Understand the role of production cost

It is wise to research and identify the real profit that a company generating from the sales of its products after reducing the involved manufacturing costs. This will help an investor to understand the real profit of a company as well as the possible cash generating capacity. It not only help an investor to identify the ability of a company to survive for long term but also, helps to invest on the best company among the group.

As we thinking, it is fairly difficult task to understand the original profit that generating by a company from the sales after reducing all the manufacturing costs involved. But as a true investor, one should find time and resources to identify all these facts prior to make any investment decision. This is the reason legend investors keep informing retail investors to not invest to any company directly once if you don’t have time to do proper research and study.

I will make you understand what exactly it mean by a simple example.

Two companies, Company A and Company B, manufacturing and marketing similar widget with a price tag of $10 each. Company A have a production cost of $6 per widget and company B have $9 at the same time. Thus they are presently getting $4 and $1 profit from each widget. Due to strong economy and customer interest on these widgets, both companies decided to increase the price from present $10 to $12 per widget. With this scenario, Company A starts receiving a profit of $6 per widget, that is a flat 50% increase in the profit. In other side, Company B having a profit of $3 per widget, compare with their previous $1 profit per widget, they are showing huge 300% increase.

In such situation arises, to which company an investor will invest? Here is the mistake most of the investors committing. By seeing the 300% flat profit on the paper or from the analysts reports, most of the investors start investing on Company B that the Company A who got a 50% profit.

But the hidden fact is, Company B getting only $3 per sale compare with $6 that Company A receiving at the same time. Analysts probably compare the previous the present profit with the previous profit both companies registered but the cash they receiving to their balance has huge difference here.

Sounds good and interesting. Now imagine, some one invested on Company A and other person invested on Company B by seeing their huge profit in the paper or tip from any analysts.

Suppose the situation changing now. Due to economic recession or losing interest from customers, each of these companies decided or forced to slash its product price to $8 per widget. What will be the situation now? Company A still able to generate a profit of $2 on each widget because its production cost per widget is $6 as I mentioned earlier. Company B, who have made a 300% profit, has a production cost of $9 per widget, immediately fall to sharp lose of $1 per widget and thus the business also starts run under lose.

If such, what will be the situation of investors who have invested on both companies? Investor who have invested on Company A by carefully research all required facts and invested intelligently still continue receiving profits and investors who have invested on Company B by not identify the fact behind its previous 300% profit figure start suffering from huge lose of money.

From the above example, as an intelligent investor, one should do proper research and understand each and every aspects the business, cash generating capacity of a company to survive any situations. Compare with Company B, Company A might have huge cash surplus from the handsome profits receiving on their products with less manufacturing costs. They can easily manage any situations due to the cash reserves they have compare with Company B.

Cost effectiveness is a required measure to analyze a company. Never invest on any company by seeing the huge numbers in the paper or the result. Instead, do proper research to identify the fact that directly affect to your investment in the future.

This is the technique a value investor should use to identify the value of a company when investing on it. Of course it require time. But, the result will be a fail proof one.

Welcome any feedback on this article that you have.

>> Read This Article...

Read more...

What I Learned From Buffet Investing Strategy

You may feel that Warren Buffett is an extra ordinary man. That is just a myth. If you ever read any book that about his life, you may wonder how an ordinary person can turn an amount of $100,000 to $30 billions. Interested on his strategy? Practically saying, it is very simple to understand and practice. It doesn’t require extra ordinary brain or out standing math skills. But, a person with common sense and above average math skills, can achieve this success if he understand and follow the strategy properly. Read what I understood from his investment strategy, here is the core.

All his investments, that gave him enormous wealth, had made based on 3 basic points :

1. Business side considerations

Buffet was keen to know the business well prior to make any investment decisions. He never invested on any company where the business he was not able to understand. He never invested on any company from fast booming sectors like IT or construction. Instead, he selected companies engaged to traditional business with considerable year to year sales and profit growth.

What idea he had used to understand the consistency of the company? He selected the company who's product people always trusted and never able to live without. All the companies he had invested have there product with high durable competitive advantage. In plain word, the products have requirements from people all the time and company maintained its monopolistic status all the time.

2. Finance side considerations

He never bothers about the P/E ratio of a company or EPS (Earning Per Share) or Book Value. All these values can be manipulated using accounting numbers. Instead, he was keen to learn the following:

• The return of equity. He was interested on any company which has consistent year to year ROE growth more than 19 to 20%.

• He was not interested on any company that has huge debt. Instead, he looked for the companies have zero debt or very few but manageable debts.

• He was keen to know the cash flow per share. An example, he never interested on any company that makes any product where the production cost of the same equals to its price. Instead, he interested on the companies who making products which has less manufacturing cost that not exceeding 10 to 25% of its price. Understanding the cash flow per share will give you better idea to analyze this.

3. Management side considerations

Buffet never interested on any company where the management was acting like bureaucrats. Instead, he was interested on a management which has efficiency to utilize its investors money properly and have innovative ideas to keep the monopolistic position of there business and product.

Above 3 are the major points you should remember when following the Buffett Style. There are another valuation considerations than the above three, but all those deriving from these points only. In such, this three points are the heart of all investment decisions.

If you are a true follower of Buffett, never miss Warren Buffett's Letters to Berkshire Shareholders, is an excellent source to know more about his style of thinking and hear the story of his success from his own mouth.

If there is any suggestions, feel free to express here.

>> Read This Article...

Read more...

Set Fail Proof Personal Financial Goals for year 2009

Year 2006 giving us lots of opportunity to think about the possible resolutions to protect ourselves by maintaining the living standard which we had followed till today and fail proof our financial status. In the panic background of economic recession and job losing fear, this has high priority to act and maintain. Here is an article with 5 possible resolutions for the betterment of your life and finance all the time.

Any one who give importance to the life of self and there family might have set some achievable resolutions for this New Year 2009. Such resolution entirely depends on each individual and it can be personal, official or any other in kind. As a Blogger entirely concentrate to the financial planning and investment, I have given high priority for the resolutions that help us to maintain our living standard. This article help you to assess, identify and act with required planning properly.

I have classified the actionable items to 5 major areas. Below are the same with its requirement and description.

• Emergency fund

Keeping an emergency fund is a tested and intelligent method to face any ironic situations like financial crisis, job lose or economic recessions boldly. This method known as the act of intelligent people. Read this step by step article to know more about the need of an emergency fund and the methods to raise the same for a relaxing life.

• Assess and get required insurance coverage

Not having enough insurance coverage mean you are in deep trouble with personal finance side. such status can destroy your financial base in a great extend. Lots of people suffering and sinking to huge debt because of not having coverage plans to meet emergency requirements that cost huge money. To meet such money requirements, they either borrow money from third party or take personal loans that have huge interest rates. A self assessment to identify your insurance requirements add extreme safety to your life and that you can realize time to time later. Read this article to assess and understand your required insurance coverage to buy as early as possible.

• Build a savings habit to your kids.

It is a truth that the habits one learn in the child hood will follow him till the end of life. Teach your kid the value of money and build a savings habit. They will be very grateful to you in the future. See this picture first to understand the requirement of savings for child. After, this is the first article to read and this is the second article both well explained the idea to teach your kid about money and savings.

• Fail proof Personal Financial Plan

Any one in present time have requirement of building a solid financial planning for life to meet all your future financial goals. Here is a series of article, which giving step by step guidance through well defined and practical examples, to have a well structured financial plan for lif.

Any intelligent action with money always give you huge profit as well as benefit. If you have not start the same till now, it is the time to start. My best wishes.

If you feel that I have missed anything or have any ideas, feel free to comment or contact me.

>> Read This Article...

Read more...

Building an Emergency Fund

People around the world are panic by ongoing economic recession. Even experts including legend investors saying, this will be a long recession compare with any similar previous same kind. People running by driven with panic to shield from any possible personal financial crisis and maintain present living standards in case of possible job lose. Those who have acted intelligently at there best time, by seeing such future financial issues, not worrying because of the immediate availability of enough funds to meet any requirements for a specific period of time they have calculated, enough to find any parallel solution to stabilize there life.

Those who are not acted intelligently to shield themselves, at the best of there time or never taken any action to keep there life standards intact incase of any severe future financial issues, are heavily panic. They should think and act for the requirement of creating an enough and well accessible emergency fund now. If you have little thoughts, you can easily raise required amount as your emergency fund. Below are the possible solutions for that.

In my various previous articles, I have given practical ideas and various methods to save money from your each action like shopping, credit card usage etc (see the links below). As a preliminary steps to raise an emergency fund, you have to decide the time to recover incase of any issues like job lose or other severe financial problems. In my personal opinion and practice, an emergency fund should be equal to your 6 months salary that should go to a separate account. This practice help you to survive next 6 months without any worries incase of any job lose or financial issues and free from such worries will help you to point for searching a better job and find one within this six month.

As a thumb rule to calculate one month expenses here is the solution:

• Identify and add your minimum monthly bill amount: This can be rent or mortgages, credit care or personal loan repayment installments, utility bills like electricity, water, internet, phone, house services, newspaper etc. also identify the services that you can cancel with one month notice like cable TV, club membership etc..

• Identify any possible premium paying month included with this six months and that cannot be avoidable. If such, identify the premium that you should pay for your health insurances, medical, term policy insurance, home, vehicle or any other insurances, SIP for mutual funds etc. You can add any other mandatory expenses like school fees, taxes etc..

• Add all routine monthly expenses like groceries, car fuel, possible medical expenses to self or family members if not protected by insurance etc… you can take a minimalist approach here by reducing your budget if willing.

• Add the required job hunting expenses. This will include the travel expenses to out of your present states, location expenses like food and stay if required etc..

Now you are with an exact figure of possible one month expense. As I mentioned the emergency fund should be equal to your 6 months salary, multiply one month expense with 6. The total of this sum will be your emergency fund.

Once you have identified the amount required as emergency fund, here is the method to work for the fund:

• Decide how much amount you can save.

• Calculate your present monthly expense. A proper budgeting with writing down all your monthly expense for 2 or 3 months will give you and exact idea about the average monthly expense. Write the extra cost, that is not a part of your regular monthly expense, separately.

• Open a separate account and start adding your savings to that. As a thumb rule, never touch this amount.

• Identify the possibility to save little more at each time. This will help you to identify possible cost reducing methods.

• Setting up an automatic deduction from your salary account to the emergency savings account is a best practice any one can follow.

• Reduce any unnecessary expenses like magazine purchases, eat out, recreations, club memberships that you are not using for long term or any other facilities that presently you are paying money as rent but originally you are not using. You can save such amount to your emergency fund.

• Try to pay off all your bad mortgages like credit card, personal loans etc… This will put you a very safe side and you will get lots of money to safe and achieve your emergency fund as early as possible.

• Utilize the possibilities of get any kind of reductions to your required items.

• All the above, if you have a secondary income, never touch this and add this total amount to the emergency fund account till achieving your targeted amount.

You can identify various savings possibilities from your daily life. Read a possible savings from your bad habit, here is an article on the savings possibility from shopping habit, here is an another article on how to save money from your credit care purchases etc… like this, identifying yourself will give you lots of opportunities to save little by little.

Remember, little pain in the beginning will give you more relax and happy to life. There ate 2 tested happiness in our world is, a debt free life and a life not worrying about future. If you will and work a little, you can achieve both. Shielding your family and yourself to any possible financial issues will give you confidence and free mind from all the worried thoughts to act properly for identifying and achieving better opportunities for settle your life in a far better than present. Best wishes to all those who reading this article.

If you found anything important points missing or required me to have an attention to anywhere in this article, please feel free to comment or contact me using my contact form in the top menu.

>> Read This Article...

Read more...

Making More Money Does Not Guarantee Financial Stability

There is a common misconception that earning a higher salary will lead to financial stability. Unfortunately if your goal is simply to make more money without having a money management plan in place you are likely setting yourself up for disappointment. People who achieve their goals of increasing their salary often don't realize that as their salary grows so do their spending habits. How many times have you read about celebrities filing for bankruptcy or experiencing extreme financial hardships? Have you ever wondered how someone who has made so much money can end up broke?

How you spend your money, how much money you save, how you invest your money and the choices you make regarding other financial decisions will all have an impact on your current lifestyle and your retirement years. Therefore the mere fact that you earn more money doesn't guarantee you will find financial stability if you do not make wise financial decisions.

You can be rich, middle class or poor, it doesn't matter what income bracket you fall in because most of us are creatures of habit. The more you earn, the more you spend. That is why it is so important to manage your money well to secure financial stability. Avoid the following mistakes that people often make when their salary increases.

Don't overspend just because you have money

The biggest reason for people who earn a comfortable salary having financial problems is overspending. If you live within your means (even if those means are better than when you earned less money) you can avoid some of the problems that befall other wealthy individuals. Better yet, if you live below your means you can continue to invest your money in order for your wealth to grow.

Use credit wisely

With an increased income you will find more credit opportunities. Do not fall into the trap of using credit excessively just because you have more money to pay the bill each month. Paying interest is not a good idea for someone earning 20K a year or someone earning 200K a year. It is still wasting money that could be better used somewhere else in your budget.

Be prepared for the unexpected

Again, this tip applies to people of all income levels, however many people stop following common sense advice once their income increases. Keep in mind that no matter how much money your make, the unexpected might happen to disrupt your income potential. Even if you are managing your money responsibly a serious illness or accident can occur making you unable to work or run your business.

In conclusion making a lot of money does not guarantee you will have a lot of money. Regardless if you are rich or poor, if you want to be successful you must save and invest wisely and maintain control of your spending habits.

Trisha Wagner is a freelance writer for DepositAccounts.com, where you can compare rates from dozens of banks in one place. Trisha writes regularly on the topics of personal finance and saving money.

About Guest Writer
This post was written by a guest writer. If you'd like to add a guest post in Money Hacker, please check out Write for Us page for details about how YOU can share your knowledge with our community.

>> Read This Article...

Read more...

Guidelines to Select Worthy Insurance Policies

Insurance can do magic. Selection of right insurance policies not only helps you tackle severe situations that cost money and also, helps to secure personal financial plan for self and family. Below are the 5 must have insurance plans for an individual to select wisely depends on there status and requirements. Success of an insurance policy selection entirely depends on identification of your exact requirements. Prior to apply any, a person should do a self assessment to identify his/her present and possible future status, dependent requirements to select right policies. Below mentioned 5 insurance policies are very specific in its kind and combination of any or all of these are highly recommended to individuals depends on his/her situation.

1. Term policy – One of the most required and friendly policy for an individual who have lots of responsibilities. If you are the only bread winner in your family and worrying about the future of your dependents in case of anything bad happening to your life, of course, term policy is an excellent option to meet all your requirements. Term policy offering huge life cover with comparatively cheap and affordable premium. Taking maximum term by contacting multiple insurers to identify the best product is a good idea. A thumb rule is, choose a term policy with life coverage equal to 6 times of your annual salary.

2. Health Insurance policy: A must required policy for individuals to insure him/herself and family members through family floater policies available with cheap premium and more facilities. Hospital expenses are the major culprit to spoil your financial plan in a great extent, having a right medical policy is highly appreciated. Reading the features and compare the same with other insurers will give exact idea with what policy you need to select and go.

Remember these points: Cover all your family members with family floater, select the best insurer with excellent service record, opt cashless plan with networked hospitals, contact various insurers to identify the features as well as the cheap premium availability. Even if you have an employer sponsored health policy, it is better to select your own policy to meet any requirements that happening between the period of leaving a job and getting another one. You should be asked and well aware about the possible discounts on future premiums in case of no claim.

3. Accident insurance: Here, I have to crack a myth, most people considering that, subscribing an accident policy only helpful to those who have a vehicle and any possible accidents that can happen in the road. That is not true. An accident policy not only intended to deal with road accidents but, any kind of accident that can harm your physic, whether it is visible or not visible, can be covered under this policy. You have option to choose cover for death, partial disability, total disability both temporary and permanent depends on your requirement.

Remember to contact multiple insurers to identify the best available policy in the market in the sense of maximum facilities as well as product features. Select all required covers depends on your needs and pay premium as per that. Many policies have option to add or avoid any categories later depends on your future requirements. Remember to cross verify your policy certificates once after receiving the same.

4. Motor insurance: If you have a vehicle, it is highly recommend selecting a proper motor insurance coverage. Such policy should include third party liability cover to protect you from any incidents that cost large money from your pocket. Compare with any policies mentioned above, this is the only policy required proper negotiations to get right premium and facilities. Prior to select a company, you are required to contact multiple vendors to identify the best in the sense of policy features as well as cheap premium. Remember, motor policies providing a facility to transfer your no-claim bonus to a new vehicle. Remember, the premium of this policy entirely depends on the age of driver, his back ground and the age of vehicle. You can negotiate for a possible discount without compromising any added features or clauses.

5. Home Insurance: Your home probably your big investment in life. If you had owned a new home, it is better to protect with proper home insurance policies. Remember, a home policy not only protecting the home from any events like natural calamities or earthquakes but, you can even select protection from burglary, protection of valuables, electronic items or any other consumer durables. Contacting various home insurers will give you exact idea on various features available with such policies as well as the add-on features upon your additional requirements. You have an option to negotiate and get discount prices due to the competition on this space.

Understanding various independent features like Fire Protection policy and Householder package policies enable you to take wise decisions by adding all required features when choosing a home policy. You also highly required to compile a list of belongings to identify which all required to protect through a policy as well.

In general, it is important to have some preparations to identify your exact requirements prior to applying any or all of the above policies. You should know and well aware why you are doing such and how this will worth to you or your dependents. Well vision and preparation prior to applying any of these policies help you to select the best and add value to your money with little possible error on selection.

>> Read This Article...

Read more...

3 Required Investment and Financial Planning Qualities

About Sherin; My Twitter; My Facebook Page

IN this article, I intend to discuss the major 3 qualities any person required highly, when dealing with personal investment or personal financial planning. Absence of any or more of this can lead to confusion, trouble or failure of planning. These 3 qualities are ‘Focus, Quality and Patience’. Each of these connected well together. Another important factor is, all of these are soft qualities and not possible to attain through any class room training. Reading the success stories of legend investors like Warren Buffett or Philip Fisher will give you an exact idea of the requirement of adapting these qualities to life to attain successful investment and personal financial plan.

The first and important quality in this group is ‘Focus’. You can also call it as ‘goal’. Any action without a ‘focus’ or goal is useless and never produce required results. If you are investing in equities or planning your personal finance in a better way, the very first requirement is, having a focus or deciding the goal that need to be achieved. This is vital to justify any actions that to be taken time to time.

Second is ‘Quality’. Quality of an investment instrument means the power of producing desired returns for long time. To identify the quality of an investment instrument, an investor should do proper study and research to understand the durability and competitive advantage of the company, quality of management team and right price to purchase. In case you are planning your finance, the quality of the products you are selecting to meet your goal are vital.

Final quality mentioned in this article is ‘Patience’. Most of us are well aware about the requirement of patience. Specifically, if you are a value investor. Patience is the utmost quality each investor as well as the personnel who planning the personal finance should have. It is not a hidden truth, money required time to grow. To go with your focus and quality investments by over covering all the tempting situations like recessions and huge market crash or volatility, practicing ‘patience’ is most required. I have already posted an article on the requirement of patience and you access the same here for more reference.

Feel free to inform or comment if you have any doubts or queries on this article.

>> Read This Article...

Read more...

Convert Your Credit card Habit as a Money Source for Your Child

Here is a double edge sword. In this article, I am introducing a new idea of converting your credit card using habit as a very good money source of your kid to save with her piggy bank as well as limit the use of the dangerous habit of credit card to help you to escape from huge debts that can trash your financial planning for life in a huge way. Practicing this method will give you multiple benefits. Firstly, you can build a money saving habit with your kid. Secondly, this will help you to build a hidden savings over long period of time. Finally, it will help you to reduce the habit of using credit cards all the time and escape from huge debts. Have a look and practice if you are a credit card animal with less self control to prevent using the same.

With a regular practice of starting such article with my own experience, I personally hate credit cards and don’t have a habit of using any kind of credit cards. I am not keeping or interested to keep one as my own. I don’t believe or never interested to keep a credit card for any ‘Emergency purpose’. As I wrote with my various articles earlier, if you have a stable, enough “emergency fund” or any parallel arrangements to meet all the critical money required situations that happening to you and dependents then, what is the importance of keeping a credit card as your ‘emergency purpose’ friend?

I hate using any credit cards because of various reasons. It is a plastic piece that can lead you to control less spending and transform to a victim of huge debt. As a person totally dedicated to create a well structured and foolproof financial planning for life and adviser of the same to my readers, I am totally against to this plastic piece. In my previous articles on financial planning, I have clearly mentioned the requirement of paying off the debts that largely coming from control less credit card usage and personal loans.

I have personal fear on any possible misuse of my lost credit cards, if such happens. Like any other facilities, credit cards are very open and anyone can use without producing any ownership proof or security pin. You have a facility to inform the same to the customer care to block, but a short time between losing your credit card and reporting it to block is enough to drag you to huge debt if it is reaching to a wrong place. Why should I take such risks? Better don’t own and be safe and relax.

We are coming back to our points. I am well aware the requirements of keeping a credit card instead of keeping bulk money in your pocket. Let me introduce you some well studied, practical methods to convert your credit card usage as a source of money for your kid to save with her piggy bank.

To practice this strategy, present a piggy bank to your kid and have proper mind-set yourself with promptness in action with punctuality.

• Whenever using a credit card to purchase, immediately calculate 5 percentage of the total purchase value and contribute an amount same to that value, to your kid’s piggy bank. OR

• Whenever purchasing anything using credit card, give 5% of each 100 bucks that you are spending, to kid’s piggy bank.

• If you are repaying credit card debt as EMI’s, calculate the interest you are paying with each EMI. Give an equal sum of such interest amount to your kid for piggy bank.

• If you ever repay your credit debt late with interest, give an equal amount of such acquired interest to you kid.

• Whenever you buy an item that is not for the common purpose of your home members, contribute 15% of the value of such item to your kid’s piggy bank.

There are several methods available in such kind, if you put little thoughts. I am sure if you follow this method, it will automatically add control to your credit card using habits and any unnecessary spending occurred due to such habit. Also, this will give an opportunity to your kid to save money as well as getting a huge savings in the end of each year to use for good purposes like investing for your kids or buying things like gold, that have growing resale value. Think practically.

Hope you have liked the article and I wish to hear from you frequently. Any comments on any missing points or additions to this article highly appreciated.

>> Read This Article...

Read more...

Build Wealth from Your Shopping Habit

Entirely different idea isn’t it? But you can’t hide any truth. Yes, we can build enormous wealth by utilizing your shopping habit. I would let you know how a shopping animal can save money little by little to build considerable savings over long time. Money always required time to grow because of its nature of gradual growth. I would like to share a very simple idea, known as ‘controls’, to your shopping action to intelligently make a huge savings. This will not only help you to create wealth over long term but it also will be helpful to teach your kids about money savings habits. Remember, my intention is not advise you to reduce your shopping or stop buying any items. But, here are some practical methods that you can practice while shopping. If you have money, you can shop as you wish at any time and anywhere. I am not the person to say you 'No' to shop or reduce shopping. Enjoy maximum shopping and practice this simple saving.

If I speak personally, I am practicing this habit for long time, more than years, and highly succeeded with idea and goal of saving money from my shopping habit. I have not reduced anything or avoid shopping to save money. But, I have shopped frequently whenever I thought and bought whatever I want over the time. But, I practically used the below ‘controls’ without any failure. It gave me lots of money as savings, with this simple and interesting habit. I can also inform you the daily shopping and associated savings are my major hobbies now. Little joke: If you don’t have a habit of shopping, I am not telling you to start shopping as a habit by today to build savings habit from shopping. You have lots of other methods to save.

Here is my personal ‘controls’ for day to day shopping. The primary criteria to start this habit is, understand the difference of “need” and “want”. Any item that is necessary for your survival should fall under ‘need’ category and items that can be a part of luxury or posh should go to ‘want’ category.

• Whenever you are planning to shop for anything that is in a ‘need’ category, prefer any shops that providing discounts. Compare the original price with the discounted price. Add that savings to your savings box or a separate account. For example, if I need an item and its original price is 100 bucks. If I am getting the same with a discounted price of 95 bucks from another store, I am saving 5 bucks on that purchased. Those 5 bucks should deposit to my saving box or account.

• When purchasing any item that falling to the ‘want’ category such as electronics, periodicals, furniture, CD’s, dress material, gifts etc., check with all possible stores near by you to identify the best discounted price. If you got a best price, buy the item and identify your savings compare with its offered price you have seen with other shops. Deposit that saved amount to your savings box. For example, if you want a music system and found the price of the same is 450 bucks in one store, 445 in other. Finally you got it in a price of 430; compare the highest asked price of 450 with your given 430 bucks. You have a savings of 20 bucks. Deposit these 20 bucks to your savings box or account.

• When you going to shop for purchasing large number of items like food materials etc., always select a reputed retail shop that giving considerable discounts on each item. When getting your bill, have a look on the section ‘the amount you saved in this bill or purchase’ if there, or the received discount on each item. Calculate that total discount you got from this purchase, deposit that amount to your savings box or account.

• Always prefer to NOT buy any electronic item that is newly launching in the market with lots of features. You should have enough patience to not jumping into any pre-launching offers or any surprising features the product offers. As it is an electronic item, a symbol of posh and luxury, wait for some weeks to get any news of launching another version of the product from the same company or a competitor. This will cause a sharp fall in price with present produce and you can purchase the same at that time from the company outlet. Once purchased, compare the given price with the price offered at the time of launching this product. Deposit that discount to your savings box or account.

• Always prefer to deposit a percentage of each 100 bucks that you are spending whenever you shop. Depositing 5 % of each 100 bucks is a good practice you can follow.

Above are some possible methods to save money along with your shopping habit. The major advantage of this system is, it is not forcing you to stop or control your shopping habit or not forcing you to not buy any items or reduce the quantity. Punctuality is the only requisite to follow this system. Any action to calculate and deposit your saved amounts to the savings box should complete time to time without any failure. It is better to appoint your kid to take care of this after you reach to home from shopping center. They will do it properly and regularly.

As a bonus, never dip to such created savings. You can later use this amount for investing purpose or any other good use.

Each person should have similar ideas to share with others to save money by not harm any action, interest or time of the readers. Narrating such ideas here will be mutually beneficial for you as well as the readers. I strongly recommend you to comment here with any idea you have, for the benefit of the readers. Also, feel free to comment on this article to point out any mistakes, any required additions, adding any more points etc.

Hope you have enjoyed this article and it will be beneficial for you to save your money in a better way.

>> Read This Article...

Read more...

How I Raised Money to Purchase My First Stock

Here is a little biographic article for those who always complain that they had no money to invest after meeting the regular expenses. I like to let you know the method I have used to raise money to purchase my first set of shares about 15 years back when I was rarely had good, permanent job and good salary. Those who went through my previous articles or a regular visitor of this blog might know that I have a habit of piggy bank savings from quiet long time as well as a direct equity investor. I have collected reasonably well amount with my piggy bank habits. When my time came to purchase first set of shares, I was not interested to dip to my piggy bank savings but, used my own simple methods to raise required amount to trigger my first purchase.

As I was searching for a right job about 15 years back, I have worked with various firms in very small positions. I rarely got good salary to meet my day to day expenses. By the born interest of share trading, I managed some amounts to purchase my first 10 shares of a well known company.

Below are the methods I have used to raise the required amount for this purchase.

• I never borrowed any money from anybody. Instead I used my own simple methods to purchase the shares

• When I was getting salary, I used to keep 10% of the amount in a separate box. Of course this was very little at that time. I have used a separate box because, the bank savings accounts was costly at that time.

• When I was spending 100 bucks at any time, I saved 10% of the same, which is 10 bucks, to my special box.

• When I was withdrawing 1000 bucks from the bank each time, even though it was very rare, I have managed to put 10% of the same to my savings box.

• When I was smoking, I never forgot to deposit 1 buck to my box each time.

• The money I was rarely getting as any present from my relatives or friends was directly going to the box.

• The surplus coins I was getting at the end of each days bus journey to and from my workplace also deposited to the box.

I am happy to say that I have not spoiled any chance to deposit coins to my box; it was totally separate from my piggy bank. After a year, I have surprised by seeing the amount I have collected with my special purpose box and it was little less to buy 20 shares of my intended company, a company I have studied on for long time before purchasing there shares, So, I thought I will take the balance from my piggy bank account and later I will add the amount to it. Thus I got the balance required amount from the piggy bank and kept in my hand very safely (This was the first and last time I have touched the savings I have made through piggy bank).

From that point, I was really waiting to get the time to come for purchasing shares. It took really long time of more than 9 months to purchase the shares of the intended company with the right price. Finally I got it. With my pleasure, I am still holding these shares which already raised 3500% in its value. I have later purchased shares of various companies but, I still love the shares that I purchased as first, with my hard earned money, and are my most favorite in my stock portfolio.

These shares later multiplied number of times through bonus issues and splits. An interesting factor is the dividends. The dividends I have got till today is nearly 6 times of the amount I have originally paid to purchase these shares at that time.

I forgot to say the story of the money I have taken back from my piggy bank to fulfill the balance required amount. I have added that money back to the piggy bank after 5 years. But, the amount I have added is just double of the original amount I have taken to purchase my first shares.

Remember famous English proverb, “Where there’s a will, there’s a way”. If you have a true will, there is not only a single way but, you have multiple ways. My experience is a best example for that.

Hope you have liked this article. Feel free to share your thoughts on this article. Any comments on the same shall be highly appreciated.

>> Read This Article...

Read more...

Invest from your bad habits

Here is a special article for those who don’t have money to save and invest for future because of any bad habits they have. Using this simple methods help such person to find money from your bad habits itself (if they still not interested to leave such habit) using simple controls and save for better future. In many ways it will be useful to them in the future. At least they can use such savings for the treatments that required later for any illness they acquiring from the bad habits they have.

it is not the time to laugh. If you take little care and least required self control, you can save money enough from a bad habit, that you already have, to save the same for future. I am not insisting anyone to stop there present habits but, informing them how one can add some kind of control to turn such habits to collect little pennies regularly to a huge savings.

Here are some best methods that can follow by any person who have some kind of money losing bad habits and interested to save some money for future but, not willing to leave the habit.

• If you have a regular habit of drinking or smoking or any other, make a strong decision to avoid the same at least a day or half of a day in a week. If you are a smoker, decide to not smoke in any one day or half day of a week. Calculate your profit from not smoking in a day or half, deposit the same to a safe place. Like a piggy bank or a savings account.

• Decide to not have your habit in the days that is important to you and family. Like birthday of your family member(s), children(s) etc.. you can also take this decision to any important occasions like Easter, Christmas etc.. Deposit such amount saved, to the account or piggy bank.

• Add 5 dollars to your savings for each 100 dollar that you withdrawing from the ATM each time.

• Add a minimum of 5 dollars to your savings each time when you use your card to purchase cigarettes or liquor or any materials that belongs to your bad habit.

• Add a minimum of 10 dollars to your savings when you conduct parties with your friends who has similar habits.

• Fine yourself by adding 10 dollars to your savings at any time if you feel guilty with your habits. For example, you are smoking a cigarette now and after throwing the butt, you have a feeling that you could have the same after some time, fine yourself by adding 5 or 10 dollars to your savings.

• Identify possible methods like this to add money little by little to your account.

Never dip into this savings. This should be most valuable to you because you have build this when spoiling your life, spirit as well as the future of family. So use it only for good future purpose.

If you follow this process for next one year without dipping to the saving, you will be amazed the amount that have in your piggy bank or the savings account. You can use this to open an online trading account to buy and hold shares of companies that falling under the “competitive advantages and durable business” as per the legend investor Warren Buffett. Once done, sit back and relax then look how your money is growing.

If you really liked this article, feel free to comment here. If you have any similar idea and feel the same will add value to this article, please feel free to narrate here.

Thanks for reading.

>> Read This Article...

Read more...

5 practical child savings ideas

Savings for a kid is a major “Need” for parents. Early savings helps them to get enough finance for the future requirements of their kid for higher study, marriage etc.. Here are 5 well researched practical tips for parents to save money for kid as well as build a savings habit to their kid.

o Present her a cute piggy bank: Present her a small piggy bank to start collecting and putting coins into it. The ideal age to start such is 2 years. This will give her a habit of collecting coins if she saw sitting somewhere. You can give small currency notes as well. Give coins and currencies regularly. This will make her savings habit.

o Open a savings bank account in her name: This is for depositing the money she is collecting using her piggy bank. You can take her to the bank when depositing the money as well. Let her have awareness of bank deals. A required care is, select an account that have compounding interest as well as lock in period for 15 years or more. Or you will tempt to take money from this account when small requirements arise. A classic approach is, add little amount in it when you have happy moments in your family.

o Start a SIP (Systematic Investment Plan) with an index fund: Have a monthly contribution of minimum amount with a good Index fund subscription. Subscribe it as long as possible using Systematic Investment Plan (SIP) or using Dollar Cost Average (DCA) method. This will not only give the benefit of growing your money with economy and compounding basis but also, will be enough to meet all her future requirements.

o Open a trading account: Open a trading account in her name and buy shares of one company in a year. Try to buy the companies using the Buffett theory by identifying the golden stocks from various companies. Hold the same for long years. This is a best option to grow the money along with your kid grows.

o Apply for a children’s ULIP: This is a best approach to have a long term investment profit. Apply for a good children’s Unit Linked Insurance Plan by considering its low costs, high fund performance etc. Always start ULIP with waiver options to ensure the premiums will not stop in case of any sudden demise of her parents. If you select this option, company will pay the rest premium from the time of the death of parent who is the guardian for kid.

I am sure the above points will work better than any other plan you decided to have for your kid.

Please comment to let me know if you have any other better ideas that you required me to add with this article. Through your comment, I can understand the acceptance of these ideas. Please do it as much as possible and without any hesitations.

You also welcome to start a discussion on this article if willing.

>> Read This Article...

Read more...

Financial resolutions for year 2009

Welcome New Year 2009. A time to forget all those bad happened in previous year and go with new hope and plan. Here are some financial resolutions for late comers. Of course, any proper action by follow this article raise your financial status to safe side at the end of this year. Think right away and go ahead with right move.

Below are the points to identify your present status and required action to resolve the issues you have with each segments:

• What is your present financial status: Identify your present financial status. Do you good job and enough money to save? If yes, did you saved enough? Have a self check to understand whether you had saved enough money for you, your family and for your kids. If not, identify how you lost your money. Plan to not happen those mistakes in this year.

• Do you have a proper budget? If you have one, analyze to understand the success of your budget or take necessary steps to give more quality to your budget. If you don’t have a budget, prepare one to understand the flow of your money. This will help you to identify the sources where you are spending money unnecessarily to make yourself and your dependents poor.

• What is your debt status? Identify the loans and other debts you have. Prepare a checklist and plan necessary actions to avoid your bad debts as early as possible before starting any investments or savings. Immediately pay-off credit card and personal loan first. Have a clear idea to control the use of your credit card.

• What are your insurance needs? There are 5 insurance requirements to a person if he is the bread winner of a family. Term Insurance, health insurance, accident insurance, motor insurance, home insurance. Identify what all are the covers you required. Remember to calculate the same with the status of your family member etc.. keep visiting this blog for more information on all the mentioned 5 insurance policies and when a person required these. My next article is on the same.

• How to plan for your kids’ future? If you have children, this is an important point you have to consider in this year. There are classic strategies that you can follow to bring your kids future bright and enhancing. You can dig further in this blog to get excellent articles on child investments and child planning.

• What about the retirement life? This is another section you should take well care of. If you have not start any plan for your retirement life yet, should start one as early as possible. Find excellent articles in this blog under the label of financial planning.

Above mentioned 6 points required your attention and self check to understand your present status. As I have only mentioned the required points, you required to dig more with this blog and visit continuously to get new ideas to understand how to plan and execute to achieve each of this. I ensure that, this blog has enough well written articles on each of the above points because of its neat dedication to investing and financial planning. Hope to see you here always.

Comment or use the contact form to contact if you have any doubts or have an idea to me to add with this article.

Wish you and family a very happy and prosperous new year.

>> Read This Article...

Read more...

Planning for retirement

All of us thinking to have a hassle free retirement life without being burden to any one. To have this, you should be financially well secured. Some early planning will help you to achieve these goals. Here are some important points you should always keep in mind to have a free, independent retirement life. Read further.

Retirement plan is not a single step process. It has lots of early planning and action involved. Go through each of these points and you will be able to understand each of this and act well.

• Plan early. You should have well plan on the retirement year. It should have in the age of 50 or 60 depends on individual. The importance of a plan on your retirement age help you to start your savings and investments early as possible as well as get an idea about the money required each month to save for invest.

• An investment for retirement life should start as early as possible once after you decide the retirement age. If you are starting your investment for the retirement at the age of 25 or 30, the monthly amount required to save will be little. If you plan little later in the age of 40 or 45, your monthly savings should be higher and some time it will not be able to meet that investment amount requirement.

• Have your monthly budgeting to identify the required and unwanted expenses. This will help you to save more money to invest. You should be well aware about the needs and wants.

• Free from debt first. Identify the trap of debt. Prepare a plan to pay-off all your debts first, before start saving and investing for retirement. Control credit card and personal loans.

• Have realistic investment plan. Always choose a well balanced investment plan upon your risk taking capacity. You could have a well balanced portfolio depends on your age and need to be re-balanced upon your age. Below are the points when dealing with investment plan.

o Get the help of a well experienced financial adviser if you are not able to do you investment plan independently.

o Always prefer the investment instrument that has ability to grow your money along with economic growth and time. Read this article to identify such instruments easily.

o Carefully choose the debt instruments that giving the compounded interest than a flat interest like bank deposits and company deposits.

o You can select and Unit Linked Insurance Plan focused for retirement planning. Carefully choose one has advantages of well performing funds, low costs. Remember, retirement investment plan not required insurance and thus you will be free from mortality charges.

o Monitor and Re-balance your portfolio time to time depends on age. When you are investing with equities, you should have patience and the investment focus should be long term than short or mid terms.

o Do not touch that money: Never touch your investment instruments or dip into your retirement savings to meet temporary money requirements.

• Start the family floater medical policies at the early age and renew the same till you live in this earth. Starting the same early guard you to give huge premium later.

• You have to consider possible risks while saving and investing your money with the focus of retirement plan.

o Inflation: While calculating your future required amount for retire life, you should consider inflation and all the calculation should be fail proof with inflation adjusted numbers.

o Remember your investment in equities and debt instruments should meet the right proportion depends on your age. For example, if you starting the retirement savings and investments at the age of 30, the recommended portfolio proportion is 30 percent of money in the debt instruments and rest 70 percent in equities or equity related instruments. If you are near to the retirement age, say the age of 55, your proportion should be 90 percent in debt instruments and 120 percent in the equities. This calculation is little confusing, here is a well researched article says how this proportion can be achieved.

That’s all for now. There are lots of advices on retirement planning available in the net. You can see the gist of these articles is the same above. Have a well thoughts and related action always. You can have a very realistic and fantastic retirement life. Remember, you can only decide your own destiny.

Welcome all your comments and any supporting ideas.

>> Read This Article...

Read more...

Get an honor with the money maniac

What is ‘Get an Honor” concept?

“Get an Honor” is an innovative concept introduced by ‘The Money Maniac” blog. Through this initiative, I intend to honor my readers and their website or blog by appreciating them with new articles in this blog.

To get honored, what you need to do?

To get honored, reader required to do nothing. This is an automatic process and some time happening without the knowledge of a reader.

What is the process behind “Get an Honor”?

While reading your comments under any article in this blog, once if I found a true hint to write an article, this new article will start with the name of the person and will give a visible link to his blog or website.

What is the advantage for a reader by getting honored?

‘The Money Maniac’ is an elegant PR4 status blog. It’s traffic increasing day to day basis. An honored person will receive considerable visitors to his own site or blog by appearing his name in the beginning of an article with a link to his Blog/Website.

Do you have any example to show how a person gets honored?

Yes. You can have a look in this article to see how the article starts with the name of the person, who gave a hint to me, and a given link to his website. This is the best example to know how this concept works with eminent way.


"Make my day bright and happy. I will do the same for you in double"

>> Read This Article...

Read more...

Welcome to Money Hacker Guest Writers Page!

"Writing energy is like anything else. The more you put in, the more you get out" Richard Reeves

Thanks for selecting my blog to post your article. I appreciate that! I love all those who have interest to submit an article here, please read this page!

MoneyHacker - A fast growing Global Finance Blog with thousands of articles covers vital lessons in personal finance to several thousands of readers and subscribers. Claims fan base of 13k+, MoneyHacker blog presenting you an excellent opportunity to share your experience & business to a highly educated, focused community through posting high standard guest articles here. It also help you to build back links, attract good traffic, get potential customers/subscribers.

Visit post schedules if you have any preferred date

Topics:
Write on any financial subject you like. You can even write technology, self help, living tips too... (you can post any number of articles here)

A Guest Article Should Be:

• A unique, standard article. (Due to getting 'CopyCat' articles, will personally verify every articles. Also, I am working hard to increase the article quality and visibility of the blog. To ensure this, I have decided to accept articles those have good standard and something for our readers to learn and practice)
• Maximum 2 relevant links.
• Limit the Title to 29 characters if possible. (If the title is long, I will make it to a short SEO optimized one.)

• Include a byline that tells about the author

• An image for the article, but not necessary. (If send an image, make sure it is a free to use and circulate)

3 steps of posting

1. Once I received an article, you will get a confirmation mail. Your article posting date get updated in my schedule availability page (you can even choose and inform a preferred date if you wish to do so)
2. Once posted, the sender will get notified with the article link. Ensure to verify there are no posting errors and desired links are working fine
3. Finally, name of author and link to the article get listed to this page.


I have started another blog named moneywithmoney.net. If you would like a guest article to this blog, visit the Guest Writers Page

No fee for posting guest articles. If you want me to give something, please like my FaceBook Fan page .+

-------------------------------------------------------------------------------------------------------------------------------
Send your articles to me at investinternals@gmail.com
My GTalk ID: investinternals
-------------------------------------------------------------------------------------------------------------------------------

Guest Writers till Today :

Wystan North Deborah Dera Sarah Washington Raine Parker Maria Rainier Bailey Harris Paul Maher Cesar Zambrano Emma Martin Wendy Lau Kate Willson David Olivia Coleman Chris Foley Sachin Gunter Jameson Eleanor Whitelee Ivan Harrison Angelita Williams Justin Teo Mirsad Jena Ellis Kathleen Macky Robert Sommers Go Banking Rates Elizabeth Flanagan David Martin Sarah Jennings JD Withrow Don Adrienne Carlson Stacey Cavanagh Debbie Brown Cole Sileven Steven Hart Paul Roberts Trisha Wagner creditcardsassistance.com Asav Patel Emily Steve Sildon Ingrid Devatova Bashir Philip Jonathan Scott Artichoke	D.J Raymond Cole Sileven Adrienne Carlson Elizabeth Flanagan Tom Tessin The Digerati Life David Brown Olivia Coleman Justin Hammonds LifeBroker - Australia Jamie Davis Karen Schweitzer Angela Tyler Rick Glaser Ally T Mark Shaw Mariana Ashley Kristen Bradley Alexis Bonari Ed O'Brien Marc Chase Brian Jenkins Ronen Vikki Karen Schweitzer Anthony Benedict Michael Mannuel Donna Reish Mike Brains Mark Tye Nadia Jones Robert Branch Marcela Dias Sandra Roberts Brett Hillman Sanjay Kapadiaa Danny Ashton Chris Philip Claudia Brian Pamelia Brown James Forrest Kristy Ramires Matthew Donald Rick Walker Alex Simmonds	Alvina Lopez M Zahid Rafiq Jennifer Sunde Tippong P Susan Black Holly Miller Angie Picardo Jocelyn Anne Shing Mon Chung Julia Slovich Jo Lewis Noreen Ruth Darren Bradley Susan Wells Ben Joven Ben Joven1 Bobby Dee Elias Cortez Kristy Ramirez Angye M LifeLockPromotionCode.net AmericaOneUnsecured.com Jack Photon M. Garcia Katei Cranford Andrew Hunter Odysseas Papadimitriou Aaron Garcia Zach Ramsay Darrell Rigley Ben Joven2 Richard Keane Hannah Daniel Zach Ramsay Ryan Sandberg Eric Graves Amanda Revie Stella Walker Bobby Dee1 Chris Spann Ryan Sandberg1 Mike Brains1 Sam Butterworth Denise Mancini
Andrew Black Marcos Garza Bob Underwood Ayo Adam Jocelyn Anne Ramalingam Ramalingam1 Lorne S. Marr Simon Drew Julia Kukiewicz Noreen Ruth1 Moneyedup.com Alban Smith SmartCredit.com Ryan Sandberg2 Beth Montgomery Pat Singer James Vanessa Mackay Evan Fischer Lorianna Larsa Michaels Noreen Ruth2 Bob Hartzell Policy Expert James Cloe Smith Kim Reid Richard Keane2 Andreas Nicolaides Jay Dombroski Jane Smith Noreen (Finance Writer) Sarah James Muzammil Bashir1 Muzammil Bashir2 Sean Gray George G Kathleen Hubert	Harris Headley Evan Fischer Karen Schweitzer Abbott Shea Raj Mehra Brittany Lyons Aviva India Katheryn Rivas Nisha Sharma Sabrina Jackson Phill Robert Cyne Biljana Dimovska Shannen Doherty James Lander Shirley Jones eZonomics Team Karen Schweitzer-1 Noreen Ruth Noreen Ruth-1 Noreen-2 Scott Hersh Jag Sandher Life Insurance Quotes-UK Eliza Morgan Matt Robinson Vic Lancer Tino Sundin

>> Read This Article...

Read more...