Finance
3 factors to consider when choosing a retirement portfolio
Going on retirement is liberating. It is the moment when you would finally get to relax and forget about your work and intent with which you were focusing on your career. The following questions will help you decide how to allocate assets for your retirement distribution.
Determining your budget and expenses
Making a list of all your necessary expenditures will help you evaluate how much you would be needing from your retirement plan. Your expenses are the main influencing factor of your retirement and having a strong understanding of how they are broken down is key. If are able to determine how much you would be withdrawing for your retirement, you would be able to find out what you would be expecting from your investments. Read the rest of this entry »
Calculations for a Comfortable Retirement
Generally, owners of small businesses decide to finance their through the sale of their company. While this may be a good plan, business owners often do not consider the amount of money that they will receive during the sale.
Develop a retirement budget in today’s dollars
While developing your retirement budget, you could start by considering your current expenses and forecasting whether these would still exist when you would be retiring. For instance, if you have children, they would probably have grown into adulthood and become self-sufficient. Other financial aspects such as a mortgage would have been paid off. Your retirement income would also need to cater for activities that you might want to indulge in once you would be free from professional obligations. Read the rest of this entry »
Investment tips for beginners
Investing can be an intimidating process for beginners. The following tips could be helpful to ease up the process.
- Choosing the right investment partner
The most crucial choice when it comes to investment revolves around which brokerage company to solicit. This is an important decision as it will impact on the amount paid in fees, the type of investments that you would be proposed and the expected returns on investment that you would get. A good long-term solution is to choose a discount broker. Choosing one that would not charge high fees and charge low commissions would be ideal. Brokers that offer mutual funds or ETFs (exchange-traded funds) without charging for a commission are perfect for beginners.
- Start with basic funds
Mutual funds and ETFs are great for beginners. The advantage of these funds is that they would split your investment across several stocks. This creates a buffer for risks associated with the downfall of any given individual stock. Mutual funds and ETFs are ideal if you want to learn about investment. Some target-date mutual funds offer the advantage of automatic computation of the risk level associated with your investment as you approach the goal you had set (such as your retirement, for instance).
- Opt for safer stocks
Safer stocks can come in the form of consumer staple products such as food, clothing and medical supplies. These stocks tend to be less volatile as even when the economy is tough, people would still be looking for buy those products. These stocks have a good long-term prospects but require patience to yield their return.
How to Solve Financial Shortfalls
If you notice a financial shortfall after calculating your expected expenses, you might have to find solutions in order to eliminate it. Several possibilities might be presented to you and you might have to adapt your solutions as per your situation. The guide below might help you come up with ideas to raise some extra funds.
Reconsider your expenditures
You might wish to go through your expenditure again and to try to eliminate anything that feels unnecessary. However, there are certain expenses that you must not drop. For instance, you might feel tempted to drop your insurance coverage, but dropping them now might be turn out to be problematic in the future. And this decision might turn out to be detrimental in the future.
Review bills and find out how to save
Take a moment to review each of your bills and think about ways to reduce your expenses. You may gather around with your family to decide how you may save on groceries, clothes and other items. You might have to change some of your consumer habits.
Consider your employment
To eliminate certain financial shortfalls, you might think about working extra hours or doing a part-time activity. If your children are teens, you might encourage them to find a job to be able to earn some extra pocket money.
Start Keeping a Log
The log would help you keep track of your expenditure and find out where the money goes. It might be some expensive lunch that you tend to forget about or a habit that has become part of your routine, such as smoking. It could be useful to note these down.
3 tips for choosing a mortgage
Choosing the right mortgage can be a tough decision. There are many factors that ought to be taken into consideration in order to avoid any contingencies in the years to come. The tips below might be helpful.
Know what you can afford
Most financial decisions would start with this step. Knowing what you can afford is about knowing where you stand financially. You might think about going through your monthly spending to determine what is within your budget in terms of the house, insurance, mortgage and property taxes. You might also think about including monthly maintenance and utility costs. Your credit report would also have to be checked to ensure that get the lowest interest rate possible on your mortgage.
Compare Loans
This shopping around takes time and energy, but it is unfortunately required in order to guarantee the best decision and more savings. You can consider a mortgage lender or mortgage broker. Brokers would sell you a loan from a lender. However, neither of these professionals would be finding the best loan for you. You would have to carry out the research yourself.
Understand loan prices and fees
Customers often make the mistake of accepting the first loan that they are being offered without thinking about looking around for a better deal. You might also keep in mind that lenders and brokers alike have a consideration for the profit that they would receive once you agree to the terms of a particular loan with higher interests or higher fees. Understanding and comparing prices yourself is the best way to strike a deal.
5 Financial tips for young adults
Most young adults are clueless on how to manage their money and most often find themselves living an existence of barely managing from one paycheck to the next. Here are 5 financial tips for young adults that will leave you comfortable and prosperous.
Learn self control – It is important to learn the art of delayed gratification. Instead of buying an item on credit as soon as you want it, try saving up the money and buying something straight off. Use your credit card only for emergencies and for the special offers that they provide.
Take control of your own financial future – It is better to understand how to control your money better, than letting your family or friends dictate your financial future. Read a few books on how to make the most of your personal finances.
Know where your money goes – Budgeting is a very good way to understand where your money is being spent. Once you understand where your money is going, you will understand that making small changes can make a big difference at the end of the month.
Start an emergency fund – It is good to pay yourself first, so that you have some money saved in case of an emergency. Set aside a percentage of your earnings, which are transferred from your account automatically to a savings account every month.
Start saving for retirement now – Saving up now for your retirement, will mean that you will have a stable income once you get old and are unable to work
Financial tips for young adults
Until personal finance becomes a subject in high school or college every young adult needs to learn how to manage their finances. Unfortunately, most don’t and as a result go out into the world without any idea on how to manage money. Here are a few tips to get your started:
Learn self-control
It is important to learn the art of delayed gratification. It will make managing your finances and saving money that much easier. Credit cards make it very easy to buy something immediately, even when you cannot afford it. Avoid those traps and only buy something that you have the money for. If not, then save up and buy it.
Setup an emergency fund
One of the smartest mantras in personal finance is “pay yourself first”. Regardless of how much your commitments are, always put away something. The starting point is your emergency fund. Set yourself a target of an emergency fund that will cover your expenses for three or six months. Once that target is hit, then look at other saving accounts.
Start saving for retirement
Thanks to compound interest, the sooner you start saving the less money you will have to contribute to hitting your retirement targets. The sooner you hit your retirement target the sooner working becomes optional and you can do anything else you want. Some companies provide retirement plans for their employees. This is beneficial as the money goes in pre-tax and some even match your contribution.
Tips for hiring employees on a limited budget
Small budgets are something businesses have to get used to when hiring new employees. Here are some tips to get the most for your money.
Know when to outsource – Outsourcing a position is a great way to reduce risks that come with a new hire. If an outsourced employee is not doing their job, you can simply tell them that you don’t require their services.
Use small to your advantage – Small businesses provide new hires with the ability to make changes that can be implemented. Make sure you highlight this fact when interviewing potential candidates.
Offer competitive non-salary benefits – Although employees are maybe willing to join a company for a smaller salary, you will have to offer them other benefits to keep them interested. For example, offering childcare services, transportation reimbursement, flexible schedules, the opportunity to work from home, are non-salary benefits that will keep employees happy.
Clearly set expectations – When the salary is low, it is best to discuss this at the early stage of the interview. The interviewer should then build on the other benefits the job offers.
Leverage existing employees – Ask employees to refer friends and acquaintances, so that they can market your company from the very beginning. This referral means that your employees will be more likely to introduce potential hires that are a great fit for the organization regarding culture and work ethics.
5 Tips to straighten out your finances
If your finances are a mess and your life goals are not being met, you may feel that you aren’t making the most of your life. Here are some ways to straighten your finances and reach those life goals you’ve always dreamed of achieving.
What do you owe – Understanding what you owe the bank is an excellent way to work towards paying off your debts. You can then look at how much money you will need to put away each month to pay up what you owe.
Learn accounting – Learning basic accounting will help you to budget and keep track of your expenses. You can then look at your budget each week and understand where you are spending your money the most and where you can save.
Transfer your income to your savings account – To grow your savings look at saving 5% of your income into a savings account every month.
Open an investment account – Investing your money wisely with the help of a reputed, experienced investor can be a smart move. Working with an investor will also teach you how to invest on your own and grow your investment.
Get an eBay account – Selling unwanted items that you own is an excellent way to get rid of junk and earn in the process. Start off by creating an eBay account and use your account to sell items on a weekly basis.
Initially following the tips above may seem complicated because your lifestyle will need to change. However, you will soon realize that within three months of following the steps above, you will increase your savings, reduce your debt and be able to reach your life goals.
Communicating with accounting and finance professionals
An effective manager will have to communicate with his/her accounting and finance professionals team to ensure daily business activities and projects are completed as per the plan. Here are six tips that will help a manager effectively communicate with his/her finance department.
Ask them to speak up – Ask your finance team to be more vocal and request for their feedback, questions, and concerns.
Check in often – Often remind your accounting team that you value their input and need their expertise to ensure that the business runs smoothly.
Don’t catch people off guard – Avoid waiting till an annual appraisal to give your team feedback, as this will give no time for a staff member or team to improve. Look at informally offering regular performance reviews.
Give it to them straight – Accounting professionals will value a communication style that is honest, reliable and direct.
Be specific – Accounting professionals will focus on data, so if you want them to work on something ensure that you are precise, accurate and technical. Avoid being general and request for numbers that will help you understand the situation better.
Ward off rumors – Office gossip can confuse employees and create misinformation and half truths. When you’re speaking to the finance team, request for information in numbers as this will provide a more accurate picture of a problem.
Training – Adding training programs to help employees communicate better is a good way to help departments and managers communicate more effectively.