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Looking for Money in All the Wrong Pockets

An incident happened this past week in which I am still scratching my head. Have you ever known you had something, but for the life of you could not find it? I will accede to the fact that occasionally, I do have a streak of absent-mindedness running through me. At times, I wish it would just walk. I was fairly certain I had an extra $20 in one of my pant’s pockets. It was what I affectionately refer to as my “mad Money.” My wife would be mad if she knew I had it. I do not remember where it came from but my real problem was, I could not find those pants. Usually, if I find money in my pants pocket there is only one explanation. I’m wearing somebody’s pants, but not mine. The truth is, my pants rarely see any extra money. If there is an occasion when I do have money in my pocket, my pants get all excited and wrinkly. Only this was different. I distinctly remember putting a $20 bill in one of my pants pockets and thinking what I could do with it. But now, I cannot find it. I knew I had an extra $20. I distinctly remember putting it somewhere. I’ve looked everywhere… maybe I should have looked somewhere. With the aimless look on my face, more aimless than normal, I wandered the house in search of the missing $20. I tried to act inconspicuous so the Gracious Mistress of the Parsonage would not discover what I was doing. Obviously, no Emmy award will come my way because my acting inconspicuous was a complete failure. “What are you looking for?” My wife queried. “Nothing,” I stammered. “When you find it, let me know. I really don’t know what nothing looks like.” Ha. Ha. Ha. Sometimes she thinks she is a comedian. However, I was not laughing. If I find that money, the joke will be on her. Then we will see who is laughing. I had two fears facing me at this point. First, she could have found the money and was waiting for me to admit that I actually had some extra money. This would invite a great deal of grief on top of my balding head. Second, if I told her I was looking for money she would want to know where I got extra money. If I cannot remember where the money is, how in the world am I going to remember where it came from? Then, she would want to know how much more money I had misplaced somewhere in the house. Actually, I want to know that myself. Such interrogation from her borders on waterboarding. If the FBI wants to learn a thing or two about torturing people, they could learn an awful lot from her. She can torture a person and not lay a glove on them. Of course it is not her glove I am worried about, it is her evil eye that goes through a person, me in particular, like a laser beam. My wife always knows when I’m lying. My lips are moving. Coming back to the missing $20. I could offer to split it with her if she would help me find it, which would leave me with $10. $10 in the hand is worth more than $20 that I do not know where it is. Then, I would have to explain what I needed $10 for at the time. Christmas is over and her birthday and our anniversary are a long way off, so I cannot tell her I want to buy her a present. I did have plans for that $20. Now, I cannot even remember what those plans were. Maybe, if I knew what I planned to do with the $20 I might remember what I did with the $20. While I was musing on this situation, I discovered a correlation between money and love. Without love, you end up with a broken heart. Without money, you just end up broke. Then out of nowhere, and I mean nowhere, an idea entered my head. I remembered wearing my brown suit when I got $20. I went to my closet, but the suit was not there. “Have you seen my brown suit?” I asked my wife. “Yes,” she said rather absent-mindedly, “I sent it to the dry cleaner. Why do you ask?” Then, with a little smirk dancing on her face, she asked, “You weren’t looking for $20, were you?” The only thing I hope is that I do not remember where the $20 came from or what I planned to do with it. I guess a freshly dry cleaned suit is worth $20. Seeking that money reminded me of a verse of Scripture. “But seek ye first the kingdom of God, and his righteousness; and all these things shall be added unto you. Take therefore no thought for the morrow: for the morrow shall take thought for the things of itself. Sufficient unto the day is the evil thereof” (Matthew 6:33-34). Then another verse. “Seek ye the LORD while he may be found, call ye upon him while he is near” (Isaiah 55:6). No matter how hard you search for something, if it is not there, you will never find it. But with God it is a different story. When we truly seek him, we always find him.

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Reinforce Your Business Plan With Sound Financial Projections

Strange as it may sound, the creation of financial projections is far more important and complex, than the actual results. More than merely the figures, it is the planning that matters. Or restated, it is the means to the end that matters here more than the end. Without financial projections, business is like fumbling in the dark without a lamp and a map and you will not be able win investor confidence or obtain financing. Even if you are self-funding, or you have a family driven business, you need financial projections as a guide and barometer to measure your company’s performance. You will need to consider these steps to arrive at your financial projections: Develop your 3-5 year Sales forecast: You can make your forecast, based on past sales data, competitive comparisons, and the current economic trend. Typically it is a blend each and you should understand that your optional lenders aren’t going to believe you anyway! We all want to believe that our sales are going to skyrocket but keep in mind that your investors are going to hold you accountable in the future. Keep in mind that if you need more capital in 3 years from now, those same investors are a great source of more cash but they will measure your current progress against your initial projections. Create an Expenses budget: These include expenses for your cost of goods, but also for your operational expenses such as equipment, payroll, rent, marketing, insurance, depreciation and so on. Typically after estimating the cost of goods, we then break down the operating expenses into broader categories such as: Sales and Marketing, Administrative and then either Research and Development or Misc. Production Costs. Conceive a Cash Flow Statement: This refers to the flow of cash in and out of your business and reveals your liquidity, or the ability to use cash when required. (and important for lenders, the ability to pay them back!) The Cash Flow Statement is of key interest to investors and lenders as they will want to make sure that your business plan includes enough cash to keep operating. Build your Income Projections: This refers to your financial position, resulting from revenues, and cost of goods sold, gross profit and operating expenses. The amount of income you project is important from the standpoint of long term viability but in some cases such as internet sales, sometimes growth and number of customers become equally important. Consider your Assets and Liabilities: Assets are things you own that have value, while liabilities are the amounts you owe to others. When building your projections, you need to make sure that you have included the buildings, equipment, vehicles and such that you will need to support your business plan. Arrive at your Break Even Analysis: A key area of interest in projections is when you are poised to make profits in your business based on a combination of fixed costs, variable costs per unit of sales, and revenue per unit of sales. This is the final phase in your business where expenses are equal to actual sales.

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Online Banking Has Changed the Way We Manage Our Day-To-Day Finances

Did you know it even gets national recognition? That’s right! National Online Banking Day is observed on the second Monday in October, which is also a traditional national bank holiday (Columbus Day). Convenience is usually publicized as the major advantage, but it definitely isn’t the only benefit. It can save you money and can definitely be more environmentally friendly. Here are a few more reasons to enjoy the perks of online banking at your credit union. Manage your own banking experience – Most credit unions that have embraced this online service give their members the opportunity to completely manage their own daily finances by paying bills online, transferring funds between accounts, depositing and ordering checks, and apply and make loan payments. Mobility – It can be done from anywhere with an Internet connection. With this added flexibility you won’t have to worry about late payments or other time sensitive financial transactions. Online Bill Pay – You can automate your monthly bills to pay automatically. By paying your bills automatically you will never miss a payment. Most importantly, not having to depend on the postal service to send your payments allows you to keep your money in your account for a little longer, earning a little more interest. View your transaction online – Online banking allows you to access your transactions from anywhere, 24-7. You can check your account balance daily, keep track of pending transactions and catch any errors quickly for easy adjustment. Transfer between accounts – Using it to transfer funds can save you a trip to the credit union. You can make transfers without leaving home, check on availability of funds before you spend the money. This service will make it easier to transfer money to make loan payments on time. Security – Using online banking allows you to setup transaction alerts, travel notifications and report fraudulent activity. You can also change your password to keep your online accounts secure. e-statements – Most statements are completed online, decreasing the amount of paper used and sent to members, making online banking a perfect environmental choice. eAlerts & Text Alerts – You can manage and receive eAlerts regarding specific account activity. Ease of use – Online accounts are simple to implement and require no more information that a regular bank account. You simply input your data online and if you run into a problem you simply contact your credit union directly for assistance. Whether you’re working late at work, catching up with friends over dinner, or relaxing on the couch at home – your banking needs are always covered with online banking – the perfect combination of service and convenience.

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Equating Profitability With Cashflows: A Myth in Corporate Financial Performance

The issue of profit and cashflow and their respective importance in business has become an unending discussion in recent boardroom discussions. As some analyst are looking at profit history of business to assess performance, others are looking at the cash movements (i.e. cashflows). People even get more confuse when a profitable business on one hand is not able to pay its suppliers or expand whiles a non-profitable business (i.e. loss) continues to stay in business. The income statement and the cashflow statement of every business has the clue to this issue of profitability and cashflow. Cash flow is the difference between the amount of cash a company receives and pays, whereas profitability is the difference between revenues and expenses and every company report on both their cash holdings and profitability as part of its financial reporting. Certain cash flows cannot be recorded as revenues or expenses at the time of the transactions, while other cash flows may not be part of the operating activities, and thus are not profit related. Concept of Profitability in Business The success of a small business depends on its ability to continually earn profits. Profit basically equals a company’s revenues minus expenses and is critical for businesses because it determines whether a company can secure external financing, attract more investors or grow its operations. A business owner must understand the importance of profitability in business management and develop strategies that give his company the best chance at remaining profitable as that is its main goal for existence among other goals. Relevance of Profitability in Business Profits stimulate investment and innovation and as a business undertakes more investment, it leads to generation of more employment. With generation of employment income, more demand for goods in the market will be created. Profit is regarded necessary for business survival and growth and a business that does not make enough profit is not likely to survive in a growing competitive environment because it enables the business to grow, motivate employee, attracts investors etc. Profit is a return on investment and every firm invest money with the expectation of higher returns on their investment. Just like shareholders expect higher returns in the form of dividend so do financial institutions expect better rate of interest on the loan given to the business enterprise. Profit is used test the efficiency of a business and the success or otherwise of the business can be judged by the extent of profit earning capacity. Profit serves as buffer to meet unexpected expenditures and as a business is exposed to many risk and uncertainties including changing market demands and conditions etc., profit is used to meet such unfavorable business changes. Retained profit serves as a form of internal financing and can be used for increasing the volume of business through expansion and diversification. Any further surplus is re-invested in the business for further development. The Concept of Cashflow The old-age saying, “cash is king” which is usually used to explain the failure of both businesses and consumer households remains relevant in modern business because without proper amount of cash on hand, entities can run into major trouble, and even be forced into bankruptcy. Cash inflow is the lifeblood of every business and businesses need cash for various reasons including investing in new infrastructure and dealing with unexpected expenses. Moreover, a key factor in a business’s potential for long-term success is cashflow and as such a company may have all the revenue in the world, but without the ability to generate cash, it can easily fail. Without cash a business won’t run, resulting in employees becoming cranky and suppliers ceasing to supply materials even though the business may be very profitable. Sources of cashflow include receipts from customers, additions to capital, payments to suppliers etc. Relevance of Cashflow in Business For a company to grow, it will often need to make capital expenditure investments in areas such as factories, machinery, or technology etc which are usually a one-time cost and require significant funds, but without cash on hand, a business may not be able to make these necessary investments and, as a result, may never be able to experience company growth. Even where loans are used, the loan agreement will require a significant down payment or periodic interest payment which will in turn require that the company have access to cash. Businesses can undertake mergers or acquisition as an expansion strategy either within their niche or to branch out into new areas but without the necessary cash, it would never be able to take that opportunity to buy a valuable company at a reasonable price. Acquisitions like these offer growth potential for many businesses. Two key benefits of holding shares is dividends and share repurchases. Dividends puts cash in the pocket of shareholders whiles share repurchase is a management way of expressing confidence in the business growth potential via share valuation. However, without cash neither dividends nor share repurchases would be possible for a public company. Every company experiences economic downtimes at some period in operation which could affect its sales and with cash, the company will be more flexible and able to survive the downturn but without readily available cash, it may be forced to wind up, downsize its staff or even be declared bankrupt. Businesses like individuals also face emergencies for expenses that require immediate payment like legal fees and unexpected costs associated with natural occurrences and as most of these are not budgeted for, it means businesses must have access to the necessary cash to prepare for such emergencies, and without cash, the business may fall flat. Businesses are expected to minimise cost and one way to do this is to reduce a lot of online transactions processing which comes with a lot of excessive fees and to use cash instead where appropriate. By paying cash, a business can reduce its online fees and ultimately cut transaction costs to the minimum with surplus cash for other productive activities. Readily available cash helps businesses expand in the absence of loans. Many businesses have difficulty accessing loans for expansion but if it has cash available, it can position itself to take advantage of opportunities to expand and make relevant decisions. Cash is essential for paying bills faster to avoid unnecessary penalties because paying creditors with forms other than cash can take longer to process, leading to unnecessary late fees and it makes more sense that paying in cash is the preferred method. Are there any differences between Profitability and Cashflow? YES! The differences between these business concepts is in recording of Non-Cash Revenue, Non-Cash Expense, Financing & Investing transactions. Companies may see increased profitability from non-cash revenues, but such an increase in profitability will have no impact on company cash holdings because companies record revenues when earned using the accrual method of accounting, despite no cash received and when cash is later collected for previously recorded revenues, increases company cash holdings but will have no impact on the profitability again. Non-cash revenue incudes accrued income, credit sales, gains and profit on disposals etc. Also, companies may see decreased profitability because of non-cash expenses, which will have no impact on company cash holdings. Companies record expenses when incurred using the accrual method of accounting, despite no cash paid and when cash payments are made later for previously recorded expenses, it decreases company cash holdings without affecting profitability. Other differences are:

Conclusion When you imagine a new business, you think of what it would cost to make the product, what you could sell it for, and what the profits per unit might be because we are trained to think of business as sales minus costs and expenses, which is profit but cash is equally critical yet people always think in profits instead of cash and interestingly we don’t spend the profits in a business, we spend cash instead. Desist from thinking that making profit increases cash the same amount because a business’s cash flow can be considerably higher than bottom-line profit, or considerably lower and know that cash flow can be negative when you earn a profit or positive when you have a loss because there’s no natural correlation between profit and cash flow. It’s thus prudent for businesses to remember that cash pays the day-to-day expenses, not profit and is important for the business always. Profit becomes more important for the long-term success of the business.

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6 Financial Investments to Take This New Year

Every New Year usher new hopes, aims, and aspirations which are unique for everyone. When it comes to achieving financial goals, it is never too late to start though it is advised to start as early as possible to get better returns. In the pursuit of achieving your financial goals, you need to first understand the potential investment options in order to make the right decision that will not only ensure financial stability and freedom for yourself but for your loved ones as well in the years to come. The idea is to start small; you do not need pots of money to invest. Here is a list of possible areas where you can venture into to understand smart investing. These financial investments should be at your New Year’s resolution list as they are a combination of risk-taking, investment amount and return of investment (ROI). These investment ideas will allow you can to balance your short-term and long term financial interests. Real Estate: This investment option carries medium risk and investors need to select the right property to get the highest return. Unit Trust: This is a collective investment plan that permits small and medium investors with similar investment ideas to pool in their funds and invest in a portfolio of securities. The pooled funds include cash, bonds, shares, properties etc. These are long-term, safe, and adopt a steady approach towards investing. By investing in unit trusts, investors with limited time can gain higher returns from capital markets. This investment option carries low to medium risk and suits the common man who is interested in equities but does not have the funds to expand independently. Fixed Deposits: Fixed Deposits (also known as Time Deposits) offer a guaranteed rate of return on your investment. Almost all Malaysian banks offer fixed deposit accounts as they ensure hassle-free management and has government insurance. Moreover, fixed deposits offer a higher rate of interest than savings accounts and can be open with a relatively low minimum investment amount. Invest in gold: Investing in gold is always considered good as it is an indispensable asset across cultures and geographical boundaries. Gold investment can either be made in physical form (like buying gold jewellery, gold coins, or bars) or by means of ‘paper gold’ (via Gold Investment Accounts of banks). Insurance: Investment linked insurance policies or ILPs provide extensive coverage and a good return upon maturity. These investments do not require large investment capital. Amanah Saham Bumiputera: This is a low-risk investment option that you can consider if you are planning for long-term investment. This is tailored specifically for Malaysian Bumiputera and is managed by Amanah Saham Nasional Berhad which is a fully-owned subsidiary of Permodalan Nasional Berhad. Now that you have a list of financial investment ideas, it is better to start now without further procrastination to get great returns.

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Retirement Plan Needs to Address Financial Costs and Burdens of Aging

By the time you hit age 40 you should have saved some money for your future retirement. The problem is too many people forget to protect those retirement funds from the high costs of Long-Term Care. The US Department of Health and Human Services says if you the reach the age of 65 you will have a 70% chance of needing some type extended care service. Health insurance, Medicare and supplements will only pay for a small amount of skilled services and only for 100 days. They will pay nothing toward custodial services (help with activities-of-daily living) which most people will need as they age. Often this means crisis management. Family members become caregivers. Caregiving is hard but when a family member must be a caregiver it adds more dimensions. This usually means the responsibility falls on the lap of a daughter or daughter-in-law. They generally have their own career and family responsibilities. Not to mention the emotional hardship that ties into a family member being a caregiver. The financial costs and burdens of aging will impact your savings and your family. Affordable LTC insurance will safeguard your assets and ease the burden that is placed on family. There are very few true specialists in long-term care insurance. This means you should seek the help of a true Long-Term Care Specialist. This person should have at least three years’ experience in Long-Term Care Insurance, represent the major insurance companies and have at least 150 clients with Long-Term Care Insurance. Most financial advisors and general insurance agents do not have the skills required to design an affordable plan based on your specific needs. Plus, they usually do not understand underwriting requirements which each insurance company uses to determine if they will even offer a policy to you. They generally have never experienced a claim, so they don’t have a full understanding of how these policies actually get used at the time of claim. This is why I assist consumers nationwide using my unique process where a client views my computer screen while we speak on the phone. A number of other top specialists will do the same thing. The key here is asking many detailed questions about your health, family history, retirement plans and concerns. Most financial advisors and general insurance agents may ask only a few questions. This means the recommendations they may give you are not appropriate and may even cost you more money than it should. Since they don’t deal exclusively in Long-Term Care planning they usually don’t understand the products and the positive impacts they can have on your loved ones. They also tend to over-insure. A true Long-Term Care Specialist will make the appropriate recommendations and consumers discover that LTC insurance is very affordable and adds a tremendous amount of peace-of-mind as you plan for your future retirements. If you are speaking to someone about Long-Term Care Insurance be sure to ask a few questions: How long have you been working with Long-Term Care Insurance? According to the American Association for Long-Term Care Insurance (AALTCI) no less than three years is acceptable. How many clients do you have with LTC insurance? No less than 100 is acceptable says the AALTCI. How many companies do you represent? The AALTCI says no less than three. How many claims have you been involved with? The more the better, keep in mind a person working three years may not have had any claims yet despite having more than 150 clients. Ideally you want a person who has experience 15+ claims. What is your general philosophy when you design a Long-Term Care Insurance plan? Listen to how they answer the question and make a judgement if it sounds like it is well thought out. Here are a few warning signs you should be aware of: 1. The agent or advisor sends you quotes without asking many questions. A true Long-Term Care Specialist will spend a lot of time asking detailed health questions and family history, in addition to asking about your future (or current) retirement plans. If they only take five minutes or less you should run away. 2. The agent or advisor immediately starts talking about asset based or hybrid plans without asking you many questions. These are life insurance or annuities with riders for Long-Term Care. They can be an outstanding way to plan for some people but anyone who brings this type of solution to you without asking many questions should be avoided. 3. The agent or advisor doesn’t explain the Long-Term Care Partnership Program. Not all states have active partnership plans in place but most do. If they don’t mention it be sure to ask. If they can’t explain it move on. 4. The agent or advisor doesn’t have a website, or their website has very little information available, it is usually not a good sign. True LTC specialists will usually have a comprehensive website with many resources available for education. 5. The agent or advisor suggests you self-insure and put money in investments. For most people this places your money in too much risk, doesn’t provide tax benefits and doesn’t reduce the burden placed on family since most LTC policies have case management. It may make the advisor money but you should be more concerned how it will protect your money and reduce family burden. If they make this kind of recommendation ask them to put it in writing. Then ask how their plan would really benefit you and your family from the financial costs and burdens of aging. Long-Term Care Insurance has become a key part of retirement planning. Seek out a specialist to help you add peace-of-mind to your plan. It is an easy and affordable way to help you have a successful future retirement. Working with a Long-Term Care specialist will allow you to get the accurate information you seek. There are several reference websites for research: LTC News offers articles and resources: http://www.ltcnews.com US Department of Health and Human Services: https://longtermcare.acl.gov/ Long-Term Care will impact you, your family, your savings and your lifestyle. Long-Term Care Insurance is Easy and Affordable Asset Protection. These plans not only protect your savings but reduce the burdens placed on family members. Act before you retire to take advantage of lower premiums and your overall better health.

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How To Save Money? Heres’ 25 Money Saving Tips To Work On

How to save money? Probably searched by lots of people on Google, no matter what’s his/her financial stature is. Earnings and utility differ from man to man, but there is hardly any person, who’s not interested in knowing the ways to save money. Interestingly, it’s the human ingenuity that lets him find out the best way to save money out of his own financial position. How to Save Money? If I ask you how to save money? Either you would be confused or overflowed with hundreds of money saving ideas. There are some common ways to save money applicable to the masses and there are some exclusive money-saving ideas researched and applied to you only. Things are good and effective so far as you apply your tips and tricks properly. Here I am enlisting 25 realistic and simple money saving tips for the readers. Please note that all these money saving tips may not have the fullest implications in one’s life, but a few out the of money saving ideas listed below have a qualitative impact on your pocket. 25 Realistic Money Saving Tips 1. Accept payments by cheque or online: This is one of the best ways to save money. It’s a human tendency to spend more with cash rather than from bank account. Research shows that a person finds it more inconvenient to withdraw money from the bank or buying goods with cards than by using hard cash. So, this is the best way to save money for them who have an irresistible tendency of spending cash money. 2. Go for exchange programmes: Before buying a new durable or capital goods like electronic gadgets, appliances, go for selling the used one. There are many sites that assist you in selling your old products through advertisements like OLX, Quikr etc. Now the product sellers are too offering exchange programs. Online shopping sites like Amazon, Flipkart etc. are giving opportunities to their buyers to exchange their old ones with the new product. Selling or exchanging the old products definitely reduces the cost price of the new one. 3. Consider buying cars at the end of the month: If you are planning to buy a car, this is the best way to save money. How? See, in most of the cases in the last week of the months, the sales representatives and car dealers are under pressure to achieve their targets. They go desperate in selling cars to customers offering good discounts or selling car accessories free of cost or at a much-discounted price. This way you get your car at the most advantageous costs. 4. Do not jump the gun: If you see a product billboard or lucrative offers, don’t go for the buy immediately. Hold your mind and think whether you need it? If it’s your requirement, what’s your budget? By holding your buy for a day or more you may be able to do the product’s cost-benefit analysis. This way you can save your money on unneeded purchases. 5. Go by the list while shopping: Whenever you go shopping, prepare a list beforehand about your requirements. You may wonder how to save money by going with a list? If you do shopping by list, it is possible to stick to the budget. Moreover, the list helps you to do the shopping more quickly than without a list. A study shows, if you shop quickly, the chances are high that you will not go for unnecessary buying. 6. Avoid outing with friends, invite them: Many of us face this problem. When you go for an outing with friends, it’s unsocial for you to abstain yourself from contributing. Moreover, taking foods and drinks at restaurants and bars are no way cheaper than you have it at home. So, instead of going to the restaurants and pubs, invite your friends to your home. This is the best way to save money who are interested in maintaining social networks as well as concerned about how to save money. 7. Use LEDs: I’ll keep this within top money-saving tips. Rather than using incandescent lights, you should go for CFLs, LEDs. They are high power efficient and reduce power bills considerably. These new technology lights even have a longer life than the traditional ones. By using LEDs and CFLs, you can save both from maintenance and durability. 8. Do periodical maintenance: If you are using multiple electronic appliances like ACs, Washing Machines, Water Purifiers etc. it’s better to render periodical maintenance. The same should be with your car too. By conducting regular maintenance, you have to incur maintenance charges which are much smaller than any major repairing or overhauling charges. At the same time, if your appliances or cars are under periodical supervision, their longevity and efficiency level also improves. 9. Sell your old books: This money saving tips is especially for the students and the parents whose children have passed out and have a pile of books covering a considerable space in their room and want to evacuate them. There are a number of sites that buy used or old books from us and pay accordingly. One of such sites is BookScouter. This searches the best match buyer for our old books. 10. Rent out your extra space: If you have a big house and leaving a part unutilised, it’s advisable to rent the same out and earn some extra money to meet household expenses. There are some companies that take your property on agreed terms for a specific period and convert into a homestay. Some of these companies are Airbnb, Oyo Rooms etc. 11. Take tiffin from home: If you want to learn the ways to save money, this is one of the effective ways to save money. First of all, your saving starts when you take tiffin to your place of work or education and avoiding canteen or outside foods which are certainly costlier than your homemade foods. Next, savings is in terms of your health. By abstaining from outside foods, you are indirectly reducing your medical bills. 12. Use public transportation or carpool: If your circumstances permit, it’s a good move to go through public transport. Using a public transport is way cheaper than using private cars. Moreover, if you and your neighbour or your colleague have a common route to the place of work, carpool is a good option. Things can be done on a rotational basis. This saves money as well as the climate. 13. Pay your debts on time: Try to pay your debts on or before time. Be it credit card bill or loan interest, paying on time not only saves you from additional interests and penalty but gives you a high creditworthiness. You can also make arrangements with the bank for automatic debt payments. This is also a great way to save yourself from a debt-trap. 14. Consume less meat: What? Yes, you read it right. But, how to save money by consuming less meat? Well, this is simple. If you take less meat in your food or goes vegan, the direct impact is in your pocket. Animal proteins are costlier than vegetables. But a much bigger impact shows on your health. Researchers found that large animal protein intake in our foods have an adverse effect on our health. A non-vegetarian is prone to more decrease in comparison to a vegetarian. And nowadays health issues cost us much. 15. Withdraw from same bank’s ATM: This is a simple but effective money saving tips to follow. As you know, if you withdraw from other banks ATM (where you don’t have an account), after a certain number of transactions the ATM bank charges extra fees per transaction. So, whenever possible, do ATM transactions with your home bank only. 16.Try to buy air tickets from the company’s site: Whenever we travel by flights we do a comparison over the internet reading freights and services. There are many online travelling sites that give you the freedom to compare flights of different companies on the same platform. But I would suggest that rather than buying the tickets on their sites it is advisable to go the native company’s sites. The charges would be certainly lower than the previous one. 17. Save at home: Make a piggy bank at your home and save whatever possible on a daily basis. Even ask your children to do the same out of their pocket money earnings. It inculcates the saving habit in you and your children and creates a fund with the passage of time, helpful at the time of your emergency. 18. Find a roommate: If you are living in a rented house and single, then this would be the best way to save money. If you have a roommate you can not only save your portion of room rents but other household expenses too. Moreover, you and your partner can share daily household works, so that the life becomes less stressed. 19. Keep your house clean: This is one of the good money saving ideas, I think works great. When we keep our house clean, it directly impacts our health. In addition to that, when the house is clean, it indicates that our staffs within the house are arranged too. This will help us in finding our requisite items at arm’s length. Misplacement and unattended staffs left us with no option but to go for a new one, which can be avoided at large. 20. Shop higher or lower than eye-level: Marketers are intelligent. They place high valued items at our eye level. So try to buy products below or above the eye level. This way you can save a lot of bucks while shopping. 21. Take a health insurance or mediclaim: Whenever you sit with your financial budgets, you must include health insurance in it. Medical bills are capable enough to tremble your financial stature. It would be really foolish to take chance by not taking health insurance or mediclaim. By paying a small amount of premium, you save yourself and your family from financial jeopardy. 22. Do your own beauty treatment: Beauty Parlours and Salons are becoming costlier day by day. For women, doing basic beauty treatment like manicure, pedicure, facial at parlours are very expensive. Rather they can try things at home. There are many good video instructions are available on the internet to assist a person to do her personal care. For men, it is advisable to do saving at home with his own saving kit. 23. Use phone guards: This is a small but effective money saving tips. As we all use mobile phones, we know how frequently it drops from our hand. By incurring a small expenditure on phone bodyguard and tempered glass, we can save hundreds of bucks. 24. Use low steam to cook: This is one of the household ways to save money. Rather than using large flame burners, it will be prudent to use small burners. Moreover cooking at low flame and cooking in covered utensil saves a considerable amount of fuel in the long run and so as your money. 25. Do not hunt for brands: If you have an obsession with brand names, this money saving tips certainly not for you. Believe it or not, if you go for value for money, there are multiple non-branded products that offer the same quality of service minus cost for brand value. This is quite visible, when a reputed company pays a big amount on TV commercials, Billboards etc., hasn’t it to recover the cost from somewhere? Conclusion When you are searching for the ways to save money, you may come up with lots of money-saving tips. But things will be effective when you apply them appropriately in your daily life. Remember, the tip works for others may or may not work for you. You have to choose your the best way to save money from the plethora of money-saving tips.

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How To Find The Right Financial Advisor For You

Finding the right Financial Advisor for you can be a difficult task. After all how on earth do you know who to trust? And just because someone might be trustworthy do they really have all the answers to the questions that you need help with? What level of experience do they have? And more importantly are they really operating in your best interest or are they just looking out for themselves? As if these were not enough concerns you also have to worry about how ethical your advisor is. You don’t want to find yourself working with the next Bernie Madoff who runs off with all of your money or is using your valuable assets to fund his or her next big Ponzi scheme. So how do you sort through all of the options and find the right Advisor for you? Let’s look at 3 things to pay attention to when selecting the right Financial Advisor for you and your family. First how do you know they are legitimate, second how do you know they have your best interest at heart, and third how do you know they will be a good fit for you? Let’s explore all three of these questions in some detail to help you get the help you need. So how do you do your due diligence and make sure an Advisor you are thinking of working with is actually a legitimate Financial Advisors with verifiable experience and up to date licenses? The first place you might want to check is a web site called Broker Check. You can just search Broker Check to find the official website. This website has a free tool to research the background and experience of financial brokers, advisors and firms. Broker check can tell you instantly whether a person is registered as required by law to sell securities offer investment advice or both. Broker check also gives you a snap shot of an Advisor’s employment history, licensing information and regulatory actions, arbitrations and complaints. Wouldn’t this be good information to have before entering into a relationship with an Advisor? Next it’s important to discern whether or not an Advisor has your best interest at heart or not. One way to help you figure this out is to ask your Advisor if he or she is acting as a Fiduciary? I know that’s a three dollar word but all it means is that they are legally obligated to put your interest ahead of their own and disclose any conflicts of interest that might interfere with that goal in advance. For example, if a Fiduciary is going to get paid a commission on a product that he/she is recommending to you they are obligated to disclose that to you before you purchase. Another helpful thing to look out for is to look for an Advisor that asks to see more than your financial statements. Before they start to work with you they should be asking to see your tax returns, your legal documents, and your insurance contracts. If the only thing they want to see or talk about are your investment statements then how can they really take your whole situation into account when making recommendations? Finally, you should never feel any sales pressure to move forward or make a hasty decision. A professional Advisor will not use old school sales tactics to gain you as a client. You may need to meet with more than one Advisor and just see how you feel at each meeting. If you are feeling pressured or uncomfortable in any way than that is likely not the right Advisor for you. You should get a sense that the Advisor in question is asking good questions with the goal of helping you to make an educated decision about your money that feels right to you. If you are getting any kind of feedback that he/she is more interested in making a sale than doing the right thing than you should probably move on to someone else. Certainly there are likely other factors that you could consider such as the Advisors specialty and even the proximity to your home town. However if you start off with the basics of doing your due diligence, making sure they are concerned with putting your interests first, and deciding if you have a good feeling about him/her than you are off to a great start to finding the right Financial Advisor for you. Happy Hunting!

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Actions to Do If You Want Your Personal Finances to Improve

At the turn of each year, we all have our dreams and we possess new energy levels to achieve them. This individual expectation is like a cycle. Everybody wants to succeed, at least in their minds but not everybody will. Below is a list of 25 actions you should take if you want to improve your personal finance this year. 1. REVIEW THE PAST YEAR: The first thing you should do is to analyze the past year. Research has shown that of the lots that make ‘new financial resolutions’ every year, less than 10% actually get to follow those resolutions through the year. Does it not bother you that at the beginning of last year, you also made resolutions that you failed at? Why turn around in cycles every year? Take a pen and paper, sit down and review your financial activities for the past year; from your income earnings to spending. Break everything down into tiny bits and you will have a clearer picture of why some of your financial desires didn’t come to pass. It could be that your total expenditure outweighs your income. Simple Guide: Create a ledger of credit and debit. Every of your income, no matter how little, should come to the credit side while expenditures come to the debit. Sum each side up. If your debit is over 30% of your credit, do you still wonder why that financial dream of yours was out of reach in the past year? 2. CREATE A CHECKLIST OF ALL YOUR FINANCIAL MATTERS: The second step is to create a checklist of all your financial matters, while including ‘Emergency’ as the last in the checklist. This is because emergency situations will always arise and can dent your plans, if you are not adequately prepared. The best way to create this checklist is to break each financial matter down into months. Many people go through the year with false belief that they have everything sorted out in their heads. The more reason they fail because human beings are susceptible to memory loss. Sort them out in black and white instead, and a new level of motivation will come on you each time you look at the checklist. Alternatively, tools such as PocketGuard and Spendee can help you do this. 3. SET SPECIFIC FINANCIAL GOALS: After creating the checklist, the next step is to set your financial goals complete with specific dates. That is only when your wishes become goals since the dates act as deadlines thereby putting you on delightful pressure to beat them. Any goal without a specific date of achievement is not a goal. You are merely wishing. Sadly, this is what many people do. By specific, I don’t mean you saying you will make a million naira in August 2018. Be more specific with date. Rather, say ‘August 30, 2018’ for instance. Then it becomes a goal that you can wake up every morning and chase around. 4. KEEP A FAITHFUL BUDGET: The failing of many people is that they are never faithful to their budget. This shows indiscipline. Learn to set and work within budget. That way, you can meet most of your financial plans and obligations. Going beyond budget will only put you in bad debt and make you miserable. If you cannot plan your budget in black and white, there are wonderful digital tools such as Wallet and Personal Capital that enables you to do this and carry your budget around in your phone. Some others like PocketGuard even alert you that you are already spending beyond budget. Take advantage of these tools for better living. One thing you must never do is to simply budget in your head. 5. SPEND WHAT IS LEFT AFTER YOU HAVE SAVED: Learn to live by this rule today. For every dime you earn, save at least 10% of it. Now, this is the difficult part: many people aren’t disciplined enough to do this. The key to achieving this is to separate your business income from your personal finance. 6. LEVERAGE ON GOOD DEBTS AND AVOID BAD DEBTS: Everybody should like debt. This is a principle of the wealthiest people in the world. They like good debt and abhor bad debt. Good debt brings you more cash flow and if well managed, sets you towards financial freedom. Bad debt on the other hand, brings you unneeded luxuries, put serious pressure on you and can make you miserable. If you must boost your personal finance in 2018, try to avoid bad debts. Good debts are incurred towards fulfilling rewarding financial obligations like the purchase of businesses, investment and stocks or real estate; these are things that will compound your financial interests over time and make you independent. Bad debts are taken out to buy non-essential luxuries such as cars, holiday trips and best proposal dinner. These luxuries don’t compound wealth. Rather, they take what you already have. Decide which one you want. 7. PAY OFF YOUR SMALLER DEBTS FIRST: By now, you must be saying ‘but I am in debt already. My debtors are breathing down my neck’. All well and good. Make it a point of focus to liquidate your bad debts. Start by making a list of your bad debts in order of their sizes. Then settle the smaller debts first. Any debt that is fully settled should be cancelled out before moving to the next. The logic behind this is simple. The smaller the debt, the easier it is to pay off. With each debt cancelled out, the more confident you will become of liquidating the bigger ones. This confidence brings with it desire not to keep going through the show of cancelling out debts every year. In other words, you’ll become a better manager of your finances. 8. LIVE YOUR MEANS: This must be a strange one. I have heard many people advocating that people should live below their means in order to have reasonable savings. Well, I actually believe people should live their means. If you can afford to conveniently buy out a business, why not? The key to living your means is convenience. In measuring your convenience level at taking on situations, you must be truthful to self about your financial situation. You might be on a 100, 000.00 Naira per month wage and feel you can live in a two bedroom apartment in town. You should calculated the other supervening expenses like monthly feeding, clothing, welfare and transportation to know how much you are left with to contribute towards the means you want to live. A simple rule I advocate is this: if a personal financial project is more than 10% of your actual income, then you might be better off living below your means. 9. AVOID HAVING ENTITLEMENT MENTALITY: As a major, nobody owes you anything in life. So quit that lazy mindset. In business as in your personal finance, you are solely responsible for the decisions you make; for your successes and failures. Once this is firmly ingrained in your mind, the zeal not to fail will become a greater motivation that pushes you towards making smart financial choices. You will learn the act of taking responsibility. The most successful entrepreneurs don’t sit down and wait for goodwill from some family members or friends. They struggle their ways through web of failure until the elusive success is captured. Then they work harder to keep the success. You should also have that mindset. 10. AVOID THE LOTTERY: This might not go down well with some lottery lovers but if you don’t have firm control of your personal finance, then stay off the lottery. People ask and I tell them lottery is business of luck based on correct punditry or guessing of a given situation. You expend money time and time again in the hope of becoming lucky and hitting the jackpot. But what if you don’t? Let us even assume you win. Have you taken stock of how much you have contributed to the lottery over the months and years and if what you won is up to your contribution? A few will be lucky to hit it big. However, a vast majority of people won’t. The wealthiest people know that waiting for some big manna from heaven is a lazy way of understanding the concept of luck. They know that luck is a deliberate effort of an individual therefore they diversify their portfolio before engaging in lottery. 11. OPERATE 3 DESIGNATED BANK ACCOUNTS: I am advocating this because most times we tend to draw from a single bank account to solve our personal financial challenges. The danger in this is that such practice is an enemy of financial planning and often runs people dry. If you are serious about securing your financial future, then have 3 bank accounts where you save at different times. The first should be for savings and this could be your salary account. The second is for emergency while the third is for philanthropy. Since you’re working on a budget, you know which account to go to on each occasion and discipline will stop you from touching the other accounts when you have no need to. Finance experts like Robert Kiyosaki advocate this strategy. I recommend it also. 12. TRACK YOUR NET WORTH ALWAYS: Do you really know how much you are worth? The problem is many people have a false sense of security. They believe selves to be worth more than they actually are. People who take control of their personal finances make it a habit to track their net worth always. Quit blushing over your assets. Try removing your liabilities from those assets to get an idea of how much you are really worth. Whatever remains after you have subtracted your liabilities from your assets is what you are truly worth. 13. DIVERSIFY YOUR INVESTMENT HOLDING: Diversifying will help you to minimize your investment risks. Smart working entails you have your risks spread in different sectors. If your investments in a sector fail, your investments in other areas will help to mitigate the effect of your loss. There are many reasons why you should diversify: loss of business, inflation, taxation, government policies and political instability are a few of the reasons why you should never remain in a single sector as an investor. 14. CREATE PASSIVE INCOME: This is a key to financial freedom. To build passive wealth, you must be involved in activities or buying assets that generate you more income. To boost your personal finance this year, start engaging in activities that will generate you income even when you are not seriously working. Leverage on technology and get involved in online businesses, get involved in genuine network marketing programs, invest in viable businesses and watch your income compound. 15. LEARN THE RULES OF INVESTING: That you want to diversify and create passive income does not mean you should not follow the rules of investing. The first rule of investing is that you should never invest in what you don’t understand. Get adequate knowledge before plunging your hard-earned money. The second rule is that you should never invest money you cannot afford to lose. Investment can be a risky venture, so have liquid cash you can fall back to if the investment fails. There are other rules you should learn such as the principle of compound interest, legal framework of what you are investing in, and so on. 16. ENGAGE IN YOUR PASSION AND HAVE FUN: Some people are miserable because they are not doing what they love. Some are stuck in jobs they hate just for the salary. To do great things in life, you must be passionate and enthusiastic about what you do. I love providing business and financial solutions to people who need them. It gives me joy. Learn to be passionate about what you do. That is when you can have fun and enjoy life to the fullest. Not loving what you do can drive you to make poor financial choices. If you hate what you are presently doing, here is a tip: give yourself sufficient time to properly invest in what you are passionate about. Then move on. 17. EXERCISE TO KEEP YOUR MIND AND BODY IN SHAPE: Many people work few hours and they are fagged out since they don’t perform any kind of exercise. Engaging in physical exercise keeps your mind at alert and your body in great shape to take on any physical activities. 18. TAKE YOUR HEALTH VERY IMPORTANT: All your goals in life will go as far as your health permits. Your health is your number one wealth; therefore you shouldn’t be careless with your health. I have seen people who are careless about what and how they eat and drink, and are clumsy. Personally, I hate sluggishness. 19. BE FLEXIBLE AND ALWAYS ADJUST: We all want to appear to be in charge, that we have planned ahead and are ready to take hold of our financial situations. However changes will occur along the way, some of them beyond our control. The people who take biggest control of their personal finances are people who adjust to favorable evolving trends. They are spontaneous in their approach towards life. The danger of being rigid is that you are not open to new ideas and opportunities. You are stuck with your viewpoint, with your personal understanding of doing things which may be what is limiting you. The wealthiest entrepreneurs and CEOs have a trait in common. They hire the smartest people to bring new innovative ideas that they can learn from and make adequate adjustments along the way. This is how businesses succeed. This is how personal finances compound. There are times when you follow your conviction, but make sure you have taken every necessary factor into consideration. 20. WORK SMART: Have you noticed that while you are stuck in your 9-5 job for a few thousands every month, another person works few hours and earns far higher than you? The rule of the 21st century is working smart. While I loathe laziness and cannot encourage it, yet your hard work should be embedded in working smart. Think of disruptive ways you can engage the public that will generate you more income. Do you have large following on social media? You should leverage on that and promote your passion. Create reasonable awareness. The more awareness you create, the more people that need your services will seek you out. You don’t have to wait for the fat bucks to come to you so you can rent the choicest office space. Take advantage of technology and start with what you have. 21. LEVERAGE ON TECHNOLOGY AND AUTOMATE SAVINGS: This is the age of technology and everything is going digital. You cannot afford to keep living an analogue lifestyle. Get accustomed with the various available technologies that can help boost your personal finance this year. It is useless, for instance, to be carrying cash around when you can easily perform banking transactions on your mobile phone. You can automate your savings and spending so that you don’t exceed your budget. An application like PocketGuard lets you do that. 22. GET INVOLVED IN PHILANTHROPY: I believe that giving is an effective way of receiving. There is fulfillment that comes with helping people around you to be better than they were. Philanthropy is not all about giving alms to the needy. It is about doing the little things to improve the circumstances of those around you. You can engage in community service, render pro bono services to do that really need it and so on. If you have enjoyed some excellent services from a startup, you can help that business survive by a little words of mouth marketing. Doing such little things go a long way to impact on your personal finance as you will be seen as a trustworthy person whose recommendation is genuine, and this can only be good for your business. 23. HAVE A RETIREMENT PLAN IN PLACE: Some people think retirement is working for several years in the civil service and retiring to a life of pension. Retirement is planning for a life of less stress at work, not that you stop work altogether. Even if you own chain of companies, you cannot work forever. You should give way at some point for younger, more dynamic leadership while you take on the overseer’s role. So what are your retirement plans? Do you have insurance in place? How about retirement savings account? Have you buried your finances in different investment portfolios that will generate you income in years to come? Do you have any shares or stock holding, and more especially, do you have any real estate investment? Have you taken time to study about some government policies in your country and even study some government introduced financial incentives such as the sukuk bonds in Nigeria to know if it’s a risk worth taking? I have seen some people go broke after retirement because of lack of adequate planning. Don’t fall into that trap of waiting for some pittance called pension from the government or whatever organization before you can survive. That is a life of misery, unless you want to live your whole life dependent on others for your basic survival. 24. HAVE A MENTOR: I believe so much in the power of imagery. You can only conceive an idea after you have built images in your mind. That is what mentor ship does to you. Whatever financial race you are in today has been won in the past by another. So make a mentor out of that person. Use their struggles and triumphs as a guide so that you can arrive faster at your destination than they did. Ask them relevant questions and get answers. There is no point making some mistakes if they can be avoided by having a mentor. We should learn to do things from a point of comfort. 25. START NOW, IT’S NEVER TOO LATE: Finally, it is never too late to start planning towards your financial independence. You can start putting in the hard work now and realize the benefits later. The danger is in not starting at all. Tip: Remember to take stock at the end of the year to see how well you performed in boosting your personal finance.

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5 Ways Being Overweight Costs You Money

Obesity is not only costly to your health, but being overweight also has adverse implications on your finances. Apart from the obvious medical expenses associated with treating health conditions such as diabetes and high blood pressure arising from being obese, here are 5 nonmedical ways being overweight costs you money.

Alternatively, doing nothing about your weight is also costly because it stems from a habit of overindulgence, and addiction and these habits are still expensive and extravagant to maintain.

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How Do Credit Card Companies Make Money?

Credit cards have gained much popularity in India over the last few years. Public sector banks as well as private banking institutions have come forward to launch a host of credit cards suiting customers with different types of needs. HDFC Credit Cards and SBI Card are the two companies with the largest market share. While banks are ready to offer you with a small loan in the form of credit cards, have you ever wondered how these banking institutions make money from these ventures? The three main ways how card issuers make money is through the annual fee of the card, interest charged on late payment, penalties on skipping EMIs, etc. At the same time, they also earn from the businesses that accept these cards. Businesses are required to pay transaction fees to the banks which also makes up for significant earning of the card issuer banks. But before we dig deeper into how they make money, let us first understand the term ‘Credit Card Companies’. It is easy to get confused between credit card issuers and credit card networks. An issuer is the bank or financial institution from which you take the card. You are taking a loan from the card issuer and paying back to them. A credit card issuing company is usually a bank. On the other hand, credit card network refers to companies that process the transaction. Currently, there are three main networks in India- VISA, Master Card and RuPay. Apart from these, American Express and Discover cards can also be found. So, when you make a transaction with your credit card, your money moves electronically from your bank through the network to the merchant’s bank. How do credit card companies make money? As mentioned above, your bank makes money majorly from you and also from the merchants where you use the card issued by the bank to make the payment. Banks or financial institutions make money in the form of- Fees Banks charge different types of fees from their cardholders- some fees are to be paid by everyone whereas other types of fees are levied on condition. Let us talk about these fees and charges-

The bank or financial institution has just gifted you a credit line. You have to pay the interest for the loan that is offered to you in the form of credit card. This interest cost adds to your expenses and is a method of earning for the banks. Interest on credit card is charged on daily basis for as long as the amount stands outstanding in your account. This is why experts always advise you to pay the total outstanding amount in full every month because interest will accrue on any amount that stands unpaid. Let us understand this with the help of an example. Suppose the billing date is on 4th of every month and payment due date falls on 29th of every month. APR = 24%

This will be the total amount due on 29th March. Now if the person chooses to pay only Rs. 6,000, the remaining Rs. 4,000 will accrue interest for each day until the amount is paid in full. Considering that the user again pays Rs. 2,000 on the 10th of April, let us see how interest cost works out- Interest = (outstanding amount x 2 percent per month x 12 months)* (number of days)365 In this case, the total interest charged would be Rs. 52.60 which is a total for Rs. 4,000 that lies outstanding for 11 days and Rs. 2,000 that lies outstanding for 18 days until the next payment. This is the reason why those who only pay minimum amount due tend to fall into debt burden sooner. Cardholders should also note that when an amount is outstanding in your statement, the new purchases that you make are not eligible for the interest free period. This is why interest charge is the easiest way how banks make money out of your credit card. Interchange Fee from the Merchant When you use your card at a merchant terminal, the merchant also pays a percentage of the amount to the bank as processing fees. This will also be added on to the bank’s earnings. It usually ranges between 1 to 3 percent of the transaction value but may differ from merchant to merchant. How to save yourself from paying too much to the bank? Savvy customers plan their transactions and payments in a way that they have to pay the least amount to the bank. These are the habits you can adopt to cut your costs-

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The Power of Thrift

“Thrift” comes from the verb “to thrive”. To thrive means to flourish, grow vigorously, to gain in wealth or possessions, to progress towards or to realise a goal in spite of or because of circumstances… ” (Mirriam-Webster dictionary). In other words, thrift isn’t so much as cutting down or not spending money. It’s about being careful in your behaviour so you can reach your goals, be happy, successful and prosperous and live your best life without unnecessary financial stress. The three scarce resources In life, there are three scarce resources which need thrifty management to achieve your goals, objectives and dreams. And no, money isn’t one of these scarce resources, at least not directly. Time, Health and Energy These are the three resources that are finite in this life. You can only use them once. They are non-renewable. So be careful how you spend them! The thing about time, health and energy is that you don’t know how much of each of these scarce resources you have left to you. It’s impossible to know how long you’ll live, how healthy you’ll be in your later years and how much energy you’ll have. And all of these factors have a direct effect on how much money you’re going to be able to generate during your lifetime. Money is time People often say that time is money, but, in reality, the reverse is true. You trade your time, your health and your energy to generate money that many people then squander unnecessarily on things they don’t really need and often don’t even bring them much enjoyment. Every time you make a spending decision, you’re committing yourself to working more days, months and years in a job that perhaps you don’t even like to get your bank balance back to where it was before or to move forward financially. Selective spending Given this, when you spend money on non-essentials, make sure that the enjoyment those things bring you more than offsets that extra time that you’ll have to dedicate grinding away at that day job! When you spend money, you’re really spending your finite resources of time, health, and energy which are in diminishing supply. Just because that paycheck comes in at the end of every month doesn’t mean it’s going to last for ever. Jobs come and go, you get old, sick and tired. And there will be a time when you’ll have to live only on what you haven’t spent and have saved up instead of just spending next month’s paycheck. State pensions are unreliable at best and they’re kicking in at an ever more advanced age – 65, 67 years old or even more by the time you get there. Work ethic Thrift is closely linked with work ethic. Some historians tell us that Protestants in Northern Europe in the sixteenth century developed an ethic of hard work as benefitting both yourself and society as a whole. The concept of thrift went hand-in-hand with this. After all, if you’re working hard for your money, it makes no sense to squander it. There have been various counter-arguments as to where and when all this really started, but for our purposes it’s unimportant. The concept is still just as valid, wherever it came from. Entitlement The mentality of entitlement is almost the exact opposite of thrift. Entitlement is where we assume we deserve things but without having to work too hard to get them. In reality, just because we went to university or did well at school doesn’t mean we’re entitled to a comfortable way of life with all the luxuries and conveniences of the 21st century. You could even say there’s no such thing as rights if you don’t accept the responsibility to work hard to get them. Of course, I’m talking in the sense of material possessions, not clean affordable drinking water or free education to the age of 18 which I regard as basic human rights. Bad habits Every time you put a cigarette in your mouth, drink too much, even exercise too strenuously you’re squandering your health. Every time you spend a whole evening watching rubbish on the television or even sleeping too much, you’re wasting time that you could use in a better way. And every time you waste energy on things that don’t bring you real enjoyment, you’re throwing away the chance to use that energy on more important things. Conclusion Richard Quest in his financial programme on CNN always finishes with the words, “And whatever you do, make sure it’s profitable.” Enjoy yourself but be thrifty with your finite resources. Be selective in how you spend them, get the biggest bang for your buck and make them last you as long as possible for the rainy day that’s bound to come along at some time or another.

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What Is Emotional Spending and Saving?

How you use your money is a reflection of your thoughts and emotions. Another way to say this is that you handle your money according to how you think and how you feel. When your thoughts and emotions are unbalanced or unhealthy, this will show up as unbalanced spending, addictive behaviour or irrational decision making. How Does This Work? If you have an emotional issue or a negative thought form, and you don’t know to resolve it, money will be used to “paper over” the issue until it goes into your subconscious mind – or you are not thinking or feeling it any more. An example is if you believe you are unworthy of having a good job, you will struggle along in your present job. You may be technically making enough money to make ends meet and to enjoy some of your time, but this thinking makes you feel off. You want to feel better at a given moment in time, so you buy yourself a “treat”. There is nothing wrong with doing this as long as the intentions are clear. If you buy yourself a treat all of the time instead of “fixing” the negative emotion, you will get into the habit of buying things all of the time. It may get to the point that you are not even enjoying the things you are buying – you are simply using the shopping as pain relief. If this happens often, you will start to run out of money and this will cause other issues. What Is this Addictive Behaviour? I use the word “addictive” to describe this situation because the pattern is similar to a drug or alcohol addiction. A trauma happens resulting in a negative emotion that cannot be resolved. The emotion stays in the body and resurfaces later on, causing negative feelings. Alcohol is consumed to soothe anger. Since the alcohol makes you feel better, it is consumed whenever the negative emotion comes up. This becomes a habit, and the alcohol is consumed regularly – and it becomes an association like “I am angry and I want to feel better.” The alcohol starts to make you ill because too much alcohol stresses your body and you become “an alcoholic” when you don’t have another way to feel better. Meanwhile, the original trauma and anger are still residing in the body. For the alcoholic, the booze is the “hit” that makes you feel better. For money, buying things that gratify represents the “hit”. You will know it is a hit because the euphoria wears off quickly and the problem is still there the next day. It may even look worse because you feel guilty at having gotten drunk, stoned or broke, and still the bad feelings persist. How Do I Resolve this? Money is often spent unconsciously – this means that money is spent in reaction to a feeling or thought rather than a conscious decision. The solution involves bringing the unconscious into the conscious so you can change the reaction. How do you do this? When you buy things, write down what you purchase so you can see it. For frequent and small purchases, as well as for infrequent purchases, recording the transactions will allow you to see how much you spend over a period of time and whether it is reasonable or not. You will likely forget how many times you made frequent or rare purchases. Pay in cash. The act of taking cash out of your bank account, counting it at that time, holding the money in your hand and counting it when you buy something forces you to ask yourself why you are doing a transaction. Since it is now conscious, the cold light of reason or observation may change your decision. Paying with a debit card, credit card or other electronic means does not register in your conscious mind the same way and the “check and balance” of your mind is typically bypassed. Ask yourself how you are feeling when you decide to buy something. If you are craving something, are moody, irritated, frustrated or angry, you are likely to buy more. I speculate that you are forced to line up and wait for purchases or are put on hold when buying on the telephone to get you frustrated for this reason. Don’t shop hungry, thirsty, distracted or emotional. If you are not happy or satisfied when you enter a store or web site, you are bound to want to feel good instantly, and this means buying things you really don’t need. Man Versus Society Unfortunately, handling money wisely and shopping because it is the best decision to make is discouraged. Consuming at all costs and for all reasons is encouraged. You are never asked if you need the item you are buying, whether you can afford it, whether you have better things to do with your money, whether you should maybe not shop at all or whether you should buy at a later time. The siren call of shopping as much as you can right now with debt if necessary is what you will constantly face from society. Since nobody will ask the questions, you will have to ask them yourself and provide your own balance to the insanity of spending blindly. Emotional Saving Is spending money bad? No, spending and saving are decisions that can be made for good or bad reasons. Can someone save too much money? The answer is a resounding yes. The frugal person may have their own demons to deal with which are: I don’t have enough money, I may need the money tomorrow, I want to make sure I survive etc. This person may never spend when they should be buying things. This person can also be hungry, thirsty, distracted or emotional and can make decisions to never shop because that keeping their money makes them feel better. Balance The key is all about balance. If you can balance your thought patterns and emotional states, your bank account will also be balanced. If you are buying things because they are valuable to you and you are getting a lot of joy from them, than these things are likely worthwhile. You will also have to dig deeply into where the feelings of lack, guilt, shame, rage and frustration come from. Once you realize that you are loveable, adequate, powerful and worthy, many of these addictions simply will not exist.

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What Causes Volatility in the Pakistan Stock Market

For a long time, Pakistan’s Stock Market was performing exceptionally well. Over the years of continued stable political and improved security indicator further strengthened the economic activity in the country. All of a sudden, political turmoil gripped the country in wake of Panama Leaks accusing head of the ruling party. Here are the reasons why the Pakistan stock market has been experiencing major volatility. Political ripple effect: Pakistan’s largest party and PM accused in Panama Gates and ousted after marathon hearings in the country’s highest court. As a result, PSX – biggest stock market of Pakistan invariably had a ripple effect all over. When the KSE100 index fell after marking historic high of around 53,000 slipped more than 30% despite venturing into MSCI regime. Risk of fiscal gaffe: Persistent rise in the current account deficit due to a higher trade gap led by a significant increase in imports as compared to exports. Pakistan’s trade deficit rose 24.18% to over $9.2 billion in the first seven months of the current fiscal, while foreign currency reserves were declining at a rapid pace. The markets are worried the way the local Rupee devolution in recent past, higher trade deficit may pose extra pressure on Pak Rupee. The total liquid foreign reserves held by the country stood at $18.413 billion on end of February, 2018 including $12.34 held by the SBP and remaining $6.067 billion by the commercial banks. Foreign Remittances: According to figures released by the State Bank of Pakistan for the period July-Feb increased by 3.41% to $12,833.64 Million compared to $12,410.54 Million for the corresponding period from last year. Foreign direct investment (FDI) remained dried up in the seven months of FY18, as FDI inflows came to $1.487 billion during July-January FY18, compared with $1.532 billion a year ago. Recuperating Exports: The exports achieving the highest monthly growth yet in the fiscal year by posting 16% increase in dollar terms exports in February 2017. However the current year’s export has already contributed additional inflows of around USD 1.5 bn during the first eight months and is expected to reach the figure of additional USD 2.5 bn, during 2017-18. This increase in economic activity in external sector reflects an increase of 0.8% of GDP. Keep Check on Macroeconomic trends: Economic manager needs to keep CHECK on current macroeconomic trends to sustain the achieved growth and huge catch up in the financial years ahead provided with controlled and fiscal discipline. Here are the encouraging signs to buildup. Timely completion of Energy Projects and low output cost would bring down cost of production. Inflation Rate around 4%. CPEC projects on track. Senate Elections clearing the political vague. Attractive Valuations. Potential growth in FDI’s.

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Investment Strategy: The Investor’s Creed Revisited

Fascinating, aren’t they, these security markets of ours, with their unpredictability, promise, and unscripted daily drama. But individual investors themselves are even more interesting. We’ve become the product of a media driven culture that must have reasons, predictability, blame, scapegoats, and even that “four-letter” word, certainty. We are becoming a culture of speculators, where hindsight is replacing the reality-based foresight that once was flowing in our now real-time veins. Still, the markets have always been dynamic places where investors can consistently make reasonable returns on their capital. If one complies with the basic principles of the endeavor and doesn’t measure progress too frequently with irrelevant measuring devices, growth in working capital, market value, and spendable income are quite likely to happen… without undue risk taking. The classic investment strategy is so simple and so trite that most investors dismiss it routinely and move on in their search for the holy investment grail(s): a stock market that only rises and a bond market capable of paying higher interest rates at stable or higher prices. This is mythology, not investing. Investors who grasp the realities of these wonderful (speculation driven) marketplaces recognize the opportunities and relish them with an understanding that goes beyond the media hype and side show “performance enhancement” barkers. They have no problem with the “uncertainty”; they embrace it. Simply put, in rising markets:

And, if the correction is occurring in the income purpose allocation of your portfolio, take advantage of the opportunity by adding to positions, increasing yield and reducing cost basis in one magical transaction.

The Investor’s Creed The original “Investor’s Creed” was written at a time when money market funds were paying above 4%, so holding uninvested equity bucket “smart cash” was, in effect, a compounding of profits while waiting for lower equity prices. Income bucket cash is always reinvested ASAP. Since money market rates have become minimal, equity “smart cash” has been placed in tradeable equity CEFs with yields averaging over 6% as a replacement… not as safe, but the compounding makes up for the increased risk over money funds. It sums up several basic asset allocation, investment strategy, and investment psychology principles into a fairly clear, personal portfolio management direction statement:

Yes, if you are going about the investment process with an understanding of market cycles, you will be building liquidity while Wall Street is encouraging higher equity weightings, while numerous IPOs are taking advantage of euphoric speculative greed, and while morning drive radio hosts and personal friends are boasting about their ETF and Mutual Fund successes. While they grow their hat sizes, you will be growing your income production by holding your income purpose allocation on target and salting away the growth purpose portion of your profits, dividends, and interest in an equity based alternative to “de minimis” money fund rates. This “smart cash”, comprised of realized profits, interest, and dividends, is just taking a breather on the bench after a scoring drive. As the gains compound at equity CEF rates, the disciplined coach looks for sure signs of investor greed in the market place:

Isn’t it great to be able to say: “Frankly Scarlett, I just don’t care about market directional changes. My working capital and income will continue to grow regardless, possibly even better when income purpose security prices are falling.”

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How to Transfer Your SBI Savings Account From One Branch to Another Online

If you have a savings account with the State Bank of India (SBI) and want to transfer it to another branch, you can do so online within a week and that too without any charges involved. You don’t even need to visit your bank branch to perform formalities as through internet you can perform all formalities from anywhere in India. If you want to transfer your SBI savings account to a different branch, below we have listed the process on how to do it online. But before that let’s understand a few prerequisites that must be fulfilled to successfully transfer your account to another branch. Things to know before you start with the transfer process Below is the list of things that you must know before you proceed to transfer your SBI savings account online: • The option to transfer your SBI bank account online is available only for savings accounts. • The SBI accounts that are inoperative or KYC (know-your-customer) deficient do not qualify for this facility. • Another important prerequisite to start with the SBI savings account transfer online process is that the account holder’s mobile number must be registered with the bank. • The account holder must also have the access to SBI Net Banking facility. • Before starting the account transfer process online, be ready with the branch code to which you wish to transfer the SBI savings account to. • You may even call SBI customer care to get the information. Process to Transfer SBI Savings Account to another Branch Online • Go to http://www.onlinesbi.com. • Select ‘Personal Banking’. • Login to your Net Banking account with your username and password. • On the top panel, select ‘e-services’ tab. • Select ‘Transfer of savings account’. Now you’ll be directed to another page, which will display your account details such as bank account number and bank branch name. It will display all your SBI savings accounts (if you have more than one). • Select the savings account that you wish to transfer to another branch. • Enter the branch code where you wish to transfer your account. • Verify the account transfer details using both existing and new branch codes. • Click on the ‘Confirm’ button. • An OTP will be generated and sent to your registered mobile number. • Enter the OTP received on your mobile number • Click on the ‘Confirm’ button. The process completes with a message ‘Your branch transfer request has been successfully registered’. Note: • If you have only one account or if you want to transfer all your accounts from one branch to another, the CIF (Customer Information File) must be necessarily transferred to the new branch. Your CIF includes details of all your bank accounts. • After the process, your account number and CIF will remain the same but your bank’s IFSC code will change as it is branch specific. Before the account transfer, if you have given your bank’s the IFSC code to other financial institutions such as mutual funds or the Income Tax Department then you will have to update them of the new code once it has been changed. It is important to inform the concerned financial institutions about the branch code change so that they can revise their existing ECS and other standing instructions. • Transfer of a SBI savings account from one branch to another may take a week’s time. Once the transfer has completed, you will be able to see the new branch name after entering in your Net Banking account.

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Online Bill Pay and Its Benefits

For every one of us, there are several bills that are paid on a monthly basis. The list includes rent or mortgage, electricity, credit cards, cell phone, internet and cable, among others. Most people pay an amount in double digits. It is natural that at times, one of these bills slips their mind so they have to pay the late payment fee. A 2016 survey by a financial firm reveals that more than 1/3 of customers or 35% of respondents paid late in the past year, and 65% were charged with a late fee. Most banks and credit companies that offer online bill payment make it easier to manage and pay bills to avoid extra fees. Besides paying bills from the convenience of their computer at any time, people can save on stamp costs and the trouble of traveling all the way to a mailbox. It is not something new to pay bills online since it is done by a vast majority of Americans. However, most of them do it with the use of different websites and providers. So, there is a possibility of missing a payment. As an alternative, wouldn’t it be better to receive and pay bills via the bank with just one list in one place? Think of how this could simplify matters. How the System Works This is just plain and simple. The individual logs in to his bank account, then goes to the online bill pay platform. He chooses the bill provider and keys in the account number corresponding to each bill, then authorizes his bank to send the payment for him. The bank can send the payments electronically or by a paper check in order for the individual to pay bills online, even though the biller does not have such an arrangement. He may either select a one-time payment or arrange a recurring one. Usually, he can choose to pay the whole balance, the minimum due or just a certain amount. Aside from paying companies like electricity or Internet providers online, the bank can also send payments to individuals – like, for example, a landlord, to eliminate the need for a checkbook. Setting up Thought the initial setup is not that fast, it can save time and problems later on. These are the things needed to be done:

Most service providers and sellers provide the option of getting an electronic bill. Whenever an e-bill is available, the bank will often alert the individual. He can then choose whether to let the statement be sent to his online bill pay center or inbox/mailbox. E-bills usually take effect in a number of billing cycles. Reasons to Use it Online bill payment helps people manage their bills and be reminded of due dates. It is easier for them to see the flow of their money, making sure that there are sufficient funds to cover every payment. This is difficult to do if paying through several websites.

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