Last month I had made a post “Needs and Wants, getting REAL about Money” which attracted a great comment by Althea. I immediately thought that the comment itself would make a good post, so here it goes.

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“I liked your article and it’s so true. The following information was taken from the book “The Insider’s Guide To Saving Money” by Michael Ellenbogen. “Cutting back does not necessarily mean giving something up all together, but rather finding a less expensive way to do it. Let us say, for example, that each morning you stop by your favorite coffee shop and buy a cafe latté. It costs $3.00, or $15.00 per week. Another option is that you could stop by a local convenience store and buy your coffee for $1.00. You would save $10.00 per week or $520.00 per year. Not bad for a minor adjustment. If you took the $10.00 savings each week and invested it at a 5 percent return, after 20 years you would have over $17,600.00. Not bad for altering one buying habit. Most people have more than one cup of coffee a day. Just think of those savings. You could even make your own coffee at work, which would save you even more.”

This book was a real eye opener, on the amount of money I have been wasting on cigarettes and so many other things. The savings added up quickly. I will be saving over $86,000.00, over 20 years because I stopped smoking 1 ½ packs per day”.

Money isn’t everything…but it ranks right up there with oxygen”. – Rita Davenport

It is a kind of spiritual snobbery that makes people think they can be happy without money”. – Albert Camus

Poverty is a blessing hated by all men”. – Italian Proverb
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If God only gave me a clear sign; like making a large deposit in my name at a Swiss bank”. – Woody Allen

More and more these days I find myself pondering how to reconcile my net income with my gross habits.”- John Nelson.

I wish that dear Karl could have spent more time acquiring capital instead of merely writing about it.” Jenny Marx

Women prefer men who have something tender about them – especially legal tender.” Kay Ingram

Asking a blogger what he thinks about critics is like asking a lamp post how it feels about dogs” Lamp Post (not a Money Quote…just for laughs).

When running out of amusing quotes, ask readers to contribute and offer a free link back”. Robin Bal (Old Chinese saying)

131_0.jpgThe term “risk” describes the probability of an undesirable event happening as a result of a present decision or of some future event. In life, we face multitudes of these risks. Financial risk is something you can never eliminate, you can however minimize risk, diversification is one way.

The worlds of business and finance are not much different from our lives when it comes to risk-taking. In any business venture, owners or shareholders are bound to face risks. Like the risks we face in everyday life, some of these business risks can be easily handled and some cannot, and the process of deciding which is which belongs to the practice of risk management.

Risk management refers to the entire process of identifying, analyzing, evaluating, and treating risks. But since businesses are faced with many different types of risks, risk management specializations have also been created to deal with them.

And then there’s financial risk management, which is very similar to general risk management with a specialization in a business’s finances. Financial risk management also follows the processes of risk identification, analysis, evaluation, and treatment. Financial risk management, however, is more focused on finances and makes use of financial instruments to manage a business’s exposure to risks.

Instead of leaving businessmen with a variety of choices for risk treatment, financial risk marketing is focused primarily on hedging, which is the use of two counter-balancing investment strategies to offset the negative effects of price fluctuations. Aside from these differences, everything else is essentially the same.

Business men don’t have much choice but to face risks.It is for this reason that knowledge about financial risk management is very important in the business world. The practice won’t help businessmen avoid risks, but it gives them a chance to counterbalance the negative effects of risks whenever they have to take one.

unilogo.gifYou and you alone, are ultimately responsible for your financial well being. Your decisions will affect how you live on a day to day basis and in the long term. Handling the financial issues associated with starting out, establishing a household and having more responsibilities can be stressful.

A solid financial foundation can help you spend less time and effort on your finances so you can devote your time and energy to other important matters like your job, your family and your future.

The only reason for earning a fat salary is not to blow it away for the good times; a sensible option can be to save some for future when destiny decides to pick on you. Putting some money aside in a savings account is a safe bet, as the ‘market’ can be a tricky territory to tread!

Reaching a point of financial security is a process that takes time, effort and perhaps some sacrifices. However, the results are worth it. By starting early, you can put time on your side. By doing a few things right from the beginning, you can make that process easier and minimize the sacrifices you may be forced to make later.

Save what you do not spend. After you have paid your bills each month, move what is left over to your savings account. You will probably want to keep some funds in your checking account to cover unexpected expenses, but by moving excess funds to your savings account, you will be accumulating assets and probably earning more that what you would have earned if you left your excess funds in your checking account.

Opening a savings account is easier than gobbling up a delicious piece of cake. All one has to do is to walk up to any high street bank and open an account. There are different types of accounts for different needs; you can easily select yours according to your means and requirements. The good life will be here before you know it. Putting a little money away today means big dollars for later.

The interest rates that you will get, differs from bank to bank and account to account as well. The rates will be slightly lower in an easy access savings account but then you will get instant access to your money whenever you need it and no notice or penalties for on the accounts.

As for now all I can say is no one can foresee the future and one should be ready to tackle the issues waiting for you in the future (yes there will be a few, life is not a fairy tale) and by having a plan B to every problem that raises its head, you can actually give your life a “…happily ever after” ending.

commercial_property_investment_liverpool.jpgInvesting in commercial property is well beyond the financial means of most people. Few can afford the large sums of money involved in buying commercial real estate. For most of us our investment in real estate is limited to where we live – our home.

But unfortunately our home doesn’t generate any income or cash flow. In fact it probably costs us money in maintenance, rates and upkeep.

Sure the financial incentive to invest in your own home is to offset the cost of renting or the capital gains you get when you sell your house if its value has gone up.

Most financial advisors will tell you the best investment strategy is to pay off your home mortgage as quickly as possible to reduce your debt.

But what about after that if you want to invest in property? You have a choice – invest in another residential property or a commercial property.

Residential properties can often provide a good cash flow from rent, but there are associated hassles with getting good tenants, poor tenants trashing your property and the ongoing cost of maintenance. If you like playing the role of the landlord and being involved in all those activities great! But what if you want a hassle free commercial property professionally managed.

An increasingly popular investment amongst smaller investors and retirees is through syndicated property trusts. This is known as direct property investment where smaller investors buy small parcels of a larger property through a prospectus. These projects are managed and marketed by licensed property dealers.

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bill_761_17680431_0_0_7000038_300.jpgThe time to pay up for last years holiday has come around again, but you may have came back from holiday only to find that there a few items on your credit statement that you don’t remember paying for.

Here are some tips on the direction you should take if this occurs. My friend Jag from MyPeculiarThoughts has also compiled Tips to transform yourself into a Savvy Card user is worth reading.

The first thing you should do is to contact your credit card company. If someone has illegally cloned your credit card details, you could find more of the same type of credit card transactions on your next bill.

The next thing you should consider is contacting all the providers of the other credit cards that you took with you on holiday. You should let them know that you think that one or more of your cards has been jeopardized and that you will need to have your accounts checked for abnormal transactions. The simplest way is to let them know when you returned back home from holiday and that any purchases from abroad should be thought of as suspicious.

Tell the credit company to cancel any cards that are thought to have had any suspect transactions performed, and instruct them to send you out new replacement cards. It will usually take a couple of days to receive your new plastic, so in that time you will have to use other arrangements to pay using cheques, cash etc.

The credit card company that you use will investigate any suspicious transactions in part to make sure that you didn’t make any of the purchases and just forgot about it, and they might be capable of plotting out a pattern of transactions from somebody that is travelling from region to region while using your card.

You should ask that your credit company send you out an amended account of your transactions and that they don’t ask you to pay on you disputed credit card bills.

One last thing, you might receive some calls from someone who claims to be from your credit card company, and they want to check your newly issued credit cards for security reasons. If they ask for any secure information, don’t let them have it, it could be the criminals calling you, and they know that you have probably been issued with new cards. They do this in an attempt to obtain entry to your new accounts.

Remember; just make sure that you can account for everything on your next bill.

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Credit Card Users & Financial Planning

main_our_products.jpgAt some point you will need to make changes to your investment portfolio. Often, investors and their advisors make wholesale changes all at once.

But that’s not really in your best interest. Read on to find out how to successfully adjust your portfolio. Using the wrong strategy at the wrong time can be devastating.

P
erhaps you’ve decided to make changes to your portfolio. It may be to take advantage of some strategies or it could be because your life situation and needs have changed. Or it might be that you’ve neglected your portfolio garden and there are as many weeds as vegetables.

Regardless of the reason, keep these steps in mind. They’re the ones I follow when transitioning a client’s portfolio.

You need to analyze your existing portfolio. Take a close inventory of your investments and research their performance. The last thing you want to do is to cut down the wrong plants while you are weeding your garden!

I
t takes more work but it’s better to calculate your actual return. Subtract what you invested into a particular holding from what it’s worth now. Look at that return in relation to the length of time you’ve held it to determine whether or not it needs to go.

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money111.jpgYou can’t force anyone to love you or lend you money. – Jewish Proverb

My problem lies in reconciling my gross habits with my net income. – Errol Flynn

Money frees you from doing things you dislike. Since I dislike doing nearly everything, money is handy. – Groucho Marx

Many speak the truth when they say that they despise riches, but they mean the riches possessed by other men. – Charles Caleb Colton

A man that hoards up riches and enjoys them not, is like an ass that carries gold and eats thistles. – Sir Richard Burton

I rob banks because that’s where the money is. -Willie Sutton.

They were a people so primitive they did not know how to get money, except by working for it. -Joseph Addison

I have never been in a situation where having money made it worse.-Clinton Jones

There are three ways of losing money: Racing is the quickest, women the most pleasant, and farming the most certain- Lord Emherst

The big difference between sex for money and sex for free is that sex for money costs less.”- Brendon Francis

I‘ve got all the money I’ll ever need if I die by four o’clock this afternoon.” -Henry Youngman

Money isn’t everything, but it’s a long way ahead of what comes next.”-Edmund Stockdale

more.gifLet’s face it: Most people spend way too much money on things they don’t really need. The more money we make, the more we tend to spend. This endless cycle of materialism has led many people to confuse the word “need” with the word “want.” As in, “we need a big-screen TV for our new home theatre.” Or, “I need a new pair of shoes to go with my new outfit.”

If you want to achieve your vocational passion, where every day you jump out of bed and can’t wait to go to work, then you need to re-order your priorities. Stay away from the purely material.

The pursuit of material success often is the root cause of burnout at midlife.
In fact, a recent study found that people primarily motivated by the love of their work grow dissatisfied as they begin to make more money.

The first step to breaking free from the materialism trap is to understand the difference between “need” and “want.”

We need food, clothing, shelter, reliable transportation, education, enrichment, and the technology necessary to do our work. Also, we need the occasional small indulgence to treat our children and ourselves.

We do not need 500 cable TV channels, brand new luxury cars, 5,000-square-foot homes in exclusive neighborhoods, lavish ski vacations, and smart phones that do everything but think for us.

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wallet_burning_money_hg_wht.gifI read with amazement a story by Gary Simpson this morning. It concerned a couple in their early 30’s from Western Australia who won AUD $793,151.87.

Their lotto dream was realized just two years ago. Lucky people huh?

OK. Nothing too amazing about that – so far. Reading on I was shocked to learn that this story is news now because, despite their massive windfall, this couple had never stopped claiming social security benefits. Greedy huh?

That welfare money is meant to be available to disadvantaged people who are in financial difficulty. Essentially it is “survival” money.

But the story gets worse, much worse…This couple spent ALL that money in just seven weeks! Gone. Vanished. Seven weeks! It hardly seems possible. So, what does that tell you?

The first thing that struck me was how utterly irresponsible this pair was. How do you spend $113,307.41 each week for seven weeks? I have great difficulty comprehending that.

What if this pair had spent just the $93,151.87 having “fun” and put the $700,000 into an interest bearing term deposit for three months at 6.00% interest while they got some decent financial advice? At the end of the three months they would have accumulated another $10,500 to play with (less tax, of course).

So many stories abound like this – people with no financial skills suddenly find themselves in possession of a large inheritance or a lottery win and zap! Just like these two, it is gone. How would you have handled it?

For anybody wanting to learn basic financial skills “The Richest Man in Babylon” by George S Clason is a great start. Had these people bothered to read such a book then they would still have a significant chunk of that money left. Maybe they would have even more. As it is they have nothing to show for it and there is a strong possibility of either gaol or massive fines for defrauding the Government.

It pays to educate yourself.

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