April 2010 | Moneyhacker

Role of Family Members to Family Financial Planning Process

Article written by Sherin Dev; Follow me on Twitter or Subscribe to articles

This is an article set to understand the "role of family members to the financial planning" process. Through this article, I intend to reveals the core factors of financial planning success through the participation of each family member by giving right contributions. Various financial planning articles in this blog already informed the must requirements of participating family members to the financial planning process to get better and sharp ideas when work as a team for the success of it.

There are financial advisers who provide financial planning service for clients. I have no idea, how many of them aware and insist to their clients to the requirements of participating their family members to the financial planning process. A wise financial plan never fails to discuss and get possible ideas from all the members in a family, to achieve the task as a huge success. Without participating members in a family, I strongly feel the financial planning process would not be completed or produce required results. This short article reveals possible roles each member in a family can contribute to your family financial planning.

Before reaching to the main point in this article, readers should know different areas of a good family financial plan. Here are those points to have a quick scan:

It is up to you to decide how your family members participate and contribute to the success of above sections. It is not possible by anyone to completely do family financial planning alone by meet all the above criteria’s and without participation from family members. Areas like goal settings, budgeting, money saving, additional income generation and financial education requires active participation from all the members in a family or it would fail to meet required goals. How can you involve your family members to these areas? To get a right answer, you should understand how and where your members able to contribute and to what areas. Here is a short suggestion from my experience to understand this idea in a better state.

1. Role of Family Head (It is you or the bread winner of family)

2. Spouse of the family head (Generally wife but some time husband too)

Spouse of family head have a very important role to the family financial planning process. A spouse could actively participate to the areas of money saving plan inside and outside the home, creating additional possible income by work part time or through small businesses, to support the main income stream of the family. This would be highly helpful if a family have huge debt and active debt management plan in place. Spouse could take the best part in the budgeting side of family financial plan as a total regulator by ensure the budget plan is intact.
3. Senior citizens in the family

I strongly feel the existence of senior citizen in our family would give us enormous security feel. They could probably the parents of family head or spouse. They generally have very good knowledge from long years of life experiences and have sharp ideas to support family financial plan. They can easily participate to the family financial planning by provide right direction and support to each of the process. As they have lots of time, they can also contribute to financial process steps through assess sharply. If educated, they would be the right personnel in your family to educate or mentor your kids to various subjects. Their experience can consider as a huge supportive factor to each and every step in a family financial plan.
4. Kids in a family

Intelligent people never avoid kids at the time of family budgeting. Parents should understand and allocate sufficient amount in each month to meet children’s needs. Thus, they should be an active participant at the time of budgeting discussions. Another important factor is, kids should grow with sufficient financial literacy and saving habits. They should aware where and how to save money inside and outside the home. Elders should support them by providing necessary training to bring their kids with financial knowledge and understand them the difference of ‘want’ and ‘need’. Kids should be wise to spend money and save maximum to support their parents.
There are other roles available to members in a family at the time of financial planning, as I said earlier, parents should understand how and where their involvement really required and that shouldn't be avoided.

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Understand the Hidden Traps in Investment World Through the Story of Monkeys

Article by Sherin Dev; Follow me on Twitter

Here is a funny yet meaningful story for investors to understand the traps and cheats associated to investment world. This is a simple story but passes a meaningful message to all. Some of us may have read this story earlier but I am not sure what moral they had received from it. At the end of this story, you will get the real moral of what it mean. Have a read:

"Once upon a time a man told a small village, “I will buy monkeys for $10 each.”

Since there were many monkeys in the forest, the villagers caught them and sold them to the man.

As the supply of monkeys diminished, the villagers’ efforts slowed, so the man offered them $20 each.

They renewed their efforts but the supply of monkeys diminished further, so he increased his price to $25.

Soon, no one could even find a monkey in the forest.

The man increased his price to $50, but announced, “Since I must go to the city on business, I authorize my assistant to buy monkeys on my behalf.”

As soon as his boss was gone, the assistant told the villagers, “My boss has collected lots of monkeys. I’ll sell them to you for $35 and then, when he returns, you can sell them to him for $50.”

The villagers rounded up all the money they could and bought as many monkeys as possible. Then they had monkeys everywhere…

… but they never saw the man or his assistant again."

Moral of the story in an investor perspective:

Investment is something that shouldn't happen by the word of any one. An investor should have enough commonsense to understand the real intention behind the word of people, news's and any kind of tips frequently circulating and available in the market. This story tells us the requirements of having our own research and study prior to make any investments than do the same by hear the word of brokers, tipsters, analysts. Such groups generally have have personal intentions to get money than make others wealthy. Have must required investor's qualities, commonsense, discipline and patience, to become an intelligent investor. Have your own study about anything and take your own decisions than hear the advices from the mouth of others.

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How to Spend Money Wisely - 10 Points to Build Intelligent Spending Habits

Article by Sherin Dev; Click to Subscribe articles or Follow me in Twitter!

Money! If take a self assessment on our money spending habits, most of us find we are not spending money, but wasting money unnecessarily by not considering the real facts on whether this spending is really worth or not. To save money by prevent wasting unnecessarily, all of us required to build our own set of rules and checklists to confirm no wastage happening prior to spend money for anything. Here are some real thoughts for that, I feel this would help us to think a moment to confirm our action before goes to the billing counter to pay for an item. More over that, these checklists intends to build our own money spending framework to prevent wastage and spend wisely.

Below, 10 questions to ask self before you purchase any item to ensure it worth to you.

1. Do I really 'need' it

Ask this question to understand whether a purchased item is a needed or just a wanted. A 'need' item is something that you may required always for your daily life. A 'want' is an item that you may purchase because of some kind of immediate attraction happened to that after the very next moment you saw it. It may or may not use regularly. You may have interested to the same for ever or sometime. Not sure. Generally people lose interest to a 'want' item after little time or days, thus the money spends on such comes as a big wastage. Before buying, identify whether the item is a needy one or thought to buy just because it attracted you.
2. Is something similar already there with me?

3. Does any used item works?

If we look around, we would find shops selling used items, factory defect items or online sites that sells second hand items. Most of the time, we would able to find a best item in these places. Once if you plan to buy any item, identify whether a used one works or not. Once OK, purchase the item from a secondary market by paying half the price or a new one.
4. How much I am going to use this item?

5. Can I afford it or fall to debt if buys?

In my personal life, I never purchase any item once if I don't have sufficient money to pay for that. Falling to debt due to purchasing any item is really pathetic. Avoid borrowing money to purchase anything. Remember the tyranny of credit card holders. Studies reveals that, credit card holders falling to huge debt due to careless spending. consider your financial status before purchase anything especially the one is costly.
6. Can I wait for little more time?

If you plan to purchase any electronics items, ask this question 5 times self. When introducing to market, most of the electronics items comes with huge price tags and later it would reduce to half or less when similar item introduced from same company or a competitor. There are lots of examples around us. When introduced iPod, the price tag was so huge but it decreased a lot after some time. Upset customers who bought the item when it launched, suite case against company thus apple given back their money. Wait for some time to understand what market tells about its quality and how company reducing its price after launching its renewed version.
7. Is this an item available from sources like friends, relatives, neighbors to meet the present requirement?

Decision to buy any item that is freely available from your friends, relatives or even neighbors, is a big wastage of money. Such item comes to use some time and buying as own to use rarely is foolishness. Get it from others to use and return back. If still want to purchase one, share money with your friends, relatives and neighbors to buy it as a common for all to use.
8. Is it seasonal?

Never purchase costly seasonal items. An example, a costly room heater comes to use only at the winter season and later would sit idly for months. This may cause damages to the item. Never purchase a seasonal item at the season instead, purchase it in advance before 2 or 3 months prior the season starts. for an example, refrigerators and coolers are not a best buy at the time of hot summer season.
9. Is there any resale value for it?

If you are purchasing an item that may not required after one or two years, it is a best practice, purchase an item that have high demand in the secondary markets. Electronic items, automotive etc. are best suitable to this kind.
10. Does this add more burden to my present budget?

If you have a good monthly budget, you may not need to ask this question prior to purchase anything. You might have kept aside enough amount to purchase your needed items for that month. If any requirement other than allocated amount, identify whether it can purchase in the next month or not. Allocate sufficient money to that monthly budget.
There would be lots of other ideas and questions to build intelligent spending habits. If you have one, share it as comment. If you found any of the above is impractical, inform my why you feel such.

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investing for kids

For the late comers, here is a group of eminent articles on the specified subject category. Click to read an appropriate one you are looking for. To read more about personal finance and investment category, visit the home page by clicking the home button above, right side of the blog title.

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Do You Plan to Invest in Stocks? Did You Check this Readiness Checklist?

Article written by Sherin Dev; Follow me in Twitter

A previous article in this blog titled how they lost their Rolls Royce in Wall Street? A Counsel on 20 Deadly Investment Mistakes, I have given a list of 20 investment mistakes. These are so deadly mistakes most frequently commits by investors around the world. I am so happy, my study and research finally ends up with such perfect list of common, but deadly mistakes.

In this article, you will find a list of must required preparation steps for any investor to understand prior to start investments in stocks. Once after, reading both articles, your mindset would be changed entirely by having all necessary information on the do's and don'ts succeed as a stock investor. Here it goes:

1. Self assessments to know stock investment readiness

Prior any plan to invest on direct stocks, have a proper self assessment to understand your readiness to invest on stocks directly. Note down your thoughts about stock market gains and losses. Identify why you think you are suitable to take direct stock investments and what are your fears related to stock markets. Have a deep look on your patience level and capacity to control panic driven activities. Once concluded, you will come with a final result to understand whether you are suitable to invest to the stock directly or not.
2. Set proper investment goals

Ask self, what lead you to the decision of making direct stock investments. Define your goals. Get answer to the question of why do you want to invest in stock market than other investment instruments that have capital guarantee. Understand the span of your goal. As stock market investment suitable to achieve only long term goals, may be an investor required to stay invested for more than 10 to 15 years, identify whether you are able to stay invested for long or not.
3. Understand asset allocation

An investment strategy that involves committing specific percentages of a portfolio to different asset types such as stocks, bonds, or money market instruments. The portfolio should be rebalanced periodically to maintain the target percentages.

4. Learn the basics of stocks and stock markets

Acquire sufficient knowledge in stocks and stock markets. What is a piece of stock meant to an investor, how stock markets works, who all connected to stock markets directly and indirectly, what are the risks and returns associated to stock investing etc. should be learned well. Without knowing the basics nothing goes to succeed.
5. Direct influencing factors to stock market

There are various factors plays major roles to the up and down nature of stock markets. Understand what are the major factors influences the stock market to make the investor rich or poor. Such knowledge highly helps to prepare early to take critical investment decisions and not lose any right opportunities. Understand the difference of macro and micro economic factors and how both influence companies.
6. Create an investment intellectual framework

Successful investor should acquire knowledge on how to select a good stock, when to buy it an when to sell. Use all possible, available sources for acquire knowledge. Read maximum about great investors, basic character and investment styles and finally create your own investment intellectual framework. An intellectual framework is nothing but a set of well defined investment rules for self to stick and follow. These are basically the well defined rules to select the type of businesses to invest, checklist to analyze the candidate, supported factors and time to invest, how much to buy and when to sell. Once have a fantastic intellectual framework, an investor should stick with it using extreme discipline.
7. Know the deadliest investment mistakes

20 deadly investment mistakes

8. Learn Diversification

A good investor should have a portfolio without over diversification and less diversification. Proper diversification requires knowing and studying more about it. Understand different sectors, different types of businesses, stocks like large cap, mid cap, small/micro cap, how much to invest on each sectors, companies with different sizes, all should come under consideration to get proper portfolio diversification.
9. Understand when to sell

Common Stocks and Uncommon Profit

10. Have a better self control

most required skills

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Qualified yet Bored? Successful Home Business Ideas for Housewives

Article written by Sherin Dev; Follow me on Twitter

Put a search term 'Home Business Ideas' in Google or Amazon, you will amaze with the results presenting from thousands of websites and books offering hundreds of ideas. I have browsed and a lot to identify some good, practical business ideas for housewives and woman, but found most of them are either not practical or required years of efforts to standardize! One another drawback on all articles and books I have found that, many of the business ideas mentioned there required either a particular skill as a professional or huge amount of time. I thought, I would write something innovative for housewives to earn real money by spending their free time innovatively.

I have asked to lots of housewives around my place to start a business, but generally getting replies of not know proper business to start. I am pretty sure, such women are either lazy to start anything or not interested to take initiatives and responsibility. It is impossible to hide a truth, behind each success there would be certain amount of efforts might have played major roles. We may get business ideas in paper, but to make it practical, of course some kind of efforts required. Below are some of the pre-thoughts before the selection of a home business as your own.

Passion - Passion plays major role to the success of any business. There is no wonder; any business that is a subject of your passion would get fast success. Before the selection of any business to start, a person should ask self whether the business is the one to which I am really passionate to or just committed by seeing it’s earning potentials or others success. As I have said earlier, ideas would be available anywhere, putting the same to reality is hard. For an example, If you plan to construct a house, naturally would have some thoughts and ideas about how the house would be both in inside and outside. Upon your ideas, a good engineer cans draw the plan. When reaching to the reality of constructing the house, we will find how much efforts required making the ideas to reality. Business is nothing different from this example. It required efforts, passion, dedication and strive to success!

Effort - Efforts can be anything. Even learning something that is into your passion framework also required considerable effort. Before entering to any home business, always keep in mind, it required considerable effort but at your free time. You should assess self to understand how much effort you can put into something that works for you in a better way. Once identified, pick a business that required the kind of effort you are able to put into.

Planning - Highest level of planning required to identify, set up and put a business to realistic. You may able to take the help of other members in the home or friends to assist you to in this step. Without proper planning and research, it is impossible to get good start up. Even if you get a good start-up, you may later lose the interest if you not have passionate to the business. If you passionate to the business, even there are possibility to meet failure if not putting adequate efforts. All these areas required right co-ordination through plan properly.

Above are the important facts one should consider before considering to start a home business. People have blessed with multiple skills, capabilities and passion. Those who identify such skills to practice it generally would get huge success. Here I would give you 4 excellent home business options for housewives and women to start. There are many and many part time jobs and business ideas available, but I preferred these three because it is the best suitable for women to start with moderate plan, effort and money.

1. Foreign Language Training

Hello women, do you know the power of having skills on a foreign language? Also, do you know the huge earning potentials and work flexibility when becoming a specialized foreign language teacher? If you are qualified enough and not doing anything, but the same time, want to learn something special then, this is your best friend and option. Learn a foreign language by getting trained by right instructors. Once done, it would come as your home business by opening your own language learning center in home or working part time as a highly paid language instructor in your area.
2. Play Home

Set up a play home. Major efforts required for the same would be getting necessary approvals, if required, from local authorities, but depends on the place and location where you are leaving and planning to set up the play home. Play home have huge potential for today’s world, as this is a business directly focusing to working parents who are always in search to find a suitable place to admit their little kids. If a housewife have enough time and love to kids, there wouldn’t be any other business opportunity better than setting up a play home.
3. Beauty Saloon

If you are beauty conscious, this business could the best option for you to set up in your home. If you have skills, there would not be any problem to get more and more customers.. To become a perfect beautician, one should have right interest, passion and should undergo for a good training. Once set up a beauty salon, a housewife gets engaged to flower arrangement business along with it to earn additional income.
4. Yoga and Meditation

When starting a yoga and meditation center at your home, you will become the part of one of the fast booming business in the world! To start a center, you need to get trained properly from qualified instructors. An interesting fact is, the course fee would be less and your health would be fine always. Never bother its course fee is less, but such center always get flooded with candidates! If your area already doesn’t have any such centers, you would be the only person going to decide about the fees for your trainings.
I feel above are the very best home business ideas for women and housewives. How do you feels with these ideas, let me know. If you have an idea better than above four, express it for others to know and start.

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How they lost their Rolls Royce in Wall Street? A Counsel on 20 Deadly Investment Mistakes

Article written by Sherin Dev. Follow me in Twitter

Warren Buffet once quoted, "Wall Street is the only place that people ride to work in a Rolls Royce to get advice from those who take the subway". Investors who able to understand the real inner meanings of this simple quote, would stop any investing activities immediatly and start to acquire real knowledge and wisdom to become a successful investor. Investment wisdom is not only acquiring necessory knowledge to make successful investment decisions, but also meant learn and avoid severe investment mistakes. Buffett's quote indirectly pointing it's fingures to the foolish investors who are really ignorant on what they are doing.

Let me ask, "Do you have any history of money loses from stock market investing?" or "Did you studied about all the common investment mistakes investors commit regularly while investing?" If your answer is 'negative to any of these questions, this article will solve your problem. Firstly, these are a well prepared list of top 20 common investment mistakes generally investors makes all over the world and a warning to avoid these mistakes when investing your money to stocks and stock markets. Secondly, if you have any history of money lose from stock investment you had made, I am sure, reading this list would help you to find the mistake you have been committed and caused money lose!

Here is the complete list of common investment mistakes:

1. Start investing without self assessment on readiness and right goals

2. Thinking and approaching stock market with full of greed to become super rich overnight.

3. Considering stock investment as a part time job or hobby or a place to test luck

4. Starts without acquiring proper knowledge on investing, stock market, risk and returns

5. Taking investment decisions with lack of knowledge on where, when, how much to invest

6. Investments on company stocks without studying about their business, management, financial status

7. Investment on companies with high debt, low or no Return on Equity, Negative Cash flow and operating in highly competitive sectors

8. Follows the activities of public, fellow traders, colleagues, big investors

9. Makes any investments on market rumors, analyst reports, hot tips, broker recommendations

10. Entering to the stock market as a short term trader, intraday trader, speculator

11. Investments without proper study, research, references on the business economics, market time and risk-return possibility

12. Not having necessary investor qualities of patience, prudence and having disadvantages like being panic on stock market volatility

13. Less diversification by putting huge money to a or two businesses or over diversification by investing little money to number of stocks

14. Investing on businesses that are unknown and/or investing on franchise model businesses, commodity businesses who have huge competitors, high debt and less or no returns

15. Panic selling of a good stock in a down market or buying a bad stock in an up market, by greed

16. Large investments on penny stocks and micro cap stocks

17. Making investments with borrowed money as loan from banks, financial institutions or from friends and relatives

18. Making investments relying on stock screener, charts, technical analysis data, candle sticks which doesn't able to expose the real fundamentals of a company than its past trading information and volatility

19. Not having proper knowledge on when to sell a good stock and when to throw a bad stock

20. Finally, forgetting the truth of ‘start investments early’, but makes investments largely just before the retirement.

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How MoneyHacker Feed an Orphan Kid from Reader Comments

"You may have received wealth from god's grace, enjoy it maximum, but don't forget to offer a small part to an orphan child raising her little hands towards you for some food to calm her hunger. Being in hunger is painful for an orphan kid when other kids get feed by parents" - The Money Hacker Personal Policy

Before reading this article, please have a look in the picture for a moment..

There are three most painful life statuses in the world. 1. A motherless childhood, 2. A losing young age (by diseases, in jail, disabilities etc) and finally, 3. Working for food and family at the old age, when it is the time to take rest. If we are not in any of these groups, we are highly blessed!

Charity - when practicing, this great tool will attach human directly to god! As a human, "I believe, charity would give peace and happiness to the soul than visiting holy places"!

My Charity Practices and How Can One Join with Me...

It is innovative, simple, but powerful. To be an active part of my charity initiatives, you don't need to spend any money from your pocket. But, should spend some moments in my blog and write worthy comments under any article/s you like.

Whenever do so, I will mark it in a separate space. At the end of each March, I will count and take money equal to the number of comment, from my received advertising fees. Remaining amount set by the charitable organization would add from my hand. It would then send to a trustworthy Charitable organization for the food, cloth and education of a kid in that year.

I believe, my biggest investments in life is charity!

Step where I am now:

1. Money Hacker Delivered First Cheque to Charity - 2011

"May all beings everywhere be happy and free and may the thoughts, words and actions of my own life contribute in some way to that happiness and to that freedom for all"

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Golden Rules to Become a Great Investor

Article by Sherin Dev; Follow me on Twitter

Investment world is vast and difficult to get right advices whenever an investor required. There are great investors like Warren Buffett, Philip Fisher and Benjamin Graham, but it is very difficult to rely on any information that claims these gurus have highly practiced. It may or may not happen, but solid evidences are less to believe it into total. If such situations, beginner investors required digging more to get right investment ideas and combine it to create their own intellectual framework to invest on stock market. Below you can find the most trusted investment advice each investor should know and practice to get great investment success in their career. It is not limited but, known as the most common and practices by all the great investors in the world. To understand these ideas, nothing required, but only commonsense.

1. Start investing early

Early investment ensures the capital growth to the maximum. It also help investors to protect himself by giving enough time in front of them to earn money in case of loses of total money. Solid reason any intelligent financial planners advice their clients to not invest big chunk of their retirement money to the stocks. Once if loses happens, a person near to the retirement gets very less time to make money again for the retirement purposes. As an investor, everyone should remember this evergreen rule, start investing early.

2. Invest for long term

There are no solid evidence available to know how long term investments turn an investor wealthy. But, it is understandable with common sense that, stock market trading is just like a gambling and long term investing with good company enable investors to take maximum advantages from the growth of the companies. High dividends, bonus shares, stock splits, all help investors money to grow to new heights if intelligently invest on good companies with long term perspective. Invest for long term thus consider as the golden rule for any type of investors.

3. Diversify your investments

Diversification plays major roles as it is the best and effective method to reduce investment risk. When diversifying, an investors spanning his money to multiple companies, sectors and businesses. Even if diversified, some situations like economic recessions would bring the company businesses down, but would not sustain forever. Situations like economic recessions, slowdown and market volatilities would happen time to time as it is the common factors to any economy and stock markets. An intelligent investor always aware of these natures and would invest properly allocating the fund to the right companies and sectors!

4. Best investment can be done by you

Yes that is the truth. You may find lots of stock recommendations everywhere, but ultimately your own pick would win over all of them. This is a little known truth to the investor community, but yes, the real fact. This is happening by putting enough care on the selection of stocks with your own money.

5. Beware of tipsters, analysts, brokers and self acting gurus

Take care on each of them. Never rely on hot stock pick news’s, stock tips, analyst reports or any such rumors that may recommend anything to investors to buy. Instead, buy stocks only after your own rigorous study and research on the authenticity. This is an investment truth much people not aware and one of the major point where people losing lots of money in the stock market.

6. Don't follow uncle Sam or imitate others

Remember, everyone have different style of thoughts and capacity. Never follow any person on what he is doing or the base of his past success. Instead, do investing as your own. Understand the risk profile of people may vary and this would cause heavy lose to the followers..

7. Don't be greedy

One of the major bottleneck with almost all the investors. Most of them entering to stock investment lead by greed by knowing how others make money. I am sure; this could later put them to deep trouble with total lose. Most of the people with investment desire to whom I met till today found with an intention to make money from stock market within a short period of less than 6 months. I generally advices them take lottery than investing on stocks. With such intention, they generally start stock trading or intraday trading. Finally, the market would become wealthy with their money within 6 months!

8. Learn necessary qualities of a good investor

At the very beginning as an investor, one should learn most required qualities to become a good investor. Patience, courage and prudence are some of the most required qualities to a good investor. A good investor never become panic or monitors his investments in each and every moment. In the same way, he would never buy or sell a stock is it the time is not right. Requirements of having and intellectual framework are must to stick on such most required qualities.

9. Never marry with stocks

Remember this golden advice always. Very less investors in the world really follow this rule. It is very important to understand when to sell stocks as when to buy them. A good investor should learn when to buy stocks and give same importance or more to learn when to sell stocks. If not knowing when to sell, an investor may suffer loses or miss possible profits.

10. Asset allocation models

Build your own asset allocation models. Divide capital to various investments like stocks, mutual funds, ETF's, Gold, Arts, Real Estates, Money Markets, Debt Funds, Fixed deposits etc.

11. Read, hear and watch

Reading good material would enhance your knowledge. Subscribe to good periodicals on investments, read the biographies and success stories of great investors, hear the interviews, watch the videos of them. This would give you with better ideas on the required steps to successfully invest your money to stocks.

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Personal Finance Strategies

I know, introducing my new readers to the most popular and worthwhile articles posted in Moneyhacker earlier would help to scan easily to read the best they look inside. Here is a set of article list that found as the most popular in this blog. Take a look.

picture: Milica Sekulic

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Retirement Strategies

Article by Sherin Dev; Follow me on Twitter

In this article, Money Hacker introduces you with necessary steps and tools to develop a fail proof retirement plan. Retirement always a big deal if you have not planned well in advance or it is smooth deal if plan well in advance. If you retire without careful planning, you may find yourself depressed, stressed or just plain bored. Here are some tips to help you plan for a happy retirement.

Plan your retirement early - Early retirement plan helps you to develop a right retirement strategy. It also helps to take maximum advantages from stock markets which always meant approaching for long time focus. An ideal retirement planning should start prior to 15 to 18 years from the date you have originally planned to retire.

How much required for your retirement - This is an important question one should ask self to plan a perfect retirement. To get a right answer to this question, one should start from identifying present living costs and required future capital with a perfect, inflation adjustment calculation. Once you have identified present living cost, future capital requirements can be determined by the use of PMT function in Excel. Another important point should come under consideration is, choosing a retirement location based on your likes and dislikes. Make a list of the things that you want to do in retirement and locate the area of the country or world that has the most things that you enjoy. Some people want to retire on a beach, some on a golf course, and some on a lake. You get to decide.

Budgeting - Budgeting is not only important when starts your retirement life but, it would be there in line always to get disciplined money management always. Once you have planned budgeting would do only after retirement, you are going to be a big loser because, and nothing will work if you have not made your life disciplined by having a right budget at the earliest.

Retirement saving - You have lots option to save money for retirement. As a best practice, start saving for retirement by hikes your contribution to the maximum to employer provident funds or 401k. You can even choose other available, guaranteed retirement plan offers from current and future employers. You can also save retirement money by kept some money aside by adding it as a plan in your monthly budget. Social Security should never be considered as a major source of your retirement income. Most financial experts will tell you that if things don't change within the next few years, your benefits will be greatly reduced and may not be available at all depending on when you plan to retire. That's why it's crucial to start planning now for your future. The more you know and the more you learn, the more prepared you'll be when you decide to call it quits.

Debt Management - Managing debt has an important role to bring your retirement plan to maximum success. Once should work to clear personal debts before taking an investment plan alive. There are number of excellent debt management article available here itself in this blog. Have a look. I am sure; it would help you in a better way to clear off all of your debts by working in a well structured way.

Investment Plan - Your next step is to work for a better investment plan. The best option for the beginners is through approaching a carefully selected financial planner. Develop an asset allocation strategy utilizing your risk tolerance profile as a guide. Decide what percentage of your investments will be spread out between various asset classes such as stocks, bonds and cash. More aggressive risk profiles will be weighted more heavily in stocks, whereas more conservative risk profiles will be weighted more heavily in bonds and cash. The percentage of stocks, bonds and cash that you hold will change over time. As you approach retirement, it may be appropriate to reduce your percentage of stocks and increase your percentage of bonds and cash.

Plan the Emergencies - There are certain must required plans should be in place when your retirement life starts. Once of the most important plan among them is to take necessary arrangement to meet uncertainties or emergencies. Choosing insurances that meet all the requirements would work better for you. Medical insurance for self and family, insurance for protecting assets, vehicles all would plan in a better way.

Reviewing plan - Review your chosen retirement plan investments at least annually to make sure that your investment options are still meeting your financial goals. As you age or experience changes in your marital status, family or career, you might want to adjust your financial goals and investment strategy.

Most people have aspirations of an early retirement. However, most people cannot or are unable to do what is necessary to achieve that goal. The key is to be realistic about your financial situation and understand that it takes a great deal of discipline to achieve such a goal. It all really boils down to how much effort you're willing to put into it. Good luck!

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