Personal Finance

The Building Blocks -- The idea of planning your finances to achieve long term security may sound daunting, but you still need to try anyhow for obvious reasons: It is somewhat of a pipe dream to depend on your employer, the government or anyone else for that matter to provide you everything you want, secondly, planning is crucial for attaining your major long-term goals such as home-ownership, paying for college, saving for retirement or building a nest egg. Therefore, the earlier you start on the path of planning the better chances you have for achieving your goals.

Savings Growth Potential -- Its amazing how your money can grow without you noticing; for instance, simply putting away $1 every day for 5 years and investing that at 4% return would amount to over $2900, over 30 years that would amount to around $20,000. If you simply accumulated that same $1 every day interest-free, it would only amount to about $10,950 in 30 years. So you can imagine the power of compounding interest.

Your Objective -- Deciding to plan for financial security without defining your specific goals is like traveling in a car without a destination – wherever you arrive could be your destination. You must ask yourself what the goals are. Typically, your immediate concern should be to create an “emergency fund” which should be around 3 to 6 months of your monthly living expenses tucked away in an account that could be easily accessed – savings account, short-term Certificate of Deposit, or Money Market account. Usually Federal Deposit Insurance Corporation (FDIC) would protect such funds up to $100,000. Beyond that you should adequately protect yourself against unforeseen circumstances and then decide how to invest your resources for the long haul.

Determining Your Risk Appetite -- Before investing you must first determine your risk tolerance level. By this we mean, the reasonable amount of risk (for a given return) you are willing and capable of withstanding with your money – with the help of our Investor Questionnaire you could determine your risk tolerance. With a well-defined risk-tolerance assessment, your Financial Professional would be able to advice you or you could be better positioned to choose where to invest your money for the long haul from a wide variety of investment options. Remember, the higher the return from an investment product the higher the potential risk. So choose wisely.

Investing For The Future -- In choosing an investment option, aside from these twin factors - your objective and risk appetite, there are a few other issues to consider; such as the effect of inflation on your investment - cost of living is always increasing. Therefore, you must be able to choose an investment option that meets your long-term goals; both in terms of being within your risk appetite and that would allow your money grow faster than the rate of inflation. If not the real value of your money could be eroded over time. To learn more about types of investment products check out our INVESTMENTS or FINANCIAL TOOLSSectons.

Protecting Your Vital Assets -- Insurance is a very important mix in your financial planning process. Your investments or savings can be literally wiped out by a single misfortune like disability, illness or death of a breadwinner. There are both public (such as Social Security) and private programs (such as individual/ group life insurance, disability insurance or long-term care insurance) that could be utilized to mitigate the consequences of such unforeseen circumstances. There are various kinds of insurance such as Health Insurance, Life Insurance (Term Life, Whole Life, Universal Life and Variable Life), Disability Insurance, Long-term Care Insurance (LTC), Homeowners Insurance, Auto Insurance. Click on INSURANCE Section for a full description.
------------------------------------------------------------------------------------------------------------
INVESTING IDEAS:

Investor Education -- You must make effort to educate yourself about investing before delving into the market. There are numerous sources and tools available today both within this portal, in cyberspace and other media outlets from where you could gain ample knowledge about finance and investing – read as much as you can and in time you would become an educated investor.

Curiosity and Caution -- Always pay attention to your gut instinct and inner voice. Be mindful of wild promises of fat investment returns, have an open mind about any investment product you read about or are offered, never be afraid of asking questions, conduct your own research if you can, before making any final decisions – as they say “if it’s too good to be true it probably is”. The technology meltdown of the early 2000s should be very instructive in that regard.

Advice -- In investing, there is no substitute to sound advice or second opinion from your financial professional about what appropriate actions to take. Not all advice is the same, but the financial professional has a responsibility by law to offer objective advice for which he/she would be compensated or could be held accountable. After all it’s your money, so you owe yourself the duty to protect it, grow it according to your best interest.

Comfort Zone -- Investing takes a lot of common sense, unfortunately common sense is not common to everyone. Quite often two factors drive investors - “ FEAR” and “GREED”. If you could to take the time and effort to build some body of knowledge about the market, companies, products, investing and remain focused on your objectives, you would be surprised that some of your best investment decisions could actually come from your so-called “circle of knowledge". That is from your intuition and the things you see, know, like and understand.

Systems, products or services you know or understand best might be turn out to be very appealing investment opportuntities to you. Your wisdom and instinct count a lot, but they cannot totally substitute for sound professional advice. The simple philosophy of "Own What You Know" made one of the best fund managers of all time Peter Lynch (of Fidelity Magellan Fund) a media icon. So trust what you know and always be willing to learn more.
------------------------------------------------------------------------------------------------------------
FINANCIAL PRODUCT PYRAMID:

Savings Account -- This kind of account is the simplest form of financial “piggy bank”, usually maintained at your local bank branch. You can store your emergency or spending money in cash at very small interest earnings and it will be protected up to $100,000 through FDIC insurance. This product features at the lowest rung of the pyramid. It’s more or less a low risk, low return product.

Money Market Account (MM) -- This sort of accounts would earn you higher interest than savings account, but it is still considered a low risk financial product for the fact that it is also FDIC insured. Some times banks require a higher minimum deposit to open this account, but your money is usually in a fixed term account and the longer the term the higher the interest.

Certificate Of Deposit (CD) -- This sort of product can earn you higher interest than savings and even money market account at a very low risk, thanks to the same FDIC insurance. So what’s the catch? Well the higher interest-earning ability could mean that you have to allow your money sit there for a little longer. You could be hit with a penalty for early withdrawal.

Bonds -- Purchasing a bond is like loaning money to the issuer, be it the Federal, State or Local Governments or even a Corporation. The bond agreement - “indenture” stipulates that the issuer would pay you a fixed interest for the loan and at maturity refunds your principal. The tenure can range anywhere from 1 year to 30 years. They are considered safer than stocks because bondholders have to be paid first before stockholders in the event of bankruptcy. The value of bond fluctuates over its life, however the bond-holder is assured of getting back the exact amount upon maturity, what the real purchasing power of the bond turns out to be is a different matter, because sometimes a bond could yield less money than the rate of inflation. There are bonds such as: Saving Bonds, Treasury Bills (with short-term maturity), Zero Coupon Bonds, Municipal Bonds, Convertible Bonds, and High-Yield Bonds. Click on INVESTMENTS for more explanation.

Stocks (Equities) -- Are probably the most popular form of investment known to most people. By buying the stocks of a company you are buying a stake in the company’s assets and future performance. If the company makes a profit you could earn a dividend and the value of your stake might grow. The price of the stock could fluctuate depending on the fortunes of the company, if that happens you could lose your investments. Mutual Funds are usually created from combining a basket of stocks or bonds to form a single investment product in which you could buy small units as shareholders. Click on INVESTMENTS for more information.

Annuities -- This a financial product usually created by insurance companies that help you accumulate money for retirement. There are immediate and deferred annuities in which you contribute money and it accumulate interest over time. The payout can either begin immediately (for immediate annuities) or at a later date (for deferred annuities). Contributions may be either before-tax or tax-deductible and grow tax-deferred. (see financial charts)
------------------------------------------------------------------------------------------------------------
RETIRMENT ACCOUNTS:

There are a few variations of retirement accounts available in the marketplace today. Depending on whether you are employed in a business, not-for-profit organization or self-employed. Increasing responsibility for retirement funding is shifting from businesses to individuals, according to expert analysis, in the 1980s companies dropped almost 40,000 pension plans, while adopting 401(k) and other profit-sharing plans.

Your retirement account portfolio can have a collection of various investment products, however experience has shown that an optimum combination of these investment products through “Diversification” can have the greatest impact on your portfolio performance over the long haul.

401(k) Plan -- Are available for employees in for-profit entities, where they can contribute a maximum of $12,000 a year – as at 2003 and up to $15,000 by 2006. Your contributions are deducted from gross income, grows tax deferred and may be matched by your employer, which could mean more money to you. Withdrawing money before 591/2 years from your retirement could result in 10% penalty plus tax, save in some exceptional circumstances like hardship.

403(b) Plan or Tax-Sheltered Annuities -- Is quite similar to 401(k) plan but are available for employees of not-for-profit organizations. The same rules as in a 401(k) pretty much applies here too.

Traditional and Roth Individual Retirement Accounts (IRA) -- Are twin retirement savings vehicles, except for some tax differences. The traditional IRA can be tax-deductible for certain income earners and grows tax deferred, but when withdrawn at retirement, taxes are due while the Roth IRA is not tax-deductible, but it grows tax deferred and when you withdraw you owe no taxes. There is a 10% penalty for early withdrawal from both accounts, save for some exceptions. One can contribute a maximum of $3000 a year to these two accounts. But if you are over 50 years, there is a “catch-up” provision.

SIMPLE IRA (Saving Incentive Matching Plan for Employees) -- This is usually a form of “plain vanilla” employer-sponsored retirement plan for small businesses with few employees. The maximum contribution is pegged at $8000 a year and it’s a very simple program without complicated reporting and testing requirements unlike the 401(k).

Keogh Plan and Simplified Employee Pension (SEP) -- Are pension/ retirement programs for self-employed people were they could contribute a maximum of 25% of their net income or $40,000 on a tax-deferred basis. Unlike the SEP Plans, Keogh is more complicated and requires some professional advice.

To access additional information click on FINANCIAL TOOLS.
-------------------------------------------------------------------------------------------------------------
News, Tips and rates are updated frequently and brought to you courtesy of Bankrate.com.

-------------------------------------------------------------------------------------------------------------

=========================================================================
MyMarketPlace-Online:

PERSONAL & AUTO LOAN:

Financial LifeLine -- financiallifeline.com

Axcess Cash -- Hassle-Free Emergency Cash Loans

Federal Money -- GRANTS! CAN YOU GET ONE? CLICK HERE!

Financial Aid -- 1.67% Student Loan Consolidation

Quick Payday -- Get Instant Cash

Capital One -- Click here for your hassle-free vehicle loan

MyPayDayLoan.com -- Need Cash Now? Apply

LowCostLending.com - Lower Your Monthly Payments? Bad Credit OK

LoanSelect.US -- Mortgage Quotes. Refinance, 2nd, FHA/VA, Damaged Credit

Neighborhoodloan, Inc. -- NeighborhoodLoan, Inc.

RoadLoan.com: -- Auto Finance Made Easy!

Related Links:
Investments Business Solutions Mortgages Insurance Mutual Funds Education Funding MyMarketPlace-Online Estate Planning	Terms Of Use Advertise

Home :: News :: Investments :: International :: Business Solutions :: Insurance :: Mortgages :: Media Center :: Stocks :: Advertise :: Contact Us