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Personal Finance

Secrets of Well Managed Checking Accounts

Don’t ignore your statements.

This seems so obvious – to the point of not even worth mentioning. But it’s amazing how many of us fail to look at our statements every month, or to look at them thoroughly. Besides balancing your account – in other words, reconciling your posted balance against outstanding drafts or checks that have not been presented for payment – you need to examine your account thoroughly every month to make sure there isn’t something there that is out of place. Did the restaurant you went to a couple of months ago record a five dollar tip or a $25 tip? Did the shoe store who took your catalog purchase back really process the credit to your account like they were supposed to? Are there fees or debits that you can’t seem to account for? These are just some of the issues you’ll want to bear in mind as you’re studying your statement.

View your bank as a partner, not just a provider.

Even if you have the most basic of checking account products, your bank should demonstrate an interest in helping you manage it successfully. (And if they don’t, shop around for another bank.) Ask a banking customer service representative what tools, consumer education, and resources your bank provides or recommends to help their customers manage their finances properly. You may be surprised to learn that your bank offers website articles, free online or in person classes, apps, or even just free friendly advice that can help you run your checking account and your overall for personal finances with great efficiency.

Take the terms of your account seriously.

If your checking account agreement assesses additional fees for transactions that exceed a certain number, or for minimum balances that drop below prescribed amount, it’s important to take those restrictions seriously. Blowing them off here and there may not seem like a big deal at the time, but over the course of a few years it’s easy for those extra fees to pile up.

Ways to Improve Your Finance

  1. Begin Using a Budget. There are many people who consider budgets to be factors that are limiting their freedom. If you want to have a better financial freedom in the future, ensure that you have a well detailed budget. No impulse buying should be encouraged. In short, tracking ones spending and living within a budget allows one to get used to a lifestyle that is within their budget.
  2. Slash your Expenses and Spending. The perfect time to figure out why you have been spending more than you need to be spending is at the end of the year. Dig into you your bank statements and check to find out where the spending was unnecessarily low. How much do you spend on entertainment, groceries, transport etc and what is it that you can do to reduce such expenses. Make a budget that cuts all those extra costs and live within the budget.
  3. Pay Yourself First. After you start saving, you will have money starting to pile up. The most appropriate thing is to pay you first by bumping up one’s retirement contributions or to transfer some certain amount of money to a savings account. You can as well do both.
  4. Completely Dump Debt. List all the debts you owe others and prioritize them according to highest interest rate or size of the balance. After you have had a budget and started realizing much savings, start paying your debts from the highest prioritized moving downwards till you clear all the debts. In short, crate an actionable plan and get out of debt.
  5. Get Right with Retirement. In case you have been borrowing money from your work sponsored retirement plan account, you are headed for trouble at retirement. At your savings rate, will you achieve your retirement goal? Discuss this with a financial planner and make appropriate steps to track your investments.
  6. Contribution Beyond the Company Match is Paramount. If you fail to contribute the required amount in to your retirement plan account as per the company’s full match, experts will tell you that you have lost tens of thousands of money over your lifetime. Don’t waste this free money. Take full advantage of it.
  7. Open some Health Savings Account. If you have a HDHP (High-deductible health insurance) plan, it is prudent that you save money for future health service expenses in the tax advantaged HSA (health savings account).

Money and the Laws of Value

Money as a Store of Energy

Money is a store of economic energy. Without the awareness, acquisition, organization, and perfection of these internal values in any man, wealth creation in a sustainable manner is impossible. Poverty resulting from lack of cash or tangible assets is temporary and easily curable; however, poverty resulting from lack of discovery or awareness of these internal sources of wealth is permanent and cannot be cured by the acquisition or possession of money or tangible assets. Attempting to cure malaria by the use of pain relieving tablets is at best a temporary solution. Unfortunately, most people looking for money usually neglect and disrespect their internal primary source of wealth. According to Mark Victor Hansen “You do not have wealth, you are your wealth”! The earlier you come to the full realization of this universal principle, the quicker you will be on your journey to financial success.

External sources of values are those invisible assets outside a person that is relatively fixed and is accessible to every man equally. These include: Time, Problems, and Relationships. Everyman has equal access to these three variables; and they are unavoidable raw materials for the creation of every form of tangible wealth.

Money Creation Process

Three variables therefore determine the quantity of money a person can legally create over a given period of time: The number of internal sources of wealth discovered and properly harnessed; Amount of external sources of values efficiently utilized; and how much of the outputs of the combination of those variables that is successfully delivered to those who need them in exchange for money. For instance, the income that an employee will ultimately earn will be determined by how much of his talents, passions, and skills he is able to discover, improve, and convert to expertise. Combined with how well he is able to manage the time, opportunities, and relationships available in his work to generate and deliver the expected results consistently over a period of time.

Laws of Value

Since we now understand that, value is the source of money; and that money cannot exist alone without corresponding value; understanding the principles and laws of value will enable us create and sustain money in a legal and enduring manner.

” In every human relationship or interaction value is always flowing but money may not”

Since value is an invisible carrier of money, you may be gaining or losing money without you being consciously aware of it. Every time you come in contact with or spend some time with people, you will either increase or decrease your cumulative value whether or not money exchanged hands during such interaction. That means if you are in a high paying job, but spend a lot of time with people with poverty mind set or low expectation individuals; your net cumulative value will gradually reduce to reflect your dominant mind set. This will naturally reduce your productivity on your job resulting in stagnation or ultimate downsizing! Conversely, if every time you have a meeting with a prospect he comes out feeling he has added more value than he gave during the interaction; he’ll seek more opportunities to receive such values, on a more frequent basis – which means the consummation of a business relationship and the signing of contract!

On a daily or weekly basis, if your interaction or association is more with those who drain value from you without offering equivalent or more value in return, you will eventually become money poor.

“Value like water has three states, as long as value keeps flowing, under the right circumstance and conditions, it will freeze to tangible money”

Many people get discouraged when they begin to offer value and they don’t immediately receive the money equivalent of such values. Such frustration often leads to compromise, mediocrity in service delivery, untimely resignation, and quitting from entrepreneurial venture. But, think about it this way, it takes time for water to become ice in a deep freezer even under the consistent application of electrical power. Even when you are delivering value consistently, it takes some time for the value to be appreciated and recognized for its money worth by other people.

Most of the world’s leading successful people have gone through times when the values they offered were not immediately rewarded with money. Zig Ziglar in his autobiography stated that his first 3,000 speeches were given for free. Anthony Robbins – the renowned author and personal achievement expert said that “in his first six months as motivational speaker, all his speeches were given free, and he had an average of 5 speaking engagement every day”.

Paying the Rent Online

Improved customer service

Instead of collecting rent personally and processing the check payments, they can have more time to focus on their marketing efforts and improve their relations with tenants. This is a way of improving their relationship with the customers, and also a way of providing them with better services.

Controlled management costs

Collecting rent online reduces the expenses related to managing properties. A landlord will be able to reduce operational costs and maintain a low property management fee. This will benefit many property owners.

Decreased number of past due accounts

There are different online payment options, such as PayPal, credit card and eCheck, so there will be a significant reduction in terms of late payments. In addition, tenants get reminders via text or email when the rent is due or fast approaching, prompting an immediate payment, if the system is in an optimized mobile device.

Faster dispute resolution and audit track

Rent that is paid online has digital paper trails. So, when a tenant claims that he paid online, the property owner can confirm or refute the claim by accessing the system. The fully integrated software for property management will allow owners to view the late charges, update the owner system and track split payments automatically.

It is safer for them to process rent payments and owner disbursements since personal details are not compromised. Their accountants can get a snapshot of tenants that have paid to enable well-informed financial resolutions.

It is Easy to Stay Organized

When money goes from one hand to another, a higher degree of organization is needed. When more tenants and properties are involved, there is a higher probability of committing errors.

Even when managing one or two properties, collection of rent checks on a monthly basis involves communication and organization to make sure that the payment is received in a well-timed manner. Errors, however small they are, could be disastrous when they are caused by arguments wherein the landlord and tenant insist that they are the wronged party.

Added security

Online rent payment eliminates the risks that come with cash payments. Furthermore, the insurance company will most likely lower coverage when there is less cash on-site.

About Gold Prices

The balance of trade – The deficit is increasing

One reason for the continued increase in the price of gold is the growing deficit in the balance of trade with countries like the US. The reason for this is the increased worth of imports, compared to exports. The imports have increased by 1.4%, whereas the exports grew up by just 0.4 percent.

The reduced production of gold

Another significant reason for the upward trends in the cost of gold is a reduction in the quantity of gold produced by countries like Australia, Philippines, China, Canada, South Africa and the United States. Since the present production fails to match the requirements of the market, the cost is going up in the rest of the countries.

Political and economical factors

Experts are of the opinion that political and economical events all over the world are also responsible for increasing the prices of gold. For instance, the price went up by nearly twenty-five percent in Asian markets during 2010-11 due to fluctuations in the international prices of oil. This had a negative effect on the exchange rates of currencies of different countries. This led to the storage of large volumes of gold by a number of countries. The action was in anticipation of political threats, and the associated insecurity caused by them.

Increased requirements of gold

In fact, a significant reason for the increasing price of the precious metal is the worldwide enhanced demand for this metal. Since the present production of gold is unable to match the requirements, its price is bound to go up. Due to the increasing demands, the existing price of the metal is almost fifty percent higher than what it was just a couple of years ago. It is also suggested by experts that the high demand for crude oil, resulting to its high price, is also adding to the price of gold. The increased revenue of countries producing oil is further adding to the ongoing phenomenon.

Options available for investing in gold are many

Many prefer buying gold coins as a form of investment, though many have a hobby of collecting gold coins. Many investors consider the collection of coins, not only for their inherent worth, but also for the joy they bring due to their exquisiteness. However, in case you are considering an investment in gold by way of coins, you need to ensure their authenticity. Likewise, many people invest in golden jewelry, which has historically proved to be an excellent asset. However, in the case of jewelry, you can’t be very sure if its selling at a future date will fetch you more than what you spent initially. The reason is the fact that the price of jewelry largely depends on its gold content, which varies. Investing in this metal in its physical form is considered the best option. However, you’ll need to store it securely in a bank, or deposit it using some company specializing in its storage.

Advantages of Using a Financial Planner

Saving Time

Even if you feel confident about your ability to handle these tasks, managing these issues can take time and effort. You can streamline your own schedule and avoid spending time on this work by hiring a financial planner to do it for you. This can be especially helpful for people experiencing a high volume of work professionally or for people with time-consuming family responsibilities.

Peace of Mind

Knowing that you have a professional working for you to manage these important details can be comforting for many people. The expertise applied to your finances can ensure that you plan and strategize correctly to work toward your goals. Without this expertise, you might make costly mistakes. With the assistance, you could even achieve your goals more quickly. You can also enjoy the confidence that comes with knowing that the professional will be continually monitoring and reviewing your situation. If any modifications are necessary, you can contact them quickly to correct the situation.

Expert Analysis

It is easy to be overloaded with information in today’s Internet age. Anyone without expertise in this specific area may have difficulty assessing this data accurately. A financial planner can provide expert analysis and planning for assets and liabilities, as well as insurance, taxes, and investments. Consumers usually have different priorities during early adulthood than they have in later ages, so planning and strategy vary. Having a professional opinion about investments as they pertain to short-and long-term goals and individual ability to withstand risks can also be invaluable to consumers.

A Cool Head

People may panic or become excited in certain circumstances. Fluctuations in the financial market may lead you to want to jump into investments with both feet or pull everything out to protect yourself against major losses. In either situation, a professional will lend solid expertise to help you make the correct decision. Perhaps it would be best to wait it out. Or, moving quickly might be the best course of action. The calm expertise of a professional who is not emotionally involved with the issues will deliver the best outcome.

Cost of Active Fund Investing

Before getting into which of the products are suitable for you, there are some aspects that need to be considered so that you understand what the variations are among the products.

Active investing is when someone (a portfolio manager) picks the stocks that are in the fund and decides how much of each one to hold (the weighting). This portfolio manager would also monitor the portfolio and decide when a security should be sold off, added to or have its weighting decreased. Since there is ongoing research, meetings and analysis that must be done to build and monitor this portfolio, this fund manager would have research analysts and administrative personnel to help run the fund.

Passive investing has the same setup as active investing, but rather than someone deciding what securities to buy or how much of each one to buy, the portfolio manager would copy a benchmark. A benchmark is a collection of securities which the fund is compared against to see how well it is doing. Since everything in investing is about how much money you can make and how much risk it takes to make that money, every fund out there is trying to compare to all of the other funds of the same type to see who can make the most money. The basis for the comparisons is the benchmark, which can also become comparing between peers or funds managed the same way. Comparisons are general in done only for returns. The risk aspect of the equation is handled by looking at what type of securities the fund holds or how specialized the fund is.

The short answer is that you have to get to know how the fund manager operates the fund. Some clues to know more quickly if the fund is active or passive are given next. If they are intentionally trying to pick securities according to some beliefs that they have about the market, this is active management. If the fund description talks about “beating the benchmark” or “manager skill” then it is actively managed. Looking at the return history, if the returns vary versus the index by different amounts each year, then the fund is actively managed. Lastly, the fees may be expensive and have sales loads.

If the name of the fund says “Index” or “Index fund” there is a good chance that the fund is passively managed. If the name of the fund says “ETF” or “Exchange Traded Fund” this could be a passive fund, but you need to make sure of this because some ETFs are actually active funds, but they are managed in a certain way. Most of the passively managed ETFs are provided by BMO, iShares, Claymore, Vanguard and Horizons in Canada and Powershares, Vanguard and SPDR (or Standard and Poors) and others if the holdings are from the U.S. Most of the other companies would have actively managed funds only. If the fund description states that the fund is trying to “imitate” the performance of an index or benchmark, then this implies that it is copying the index and this is passively managed. From the return perspective, passively managed funds will be very close to the index that they claim to imitate, but slightly less due to fees each year. The amount that the returns are under the index will be close to identical each year unless there are currency conversions or variances in cost which may come from currency fluctuations or hedging that the fund may do. Passive funds typically do not have sales loads as they are geared toward people who invest for themselves.

Start a Savings Plan

Once upon a time, people saved for things before they were able to buy them. However, we have gradually drifted from being savers to spenders and being in debt, due to the easy availability of credit. For many people, their expenditure is more than their earnings, which means they are using credit to purchase things. Put another way, they are using tomorrow’s income to fund today’s consumption.

But another and better way is to live within your means and save for the things you want, particularly consumable items. While interest rates are low it may seem like a good idea to buy what you want now and pay for it later. Unfortunately, with the possible exception of housing, most items purchased are what’s known as depreciating items or assets, where the value of the good decreases over time. If this item has been purchased on credit, it is most likely that by the time the item has been paid off, the value of the good is far less than when it was purchased.

In addition, there has usually been interest charges applied to the loan, which means the actual cost of the item ends up being far more than the initial purchase price. Wouldn’t it be better to save the cash for the item, save on the interest expense and be in a better negotiating position to obtain a discount because you’ll be paying in cash?

The easiest way to start saving is to have this happen automatically without much or any effort required. This can be done by establishing a special savings account, preferably one that you can’t access easily or penalizes you, for example with lower interest rates, for withdrawals.

Then set up an automatic transfer to move a set amount from your regular account into this new savings account. Or you might be able to speak with your payroll department about having your salary paid into two accounts, your regular and your savings account.

How much should you put into your savings account? It’s completely up to you! A good rule of thumb is 10% of your income, but you can change this figure to suit you. Ten percent might be a bit much to begin with, especially if you do have outstanding debt. Start with whatever you can comfortably afford to begin with. This percentage can always be increased over time.

Be aware of all facets of your income which can include overtime, commissions, bonuses, tax returns, cash gifts, sales of assets and myriad other things. If your automatic transfer only transfers a set amount of your fixed base salary every pay cycle, you might need to manually transfer your percentage amount to your savings account on any additional income.

Use the miracle of compound interest. It is said that Albert Einstein referred to it as the eighth wonder of the world. This is when you start earning interest on your previously earned interest, although its most dramatic effect is after a longer period of saving.

Eventually you might think about setting up a number of savings accounts such as a consumable items savings account (there’s that TV, car and holiday we were talking about) and what you might want to call your “wealth account”. This is your investing account and from where you purchase income producing assets.

How much you earn has no bearing on your ability to save. It’s not about how much you earn, it’s what you do with what you earn that’s important. The point is, it doesn’t matter how much you save or when you start saving, what matters is that you start.

Selling Gold For Cash

This is the big question! There are a few choices available to those that want to sell their gold. For those that own scrap gold, the refineries or pawn shops are the first two choices. On the other hand, if you have old jewelry made of gold, you can also try at jewelry stores, collectors, refineries etc. First decide what you are going to sell and afterwards decide which buyer might pay more.

This is one of the options. There are a lot of sites (eBay for example) that can allow you to show your metals to the world. Of course, this is not the most common place when it comes to selling worthy metals, but it works, because there are a lot of interested people.

This is the greatest thing about displaying your stuff online. Some might not pay the price you want, but this does not mean that you have no chances in getting the price you had in mind. A good tip is to do some research and discover the price that people are willing to pay. Either way, be prepared to get a different offer from what you had in mind.

It is important to know that the majority of buyers might not offer you the price of your dreams. So try to have realistic expectations on the price that you will have to receive for your gold. Prices that vary between five and ten percent less than what gold is really worth are quite common. This happens because the person buying needs the chance to get a profit when they are reselling your gold.

For instance, think about a scrap jewelry where you want to sell for the price of $100, because this is how much the market says it is worth. The person buying this will not be able to offer you this price because they will not manage to sell the piece for a profitable deal. Buyers seldom pay more than the price offered by the market.

The place of the transaction is not the only one that is important in this situation. You also have to be careful on the manner of payment. Cash or certified checks are the only methods which you should accept. This way you will avoid getting scammed. The most usual scam is the one with the credit card. Buyers who purchase with their credit cards can easily reverse all the charges and get all their money back. Losing your gold and your money does not sound like a good deal to anyone.

Profitable Options for Gold Investors

Physical Gold

The simplest way to buying physical gold is to procure bars and coins. The practice has been widespread for a long time and continues to be a favorite of many people that enjoy having physical possession of this precious metal as a kind of investment. Possessing gold in its physical form brings peace of mind to many.

However, one must be careful and do some homework when buying gold. It is reported that Chinese-made counterfeit gold coins are in circulation in the US market. So, you should stick to buying gold coins produced in government-owned mints only. Often, these are sold at a premium. Some of the recommended gold coins worth buying are the American Eagle, Canadian Maple and South African Krugerrands.

Gold Mutual Funds

The benefits of buying mutual funds are well-known. Investing in gold mutual funds allows you to expand or restrict your risks. When considering to invest in such mutual funds, look for funds that have stocks in companies using modernized techniques of mining and purifying the metal. You stand to profit more through such companies, compared to old companies following the traditional style of mining, or those that are rather new in this business.

ETFs

The latest trend is to buy stocks of SPDR Gold Trust ETF. This is an exchange traded fund (ETF) and its working is just like any other stock or a mutual fund. The main benefit of this kind of investment is the fact that you are saved the hassle of looking for a source for the gold and you also avoid any expense for its safe storage.

Junior gold stocks

If you have the capacity to take more risks, you can invest in these stocks, which are most likely not to have their own mines. Generally, they are occupied with the exploration of gold and thus more prone to incur loss. Their capital is quite low, compared to matured gold companies.

Gold futures

Unless you are a highly experienced investor, you should refrain from this activity. This is easily the most difficult form of investing in gold and it is very risky. Trading in gold futures is too difficult to be understood by majority of investors.