage your personal finances to enjoy a worry-free life!

It’s true that money cannot buy love or happiness for you, but it certainly enables a smooth running of your life.