How To Choose A Good Financial Doctor.
November 23, 2009
With the recent economic crises in all sectors of the economy, individuals need to know how to choose a good financial adviser. l liken a financial adviser to a doctor, because just like a doctor should know about your health so should a financial adviser know all about your financial health. This blog looks at five key features that can guide you in selecting a good financial adviser.
1. Pressure.
This is generally not a good sign as you need time. Time to understand and feel comfortable about the investment in which you want to put your hard earned money. If you feel pressured well buyer bewayer they is a chance that this is not your financial advisor..
2. Their payment.
L think l have one of the greatest financial advisers. Initially when l started to work for her he at first gave me lots of free advice. l had to ask her how she made her money. She was not only eager to tell me but explain but on all other engagements she volunteers her info beforehand. Well it is no wonder l have referred her to my family and friends.
3. Your background
When l first met my financial adviser. She wanted to know where in life l was. What l was able to save comfortable. She took time to compare my income and expenses. This helped me be realistic on how l was going to achieve my goal. So if your financialadvicer does not go through your financies how then will they be able to realistically advice you
4. Incentive to invest
My financial doctor then looks at my 401 and various investment that were offered. We then were able to diversify, and within 6 month we saw a difference. Now we review every my statement every six month this give me incentive to save for retirement. Hence l have not really lost my retirement even in this market. Your financial doctor should be able to diversify your investment, if the put them all investment together that should trigger an alarm in you.
5. Incorporate the whole family
Your financial doctor should discuss your investment with the whole family if they insist on seeing just party then they have a problem with authenticity. The financial doctor should have the whole family interest at heart. This starts with incorporating both parties. That is husband and wife or both partners.
lastly take time when looking for a good financial advisor. This is your hard earned money and just like your health, your financial investment could mean life or death
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Three Hidden Fees In Mutual funds
June 26, 2009
Investors in stock have to be wary of hidden fees in most managed mutual funds. These fees are hidden as they are not in published annual expense ratio. What is the effect of these fees? Since they are passed on to shareholder they could add up to 2 to 3% in addition to the brokerage commission. This in effect reduces your return on investments. This blog look at some of the hidden fees.
Custodial fees
A custodian of mutual fund is an entity that holds security owned by mutual fund. This entity could be a trust company, organization or commercial bank. The fee they charge is known as the custodial fee. It is important to note that, while virtually all fee-only investment advisors have custodial fees; most don’t readily disclose the fee. The only way to avoid this is to Investing directly in funds that you select yourself.
Brokerage fee
This is the cost of the broker who handles the transaction. Not all firms charge this fee firms brokers like Fidelity and Vanguard don’t charge for their own funds. This fee can be avoiding by reading the fine print gives to get the scoop on what brokers waive their fund transaction fees.
No loaded mutuals
These are No-load, no-transaction-fee funds. This reduces fund operating expenses, and hence a high return to the investor. Firms like Charles swab offer low expenses funds. However some people argue that management of the funds if more crucial that just looking at the expense. My opinion is that the funds are buy are well manages and have low fees.
However the investor has to reminder that just like with any business, running a mutual fund involves costs. For example, there are costs incurred in connection with particular investor transactions, such as investor purchases, exchanges, and redemptions. It is up to a prudent investor to do their due diligence to optimize their investment strategies
Five malpractices of credit cards
May 19, 2009
The current economic hardship has led to an increase in the use of credit card by many individuals. These has resulted to a credit crunch. On the other hand credit companies drastically tightened and introduced unfair policies. These policies which l opt to call malpractices are hurting all individual whether you are in good standing or not. This blog will focus five recently introduced malpractices
1. Higher interest rate.
Most credit cards are arbitrarily increasing their interest rates with no reason or rhyme. Failure or delay to pay one payment may spark an increase in interest rate. Also they are cases where a misstep with one card can set off a chain reaction of higher interest your other cards that are in good standing. This is an area where l feel the government should and l believe have started to look into. The goal is to implement laws to protect the consumers who are working hard to pay the credit cards.
2. Reducing Credit on cards
l have been a victim of these in three of my cards. l worked so hard to pay off my credit cards after seeing how much interest they were charging me. The payback l got was a reduction of my available limit from $3500 to $ 300. In confusion l called them to find out if this was an error only to be told that it was a result of my reduction in credit score. This did not make sense as my credit score had actually increase after paying the debt. But now it was affected adversely when they reduced my available limit. This also happened to two more of my cards
Suzie Orman in the Suzie Orman show had talked about these and warned people about it. In fact she is now advocating for people to focus more on building their emergency funds as opposed to first paying off their debt. What can l say, way to go girl or it is awesome thinking.
4.College Student on credit cards
College students are lured into getting credit cards to help with school fees and the cost of living. They are not informed that they will not only pay back these cards but the school loans are not discharged in Bankruptcy.
The government is introducing a bill where these instead of tossing a card to any college student, issuers would have to verify that a person under age 21 has adequate income to pay the bills or assign a parent to pay.
Under the House bill, those under the age of 18 could not be given credit cards.
4. Balance transfers
Card companies sometimes offer low interest rates - occasionally zero percent for a while - on money moved from one card to another. Yet consumers do not realize that if they also have an old balance at a high interest rate at the company at the time of the transfer, the high-interest debt remains. All monthly payments typically go to retiring the zero percent interest balance.
The Federal Reserve has called this deceptive because it obscures the effect of the lagging high-interest debt.Under the House measure, if a consumer makes a monthly payment in excess of the minimum requirement, everything over the minimum would go toward the high-interest balance. In addition, under a proposal by President Obama’s administration, the low rates would have to last for at least six months
5. Exceeding limit use and Education
Consumers could also require their card companies to stop allowing them to make purchases that exceed their credit limit. Currently, some let people go over their limit, and then typically charge a $30 fee.
“Many people would walk away from a purchase if they knew they were going over their limit,” Plunkett said.
l believe many people are not longer ignorant about finances. Credit card companies should explain in clear fine prints the cost of each card they give the consumer. They should ascertain that the consumer will afford to pay them back based on income. If the credit card companies did their job and the consumer were rightly informed, business would boom on both end creating a win win situation ethically.
Tips To Rescue Your Personal Financial Goals During Recession
April 5, 2009
The effects of the recession are being felt on most people finances. This necessitates us to change our financial goals according to the times. So how to we go about adjusting our finances? Most financial gurus advocate for six to eight month emergency fund. However with many people out of jobs and this number expected to raise s how do we proceed? One of my favorite financial gurus Suzie Orman shocked her audience when she appeared on Oprah and share her shocking yet practical recession rescue plan
1. Live on half of your monthly income. As l write l still can see the mouth dropping on the audience. Her point is based on the fact that it is now taking eight months to one year before one land on a job. To accomplish this means cutting to the very nifty gritty. This she asserts will help accomplish the eight month savings and we will be ready for the rainy day or stormy day. Now
2. Suzie Orman for the longest has been advocating for people to pay all their credit card debt. This has now changes and with good reason. She says that for those who are being retrenched from their jobs and are receiving a some severance package, do not use it to completely your pay credit card debt, and rather pay the minimum. This is because once you pay off this credit card the company’s are reducing your credit availability hence you are now left with no saving nor any credit available.
3. Unemployment compensation which usually last for 26 weeks and can be extended to 46 weeks however this varies from state to state. So find out in your state how long one can receive this compensation. However unemployment compensation is only 50% of what one’s monthly income was. This goes back to having a hefty emergency fund. Remember too that unemployment is taxable income.
4. Also on those mortgages she says do not lose your home without a fight. Find out if you can qualify for a loan modification or loan repair.
Above all Suzie urged us to look at what we have and not what we have lost. She put it this way if you continue to look at the rear view mirror you will get into an accident and the only person who will be hurt is you.
Five Actions That Help Track Your Financial Strategy.
March 1, 2009
As the market changes so should one review their investments to track their financial strategy. They are various ways to keep track of ones investments below are some actions plans that can begin this process
1. Re-evaluate your goals
Nothing stays constant. So as the market change one needs to re-evaluate their goals. While they are different view on time period when on should review. Most analysts recommend either every three months or every six months with every one year being the longest
2. Analysize your saving and spending
This should be done consistently. Whether you are saving for retirement or living in retirement, review your current spending. It may be necessarry to increase retirement money to help keep in track.
3. Re-position your portfolio.
One may need to strive for 10-20 fixed income securities across different maturities and in a number of corporate or munipal sectors for proper diversification.
4. Capitalize on your losses
You can deduct up to $3,000 in tax losses each year after you offset gains. If your income is within certain limits you may be eligible to convert your traditional IRA to a Roth IRA. It is important to consult a tax professional before making a tax bases investment decision.
5. Review your will and/or documents
Make sure your beneficiaries are listed the way you wish. Talk to your financial advisor to ensure you leave the legacy you intended.
In a tumultuous market, it is important to review your financial strategy. while the market was a challenge for most investors, they were also opportunities created.
How To Use Affirmation In Setting Goals
January 21, 2009
The use of affirmations is said to significant increase the achievement of goals, this is because most of our decisions (almost 99%) are made by the subconscious. This arouses my interest as to how l can influence by subconscious to align with my goals. The answer was the use of affirmations.
Affirmations are positive thoughts and ideas about yourself and expectation of your future. They only work if you say them. Affirmation gives instructions to the subconscious as the subconscious mind does not have negative qualifiers like not and don’t. They are three elements to include in writing affirmations.
Affirmations need to be in present tense.
For instance’ I am creative’ or ‘Money is easy to acquire’ this lets the subconscious mind be open to ideas and opportunities that align to your goals. This also aligns like minded people who either provide you with opportunity or meet some of your goals.
Affirmations need to be positive
This means that you write what you want to accomplish not what you do not want to accomplish.
‘l meet qualified buyers’ and not ‘l do not want to meet unqualified buyers’.
Lastly Affirmations are specific
State exactly what you want. For instance ‘one of my affirmations was’ I have many good renters for my property After two weeks of saying this l now have three potential renters and am still getting calls.
One of my goals this year is to use affirmations to achieve my goals. I would encourage you to use affirmation and let me know your results.
How To Measure Your Goals In life.
January 11, 2009
Most people by now have probably set their 2009 goals but how will they measure the achievement of these goals. Writing them down is obviously the first thing. One of the great personal development teachers Jim Rohn shares some thought on measuring the goals. As you reflect on your goals hope this article can help improve and achieve those goals this year.
I really like this acronym S.M.A.R.T., because we want to be smart when we set our goals. We want to intelligently decide what our goals will be so that we can actually accomplish them. We want to set the goals that our heart conceives, our minds believe and that our bodies will carry out. Let’s take a closer look at each of the components of S.M.A.R.T. goals:
Specific: Goals are no place to waffle. They are no place to be vague. Ambiguous goals produce ambiguous results. Incomplete goals produce incomplete futures.
Measurable: Always set goals that are measurable. I would say “specifically measurable” to take into account our principle of being specific as well.
Attainable: One of the detrimental things that many people do - and they do it with good intentions - is to set goals that are so high they are unattainable.
Realistic: The root word of realistic is “real.” A goal has to be something that we can reasonably make “real” or a “reality” in our lives. There are some goals that simply are not realistic. You have to be able to say, even if it is a tremendously stretching goal, that yes, indeed, it is entirely realistic — that you could make it. You may even have to say that it will take x, y, and z to do it, but if those happen, then it can be done. This is in no way to say it shouldn’t be a big goal, but it must be realistic.
Time: Every goal should have a time frame attached to it. I think that life itself is much more productive if there is a time frame connected to it. Could you imagine how much procrastination there would be on earth if people never died? We would never get “around to it.” We could always put it off. One of the powerful aspects of a great goal is that it has an end, a time in which you are shooting to accomplish it. You start working on it because you know there is an end. As time goes by you work on it because you don’t want to get behind. As it approaches, you work diligently because you want to meet the deadline. You may even have to break down a big goal into different parts of measurement and time frames. That is okay. Set smaller goals and work them out in their own time. A S.M.A.R.T. goal has a timeline.
Accountability (A contract with yourself or someone else). When someone knows what your goals are, they hold you accountable by asking you to “give an account” of where you are in the process of achieving that goal. Accountability puts some teeth into the process. If a goal is set and only one person knows it, does it really have any power? Many times, no. At the very least, it isn’t as powerful as if you have one or more other people who can hold you accountable to your goal.
Five Ways of Improving Cashflow Formula
November 25, 2008
Cash flow formula looks at ways of managing the influx and outflux of cash. In this tightening economic periods we all need to have some cash flow formula. The aim is this blog is to look at some internal areas that one can focus to better manage cash flow. This ideas not only apply to business but also personal finance (more…)
six areas of life that make us whole
November 12, 2008
It is important now more than ever to have goals in all areas of our life. This is because we can get too busy with life. We can start living too much in to the future and forget the importance of living in the now. this blog looks at area of our life that makes us complete that is :family and home life, financial and career aspirations, spiritual and ethical standards, physical and health issues, social and cultural activities, as well as mentally and educationally. Setting goals in each of these specific areas is critical to living a balanced, fulfilling life. When we use a value-based process, we are better able to achieve our goals with integrity.
Family and home
You may want to set some family goals as well. These could include things such as family home evening or scripture study. You could also set goals to spend more time together exercising as a family or spending an extra night a week or a month together. You can set a goal to eat dinner together a few times a week. The goals can really be tailored to your family’s needs. (more…)
Altering our mindset to develop reasonable goals
November 11, 2008
Our mind set has a lot to do with how we write goals. Having well written goals will enhance performance. Aligning our mindset with our goals help imprint them in our
Subconscience .This article looks at how to alter our mindset and develop reasonable goals.
The first thing you need to do when writing your goals is change your mindset about how a goal should be written… Developing specific goals makes them more solid and can help motivate you to do what’s necessary to achieve them. More specific goals would be to “make $5,000 more per year” or “work out four times per week.”
Your mindset about writing goals should also change to include how measurable the goals are. Good goals should be measurable; that is, they can be measured in terms of time, amount earned, or other measurements. For instance spending one hour reading or making ten cold calls. This makes it easier to track your progress as you work to achieve your goals. (more…)
