Managing your Financial » investment

Your Financial Health

Mon, 28 Nov 2011 13:00:40 +0000

Checking your financial health is as important as visiting your doctor for routine health checks. By doing health checks, you also will feel calm or relieve when the results are good. If, for example, found undesirable conditions, then you also can take steps to fix it.

The same also applies when making a financial health check. These checks will help you determine if financial condition is fine, or there should be increased or considered.

Where do we start it? You need spend special time in conducting financial health check. Depending on the scale of financial assets and liabilities you have, you might also involve other people to help do that, and some even use the services of a private accountant. Whichever way you will use, is more better to do than nothing.

Be honest when performing the check. Do not hide debt and hope that this obligation could disappear as if by magic. Do not wait to be dealt with later-later. By hiding things like that, just get yourself exposed to great financial risk.

Begin by listing the value of your assets. In this case, assets including home or property, financial products, stocks, bonds, deposits, cash, etc.. Then make a list of obligations such as credit house / apartment, car loans, credit cards, and others. Reduce the value of your assets with a total amount of liabilities, then the result will show a net worth.

Make sure all your documents are in prime condition. Separate archive documents in some parts, for example there are sections for portfolio investment, property documents, deposits, current account statements, savings, insurance, etc..

Review your insurance.
The main benefit in reviewing your insurance policy is to make sure you have enough protection for the next period. In some cases, it may be that you have too much insurance and paying premiums is too big, although maybe it’s because you have an additional child or get a raise. Whatever it is, do the analysis on the re-insurance policy will help ensure you have adequate protection for important things.

Review your financial goals
It is important to review your financial goals regularly, because there may be situational changes. It could be that you are expecting a child, or will change jobs. Perhaps there is also intending to continue studies stopped working, or interested in a property cheaply. Whatever the situation, these things can impact on your financial goals, because now your financial status will change with the payments you have to do to the things that have not been planned in advance, thus changing also the dynamics of your financial plan.

Instead of these ways, of course some tutorial on your financial health you could seek it on the internet, plenty of them are good. Some good financial sites could be seen from its traffic and good connection from its server, this is possible if they do list their sites into good webhosting.

If you thing you have succeed with above tips, you could share it either online or offline, for online, I suggest you to read some hosting guide before you choose.

Women & Financial Independence

Mon, 21 Jun 2010 04:04:17 +0000

Women and financial independence is quite possible but will be more difficult than a man achieving financial independence. Financial independence indicates that there is no dependence on a paycheck and that basically you are your own boss. Women having the responsibility to raise families often have to put their financial independence on hold until the family unit is feasible for business endeavors. Financial independence does not mean to have a large bank account. Financial independence indicates that the the woman can not has their own businesses.
Very few people has achieved financial independence because of the risks that have to be taken and the financial capital needed for business start ups not only for women but for men as well. . One may say that Warren Buffet the billionaire has financial independence but it appears that he works harder at forecasting the economy than being employed. Most financial independent people are either in real estate or investment banking and have their own business. Women owned businesses can indicate financial independence because they are self supporting which indicates independence and building wealth to be self sustaining.
The term rich and financial independence has been used synonymously but there are rich people who are not financial independent and financial independent people who are not rich. For the sake of everyday terms and for a goal that would put the high achiever in reach of a lucrative income, financial independent is described as owning your own business and not having a boss. Most men achieve this plateau of financial independence than women but that is no indication that there are top producing financial independent women. The numbers are scarce of women and financial independence than men in the same financial status. Being responsible for the sustainability of the business and the longevity of the business along with the customer retention is paramount of women and financial independence.
Women owned business are in the minority and there are less financially independent women than men. A generalized reason for this inequity is the fact that women are most likely wives and mother who takes care of family and supplement income with a part time job or even a full time job. Social norms still places the man as the head of the household and the one responsible for the financial stability of the family. Given this responsibility, it is the man of the household who is most likely seeking to be financially independent. Women are seeking to be financially independent but not on the larger scale as men.
Even in the workforce, a woman’s salary still trails that of a man. If a woman is seeking financial independence, there will be steeper mountains to climb to reach that goal. Venture capital to get started can be more difficult to obtain and most likely the woman would have to to get helpful information on starting a business from the Small Business Administration or the SBA. Recently, investment groups just for woman has sprung up around the country and this is one way to get venture capital to get started on owning a business and becoming financial independent.
Owning a business is a twenty four hours a day job seven days a week and there is never enough hours in a day to work on building a business for financial independence. Most likely the woman can use time management to get tasks done but must be prepared for the hard work and long hours to get a business started even after qualifying for venture capital. A woman can achieve financial independence but the work is hard and the hours are long but worthwhile if financial independence has become a lifetime goal.
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Managing your Own Money

Mon, 21 Jun 2010 03:45:49 +0000

Many investors who manage their own money and their own investments have several tremendous advantages over fund managers. Investors who have bypassed the allure of the fund management industry often come to realize that through diligent research and logic, they can keep up with the returns of the big boys.
My investment business, albeit in the fund management profession, is run along the private investor’s lines. All of the advantages below are practiced by my fund.
While this may appear to be caused by superior market knowledge and over-confidence, there are in fact a number of advantages the small guy has. I advise all amateur and part-time investors to read over these structural advantages and use them to your benefit.
1. You can wait.
Private investors have the luxury of time on their side. If you cannot find anything attractive you can stay in cash. Fund managers do not have this luxury for two reasons. Firstly, they have to invest to their mandate irrespective of current market valuations (for example equity funds must have a certain percentage of their money in equities at all times). Holding cash in the fund is also a risky strategy for fund managers as they run the risk of being left behind by their peers, whom they are compared to on a quarterly, monthly and sometimes even daily basis.
2. You can invest anywhere and everywhere.
Without an investment mandate, you can invest in any type of asset in any country that offers an attractive risk return trade-off, be it corporate bonds, equities, options, real estate etc. As mentioned above, fund managers have to stay within the fund’s investment area. In the case of pension funds, there are even more severe limits that, in my opinion, limit the returns the fund can provide.
3. You can invest in any size
Similarly to investing anywhere, there are no size constraints on your investment. Fund managers are faced with ridiculous restrictions as to how much to “weight” to certain indexes in order to match their performance as closely as possible.
4. You have no benchmark
You only have one goal in mind, and that is to grow your investment portfolio each year irrespective of what the market does. I do not consider it a good year if I have lost 25% while the market has lost 40%. Fund managers are groomed to beat their benchmark and this performance is always viewed in context, irrespective of absolute return.
5. You can focus and ignore
Studying, understanding and applying what has worked in investing is all you need to do to be successful as a private investor. I advocate reading Benjamin Graham classic, The Intelligent Investor. The rest should follow. Pay no attention to market noise, alternate opinions or what the television “talking heads” say. Do your own research and arrive at your own conclusions.
6. No conflict of interest
The individual investor has only their interest to look out for. This is a big advantage when it comes to large fund managers catering to larger institutions. Fund managers have to think of keeping their jobs, increasing their assets under management and keeping clients happy, suggesting that performance is not the most important thing on their minds. Also, clashes between investment banks and fund managers are regular occurrences and sometimes result in inopportune purchases by fund managers.
7. You can have a long view.
According to a study by the New York Stock Exchange the average holding period of shares held has declined from five to six years in the 1950s to 11 months, meaning the average holding period is less than one financial year. It is extremely unlikely and almost impossible that an undervalued company can right itself in such a short period of time. This may be the largest competitive advantage you have: The ability to look at a company solely on valuation and keep it as long as it is undervalued, irrespective of what the competition is doing or market price.
8. No peer pressure.
There is no pressure to buy or sell any investments. Fund managers get compared to benchmark indices and other funds, including the individual fund holdings. If you manage your own money you have none of these problems.
9. You decide.
The private investor is in control of all their decisions. You make the final decision after you have done the analysis. You may be wrong but at least you make the calls either way. Many fund managers are run by committee which leads to inherent clashes. Try telling your boss that his investment ideas are wrong!
10. You don’t have to di-worse-ify!
Every individual should hold only as many stocks as they feel comfortable with. There is no set limit either on the low or high end. However, most mutual funds hold positions in excess of 100 stocks. My business has only 7 positions. While I advise 10 as the optimal, we won’t buy stocks just because we hold seven and need ten!
11. You control the costs
Controlling costs and fees (the friction of investing), is a very important part of realizing superior long-term results. Discount brokers provide ideal services for the private investor, so long as you are not a day trader! Calculated over a period of 20 to 30 years keeping costs low makes a huge difference.
12. You can be fully invested
This is a huge structural advantage you have and is the bane of the fund management business. Fund managers are bound to get redemption requests when markets fall, and to meet such requests either need to be in cash or sell shares. However, as we have seen in 2008 in particular, when markets are falling liquidity drops, sometimes to the point where a fund manager is unable to sell his position. This results in selling pressure on stock prices leading to further market falls, thus triggering more redemptions, and so on.
There are of course a few funds where the drawbacks mentioned below do not apply but they are in the minority, my fund being one of those. The large bulk of fund management companies are focused on growing the amount of money they manage, while the performance of your portfolio is not the utmost concern.
If you do not want to manage your own investments then find a fund manager who is not bound by parameters and can show clearly that the performance of your investment is there foremost concern.

Managing Your Money

Mon, 21 Jun 2010 03:39:21 +0000

It used to be that people shied away from sharing intimate details about their financial lives.
Now, amid the rising popularity of social-networking services such as Facebook and MySpace, a crop of new personal-finance Web sites is letting users post their private personal-finance details and share advice with each other on tracking their spending and making better investment decisions.
Some of the sites, such as Wesabe.com and Geezeo.com, include many of the same features offered by popular software programs such as Intuit Inc.’s Quicken and Microsoft Corp.’s Money, such as the ability to track spending in different categories and from different sources in one place. But they also allow users to get feedback from peers that is tailored to their specific circumstances. Some allow users to rate the quality of other members’ tips or provide feedback on various products or services they’ve used.
Josh Young, a 26-year-old environmental engineer from Cincinnati, decided to try out Wesabe after reading about it in various blogs. He wanted to pay off his credit-card debt and the two car loans that he and his wife shared, and he expected the site would help identify areas where he and his wife were overspending. But he also got help from other users who shared their own tips on reducing debt and cutting spending. “One of our goals was to pay off all our debt, and we’re almost there,” says Mr. Young.
Some consumers may have security concerns about sending their personal financial information to a Web site. In general, the sites say their systems are protected against identity thieves and are just as safe as banking online. Wesabe, for its part, stresses that it doesn’t store users’ login information on its servers and screens out any personal information from the data to protect users’ privacy.
The type of information you need to enter into these sites — and how public that information becomes — depends on the site and what you want to get out of it. At Geezeo, for example, users provide their passwords for their bank and credit-card accounts, which the site uses to automatically pull users’ data into its systems. At Wesabe, users download a software program onto their computer and then enter their passwords. The program then pulls their data from the banks to users’ computers, and then uploads it to Wesabe’s computers.
At both sites, users’ data is kept private, although members can voluntarily share more information about themselves with other people. The sites will also aggregate user information to reveal spending patterns in the community — such as the average amount users spend on gas — but will not disclose individual data.
At other sites, such as the just-launched Covestor LLC, which allow investors to share their portfolio information, members manually input transaction data for their brokerage accounts or provide their account passwords to have the firm automatically track their trades. Members can choose to remain anonymous, and the actual dollar values of trades and specific holdings of each member always remains confidential, with only percentages displayed.
Still other sites, with names such as Buxfer.com and BillMonk.com, help college roommates, friends and family members keep running tallies of shared expenses. At the same time, some smaller brokerage firms, such as TradeKing and Zecco Holdings Inc.’s Zecco.com, are letting clients share information about their holdings, recent trades and investment strategies with other users if they choose.
Users of the sites can reveal as much or as little about themselves as they want to. At NetworthIQ.com, a site run by Portland, Ore.-based Fourio LLC, users’ information is kept private until they choose to create a public profile, at which time only their general net-worth statistics are made public and any personal information, such as email addresses, remain private.
An estimated two million households are expected to use these sites by the end of next year, says Jim Bruene, editor of Online Banking Report, who published a report on the sites last week. That number is expected to jump to about 16 million households in 10 years.
The sites could remain niche players, however, if they aren’t able to attract enough users, he says. “Not everybody wants to see their bank-account balances,” he says. (Dow Jones & Co., the publisher of The Wall Street Journal, and IAC/InterActive Corp. are jointly developing a personal-finance Web site.)
The target audience for these sites is younger users. “The idea of looking at a ledger and seeing a check number, that’s really boring,” says Harper Reed, a 29-year-old software engineer in Chicago, who uses Wesabe to keep track of his spending. “But being able to say, ‘I’m trying to spend less money at Amazon,’ and seeing how many people are also trying to save money at Amazon is a better way to quantify the numbers to me.”
The ability to share and compare one’s finances with others can also help motivate people to build their wealth. NetworthIQ lets users create profiles based on their actual net worth. They can then compare themselves with others by age, income or occupation, link to other users, and track their progress on a blog. About one-third of the site’s 9,000 registered users choose to make their net-worth figures public, although the data are self-reported and the users’ identity is masked.
On Geezeo, members can create discussion groups with other users about specific financial topics. The site lets members create a consolidated view of their financial accounts and use text-messaging technology to get quick balance updates from their mobile phones. Starting this week, users will be able to provide feedback on financial products, such as student loans, credit cards or savings accounts.
“This totally makes sense for the 20-something crowd,” says Brian Jones, a financial adviser in Fairfax, Va., and author of “Getting Started: The Financial Guide for a Younger Generation.” “There’s a lot of utility here because their situations aren’t that complex. This generation is very comfortable with online profiles and is very open with sharing information online.”
Katie McCaskey, a 33-year-old New Yorker, likes the anonymity of being able to discuss her personal finances online. “I recently went back to graduate school, and I freaked out about how much this degree cost me,” says the freelance artist, who now uses Geezeo to keep track of her finances. “After frustrating everybody in my family and social circle with my concerns,” she started writing a blog to swap advice on paying down debt.
Some sites also allow users to keep track of shared expenses between friends and family. Mike Zazon, a 23-year-old student in Columbus, Ohio, previously used spreadsheets to keep track of expenses that he had to split with his roommate. Now, whenever they pay bills, they post the transactions on Buxfer, which automatically divides up each person’s share and alerts others in the group by email or text message that an expense has been posted.
“It takes away the awkwardness of going to collect later,” says Mr. Zazon.