Income Finance

Archive for September, 2011

While it is a fact that most of us very prudent when it comes to managing our finances, most of us are good only in managing our own home finances. We find it very difficult to manage our long term finances because we do not have the right kind of experience and expertise in finding out the right sources where we can manage and park the funds which will ensure us good return after a period of time. In such situations we would be required to take the help of some qualified persons and towards this objective it would best to take the help and assistance of a good and qualified financial planner. They play a very important role in ensuring that your hard earned money gets the right kind of return over a reasonable period of time.

Investing in stocks and shares is indeed a good option but the problem is that only very few of us have any reasonable idea about the way these stocks and shares perform.

Hence it would be better to hand over the job to a professional and a good and professional financial planner is the best option that we can think of. Further today’s employees are too busy to devote time to managing of their funds and would rather prefer to hand it over to some good and reliable person or groups of persons. It is therefore quite common to find such persons in various financial industries and there are dozens of mutual fund companies where such professionals are seen sitting extending their hands of cooperation. They however charge for their services which usually is a percentage of the total funds invested through such professionals.

Though there are some such financial planners who are recruited by the companies or banks, quite a few of them work on their own and are termed as self employed financial planning experts.

They work on their own and are not attached to any company or organization. Hence, they would be able to help the customer out with various sources of investing of their funds. However, becoming a financial planner is not an easy job and it calls for a lot of hard work and also requires passing an exam. They are under close scrutiny and regulations and hence to succeed in this profession the persons have to be diligent, honest and hardworking. But all said and done it is a wonderful place to be in where a lot of money is there to be made.

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QNUPS is a legally accepted mode of cutting down IHT by means of investment in an assortment of offshore pension plans. Lots of UK citizens residing in distant countries are availing of this scheme in recent times subsequent to their superannuation. It is expanded as Qualifying Non UK Pension Scheme. This scheme was formally initiated by the British government in the early part of 2010. Under this plan, the UK administration affirmed that a few forms of pension schemes intended for UK citizens living in a foreign country were excused from being predisposed to pay the UK inheritance tax.

QNUPS is available in different nations all over the world. It does not necessarily have to be initiated in countries having a Double Taxation Agreement signed with the British administration. This entails that these countries are not under the obligation of any data sharing requirements.

Consequently this scheme is not under the purview of the HMRC. This makes sure that you have improved options of countries that can be a host to QNUPS plans.

The norms of QNUPS affirm that minimum 70% of a member’s pertinent finances will be selected by the plan manager as a means of endowing the member with an income for keeps. In case the member has died, this is provided at once to heirs along with the pension benefits to be paid to the member under QNUPS. There is no need for the trustee to report to the HMRC. The member will get potential benefit payments without the tax being deducted at source automatically. The members will thus be accountable for the statement of income in their present state of residence.

This offers a better discretion in terms of investment options after retirement, as compared to other UK permitted pension plans. You can sign up an investment consultant of your preference or pick from several pre-approved venture consultants dealing with a broad variety of asset categories and risks. Investment alternatives are extensive and include investing in stocks, ventures and various insurance policies. Non-standard assets such as residential and commercial property, private equity, loans to members and land may also be held.

QNUPS has come as an additional benefit for the retired UK citizens settled overseas and who are worried about inheritance tax in the UK. This is principally true for those who look forward to give a part of their savings over the years to their successors after their retirement.

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Financial transactions can get a little confusing and overwhelming. What with the scrupulous details and the need to be extra precise, financial matters can get a little messy. If you are one of those who find it a challenge to handle these transactions, consider hiring a financial planner.

A financial planner provides assistance in dealing with the financial aspects of goals and strategies. This is done through proper planning that involves education planning, cash flow management, retirement planning, risk management and insurance planning, estate planning, etc. A financial planner either works independently or with a firm.

A financial planner should have obtained a Bachelor’s degree, specifically a course related to business, finance, accounting and management.

A sufficient background in economics is a huge advantage, but this is not required. A financial planner should also be analytical and have excellent quantitative skills. A Masters in Business Administration (MBA) is also ideal.

One of the main responsibilities of a financial planner is to assist their clients in setting realistic and feasible financial goals. He or she also helps the client formulate personal budgets, monitor expenditures, and develop strategies that can help collect wealth. A financial planner also offers efficient tax planning services In San Jose financial planners give recommendations and financial advice but take note that their clients always have the final say.

Financial planners need to acquire certification; the requirements vary per state.

Although not really a mandate, aspiring financial planners need to pass a certification exam for them to be able to hold the title “Certified Financial Planner” (CFP). This provides the opportunity to offer financial services such as tax planning services in San Jose, and work with financial advisors, mutual fund companies, investment managers, and the like.

If you are seeking financial help, better get a financial planner now to help you ease up on your financial transactions such as tax preparation San Jose firms have a lot of these professionals who will help you learn more about financial concerns and help you strategize. After all, money takes effort to be earned; the same amount of effort can be used in handling it.

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Online investment strategies can include a wide variety of options. Online brokerages and other websites enable anyone of legal age to engage in buying and selling stocks, bonds, currency, commodities, and precious metals. Because investing online is both easy and risky, if you are inexperienced with trading, take every precaution, research well every investment firm and every investment prospect, and invest slowly and with extreme caution. Learn about investing and formulate your investment strategy before spending your hard earned money.

Investment Markets

Before spending the first cent in an online investment, ensure you know precisely the type of investment tools that suit your investment outlook, short term and long term financial goals.

The categories of investment vehicles include:

Capital Market: Where governments and large corporations raise long term funds. Those providing capital meet those who provide securities, and trades are made, each side hoping it will make money. Capital market investments include stocks, bonds, mutual funds, options, Treasury bills, and more.

Commodity Market: Investors in the commodities markets enter contracts on such items as agricultural products including fruits, crops, livestock, coffee, soybeans, and more, as well as precious metals—raw or primary products. Most commodity contracts usually pivot on future prices, such as a springtime purchase on winter wheat.

Foreign Exchange (Forex) Market: Anchored completely in buying and selling currency, the Forex Market has a direct impact on the value or strength of each country’s currency.

Inflation plays its part, but as with all investment vehicles, the amount of investment interest and activity in a currency–how much is purchased, and the price an investor is willing to pay—influence how much one currency is worth in relation to another.

Money Market: A traditional or online investment in the money market involves trading securities with a maturity of less than one year.

Real Estate Market: While investment strategies that include buying real estate online are not quite the same as other online investments, searching for real estate for sale can easily be conducted via the Internet. If interested in investing in this market, look for good values in land and land improvements permanently affixed to the land. Before purchasing, however, ensure you conduct due diligence on any property that catches your eye. Common real estate investments include solely land or commercial, residential, or industrial buildings.

Cautionary Points

Regardless of what type, method, or amount of investment you want to make, never invest any money before you thoroughly investigate for yourself the opportunity that you find. Don’t automatically take the word of someone, simply because he or she may have a license. There are different types of license, and while legal, not all are issued by the Security Exchange Commission.

Read ‘opportunity’ emails with a jaundiced eye, if at all. Report spam to the email provider. If you sign up for an online investment e-zine or newsletter, do so with the foreknowledge that it may increase unsolicited emails from others.

Most importantly, never invest blindly or automatically. Keep control of your money; don’t allow others to manipulate your investment dollar without your expressed and per-instance authorization, and make sure you articulate permission or denial in writing. Formulate an investment strategy and stick to it.

Summary

Regardless of the market in which you opt to implement your online investment strategies, remember to start small, start slowly, and never invest more than you can afford to lose. While not the intent for most investors, there is no guarantee that any investment you may make will make a profit. But with study, patience, and a bit of luck, it just might.

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No plan survives first contact they say and this is definitely true with investing, unknown variables can crop up anywhere anytime and ruin your perfectly calculated strategy. However you shouldnt let this scare you away from being prepared. The best plan is a flexible approach, ready to accommodate disaster or opportunity with a strong safety buffer.
Playing it safe is relatively straightforward, be conservative with your budget especially for your first property, if things go bad you want to still be able to pay your mortgage without fear of foreclosure. For most people it comes down to risk vs reward.
Some of the more risky options could be buying and flipping in short-term high growth areas like mining towns like Port Hedland or the Hawsons Iron Ore Project 60km south west of Broken Hill which currently has pretty good rental yield, low capital growth, a very low vacancy rate but a declining population.
A closer look reveals LendLease is going to spend $ 40million building a shopping plaza, Carpentaria Exploration made their announcement about Hawsons in mid-December and then there is also the new Silverton Wind Farm project and its $ 2.2billion worth of investment which is obviously a major cash injection into that area.
It should be said that nothing is set in stone, any one of these companies could encounter trouble and cancel their project leaving you with a worthless property in a dead-end town.
Damon Nagel, managing director of property investment advisory firm Ironfish, recommends that investors who adopt a long-term view and strive to build a balanced portfolio will achieve the most success. He stresses the importance of strategy

From the outset, adopt a clearly defined strategy and aim to build a portfolio that will meet your objectives, he says. Property investment can be broken down into three distinct phases growth, consolidation and income realisation and your objectives will determine the strategy and the types of property in which you choose to invest.
As with any good strategy, the key is research and I like to keep it simple when figuring out my budget for this my favourite resource has always been this Your Mortgage home Loan Repayment Calculator, but the beauty of the internet is that whatever you’re going through, someone else has probably done before and with a bit of luck you can learn from their experiences.
Great communities form around investing, trading stories and tips such as the Your Investment Property forum which is great for Australians who want a personal look at investing. As with all things its best to take this information with a grain of salt but learn as much as you can, its free and easy and youll be armed with a much better understanding when you start to consult with professionals.
You should learn about positive vs negative cash-flow, the pros and cons of each and why certain people advocate one or the other, both are very valid approaches depending on your situation.
If youre considering something different like a property syndicate to spread the risk and financial burden forums like the above can be a fantastic place to read about the successes and failures of others.
Tim Riley from the Property Collective wrote, I’ve been in three property syndicates since 2006 and am involved with two at the moment. Money issues are a constant presence in any business and a syndicate is no difference. In the syndicates I’ve been involved in, particularly my first one, had their fair share of money stresses. However, in that instance we managed to work through the issues and arrive at a solution that worked. So there are a few ways to enhance your knowledge and learn from the mistakes and successes of others.
It should be said though, learning by doing is the fastest way to become an expert, you’ll probably never understand the in’s and out’s of property investing completely until after you navigate the minefield of your first investment.

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Oh how often we daydream about our lazy days of retirement?

Do you picture yourself on a beautiful beach in a resort setting or maybe in a big city environment?  What ever your retirement daydream may be, you really need to ask yourself : how will you pay for your retirement investment strategies to give you the income you desire?

In order to really live the dream of retirement, you need to get real.

Math equals (=) numbers and numbers don’t lie. They just tell the truth. Numbers don’t care who you are or where you want to go. They have no personality but a lot of meaning.  Numbers are there for everyone to put to use in their retirement investment strategies.

First, how much do you need per year?  Maybe your Social Security

and pension or IRA’s add up to $ 25,000 per year. You have to figure all your expenses even if you plan to down size.

There are probably ‘things’ you want to do that you haven’t done before. Maybe a trip to Europe or 2 cruises per year. You’ve had your eye on that ’62 Corvette

you could never afford. Add on a little extra for the unexpected. Let’s say $ 5K per year. So in total, you will need an income of about $ 45,000 per year. If you minus your guaranteed income of Social Security and pension (IRA), you will need an extra $ 20,000 per year.

Holy extra income batman. So, Robin comes out of the bat cave with  retirement investment strategies.

Most retirees continue to work because of financial need and to avoid boredom.

If you don’t plan to work, retirement investment strategies

may include downsizing by selling your home and taking the surplus to invest for a monthly income. Where will you invest those funds? Just like your life before (retirement), life in retirement has no guarantees.

So, you must approach retirement investment strategies with an open mind and stick with sound retirement investment strategies that will benefit you.

Any investment counselor should be able to help you see the importance of retirement investment strategies that fit your risk tolerance and needs. Only use a financial specialist that has credentials, tax attorney or CPA.

Once you start dipping into your retirement investment strategies,

keep a flexible attitude about spending so you may keep on track.

What’s important is that there are not retirement investment strategies that are generic. In your tools, there will be a mix of

index funds, managed funds (actively) and funds that should be targeted for certain dates and guaranteed principal funds. When you hear the word, funds, it simply means your money deposited  into a certain product that will fund or  earn you income.  

Your goals should include maximum wealth, high returns and growth.

As you are approaching retirement, your retirement investment strategies should take you out of risk investments and place you into conservative and guaranteed investments with certain percentages of your portfolio in each.  Retirement investment strategies are based on a relationship of risk and return. What are some retirement investment strategies?

* mutual funds

* stocks, also known as equities

* bonds: municipal, corporate, federal gov’t

* annuities

* c.d.’s

Each may have their own inner or sub investments. Due your due

diligence. It’s retirement investment strategies for your future and yours alone.

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You need a basic investment strategy before you start investing. First, concentrate on asset allocation. Then keep your diversification (balance) on track as the years go by. Here’s an example of how to start investing with a sound investment strategy.

Drew decides to start investing, $ 5000 a year for twenty years. He wants to keep his risk moderate to low, and figures if his money grows at 6% to 7% per year on average that he will have about $ 200,000 in 20 years.

First, he deals with the asset allocation issue. How does he divide up the $ 5000 in various investment options? He decides to go with 1/3 in a safe investment that pays interest, 1/3 in bonds to get higher income, and 1/3 in stocks to get growth. This asset allocation makes Drew comfortable because it is a bit conservative and will give his portfolio considerable diversification.

If stocks have a rough time of it for a couple of years, he can ride it out while earning income on 2/3 of his money.

Plus, he will invest money in the amount of $ 5000 a year, and doesn’t need to worry about timing the stock market.

Now, here’s an important part of Drew’s overall investment strategy he does not want to overlook. As the years pass his asset allocation will get off track, since each of his investment options will earn different returns.

For example, let’s say that in his first few years he averages 3% a year in his safe investment, 6% in his bonds, and 12% on average yearly in stocks. Drew looks at how much he has in each and sees that more than 1/3 of the total is now in stocks. The other two investment options each represent less than 1/3 of the total.

To get back on track (1/3 in each) his investment strategy requires him to move some money around, from stocks to the other two.

In the future he will move money whenever he gets off track to keep the three investment options close to equal in value.

Ignoring your investments is poor money management. Drew does not want to just let things ride because he does not want to risk having much more than 1/3 of his money invested in stocks. At the same time, he does not want to have much less than 1/3 invested there either, because he needs some growth in order to average 6% to 7% overall in his investment portfolio.

Drew has made a financial commitment to himself to invest money. The only remaining problem is that he does not know how to pick stocks and bonds to invest in. Mutual funds are the simplest solution here. This way he has the advantage of professional money management and diversification within each of his investment options.

Very simply, he splits his money three ways: a money market fund, bond funds, and stock funds.

If Drew decides to get more aggressive or conservative along the way he can change his asset allocation to reflect this. Then he continues his basic investment strategy of keeping his new allocation on track whenever it gets out of line.

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As a stock investor, you should keep on learning new stock investing strategies. What worked in the past may not work now. What works now may not work tomorrow. So, as an investor, you need to keep on learning new things. Buy and hold was one of the most favorite stock investing strategies of the past. Does it work anymore? Most analysts are of the opinion that the days of buy and hold stock investing are over. Markets are much more volatile now. Electronic trading has infact changed the very nature of today’s markets. Here are five stock trading strategies that you can use over and over again;

Stock Investing Strategy #1: Always Look For Those Companies That Others Are Ignoring

Always look for those companies that are being ignored by most of the analyst. Most of the stocks that are hyped by the analyst on CNBC, Bloomberg, Wall Street Journal and other financial media always get overpriced pretty soon when most of the investors rush to invest in them.

There is no use in investing in these over hyped stocks that are always overpriced and may soon crash. There are companies that go out of favor with the market for multiple reasons. But the underlying fundamentals driving the business of those companies are still strong. If you do your research, you can easily dig out such companies. The trick lies in investing in stocks that are undervalued.

Stock Investing Strategy #2: Enter And Exit The Market Using Stock Charts

Good Stock Picking is only the first step in your ultimate goal of building a market beating stock portfolio. Once, you have identified, your favorite stocks that you think are worth investing, don’t simply rush to invest in them.

Observe the behavior of the stock on the charts for a few days. Use the charts to time your entry into the market. If you want to go long on a stock, enter the market close to the area of support. Similarly, if you want to go short on a stock, enter the market near an area of resistance.

Stock Investing Strategy #3: Use Limit Orders

Don’t simply enter and exit using Market Orders. Using a market order means getting the current market price. When you use the market order, your order might get filled at a price higher or lower than you had in mind when you placed the order. This is due to the fast nature of the stock market where stock prices are always moving up or down. Use Limit Orders and get the price that you had wanted for your stock.

Stock Investing Strategy #4: Keep an eye on the currency market

Financial markets are highly interlinked in today’s global economy. Any disturbance in any other financial market may soon ripple over to the stock market. Keep an eye on other markets that can affect the prices of stocks in your stock portfolio. Currency markets are very important to watch if you have included foreign or international stocks in your stock portfolio.

Stock Investing Strategy #5: Have an open mind

Follow the trail of hot money. Go where you will get the best possible return on your investment. If it is the gold market, go there. If it is the oil market, invest there. If it is the currency market, trade currencies. This is what hedge funds are doing to maximize their returns. Include commodities and currencies as well in your portfolio. This is what you should also learn. This is also called Market Timing. Learn the art of Market Timing!

These five stock investing strategies will help you build a market beating investment portfolio.

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Choosing the financial planner that is right for you can be very confusing and somewhat difficult. Finding the person or company that you will be able to trust with your planning and finances is important. So learning where to start takes some consideration.

Before beginning a search for a planner take some time to evaluate what your actual situation is financially. There are several free calculators on the internet that can help you begin by determining your current financial position. This will help you get a better idea of just what type of help you are looking for from an adviser.

Next, you will want to have an idea of what your goals are for making short, medium, and long term plans. This will help you further determine what type of advice you are seeking from a professional. There are several areas in which a professional can help. For instance, you may only want assistance to plan appropriately for retirement.

On the other hand, you may be looking for help in all areas of your finances so that you will be financially secure.

Now that you have done some foundational work, you will want to take time to research before hiring an adviser. There are a few things to consider that will help you decide on the best match for you. First, make sure that the company or person has the proper licensing that is necessary for your state and county.

Next, you will want to investigate the experience that the planner has. Find out how long the person or company has been in the business and in what areas they are experienced in. Depending on what type of help you are looking for, you will want to be sure that the they have ample experience in the area. Locating a firm that is experienced in all areas can be helpful to you as your needs tend to change over time and you will be able to stay with the same company.

As with any service you choose to hire, it is advisable that you ask for references to check with past and present clients to see if they have been satisfied with the services provided by the company.

You may even want to check with friends and relatives for their recommendations.

In additions, find out how the provider charges for services. For instance, you will want to know is this a fee for service provider or do they make a commission from providers of financial products. Be sure that you are at ease with how the planner charges you for services.

Know who the planner is affiliated with or owned by. Some advisers are independent or work for privately owned companies, while others are connected with big financial organizations and banks. These large institutions can restrict the products and services that can be offered to the client. Because of these restrictions, it is often better to seek the help of a financial planner that works independently or for a privately owned company.

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The most common paradox we come across is ‘money does not bring happiness.’ Then why since time immemorial, people from different civilizations, continents, customs and religions desire to be affluent, prosperous and wealthy. Money is not everything in the world, definitely there are few things, much more important than prosperity, like our health, family and people we love and respect. Nevertheless, money is the binding factor of present age that manages all our needs.

People who say money could never buy happiness are those who either don’t have money or those who have it but do not know how to properly utilize it. The best utilization of money is to invest it, to get an opulent present and future life, without economic worries.

For the success of every mission a strategy is needed. To get the economical freedom and be self sufficient one has to adopt investment strategy.

The strategy mirrors various internal and external factors such as present income, the type of work and industry, age, education, mindset, risk tolerance and so on. There are various avenues of investments: art, antiques, business, property, equity and so on.

However, historically proven, investment in equity yields higher returns provided we have prudently planned our portfolio. Equity investment means buying shares of a specific company with the expectation of generating wealth through dividends, capital gains and appreciation in the price of shares. The role of the investor is to provide the requisite funds to the company, with the assurance of receiving a proportionate percentage of profit.

Investment strategy is associated with various risks. We should properly understand several kinds and forms of risks before taking investment decisions.

The most widespread risk is emotions and speculation, Speculation is not investments; investing in equities and/or derivatives on the tips from friends, relatives, guests on CNBC TV, etc. expecting a quick windfall profits. Understand, that even the most visionary and experienced investment guru like Marc Faber acknowledges timing the market is the most difficult task and requires lots of experience, expertise and data. Every investment decisions should be based on proper research conducted by competent analysts. Once should take their advice and ask as many questions in order to clear the air

The most successful investment strategy, adopted by Berkshire Hathaway chairman Mr. Warren Buffett is value investing. Accumulate shares of companies that are available at tangible book value, are traded at lower than their book value, have low PE (price to earning) ratios with high dividend yields. Value stocks outperform market in longer run, provided we do not let our emotions play any role in our investments decisions. No greedy buying, no panic selling, no speculations, not following herd mentality i.e. buying or selling because one of our acquaintances is doing so. We should always diversify our portfolio baked by solid research conducted by proficient professionals of a qualified fund house offering PMS services with good track record. Never forget to periodically monitor and evaluate the returns of the portfolio, checking if they are going steady with the market or the benchmark index and the investment goals.

Always keep in mind that our money should work as hard as we do and if the portfolio is not keeping pace with the expectation, do not shy to reshuffle the investments. In the end of the day, we would be responsible for the profit or loss, so be shrewd and prudent and get rich soon.

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