Fortune Watch

“If there’s anything I can do, just let me know.”

Admit it. You’ve said that at least once to someone going through a rough time–we all have. Matter of fact, it’s much more than a well-worn, well-meaning phrase that we instinctively say before hanging up the phone, anxious to our friendship duty. Do we ever question if we’re doing the routine rounds or do we feel a pull in our heart?

Let’s face it–how many of us, while in the midst of a crisis, can really get it together to tell exactly what we need? Unless of course it is an injection of a dose of money. So that brings us to the million dollar question–How do you deal with friends who need Financial help?

This could be a delicate situation that can perhaps degenerate itself into a difficult situation, as compared to your own financial status at that moment. If you’d like to help a friend who’s in a financial mess, just keep in the back of your mind that “Money really is power.” And it’s your responsibility to be sensitive to that.

Should you lend money to your friends? Shakespeare said, “Lend money to a friend and you lose both, money and friend.” My dad educated me a bit on this; his advice was that if at all you must help a friend financially, never lend more than you can afford to lose. That’s also my advice for people who are out to make a killing in the stock market–never invest more than you can afford to lose. And that’s what they call the “risk capital.” How much risk capital do you have after all your savings for the rainy day?

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There has always been a need for retirement planning and today is certainly no different. There are many other types of retirement plans that are available to you. You will need to take the time needed to evaluate what your current financial needs are and what you expect the future to hold.

You must keep in mind that your planning today is not just for the ideal future, but the future that will be reality for you if things turn out to not be ideal or according to your plans today. By starting early and contributing the maximum that you can afford, you will have a better chance of being prepared for the unforeseen.

Unsure of what you will need for retirement? Are you on track or not? Don’t forget that life expectancy is getting longer. Today you can expect to live 20-30 years past retirement and, suddenly, the amount you need to retire comfortably with a major change in lifestyle gets very large.

Lets say that today you need $40,000 to live on and you retire in 20 years, you will need a minimum of $850,000 to carry you through retirement. That is assuming that you will live an additional 20 years after you retire and are in good health.

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Are you short for month money at the end of each month? Do you have 5-10 credit cards, all maxed out to the limit? Do you forget to pay your bills on time? If you have answered, “Yes,” to any of these questions, don’t feel bad and don’t worry. I have some tips that can help you improve your financial picture: Create a Bill-Paying System

The first thing you’ll need to do is to go out and pick up some colored hanging folders. If you don’t have a file cabinet, get a file box that you can find in any stationery store or discount department store. They’re very inexpensive. Then, make a folder for each expense. Use one color for your bank statements, another for your utility bills, and another for credit cards. Keep the system pretty simple or complexity could let procrastination) take over.

Each day when your mail arrives, separate it immediately into what you don’t need and want to throw away and your bills and other things that need attention right away. Do the things that are needed and either pay the bill right away or put them in a central place where you can retrieve them when the money is available for paying the bills. This could be the front of a desk drawer, for instance, or even a basket on top of your desk. Just be sure that nothing goes into that basket besides your bills.

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“I‘m living so far beyond my income that we may almost be said to be living apart.” – E. E. Cummings.

“A large income is the best recipe for happiness I ever heard of.” – Jane Austen

“If there is anyone to whom I owe money, I’m prepared to forget it if they are.”Errol Flynn

“If you owe the bank $100 that’s your problem. If you owe the bank $100 million, that’s the bank’s problem.” JP Getty.

“Undermine the entire economic structure of society by leaving the pay toilet door ajar so the next person can get in free.” Taylor Meade.

“It’s morally wrong to allow a sucker to keep his money.” WC Fields.

“You should always live within your income, even if you have to borrow to do so.” J Billings.

“October is one of the particularly dangerous months to invest in stocks. Other dangerous months are July, January, September, April, November, May, March, June, December, August and February.” Mark Twain

“Money is better than poverty, if only for financial reasons.” Woody Allen.

“The hardest thing in the world to understand is income tax.” Albert Einstein.

“Money can’t buy you happiness but it does bring you a more pleasant form of misery.”
Spike Milligan.

I see a parallel here between medical treatment and investment advice. In both cases, the choice of expert is an extremely high-stakes decision. If your doctor prescribes the wrong course of treatment, you may not wake up the next day. An incompetent investment adviser may leave you unable to ever retire.

Investing to a lot of people is comparable to going to the doctor, you know you should but it’s kind of scary, so you put it off. Does that sound familiar at all? Well, the thought that should be even scarier is what may happen if you don’t start investing.

One of the biggest misconceptions about investing, whether it is the stock market, bonds, real estate is that you have to have a lot of money to do it, and you only do it so you can get rich. The truth is completely different.

The truth is, investing is something you do to secure your financial future and also build a retirement fund. Suppose you were downsized out of your job? Suppose your retirement is up in 10 years? By investing, you will be prepared to meet these new challenges.

That’s the real meaning behind investing, planning your retirement, not becoming a millionaire. I’ve found few of the biggest reasons why many people fail to get started investing in their financial future as follows:-

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Get real about money. Let’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.

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Losing sleep over buying a mattress could be understandable; people are tossing and turning on potentially bad beds because they dread mattress shopping.

Now let’s take a look at losing sleep while investing. The recent events in the stock and bond markets drew everyone’s attention. No doubt you took a look at your investments and, perhaps, worried about one or two. Maybe, you made some changes to your portfolio.

Let’s take a look at your experience and see if there are some lessons to be learned.

Did you lose sleep, literally or figuratively, over any of your investments? This is the gut check measure of risk tolerance. Investing is not an emotional decision, it takes hard work and discipline, but if you worry too much about an investment, it isn’t right for you. One of the hardest parts of investing is keeping your emotions out of it (i.e., taking a loss or selling your “favorite” stock).

Emotion will only cause you to buy at the market highs and sell at the lows. But, did your gut tell you to sell anything during the recent market correction? Rule number one of gut check investing is: if you lose sleep over an investment, it’s probably too risky for you. How do you know? This brings me to the second rule of gut check investing.

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No one likes to imagine that illness or death could compromise their family’s financial security. But, tragically and all too often, these things devastate families and leave them in a vulnerable financial position just when they need the most security.

Spending only a few hours preparing for such a scenario might save your family needless trouble. Once, only fathers needed to worry about this, but today with two-earner families comprising the majority of families, both partners should actively participate in planning to ensure financial security for themselves and their children.

At the very least, each partner should have a simple will specifying who will receive assets and who will take guardianship of the children. Financial professionals advise naming one person to control the financial assets and another person to take physical custody of the children. Although this is a good short-term solution, you should consult a lawyer as soon as possible, particularly if you have a lot of assets or there is disagreement in your extended family about who should serve as guardians for your children.

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An identity thief takes your personal information and uses it without your knowledge. The thief may run up debts or even commit crimes in your name. Identity theft is serious. While some identity theft victims can resolve their problems quickly, others spend hundreds of dollars and many days repairing damage to their good name and credit record.

As the name suggests, it is the theft of the personal information of another. The theft would be incomplete unless the information was used for some nefarious process, and it is in many different ways. Keeping your personal information from falling into the wrong hands will help you from becoming another identity theft victim.

The most common form of identity theft is not the stealing of credit card numbers. Instead, the devious individual is aiming for your social security number. Why? That number is the basis of many different financial transactions.

With a social security number, an identity thief can take many financial steps. They can open multiple credit card accounts. They even apply for a loan once they establish a second address.

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Mistakes happen, and it seems as if they pop up on bills quite frequently. How closely do you read your statements, receipts and bills? Do you take the time to review the actual charges, or do you simply assume that the bill is correct. Remember that when it comes to numbers, errors happen frequently.

For example, one time my bank was even wrong on my statement. The computer added something incorrectly. Sometimes numbers get transposed when they are entered into the computer — you have to double check. On another ocassion I was charged $200 on my Visa card as card replacement fees, which actually should have been $20.

It is estimated that consumers lose millions making unnecessary overpayment’s on accounts each year. For example, cellular bills are notorious for being wrong.

There are many things to look for when you are spending money and paying bills. The most common thing to happen when you are shopping is that you are charged the wrong price for an item. Make sure that if you buy something on sale you are given the appropriate sale price. Know the price of the items you are buying.

Once, I bought two bars of chocolate. The cashier accidentally pushed the two button and the three button, charging me for 23 bars of chocolate. I knew that the total didn’t sound right and checked the receipt before I left the store.

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