Personal Finance Tips 2015 – Are You in Control of Your Five Main Personal Finance Needs?

 Personal Finance Tips 2015 – Are You in Control of Your Five Main Personal Finance Needs?

The key to getting the edge on average-Joe finances and struggling with money worries is through gaining first-rate ‘financial literacy’ which reduces any over-dependency on accountants, financial advisors and so on, so that you can get control of and start to manage and direct your own personal finances. A great starting point on this journey is to know about and understand the 5 main financial needs in life as per classic financial planning.

The 5 Main Personal Finance Needs in Life

In classic financial planning there are 5 defined financial needs a typical person will have, oftentimes at pretty predictable time frames.

I find it can be a useful back of a napkin checklist to have the following 5 financial needs listed in front of you and then ask yourself what you could be doing now to ensure you are actively addressing each of these 5 financial needs:

  1. Savings i.e. the financial need to accumulate a lump sum from surplus income (typically saved from earned income) to meet some financial objective and/or build up a rainy day fund. An example of this would be you saving a down-payment for a home purchase at some stage in the near future. Another example of saving is building up an emergency fund (e.g. setting aside 6 months living expenses). You might also start saving with a view to utilizing these funds for a longer term objective such as building up a rainy day or retirement fund.
  2. Investments i.e. the financial need to invest a lump sum not required by you for a period of time, so as to earn a better return than standard saving can generate. A common example of this is investing a capital sum into bonds or stocks so as to generate a medium-to-high return. Another example of this need could be where you’ve recently retired and have received a lump sum retirement benefit and want to invest this appropriately. You’d have a financial need to invest this lump sum in the most suitable fashion possible (in a manner keeping with your age, risk profile and financial goals) so as to maximize your capital return and/or generate a future stream of (passive) income.
  3. Protection i.e. the financial need to provide financially for certain unpredictable events in life, such as ill health or death, causing the total cessation of earned income for you and/or your dependants. An example of this is when you get a mortgage, you will take out a life assurance policy (mortgage protection payment insurance) which would ensure the mortgage is paid off in full were you to die before the end of the mortgage term. In addition to simply buying life policies you can “protect” yourself by building sources of passive and portfolio income.
  4. Retirement Planning i.e. the financial need to accumulate funds to provide a replacement income (passive income and portfolio income) in retirement as you’re no longer working (either by choice or necessity) and not generating earned income.
  5. Mortgages i.e. the financial need to borrow a capital sum to fund the purchase of a property, usually an apartment (condo) or house, which will typically be used as your home.

The Typical Timeline of Your Personal Financial Needs

Your financial needs generally change as you get older. A typical timeline of changing financial needs during the course of someone’s life would be as follows:

  • Age 20- 30: Savings & Mortgages,
  • Age 30-40: Protection & Longer Term Savings
  • Age 40-50: Investment & Retirement Planning
  • Age 60: Investment

It’s important to note that this is a very general timeline. Personally, I think retirement planning should be looked at much earlier in life. With the exception of the current generation of kids (who actually will live shorter lives than those of us in our 20s, 30s and 40s now due to the growing obesity problem), people are living longer than ever before. However, less and less people are planning for and providing for their longer than ever retirement financial needs. (Why not take a look out our website and other articles on retirement planning to understand you retirement planning needs further.) I’ve heard it is said that people spend 5 times more time planning their holidays than they do their retirement! Sad but unfortunately true!

Becoming Your Own Financial Advisor

The process of personal financial planning is a process you can either undertake yourself or most likely with a financial advisor. The objective of financial planning is to achieve your financial plans and goals through the most efficient management of your available financial resources and proper use of financial products. Unfortunately, most people are not equipped to undertake financial planning themselves and they therefore over-rely on financial advisors and institutions.

A word of warning!! There are only a minority of financial advisors that truly have your best interests at heart (sorry…but it’s true). Many are merely flogging you financial products for commissions and fees. The only financial advice worth taking is paid-for financial advice and advice that is in writing. This is as close to independent financial advice that you are going to get I’m afraid. At least by paying for the service, you know the financial advisor is going to provide a service in return for payment rather than have some financial institution line his pockets with initial and trail commissions on financial products sold to you which may or may not be entirely suitable.

After the recent financial crisis and the expos on the entire financial system, there has never been a more important time to get skilled-up and be your own financial advisor. I’m not saying don’t have a team of financial/tax/legal experts you can turn to for advice. Do! However, I am saying, get empowered and become knowledgeable on the financial requirements you have and the strategies, tools and techniques you will need to achieve them. To become rich and create wealth beyond mere averages requires you, to at least some extent, become your own financial advisor.

Equipment Lease Finance Tips 2015 for New Businesses

 Equipment Lease Finance Tips 2015 for New Businesses

Equipment lease finance is a great option for those who are planning to start a new business. Instead of applying at a bank for a loan to purchase necessary equipment, one can choose a leasing option which helps avoid unnecessary delays in the business operation. Moreover, one can avoid the normally extended waiting period to get their bank loan approved. In this article, we will talk about the essential tips for start-up businesses, new businesses and established businesses that are planning to apply for equipment lease financing.

In the first place, it is very important to consider one’s qualifications. Leasing companies each have their own set standards for approving leases.

Always make sure that the company you choose offers services for start-up or new businesses. You will come across many lessors who are willing to finance customers with a good credit. So if your credit history is below the mark, you will want to work with leasing companies that have lower credit experience.

Many leasing companies also have restrictions on the kinds of equipment they are able to finance. For example, some lessors do not lease high-risk equipment like restaurant equipment, ATM machine routes, vending machines, etc. So you should first find out whether the leasing company you have chosen is able to provide you financing for the equipment you require. One more important thing that should be taken into account is the expiration term. You should carefully research the exact date and nature of the expiration of your lease.

When choosing the equipment lease financing option, it is very important to choose a program that is suitable for your needs.

Lease programs vary depending on the company providing them. Moreover, there is no standard lease program that will suit every type of businesses. One must consider a number of things before choosing an equipment lease program. For example, the size and financial health of your organization are very important. Important information about lease programs offered by a particular company is available on its website. You should always choose a company that has a well- maintained website where you will find clear program and contact information. The better known companies will also have a simpler lease process that is more manageable and hassle-free.

Equipment lease financing has become quite popular during a time when business owners do not want to go into the hassles of bank loans that include financial statements, pro forms, business plans, tax returns, etc. Companies prefer to work with an experienced equipment financing company with whom they can freely discuss their company’s details with knowledgeable professionals and learn more about equipment lease financing.

Six Personal Finance Tips to Money, Wealth, Financial Security and Personal Finances 2015

 Six Personal Finance Tips to Money, Wealth, Financial Security and Personal Finances 2015

Today everyone wants their money to be safe and secure. However, the financial world is growing more unstable and our needs are changing at a rapid pace. The necessity for individuals and families to save and manage their money has never been greater, harder and it is not getting any easier. Managing a budget, saving and investing your money wisely is the immense subject on everyone’s mind. Saving money has become extremely hard today. You should save for retirement, save for your kids’ college education, save in case you get laid off and save just to create a sense of comfort.

Have you looked at your finances lately? The process of saving money, create wealth and achieving all of your financial goals start with the awareness what personal finance is. Personal finances are not about cashing your payroll check, paying your bills and meeting all of your monthly obligations. It is about having enough money saved in order to meet all of your financial goals in life.

Money is a medium of exchange, but the lack of money adds to great emotional stress in our lives. Take control of your finances immediately by reviewing the following tips provided.

Today is an excellent time to start reviewing your finances and put together a good financial program with goals that fits your financial needs. After you review your finances, take immediate action and make some positive adjustments. Do not try to take care of it by yourself. Make sure all of your family members know about your plans and they can assist you in meeting all of your financial goals. An important issue is to measure your results and make all possible changes needed. When you and your family achieve all of the goals, reward yourselves. Rewards are always great motivators. Start Today.

Six Personal Finance Tips

1. It is not what you earn, it is what you save. Save at least 10% or more of your net earning from every paycheck. The important issue is to spend less than what you earn. Do not go beyond your means.

2. To maintain a good savings account take control of your spending. A good spending plan, not a budget, will let you know where you are spending. Decide on what you want to spend your money on in advance and keep track of all of your monthly transactions. From there you will know what your spending habits are.

3. Is your Bank meeting your needs? Possibly you might need to look at another bank that offers a much greater savings and or investment program. Today, Online Banks offer great investment programs.

4. Apply and use credit cards that offer 0% for 12 months or more. Every monthly payment that you make will go directly to the balance and not to the high interest. When the 0% intro program is about to expire review what the interest rate will be. If the rate after that period is 10% or more, apply for another 0% credit card and transfer the remaining balance. Keep this process and you will never make an interest payment.

5. Buy a home. Your best investment is your home but only if you get a low interest rate mortgage. If the current interest rate is 2% lower than your present rate, refinance and lower your monthly payment.

6. The only possible way to build wealth is to determine a percentage of your income that you are willing to invest every year.