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Saturday 31 December, 2011
Friday 30 December, 2011
Future Financial Planning Portfolio for Retirement
Have you taken some time off to do some future planning for your kids? We would now discuss the opportunities which you can deploy for your future plans. Opportunities like mutual funds, equities, fixed deposits and insurance are all financial planning options before you for your children. Apart from this you also make plans for your retirement years and many other objectives like purchasing a house, buying a car, etc
.
Mutual Funds: This is the one of the most popular option before you. There is an option before you to make investments in different areas like gold, debt, equities, property and variety of other mutual fund schemes available. Here you get the benefits of an experienced fund manager by just paying small fees in the starting and the recurring annual fees.
Thursday 29 December, 2011
Family Income Benefit Insurance
Let's consider first the difference between the two types of life cover. Level term insurance will generally pay a lump sum during the policy term, while family income benefit will pay an income for each year that is left on the policy. It is important to remember this, as this can determine how much will be paid out in the event of a claim.
The best way to illustrate difference is to through an example. For instance Mr White takes out a £250000 level term insurance policy on a 20 year term to protect his family, because he has dependent children of a young age. Mr Black decides to take out a family income benefit insurance policy for £15000 per year over same term of 20 years, to provide cover for his own young family.
However, though £ 15,000 per year will add up to £300000 over the term of 20 years, this does not mean this amount will be paid out. If the cover pays out the first year this is fine £15000 will be paid for every year left on the policy i.e. 20 years. But what if Mr Black dies 18 years into the policy term, then only £30000 would be payable over the remaining period of the policy i.e. 2 x £15000. However if Mr.White died in the first, second or last year of his level term policy, his family would still receive £ 250000 as it does not matter so to speak when he dies, the level lump sum will pay same amount within the policy term,£250000
So you can easily work out from the example above that family income benefit insurance is a form of decreasing term assurance under another name. Who would buy family income benefit and why? Well people who want to save on life policy premiums might consider buying this type of cover. The price is usually lower than level term assurance, because the benefit is reducing each year as we have seen in our example above. Hopefully you will now see the difference between the two insurances and from our example, be able to decide what type of policy you need or want. It all comes down to cost and what you need life cover for in the first place. If you are on a budget then family income benefit is an option to consider, but compare it against other types of cover first, before deciding.
Article Source: http://EzineArticles.com/6555820
Wednesday 28 December, 2011
7 Things You Need To Select The Right Retirement Plans
1. Your Expected Retirement Costs - Choosing the right retirement plans should include an evaluation of your expected retirement costs. These costs may be different for each person, and the ideal plan for your retirement will allow you to save the amount of money that you expect to need once you decide to retire. Some plans may not offer investment options that will provide the return needed to reach the desired account balance. Make sure that you include all of the possible expenses faced after retirement; otherwise you could choose a plan that falls short.
2. Your Anticipated Plan Contributions Each Year - The plan that you choose should factor in your yearly expected contributions and ensure that your retirement goals can be achieved. Some plans may limit allowable contributions to a small amount on an annual basis, and some plans may allow catch up contributions once you get close to retirement age.
3. Tax Planning Advice - Finding the best retirement plans should include professional tax advice. The consequences of poor retirement planning can be large tax liabilities, at a time when your income is needed the most. Some plans utilize pre tax contributions that are taxed upon distribution, while other plans use contributions made on an after tax basis so withdrawals are not taxed after retirement. Tax advice can help you choose the right plans for all of your retirement needs and goals.
4. A List of Retirement Goals - Before deciding on the best plan for your financial security during retirement you will need to create a list of your retirement goals. Will you want to travel? Will you keep a second home? Will you work at a part-time job or take up a hobby with related expenses? Your retirement goals will affect the best plan for your future, and the amount of retirement income you will need to live on without financial problems after retiring.
5. A Professional Financial Planner - A financial planner can help you choose the best retirement plans for your unique goals and financial needs at this stage in your life. A financial planner will help you to set financial goals, and then outline steps you need to take so that these goals can be easily met.
6. A Good Retirement Calculator - A good retirement calculator can help you accurately calculate all of the expenses you will have after you retire. This should be one of the first steps in retirement planning so that you do not end up short on funds in your golden years. These tools can help identify unexpected costs and expense that you may not have considered.
7. Your Annual Income Amount - Some retirement plans have certain restrictions concerning annual income amounts for eligibility. Many 401K plans, IRA accounts, and other retirement options may not be open to high income earners. Some plans may be intended for small business owners or self-employed individuals, while others are intended for high income employees, and still others may be ideal for low-income wage earners. You will need to know the annual amount that you earn to determine which plan is right for your retirement needs.
2. Your Anticipated Plan Contributions Each Year - The plan that you choose should factor in your yearly expected contributions and ensure that your retirement goals can be achieved. Some plans may limit allowable contributions to a small amount on an annual basis, and some plans may allow catch up contributions once you get close to retirement age.
3. Tax Planning Advice - Finding the best retirement plans should include professional tax advice. The consequences of poor retirement planning can be large tax liabilities, at a time when your income is needed the most. Some plans utilize pre tax contributions that are taxed upon distribution, while other plans use contributions made on an after tax basis so withdrawals are not taxed after retirement. Tax advice can help you choose the right plans for all of your retirement needs and goals.
4. A List of Retirement Goals - Before deciding on the best plan for your financial security during retirement you will need to create a list of your retirement goals. Will you want to travel? Will you keep a second home? Will you work at a part-time job or take up a hobby with related expenses? Your retirement goals will affect the best plan for your future, and the amount of retirement income you will need to live on without financial problems after retiring.
5. A Professional Financial Planner - A financial planner can help you choose the best retirement plans for your unique goals and financial needs at this stage in your life. A financial planner will help you to set financial goals, and then outline steps you need to take so that these goals can be easily met.
6. A Good Retirement Calculator - A good retirement calculator can help you accurately calculate all of the expenses you will have after you retire. This should be one of the first steps in retirement planning so that you do not end up short on funds in your golden years. These tools can help identify unexpected costs and expense that you may not have considered.
7. Your Annual Income Amount - Some retirement plans have certain restrictions concerning annual income amounts for eligibility. Many 401K plans, IRA accounts, and other retirement options may not be open to high income earners. Some plans may be intended for small business owners or self-employed individuals, while others are intended for high income employees, and still others may be ideal for low-income wage earners. You will need to know the annual amount that you earn to determine which plan is right for your retirement needs.
Tuesday 27 December, 2011
Investing In Gold - Not Only Good, But an Excellent Idea?
You've probably seen the signs by now, since they're pretty much everywhere you turn. People are buying gold in record numbers and it really shows no sign of stopping. From television commercials to pawn shops, the number of buyers for gold has triggered a modern gold rush. If investing in gold sounds like a good idea to you, that's because it is. Most investing experts recommend that your portfolio be made up of three to twenty percent gold investment. Gold affords you a kind of portfolio insurance and protects you against inflation or other national or global events. Simply put, investing in gold shouldn't be ignored.
Basically, there are a few ways that you can go about investing in gold. The most obvious is to actually buy physical gold, no matter what the form. There are plenty of different ways to do this but most opt for gold bullion coins which they then store in their safe deposit boxes or even in their home. Of course, you'll have to actually have a place to store your gold, which is why many people look into other options when they decide that investing in gold is the right decision for them to make.
Another option if investing in gold is something you want to do but you can't deal with storing the physical gold is to invest in exchange traded funds. Basically, every share of one of these funds that you purchase will essentially mean that you own one tenth of an ounce of the gold they're storing. There are several different types of exchange traded funds that can help you invest in gold, so take the time to review them and you'll likely find that one or more are perfect to add to your portfolio. They are a bit different than buying shares in a company, but hold many benefits that make them worthwhile.
You may want to consider alternative ways of investing in gold. One of the most intriguing options is to invest in mining operations. You'll get a three to one leverage in many instances but investing in gold mining operations obviously carries more risk than other choices. In summation, there are plenty of different options for gold investors. Less volatile and more dependable than many other options, you owe it to yourself to add gold to your portfolio in one way or another so that you can get all the benefits it can provide.
Basically, there are a few ways that you can go about investing in gold. The most obvious is to actually buy physical gold, no matter what the form. There are plenty of different ways to do this but most opt for gold bullion coins which they then store in their safe deposit boxes or even in their home. Of course, you'll have to actually have a place to store your gold, which is why many people look into other options when they decide that investing in gold is the right decision for them to make.
Another option if investing in gold is something you want to do but you can't deal with storing the physical gold is to invest in exchange traded funds. Basically, every share of one of these funds that you purchase will essentially mean that you own one tenth of an ounce of the gold they're storing. There are several different types of exchange traded funds that can help you invest in gold, so take the time to review them and you'll likely find that one or more are perfect to add to your portfolio. They are a bit different than buying shares in a company, but hold many benefits that make them worthwhile.
You may want to consider alternative ways of investing in gold. One of the most intriguing options is to invest in mining operations. You'll get a three to one leverage in many instances but investing in gold mining operations obviously carries more risk than other choices. In summation, there are plenty of different options for gold investors. Less volatile and more dependable than many other options, you owe it to yourself to add gold to your portfolio in one way or another so that you can get all the benefits it can provide.
Monday 26 December, 2011
Mutual Funds - A Secure Investment
By Joseph Kenny
Mutual funds are a collection of stocks and/or bonds invested in different securities, which include fixed market securities and money market instrumentals. It facilitates investors to put their money under an efficient investment management. There are three types of mutual funds namely, income funds, growth funds, and balanced funds.
The basic principle underlying mutual funds is to pool in money with other people to convert it into funds. Mutual funds generally buy shares in stocks wherein an experienced fund manager performs the task of selecting, purchasing and selling off the stocks himself. Certificates are then issued to the shareholders as a testimony of proof of their partnership and participation in the emoluments of funds.
There are particularly three ways in which you can make money from a mutual fund. They are:
1. Benefits can be earned from the commission on stocks, and interests on bonds. All the income received all round the year is paid by the funds in the form of a distribution.
2. The fund will have an outstanding benefit provided the funds sell high priced securities. Most of the profits are given back to the investors in a distribution.
3. The value of the fund's share automatically increases with an increase in the value of unsold high priced fund holdings. Accordingly, you can always sell shares of your mutual fund for profits.
Many people find investing in mutual funds an attractive option to that of dealing directly with the stock market because it is comparatively safe. In fact, these days, mutual funds have become the first preference of many investors. Mutual funds provide a balanced and better approach compared to conventional stock market alternatives. It has an added advantage of investing in several distinct sectors and firms, so, if one company suffers losses, the others may be rising. Investing in mutual funds, therefore, minimizes the loss-bearing risk of monetary assets.
In a nutshell, here are the salient points of the advantages of mutual funds:
1. Cost-effectiveness of investing in mutual funds: The main advantage of investing in mutual funds is the efficient management of your finances. Investors buy funds because they lack the competence and time to manage their own portfolio. It is a cost effective method, especially for a small investor because it is expensive to get a manager to manage individual investments.
2. Diversification: Compared to individual stocks or bonds, mutual funds diversify the risk of bearing loss. The basic intention being to invest in a diverse number of assets in order to overcome the negatives of loss making stocks or bonds by the profits reaped by others.
3. Economy of Scale: The transaction expenses are relatively low as a mutual fund is bought and sold in large amounts of credits.
4. Liquidity: Mutual funds provide the opportunity of converting shares into cash at any point of time.
5. Simplicity: It is easy to buy a mutual fund. Most companies have their own automatic purchase plans, and the minimum investment rates are very small.
Therefore, investing in mutual funds is certainly a secure investment as the chance of loss is spread out, and the opportunity for gains are numerous. At the same time, it is both cost-effective and an investment that gives great future returns.
The days of depending on government largesse in meeting old age financial requirements are growing dimmer by the day. Hence, investing in mutual funds can be a wise choice, especially for those who plan for an early retirement and hope to enjoy a secure senior citizenship.
The basic principle underlying mutual funds is to pool in money with other people to convert it into funds. Mutual funds generally buy shares in stocks wherein an experienced fund manager performs the task of selecting, purchasing and selling off the stocks himself. Certificates are then issued to the shareholders as a testimony of proof of their partnership and participation in the emoluments of funds.
There are particularly three ways in which you can make money from a mutual fund. They are:
1. Benefits can be earned from the commission on stocks, and interests on bonds. All the income received all round the year is paid by the funds in the form of a distribution.
2. The fund will have an outstanding benefit provided the funds sell high priced securities. Most of the profits are given back to the investors in a distribution.
3. The value of the fund's share automatically increases with an increase in the value of unsold high priced fund holdings. Accordingly, you can always sell shares of your mutual fund for profits.
Many people find investing in mutual funds an attractive option to that of dealing directly with the stock market because it is comparatively safe. In fact, these days, mutual funds have become the first preference of many investors. Mutual funds provide a balanced and better approach compared to conventional stock market alternatives. It has an added advantage of investing in several distinct sectors and firms, so, if one company suffers losses, the others may be rising. Investing in mutual funds, therefore, minimizes the loss-bearing risk of monetary assets.
In a nutshell, here are the salient points of the advantages of mutual funds:
1. Cost-effectiveness of investing in mutual funds: The main advantage of investing in mutual funds is the efficient management of your finances. Investors buy funds because they lack the competence and time to manage their own portfolio. It is a cost effective method, especially for a small investor because it is expensive to get a manager to manage individual investments.
2. Diversification: Compared to individual stocks or bonds, mutual funds diversify the risk of bearing loss. The basic intention being to invest in a diverse number of assets in order to overcome the negatives of loss making stocks or bonds by the profits reaped by others.
3. Economy of Scale: The transaction expenses are relatively low as a mutual fund is bought and sold in large amounts of credits.
4. Liquidity: Mutual funds provide the opportunity of converting shares into cash at any point of time.
5. Simplicity: It is easy to buy a mutual fund. Most companies have their own automatic purchase plans, and the minimum investment rates are very small.
Therefore, investing in mutual funds is certainly a secure investment as the chance of loss is spread out, and the opportunity for gains are numerous. At the same time, it is both cost-effective and an investment that gives great future returns.
The days of depending on government largesse in meeting old age financial requirements are growing dimmer by the day. Hence, investing in mutual funds can be a wise choice, especially for those who plan for an early retirement and hope to enjoy a secure senior citizenship.
Saturday 24 December, 2011
Tips For Investing in Mutual Funds
When you are choosing opportunities to invest in, you must realize that there are disadvantages in mutual funds. Investing in mutual funds will require you to pay management fees which can eat away at your return. The fund is invested without regard to the fees paid by the investor. In fact, there are many disadvantages to managed funds that have been discussed in financial publications.
While you consider all of the disadvantages to mutual funds, there are some advantages that should be considered as well. Some benefits are not apparent to theaverage investor and they will help you to make an informed decision about your investment opportunities.
The first benefit is the investment strategy that comes with mutual funds. The investment securities are part of an overall approach to investing that will increase the value of the portfolio over the long or short term. The manager of the fund selects investments for their attractiveness at the time of the investment. The manager will make the determination on the types of investments to make to ensure the goal of the entire portfolio.
Investing in funds also gives the investor a chance to invest in areas that are not familiar or even well known to the investor. The fund provides a mix of assets that allow the investor to create a portfolio of investments that will continue to bring a profit for years. Having a mix of assets in a managed fund is the best way to be successful. Not every investor will be an expert in all areas of investing. An investment fund allows the investor to have a good mix without needing the expert knowledge. The cost of the investment is usually fairly low in comparison to the level of return.
Mutual funds can be chosen according to what the investor needs in their portfolio. A mutual fund can be used to add balance to the portfolio or to fill a gap that is in the investment mix. The fund can be chosen to meet those needs.
There are investment funds for everyone and every possible need. The investor should do their homework and choose the investment opportunity that best meets their needs. Finding the right investment fund is an important part of investing.
Article Source: http://EzineArticles.com/4831668
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