Retirement Planning – Where Should One Invest?

You can get nuggets on how to invest for your retirement and where to take your IRA and get the best returns according to your expectations. While you need to invest, you can get help from professionals in the field who will give you information on how to go about it.

Investment Options

Gold Investment

This is by far the fastest rising industry today thanks to the rising demand for gold and the decline of the dollar. Investing in gold is easy as the number of well established companies is rising fast making the customer get easy access to the gold investment services. Many people are rolling over their 401k accounts into gold investment as the field is promising.

If you need to invest in gold for your retirement, you should weigh the options available and choose the best from the options. You can invest in gold stocks, own the metals directly or other options. The option that you choose should be profitable and easy to implement.

Investing in stocks

Stocks have been used for a long time by many people as the main form of retirement investment. People choose the best performing companies in any industry and invest their money there. The stocks industry has been oscillating and investors can make a lot out of them, sometimes lose and sometimes stagnate. You should check the history of the company and predict the future of the company by use of market charts to choose. You can see how the company has been faring in the market by looking at online reviews. The decline of the dollar however has affected the popularity of this niche and made many run from it.

Starting a Business

Most people save to start a business after they retire. The business they start can be in any field as long as there is a market gap. A business gives you freedom as you are your own manager and you only have you to answer to. You can start a small business when you are still employed let it grow as you work. After you retire, you will have a good business and you will age gracefully. The transport and the sanitation industry are among the fields that one can have a great business. The IT industry is also lucrative for a business.


You can roll your 401k into agriculture and make a difference. Most people have turned into agriculture and agricultural products to get great returns for their retirement. You should look for the best product to deal with if your need to succeed in this field.

Your Investment Strategy – Using a Portfolio

Investment management is an important part of financial planning that helps you to achieve your future goals if you get desired returns from your investments.

Before you start moving your money around, it is critical to gain a broad understanding of the different types of investments you can make.

As far as debt investment is concerned, we get a specific rate of return on investment before we invest I.e Fixed deposit, but if we talk about Equity, Commodity and Real Estate we cannot predict a specific percentage of profit and at times there is chance of capital loss.

Let’s assume that Mr. Ajay Verma wants to start investing Rs. 10, 000 per month to fulfill his future goals. He wants to get 12% to 15% return annually on his investment. He has done his research and checked with banks, post office, mutual fund companies and found that by investing in debt class, he can get 7% to 10% return that too before paying tax.

Generally, if you go to a financial advisor, he will do your risk analysis and give you guidelines on how to invest your money in an appropriate ratio between debt and equity. Do you think merely by investing in debt and equities on the basis of the suggested ratio is enough to get your desired return that help you achieve your future goals

Let’s look into this a little deeper. Mr. Ajay Verma’s example and assume that he invested in debt and equities at 40: 60 ratio (40% in debt fund and 60% in stocks). He invested 4000 per month in debt mutual fund and 6000 per month in 2 different stocks. At the end of the year, the return from the Debt fund and shares are:

Stock 1: 20% (Rs. 36000 * 20% = Rs. 7200)

Stock 2: -5% (Rs. 36000 *-5% = Rs. -1800)

Debt fund: 8% (Rs. 48000 * 8% = Rs. 3840)

Therefore, an average return would be around 8%, which is much lower than expected.

Most investors make the common mistake of blindly investing their money in the stock market and this is not a very calculated way of getting assured returns. A lay person may not be able to ascertain the risks involved in playing in the stock market so it is vital that he seeks advice from a portfolio manager who can assess and guide a person’s money into the right channels. This is a safer way of assuring higher returns.

It is vital to have a portfolio manager who plays an important role. Because before investing in an asset one should analyze some factors on which its return depends on. I.e. risk/reward ratio and the time value of money.

A portfolio manager allocates your money among various assets considering time, risk and return factors. He prepares investment strategies which vary from person to person and invests accordingly.

After the investment, periodical review of the portfolio and rebalancing asset allocation is very important. Rebalancing your portfolio involves shifting your money from one asset class to another to return to the ratio determined earlier.

Are You Ready to Invest?

When I had just started to feel comfortable in my career my inbox was regularly flooded with advice from well-meaning relatives and some experts on how I should start investing for future. Just the sheer amount of advice is mind-boggling. Now of course it is always good to feel secure about your future and creating a secondary revenue stream via your investments is just the thing to secure some wiggle room while planning your expenses. But is it the right time to start investing for you. Don’t follow the crowd and think for yourself. Are you ready for the uncertainties of today’s economic scenario? Have you made enough provisions so that you and your loved ones can maintain a comfortable lifestyle in case of an unexpected mishap. Here are some pointers you might want to consider before you take plunge into the investment market.

    • Monthly Expenses: In the current economic climate no job is permanently secure. If unfortunately you lose your job for any reason, do you have enough resources to give you a comfortable cushion. First thing I would recommend is to make a monthly budget covering all essential expenses such as rent, utility bills, grocery, gas and some entertainment etc. Next thing on agenda is to have enough funds readily available in your savings account to cover for six months of your monthly household budget. This is your contingency fund and will be left untouched unless there is an emergency. In case you have to make a withdrawal from this, remember to top it up as soon as possible.This will give you enough time (hopefully) to find another job of your choice and not settle for the next job available. It also assists you to support your lifestyle.
  • Insurance: If you have any dependents, you would want to make sure that they are well looked after, if(God Forbid) something happens to you. I would recommend a term insurance for the peace of mind. This is not something for tax benefits or as an investment option. Work out the amount that you feel is enough and if you are under 30 it is very easy to get a very good premium rate for term of 30 years.

Now you have secured your immediate needs and have bought some peace for your mind, it is time to start investing and creating a secondary revenue stream for your family.

The Essentiality of Financial Well Being

“When I was young I thought that money was the most important thing in life; now that I am old I know that it is.” – Oscar Wilde

Mammon worship is not something all that detestable. But to give a go by to values for the sake of material prosperity is loathsome.

Wealth is not a source of pleasure and wellbeing. But sufficient money keeps at bay several factors that estrange us from happiness.

What constitutes wealth?

People at your command, friends, kith and kin, fleet of vehicles, liquid funds on hand, good off springs are all deemed as part of being wealthy. But all these should keep a person in a state of happiness, otherwise, even liberal doses of all the elements stated above have no relevance to the man who owning them. All materialistic wealth is accompanied by the burden of safeguarding it and the fear of losing.

We have to agree, money decides the quality of life though it sounds to concepts of piety. Life gains a certain freedom on account of financial well-being.

Excruciating, truly, is life lived in everlasting want and financial struggle.

Warren Buffet, the celebrated investment expert reportedly said that being born in penury is one thing and remaining in poverty all along is utter incompetence. The remark made by Buffet describes the entire gulf between living a meaningful and goal-ridden life versus leading an aimless existence.

Poverty has a telling effect on physical and psychological health. Inter personal human relations get strained for reasons of money.

Nevertheless, cultures all across the world have attached a certain impiety to being rich. Oft heard negative comments over money and its relevance:

I) Where will this craving for earning money stop?
ii) Is every rich man truly happy?
iii) Wealth accumulates if only one is corrupt, dishonest and fraudulent.
iv) It is immoral to run after money
v) Money leads to spiritual bankruptcy

A pondering need be done whether all these aphorisms have substance in them or they have simply emanated from unrequited seekers of wealth.

It is also noteworthy that just through prolonged repetition; these ideas have gained an aura of plausibility.

Definitely, all the negativity over money needs a re-thinking. Nothing wrong in getting fixed to ideas like:

I) Succeed in becoming affluent
II) Create a surplus of my income over my expenditure
III) I would give up my innate indifference to become wealthy.

But becoming rich involves the risk of risk taking and risk bearing. One has to be prepared. As the oft quoted economic precept says, profit is the reward for the risk taken.

Every passing moment must be utilized to enrich ourselves in knowledge and every unit of our earnings need be carefully preserved and invested in the right way. Seeds must be sown even when we are young so that we lead our old age fully in dignity and with an undying enthusiasm.

Everyone desirous of going ahead financially has to know one basic doctrine that simple unimaginative toil and drudgery is not the highway to reach heights.

The potion has to contain some individual smartness, some more intelligence and information, a bit of diligent observation and finally, that pinch of salt called perseverance.

It is to be always remembered, the moneyed man commands respect from the world. But it is never to be forgotten that stooping to undesired levels kills our own self-respect!

Qualitative inner self lends a glitter for all external paraphernalia of wealth possessions. Excellence inside has several facets. Sincerity in thought, deed and action, tolerance, anger under control, are only a few measures of the inner quality.

The Five Laws to Wealth Creation

There are some laws to wealth creation which are just what they are, proven laws. And if you follow them you will realize wealth. Understand however, that wealth is many different things to many different people. Most people hear wealth and automatically think of someone like Oprah Winfrey, Warren Buffett or Bill Gates. True, these individuals are mega wealthy, but that does not mean that their status is true wealth to everyone. You need to determine what it looks like to you for yourself in your own life.

Over my career in the financial industry I have come across many diverse and unique people. And just as diverse as one individual is from the other, so will be his or her strategy to wealth creation. Not everyone wants to be rich or overly wealthy but there is always one common thread; everyone wants to be financially free, happy and secure.

Here are The Five Laws to Wealth Creation.

1. Set Goals

Setting goals creates your personal roadmap. Start with the end in mind and work in reverse. If you need help with this consider working with a financial advisor for the answers to the following questions but always remember that you’re the boss. Ultimately all decisions are yours to make.

Where am I today financially? – Where do I want or need to be? – What strategies will I use to get there?

2. Reduce & Eliminate Debt

Many years ago a CFP and colleague of mine said this, “Trying to create wealth while having debt is like walking with cement blocks on your feet.” Debt is just that; cement blocks on your feet or a 50 ton boulder on your back. Imagine that you are wanting to create wealth for yourself and your family but you have a mountain of debt to get rid of… have you really created anything at all? If you’re truly committed to creating wealth you must get rid of all your “bad” debt.

3. Pay Yourself First

It is an ancient Babylonian theory that ’10 percent of all I make is mine to keep’. George S. Clason wrote what I consider to be a phenomenal book called, “The Richest Man in Babylon” and I encourage you to pick it up. This is the oldest and most proven law to creating wealth. Most of society is conditioned to paying “others” first like the telephone company, the gas and Electricity Company or the bank. I’m not suggesting that you do not be responsible and meet your obligations however, what I am suggesting is that as important as these expenses are, you must place your financial future above them. Understand that this is a process and you will not achieve this overnight. The thing to keep in mind however, is how much you earn is not what matters most, but instead how much you keep.

4. Buy. Hold. And Prosper.

Within financial circles it is advised to invest a portion of your income in something for example, real estate, businesses, precious metals, or stocks. I am not a fan of any paper derivatives so I won’t speak to the context. Solid, long-term assets are in my opinion the best to protect your money and future buying power. You may not be a savvy investor today and that’s okay because first you need to create the positive habits that put you in a position of choice. Once these laws become a part of your psyche then you can consider the various options available to you and begin creating your long-term wealth preservation process.

5. Remain Diligent and Stay Committed.

Along the way you will invariably be challenged by circumstances, life events, and just “stuff”. At times it may be difficult to look at your situation and see an eventual end. But stay the course and be diligent with the strategy that you’ve created. You may have to make small adjustments along the way and that is okay, just keep moving forward in the direction of the goals that you originally set out to achieve.

Four Estate Plans You Should Consider

At some point you have to decide what you want done with your assets after you pass. It can make things much easier for your family during their time of grief if you have something set up. There are several estate plans that you can choose to utilize.

1. Wills

One of the most popular options is the will. It is one of the easiest processes to complete. You can do this yourself by filling out a one or two-page document, signing it, and having it witnessed. You can also go to an attorney and have them assist you. This is a good step if you have assets that need to be distributed among several heirs. An attorney can also help ensure that the document will hold up in probate court once you are gone. A will is essential for parents under 18, as it can serve as a way to say who should take custody of the children.

2. Revocable Living Trusts

If you want to forgo the hassle of probate for your loved one, you might consider having a revocable living trust as part of your estate plans. These allow you to pass property to your loved ones without going through the court. Any bank or financial institution can help you set up one.

Probably one of the best things about this plan is that it can be easily altered. You can add money to the account, take money out, and even name new beneficiaries. If you need to, you can also remove beneficiaries from your list. After you pass, this property is transferred quickly to the people you have chosen.

3. Totten Trusts

Any bank account can be turned into a Totten trust with only a signature on a few forms. What this does is designates the chosen beneficiaries that receive the contents within your account. They are simple to set up and are transferred quickly to your loved ones upon your death. In addition, if you have stocks and bonds, you can set these up to pass to whomever you choose in this manner.

4. AB Trust

A final trust for you to consider in your estate plans is the AB trust. With this, you leave your property to your spouse, and vice versa, for life. Should you pass away before your spouse, the property becomes theirs for the remainder of their life. Once they pass it moves directly to your children. While it can protect your estate from federal taxes, it can also be expensive to set up. This bypass, as it is better known, is only a good idea if you have over $3.5 million in assets, which is the limit before federal taxes become a concern.

In addition to setting up wills and trusts, you can also make charitable donations and gifts. Remember, you can only give as much as $13,000 to an individual or $26,000 to married couples per year before they have to pay gift taxes. It is a great way to reduce some of your assets and avoid death taxes upon your passing.

Five Practical Steps for Critical Estate Planning

According to data from the National Association of Estate Planners & Councils, over 120 million Americans don’t have updated plans to protect their families when accident, sickness, or death happens.

Jumpstarting the estate planning process can be the most significant present you give your family so that your loved ones aren’t left with uncertainty and conflict. These five steps can help you start the process and provide clarity to your family about your last wishes.

1. Create a Will

If you die without a will, the court will decide what to do with assets, debts, and even your children. This is called dying intestate, and it leaves the distribution process up to the state law where you reside. To write a valid will, simply focus on stating exactly who you choose to inherit your property, and also write who you want as a guardian for your kids in case something happens to the other parent as well. If proper planning is not completed, your family will be stuck in probate court, which is time-consuming and expensive.

2. Consider a Trust

If you want to avoid the probate process entirely, consider setting up a revocable trust. If you hold your assets in this manner, you will essentially transfer ownership of your property to a trust that includes exact details on distribution when you die. Because the information is contained within one document, you are able to skip probate completely.

3. Set Up Life Insurance

Life insurance is a smart idea, especially if you have young kids, are a homeowner, or you will likely owe a large amount of estate tax after you die. You will need to make sure that you have adequate coverage for your family to meet all of their expenses when you’re no longer there to help. Consider purchasing term life insurance, which can be an affordable option as you pay a fixed premium for the entire life of the term.

4. Assemble End-of-Life Documents

Beyond wills, trusts, and life insurance, critical estate planning should also involve assembling three important end-of-life documents. To help your loved ones follow your wishes when you can’t, you should make sure they have these three documents:

– A power of attorney that allows your designated agent to manage your legal affairs and financial situation.

– A form that allows the release of information from your doctors to chosen representatives.

– An advance directive form where someone is named to make medical decisions when you’re incapacitated, and a living will to detail exactly what medical treatment you desire when your life is ending.

5. Learn About Estate Taxes

Although the majority of estates will not owe taxes, if you have a taxable estate that is worth over $5.43 million, it is important to understand how much you will owe and how to strategically minimize that amount. For example, if you leave all assets to your spouse, that distribution will be tax exempt.

Medical Receivables Financing

The Rx for Ailing Cash Flow

The current adverse financial structure of the healthcare industry has placed hospitals, medical groups, private practitioners and other providers in a perilous position. Cumbersome and bureaucratic third party billing systems with long time-to-collection waiting periods have resulted in inconsistent cash flows and limited capital for growth. Nationwide, two-thirds of physicians work in practices that are set up as small business. Payment cuts 18% over four years, together with soaring malpractice premiums and other overhead costs, have threatened to put such practices out of businesses. More than 50% of doctors have deferred plans to purchase much-needed new equipment, and 30% either have laid off staff or are planning layoffs in the near future.

What Factoring “Is Not:”

o A Loan – Factoring is the sale of your medical claims for services already delivered

o Offered By Banks – Factoring is not an asset-based loan, nor is it a debt facility similar to those offered by banks.

Why not simply pick up the phone and call a bank for a loan to get through the crisis? Many of you already tried that and have been surprised to find that the average practice may not have sufficient credit and assets with which to secure adequate working capital. Additionally, the traditional banking loan application and approval process is long and involved. Debt is created for the practice to repay, and personal guarantees are required. The practice becomes less desirable for resale or acquisition.

Unlike bank lines that can tie up all of your assets, factoring involves only your third party medical claims

o No collateral other than accounts receivables

o No financial guarantees

o Unlimited amount of dollars

Factoring provides working capital without adding debt to your balance sheet. There is no predetermined maximum limit. This working capital arrangement is not limited in amount as many bank products are nor is it subject to banking “regulations.”

Surveys of physicians have identified the following immediate needs:

The creation of solid dependable cash flow

Decrease in the reimbursement interval between the time service is provided and payment is received

Increase in the overall percentage of claims collected

Reduction in administrative costs

Ready availability of cash for new equipment, expansion of office space, the addition of new partners, and practice marketing

Four Tips on How to Avoid Financial Debt and Manage Your Budget Smarter

Budgeting and avoiding financial debt is a huge thing we could all improve upon. We all know that their needs to be some kind of improvement, but do we genuinely know exactly where to start? Luckily, to suit your needs, we did all the hard labor for you. Now all you have to do is remember these excellent solutions that will help you manage your regular finances and save money in more ways than one.

Automated Bill Payment

Utilizing an auto-payment service can save you time, strain, and most importantly tons of dollars over time. You need a service that’s unique since not only does it assist you to stay clear of expensive late charges or handle your payments in a single location, but also functions with every one of your loan providers to develop an accelerated personal debt reduction payment plan.

This service should help to get you away from personal debt a lot quicker and can likely aid in building you important equity and/or lower overall interest payments.

Never stress again about when your costs are due or the possibility of “snowballing” into personal debt. Get your loans paid out off faster and tailor your spending plan in the direction of a lifestyle, which is debt-free.

Financial Loan Consolidation

A personal loan consolidation may be desirable to persons, which might be up to their neck in financial debt.

Although the attractiveness of paying a single month-to-month payment with a low-interest rate looks like a promising deal, all probability it is likely to set you back far more in the long haul. Chances are that you shouldn’t choose to get yourself caught up carrying out a consolidation unless of course you’re truly and hopelessly drowning with immense rates of interest and high monthly payments.

But when that’s the case, be sure to understand what your every month payment is going to be. If it is just as much, or slightly higher but into your price range, you might want to think about paying off your debt on your own with increased payment amounts each month. You will likely finish up your loan and pay out a lot more in interest, considering that your loan will likely be present for a large span of time.

Debt Management Plan

Deciding on a Debt Management Plan may help you with being structured and on time with all your charges via practical budgeting. Many financial authorities recommend utilizing a debt management plan as the ideal strategy for financial stability. Through this technique, you send a single payment for the agency managing the direct management plan and afterwards the quantity is going to be broken up among your lenders. This may possibly have an adverse affect on your credit history rating, but once you have paid off the debt in 3-5 years, your score should undoubtedly grow positively.

Through a direct management plan and help from a certified credit counselor, you can be on your way to meeting your economic goals, increasing your credit score, and taking control of your funds.

Financial Debt Avoidance

One of the simplest ways to deal with your financial debt and your budget would be to steer clear of debt to begin with. Needless to say, it’s simpler said then done. Although the earlier and faster you come to terms with the idea of intelligent budgeting, the earlier you might be living a life with less strain.

Initially, realize why many individuals get into debt:

• Reduced Earnings
• Poor Money Administration
• Underemployment
• Gambling
• Medical Expenses
• Minimal Savings

What you might take away from these financial debt causes is the fact that you should prepare yourself with a scrupulous and sensible spending budget, which allows you to stabilize your income and minimize your expenses. When you have extra cash, put it into a personal savings account for all those unpredictable expenditures. Keep away from overspending on things that aren’t needed and be certain to plan correctly and accurately. If you’re presently in debt, attempt an option from the list of other three strategies and if you are successful, do not at any time go down that road yet again.

3 Steps to Personal Financial Success – Part III: Save Some Money

Obviously, you cannot be a financial success if you don’t have any money or are not living the lifestyle that you envisioned. Question: Do you know what your net worth is? Many people don’t and are afraid to even try to determine what it is. It may just be the one thing to get you taking action towards saving your money.

How Much to Save?

Most say save 10% of your income. I say save more, but it all really depends on how much debt you are currently working with and where you want to be in the next year, 10 years, or by retirement (This should be determined in your goals. Read Part I of this series). If you are looking to retire in 30 years, investing $300 a month at 8% will yield you roughly $440,000. Enough for some to retire on, and probably a whole lot more than where you are currently headed.

What if I have Debt(s)?

If you have debt, it is important to get that debt out of the way. The logic here is that most credit card interest rates are upward of 12%. If you have debt on that card, but decide to save your money in an account earning 5-8%, you are losing money.

So what to do? Save enough for a cushion. Determine how much you may need for quick emergency cash such as $1000 – $2000 dollars, and save this amount. Once there, devote however much you were putting away into these accounts to paying off your debt as quickly as possible.

What Financial Vehicle should I use to save My Money?

Good question. There are many options that will get you where you want to be. When I think about where I want to save my money I think of 8 things:

1. What is my purpose for saving this money? (Very Important)

2. How much of a risk am I willing to take?

3. Will I be able to get to my money quickly?

4. Are there any penalties for getting my money?

5. How much do I want to save?

6. What reputable company should I save / invest with?

7. How much am I able to put aside monthly to achieve this?

8. How long will I be saving for?

I recommend separating your savings into multiple accounts (Christmas savings, car savings, retirement savings, etc.) and for each, make choices that will be conducive to how you will use the accounts.

If you are saving for a car for 1 year, you may want to use a 1or 2 yr CD. If you are saving for Christmas you can do the 1yr CD or use a Money Market account to allow you to get to your money if you have an emergency before Christmas and have to sacrifice some funds. If it is retirement you are saving for, there are numerous annuities, the most famous being the Traditional and Roth IRA which provide significant tax advantages depending on how you use them.