What is Inflation? How it affects our financial?

Government or other state financial authority often heard announcing the inflation rate of a certain period. For example, in the USA the inflation rate from Jan-Jul 2013 is average 1.6% (www.usinflationcalculator.com)..

Well, now the basic question is.. What is inflation? How it affects our personal finances? Is important to know the inflation rate? What should we do to deal with? What is inflation rate?

Based on common understanding of economic, inflation is a process of rising prices in general and continuously, caused by various factors. For example: increased consumption, excessive market liquidity, un-smooth distribution of goods. Also, it could be said that inflation is the decreasing process of currency value continuously. Simply put a can of coke. Ten years ago maybe only needs 10 or 15 cents for a can. Now maybe it needs around 70cents or even $1. The price continues to rise while the purchase value of money ($1) becomes lower and lower.

The rising price of goods, while our salary still fixed, the amount of money needed to buy the same product will be bigger. Thus, probably the amount of money that can be set aside for saving or investment for each month will be reduced.

Is important to know the inflation rate? YES, it is very important!

Knowing the inflation rate makes us become more aware of what is going on and what to do. For example, our country inflation rate is average 5% this year. Is the money we save or invest growing? I am afraid not! What should we do to deal with inflation?

After knowing the meaning of inflation, inflation rate, and its relationship with to our financial life, some important things to do are:

1.  Check our fund placement allocation.

2.  Diversity is important. Do not keep all money in just one financial product. (See Asset Allocation).

3.  Saving our money in saving product will only grow 1-2% per year. While in deposit probably could grow around 3-4% annually. In the meantime, inflation rate is average 5%.

4.  Find another financial product that can grow your money compete with inflation rate.

5. Change our dreams become goals. Clearly state your expected amount to reach, what is your financial goal, when to achieve it. This is because the price of our ‘dream’ will continue to change each year in line with inflation.

6.  Pursue your dream by raise money on the right product, so that dream can turn into reality.



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You've Got a Marketing Plan Down-Now What?

Whether your marketing process was the easy or difficult part of your business plan thus far is no matter. Your plan has finally been created, and you are hopefully on a path to financial success. What are the next steps you need to take? Read on to find out.

Funding 
To actually put your plans into play, you are likely going to need some funding for materials and supplies. Of course, if you are a well established business, this amount is probably already available in the budget. For entrepreneurs and small business owners, consider taking a little bit out of your personal savings account for start-up costs. Opting for a loan is another possibility, so you want to be sure you'll be able to pay it back.

Ads
While you were devising the marketing plans, you probably discussed a number of different possibilities for advertisements. At this point, you know the designs you want, and now is the time to put them into play. Bring them to the in-house designer. If such a person does not exist in your business, try to find some freelance workers, or consider bringing a designer on board the team. For individuals who are going into business for themselves, you may want to ask some family members or friends if anyone would be interested in joining in the endeavor.

Secure Your Platform
The most brilliant advertisement in the world will not attract a single customer if it spends all of its time bound up in a design studio. During the planning process, you probably decided where you would put your ads. For example, maybe you decided that a Facebook page would be your main form of communication with clients. While the advertisements are being worked on, start creating the Facebook page and adding pertinent details to it. If certain stores said you could put your ads in their business windows, call up to confirm and make arrangements to go down to the shop one day. You need to start getting the word out there as soon as possible.

Re-Evaluation
It's unlikely that the exact same marketing plan is going to work for every one. Customers change, and the most popular ways of marketing shift as well. A few months down the road, evaluate how the plan is currently going. Are you drawing in more customers, or would a new platform be more suitable to the type of products and services you are offering? Make the necessary adjustments, but do not let this be the end. You should always be critiquing your work and looking for ways to make it better. By doing so, you are opening up the doors to more business.

Creating the marketing plan is, of course, the first necessary step. After that, you must start to put this plan into play and begin gauging how successful it is. Throughout the life of the product or service, you will often be figuring out what you can do to make it even better for the consumer.



Guest post from Roger Bladeson
Roger Bladeson writes about his background in business, marketing and education. His most recent work focuses on the top ranked hr masters programs.

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Financial plan is important! Why?

Here is short article about financial planning.

Many financial planners suggest to every person or family to make a financial planning for life. But what is the reason? Well, here are three reasons why we should make a financial plan in our lives.

First reason is for yourself.
Everyone has a need to be met. For example, to shop, to live comfortably, take care of yourself, and others. Well, to fulfill all that needs, of course, we must have money. There have to be a financial planning.

Second, for the family.
We have relatives and family. Moreover, for those who are married and have children, of course, we have to provide funds for the education of children. When our children ask for toys, of course, we also have to have the money to buy the toys.

Third, for legacy.
In addition to yourself and family, we also need financial planning for our successors. Maybe later when we are not in a productive age, we need help from other people in our old age.

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5 things of financial health

There are 5 things could be used to identify your financial health:

1. You know how to treat money.
Family background shaped the way you look at money-including the habit of saving, investing and using money. When your parents love to invest, then surely you will also follow their footsteps. The more you know how to treat money, the more you do not depend on money.

2. Dare to take financial risks.
It does not necessarily mean that you have the courage to invest your money in large numbers on a new business. The definition of financial risk-taking can be a smart move to invest, such as buying a house or apartment as an investment and then sell or rent it, then you would have extra income.

3. Having an investment product, savings and credit card accounts.
In addition to having a saving account and a credit card you should also have a personal investment, such as mutual funds or in other areas that you are good. Not only you would have the flexibility to use your own money, it also indicates that you are financially independent person.
 

4. Having the collective and individual financial goals.
You should have collective financial goals as a couple, and as individual. Collective goal such as own a home and a car and pay off the mortgage in a couple of years agreed. While for your individual goal is such as buying the latest gadgets.

5. Understanding the basics of finance.
At least you have to understand the rules of the income tax, basics of medical insurance, pensions and interest rates. The more you master the financial problems, the more independent you are because you know what to do with your money.


[image taken from: mizan.com]

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Financial capability

Have you ever felt your salary is not enough even increased every year? Are you sometimes feeling disappointed because of you are not able to buy your desired products? Why does this situation come? There are two causes.

1. Limited salary.

Your salary is fixed every month, while your needs and wants are unlimited. For example, your salary is now 2000, you certainly cannot buy a house in installments where the monthly installment amounting to 3000.

If you want to force to buy a house, you have two choices; first, you have to look for additional income. Or the second way, you are looking for a house with smaller installments than your salary.

2. Expenses exceed the salary.

You already know that the amount of your salary is 2000. Then, you have to think and try hard to manage the salary to pay all cost of your needs and wants. Set aside 15% of your salary for future investment funds (Future First), the rest of it may be used to pay all expenses including the various debts that you have created.

Never spend money for the cost of living exceed your salary, due to a deficit that could deplete your savings or investments.

The main thing is how you live below your financial capability, maximum of 85% (because you have set aside 15% for independent and prosperous future).

Good luck!

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Are You Financially Healthy?

It is already 90 days since the New Year, what have you done to your finances? Evaluate the financial health is the most fundamental things you must do before investing.

Someone who is financially healthy, generally know the condition of assets and debts, able to always pay the mortgage debt on time, and know how to use the assets and cash flows to achieve life's wishes. How about you?

The easiest way to find out the financial health is to do a financial check-up. This process can be done alone or in consultation with a financial planner. You will be invited to recalculate the amount of assets and the amount of debt currently held. In addition, you will also be required to inform the amount of your income each month and where the money goes.

There are five areas you should look to determine how healthy your finances, and how close you are to achieve your life wishes.

First is the emergency fund. Every person shall have an emergency fund at least 3 times the monthly expenses.

This emergency fund should be in liquid form of assets and the value is not decreased, such as savings, deposits, and money market mutual funds. If you currently do not have an emergency fund, start setting aside 10% of income, until the ideal is achieved.

Second is debt. Summarize the minimum payment on all your debts. These include credit cards, car loans, housing loans, and other loans. Total payments of all your debt repayments should not exceed 35% of monthly income.

Do not forget to diversify

Third is pension funds. Prepare your future by starting to invest for retirement. Try to set aside 10% of income to the appropriate investment products for pension funds.

Fourth is insurance. Protect the asset value and economic value of your soul is very important. Evaluate your protection needs, and make sure you have insurance that is really needed by your family.

Fifth is wealth diversification. Having assets that spread across three different allocations is a wise thing. Combinations that must exist: a stable liquid assets (savings deposits), physical investment assets (precious metals, property), and investment asset in the stock market (mutual funds, government bonds, stock).

For each category, you can select one. Consider your financial goals, your current situation, and how much time you have to achieve your goals and wishes.

Financially healthy is the first step towards the financial freedom stage. Like the human body, the financial health must be achieved and maintained.

Live a beautiful life!

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5 Financial Priorities for young people

Priority means putting the primary needs in top priority compared to other needs. Usually these primary needs are precarious and cannot be postponed. In priority, most of young people still tend to be against the rules and want to prioritize what they want.

Hundreds of items, hang out places, socialite activities style, and all of which require money are usually on top of their shopping list. Instead of saving money, young people usually tend to spend money. Especially, for those who just have a job and can make money for the very first time.

Here are five priorities that should be implemented since the first time of young people to work or receive income:

1. Emergency funds
Collect the saving funds for some 3-6 times of your monthly income. The purpose is to anticipate the possibility of temporary interruption of income due to termination of employment. If young people can allocate 50% of his income to establish an emergency fund then within 6-12 months will reach its quota.

2. Funds for marriage
Collect the saving fund for 6-12 times of the monthly income. This is to anticipate the possibility of getting married at any time. If young people can allocate 50% of his income to establish a marriage fund then within 1-2 years will reach its quota. Do this after the emergency funds collected.

3. Home
Collect your earning for 24-36 times of your monthly earning. The goal is to pay a down payment and other costs. The assumption is that most people cannot afford the cash to his home, then take out a loan (mortgage) at banks. If young people can allocate 50% of his income for a house down payment, within 4-6 years will reach its quota.

4. Retirement
Follow a pension program that can debit your earning on a certain percentage of 5% -10% of income per month since the first time you work and continue until age of 55 years when you are entering retirement. Accumulation of these period will generate millions, even billions of dollars for your retirement living.

5.Health
Buy a health insurance-only if your company does not reimburse the cost or does not have any hospital care program. This is especially for professionals and businessmen who bear his own costs of health. Allocate 5% -10% of annual income to pay health insurance premiums.

By implementing the five priorities above, young man is automatically prepare his old age pension fund and to be able to anticipate the financial risks with emergency funds and health insurance. Inability of financial concerns that often lead to delays in marriage can be avoided.

(image taken from:ncbm.org)

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Prepare your retirement funds

After working hard for decades to make money, someone who enters retirement period will want to enjoy life in peace. Surely you would be happy if you can still be financially independent. Therefore, thinking and preparing for your retirement funds is essential.

The sooner you allocate your money for retirement funds, the amount of monthly installment payment would be smaller. But the collected funds are potentially bigger. You are also having the bigger opportunity to gain the compounding return (accumulated profits). So you should start planning to collect your retirement funds as soon as you work and earn income.

It is better for you to not only rely on the pension funds managed by the agency or company where you work for. It is because usually this pension funds agency only places the funds on a conservative investment instruments with low return.

Select the more aggressive investment product

In fact, preparing the retirement funds may need up to decades time of investment. A small return of investment probably will not cover the inflation. Therefore, you suggested to allocate yourself a retirement funds to the investment product with bigger potential return. On the other hand, do not need to worry about the investment risk because the long-range of investment can minimize the risk.

The amount of money to set aside for establishes this retirement fund is relative. There are many factors that affect, such as current salary, income expectations and future lifestyle at retirement, your investment character, and how much time you need to prepare this retirement funds.

Well, here are some investment tool you could use to establish and preparing your retirement funds.

Stock or equity mutual fund
There are at least two advantages to be gained from investing in stock mutual fund, the potential return of the stock price and ease of investing.

The potential return is large enough, can be up to 30% per year. But, there is risk of your investment may go down because of price fluctuations of stock in your portfolios.

Stock investment
Besides enjoying the rise in stock prices, investors can enjoy the company's net profits or dividends. However, it takes careful analysis to not select the wrong stocks. You can select stocks with good fundamental performance, such as large company stocks or blue chips.

However, blue chip stock prices, generally, expensive. So, you could buy the second-tier stocks that have the potential to have good long-term growth.

Bond
Bond with the long-term period over 15 years can also be an option. Just like stocks, you should keep this for long-term, even to its maturity.

You can gain a benefit of the coupons interest or price increases. To reduce risks, financial planners recommend that you choose the government bonds more than corporate bonds.

Property investment
Property can be a source of retirement funds. However, selling the property is the final choice. Except the price is not cheap, selling the property is not easy. So, it is better to rent out your property to get passive income.

The selection of the type and location of the property becomes a crucial factor because it determines the rate of price increases and rental demand.

Well, let us prepare our old age period.
Let us prepare the retirement funds! Make a better personal financial planning!

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7 Habits to Improve Personal Finance

Habits that you run every day will determine your future. No exception in financial condition. Try to observe your habits and how to manage money. If you are facing situation where you cannot enjoy your regular monthly income, having deficits in the end of each month, it's time for introspection.

Find out the cause of your ‘messy’ financial condition. You probably do not run a good financial habit. There are seven good financial habits of personal finance that could make you a positive person.

1. Saving.
Only by saving, your life can be more peaceful. You will be comfortable because your future spending is already on the savings.

2. Smart shopping.
You are aware of and had the habit of avoiding excessive spending. You simply shop according to your needs and budget. That way, you can save more so that there is enough excess money to invest.

3. Record all transaction.
This is a simple method that can be applied to anyone. The goal is in order to more easily control your spending. You can see more details of each financial turnaround. But do not just record it. Make this note as a reference to make changes and improve the bad financial planning.

4. Avoid debt.
Debt, especially consumer debt, is very high interest and burdensome. Credit card interest that you frequently use to shopping, for example three percent per month or 36 percent a year, is higher than deposits or even higher than capital market investment. Debt must be controlled to achieve good financial planning.

5. Controlling expenses.
Various ways can be done by keeping track of spending. For example, using the 'envelope system' that can help you limit spending and more disciplined. With the envelope system, you are "forced" to use funds already budgeted through the envelope system.

6. Maintain the financial security of families.
It can be done by applying the purchase of insurance such as life insurance and health insurance. Life insurance serves to protect families from losing their living source of income from a person who becomes a mainstay of the family when he died.

7. Investing.
There are many options to invest. You could buy precious gold metals, saving money on deposit, buy mutual funds and stocks. Each of investment tools has various advantages and disadvantages, and risks, so depending on your profile as an investor.

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5 Financial Planning Tips for a Widow

Acknowledged, it is not easy to decide a divorce. Many things must be considered, from the psychological, mentally, and also about financial. Especially for a woman as a wife who relies on the income of her husband during marriage.

Well, here are tips on managing finances for a woman who had just divorced.

1. Have your own source of income
After a divorce you need to have your own income, even if the court decides you will get allowance or any other money from ex-husband. Why? Quite simply because this benefit is generally a fixed amount, while the prices of goods and services out there are usually always go up every year.

Is that it? Any other reason? Prestige! You must show to your ex-husband that you also could be independent and not necessarily have to depend to him all the time. Is not it?

2. Prioritize Needs
Divorced is a sad moment. Eventually it is the time to you to rearrange your life.
When rearranging this, what you should do is to try to meet your basic needs first.

For example, if you do have your own source of income, do not directly used to buy your desires. Prioritize your needs first, then the rest, if any, use it to buy other things that you really want.

Remember that you recently divorced. Well, if you do not meet your needs first, while you've bought other things that are not necessarily need, you will lose your income quickly.

3. Look after your Insurance
The next thing you should do is to re-evaluate the insurance programs that you have taken. What needs to be changed? Or do you need to take a new one?

Consider if you need to take insurance on behalf of yourself with your child as beneficiary. It is suggested that you do not rely on the insurance program that had taken by your husband when your family is still intact.

4. Saving, saving, and saving
Remember that when you are recently divorced, many of you may not bring the wealth at all. Or, if there is the split of wealth, the amount may not much enough. In fact, anything can happen in the future. It could be you are not able to work and earn money, you could be laid off (if indeed you decide to work again), and so on.
This is important reason of why you have to saving.

5. Decide carefully when it is about financial problem
Now, you are alone. You are also as head of the family. Therefore, try to be careful of the financial decisions you take.

If you want to buy a car, think carefully about what the effect to your financial planning. If you decide to run a business, think also whether your business is really going to run well because if not running seriously, it will be bad consequences. So be careful.

Hopefully the above suggestions can help you to better manage your finances after a divorce.

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7 sources of wasted money

Without realizing it, we do every day waste. Identify the little things that could potentially spend the money in your pocket and could impact your personal financial planning.

1. Late of paying bills.
A fine with a small number of impressions is often neglected. But after a long time, it would be a lot of money. Try to always on time in paying electricity bills, telephone, internet, or your credit card. Use the calendar reminder feature on the phone, if you are forgetful type. If the bill is yet to come and bill deadline is near, you should contact the company to determine the amount of the bill, especially for credit cards. Late of payment means not only pay the penalty, but also have to pay the interest.

2. Nonsense purchase.
Sometimes when we buy clothes, actually we do not need it. We buy clothes just because the model is nice and new. Yet, in the end we only wear it once or twice only, or even never at all and just kept in the closet.

3. Too often to eat in restaurants.
This is a hidden waste that is not felt. It is not mean that you are prohibited to have eating out or having coffee with friends after work. But you have to know your limits and if it exceeds the monthly allocation, no other ways except compensate by reducing other expenditures. For example, try to occasionally bringing your own lunch from home, made by your wife or yourself.

4. ATM fees.
You often faced with a situation that there is no ATM of your bank and you have to withdraw money from ATM of other bank with charged. Don't get used to it. Try as much as possible to withdraw money at no cost. Learn the offers from your bank. Some banks offer free transactions with certain conditions.

5. Impulsive buying.
Discounts or credit card promotions are often the weak point of a woman when shopping. Promotion of buy one get one, extra discounts when shopping for a certain amount, or a special gift with special expenditures are often an irresistible offer. It sounds like a classic, but are you really need it? Imagine how many items in your closet that have not been used, even once.

6. Use a car for a short distance.
Go to the supermarket that is only two blocks from home would not need to use a car. Try to walk or ride a bicycle to get to a place that is still accessible and need affordable energy. Besides saving, you also help reduce pollution from car exhaust.

7. Waste of power.
Turn off electrical appliances or lights when not in use. This sounds trivial, but it will feel when you pay your electric bill.

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Financial tips for fresh graduate

After completing studies for four years, many hours studying until late at night, then it's time you face the real world. When you moved to the adult phase of life, make sure you are able to handle the financial situation.

While you are still young, you have to learn about money management. Here are financial tips for fresh graduate:

1. Make a health care coverage
When you are entering the workforce, your health care dependents of your parents will probably end up in line with your graduation. So you must need an individual health insurance plan.

2. Save money for the future
Try to join the pension plan at your workplace. If you are still young and the company offers the plan, take the chance. You also need to manage your savings before you have a lot of financial obligations such as children and home.

3. Allocate for emergency funds.
Allocate part of your new job salaries to build a saving account to serve the emergency fund.

4. Learn about tax.
Educate yourself about tax cuts make you aware of the tax bill.

5. Handle your credit cards wisely.
Use your credit cards carefully and always pay the balance on time each month.

6. Create a saving goal.
After you earn a salary, you need to make retrenchment. As a recent graduate you may want to focus on retirement planning or advance funds for a house.

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How to make safe investment?

Rise and fall in your investment value throughout 2011 surely provoke anxiety for many investors who had just started to put money into the capital markets as well as precious metals. Thus, one question that inevitably arise is "what is the most secure investment for me?"

Talking about risk, I am convinced, surely there is always a risk contained in every investment product. For all investment options, you will definitely be dealing with three types of risk: loss of capital, the difficulty of converting to cash, and the loss of purchasing power due to inflation. Among all three of these risks, I am sure most of the young investors or newbie investors will definitely put the risk of capital loss as the greatest risk.

To me, a safe investment must be adjusted to our financial goals. The term 'high risk, high return' should be changed to 'highest possible return with calculated risk'. We must look for an investment product that can produce the highest potential yield for all our financial goals.

First, for financial goal under a year period. Holiday fund for the preparation of Christmas 2012 is an example of short-time financial goal. For this, you cannot tolerate the risk of capital loss due to the arrival needs is certainly in the short term. Therefore, the choice of your investment is savings, deposits, and money market mutual funds.

Second, for the purpose of emergency funds. Emergency funds are only used for unexpected purposes, such as hospital costs, the cost of replacing damaged refrigerator, put into this category. The risk is that we cannot withdraw the investment cash immediately. It would be very scary. Bank saving account is the best place to store the emergency funds. The next option is a money market mutual funds because it can be withdrawn at any time without penalty. But for bank deposits, if you withdraw before its due date, it means you will pay a penalty.

Third, for the financial goal of above one year. College education fund for seven years old children, your pension fund, or funds to purchase a second home, are including into this category. You cannot still use savings or deposits for this purpose.

If your savings just give you 2% a year, while the inflation rate reached 6% a year, then you actually lose 4% of the money. So, although your initial money may be secured, you are losing the purchasing power more than half.

Looking for a balanced combination of financial planning for your financial goals is an art in making an investment portfolio that is "safe" for you. Whatever your life situation, I recommend that you save money on products that the risk of capital loss and liquidity risk is low, a minimum number of 3-month expenditures.

The more risky your job, due to unfavorable business situation or choice of working as a freelancer, then you should enlarge the amount of funds placed in this product.

Along with investing experience, you will understand the performance of various investment assets and risks that may occur. Most importantly, you still feel safe and comfortable in investing to achieve a prosperous life.

Live a beautiful life!

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Between Saving And Investment

It is better to know in advance the difference between saving and investing. Saving money means we put aside money without expecting an increase of the value of the money we save. By saving money in the bank, at least we know that the money would be safer than if we put it under the pillow. Indeed, if we see at a glance, a wide range of savings, the bank offers savings rate of 1-3% annually. However, if we look, every year, the prices of goods are always increasing with the percentage that far exceeds the interest savings that we get. If we are aware, we have reduced the actual cash value.

While if we invest, we expect an increase of the value of money over time, so it will give us benefits. The money is expected to deliver increased value of investment called an asset.

Types of Assets
In investing, where there are two kinds of assets, i.e. real assets and financial assets, which both can be considered as an investment vehicle in order to achieve your financial goals. In investing, you should remember that there are always risks of losing your money. Therefore, you must really know the assets which would you choose to invest.

Real Assets
Real assets are assets that have the form. For examples: land, houses, gold and other precious metals. This is a common investment way. For example, you buy a house, and then rent it so you get a monthly earning. When the house was finished hired and the price goes up, you can sell and earn profits. You will get many advantages of investing in real assets, because even if the price can go up and down, but in the long term will likely continue to rise in value.

Financial Assets
Financial asset is an asset that its form is not visible, but still has a very high value. Generally these assets are financial assets in the banking sector and also on the capital market (stock exchanges). Some examples of financial assets are money market instruments, bonds, stocks, and mutual funds.

Choosing the type of investment that suits your choice
Once you learn the types of investment above, then the steps you should do is figure out the benefits of any type of investment. Each type of investment has some special characteristics, namely the potential yield obtained, the level of investment risk, ideal investment period, and the amount of money needed.

For long-term needs, it would be great if you pick stocks and property that is the appropriate type of investment, because it provides the potential for high growth in investment return.

While bonds are appropriate investment for your medium-term needs because it gives you coupons periodically. Meanwhile, for the short-term investments, products such as bank saving is the most appropriate financial products.

Once you can understand the benefits of each type of investment, choose one that best suits your needs, the length of time and finances you have. In addition, you should also consider other criteria that make you confident to invest.

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Priority in Financial Planning

For those of you who have been through a financial crisis in 1998 and 2008 years ago as I was, definitely not going to deny that financial planning is increasingly important. But having a financial plan is not enough. More important, you must be precise in preparing the financial plan priorities.

Even if you have very identical plan tailored to the investment, in fact there are priorities that apply to all people in making the financial planning. What is it?
When making financial planning, we must start from the highest priority. Is it for investment? Of course not!

First, we must check and pay off our consumptive debt. Let us check out our list of debts, is there any credit card debt and unsecured credit debt? If there is, then pay off this debt with the money you have in savings.

If you like to pay credit card bills with a fixed amount, such as $500 per month, eliminate the habit. We must always pay off credit card usage, regardless of the number of bills.

Second, cash flow should be positive. This applies to monthly cash flow and annual cash flow. Household expenditure, utility bills, monthly expenditure, as well as personal shopping, must be paid from the monthly salary. While the holiday cost, land and building tax and other expenses should be paid from your bonus fund or holiday allowance.

Well, how to make the cash flow always in positive trend? It is easy! Do not let your expenditure bigger than your income!

Third, you must have an emergency fund. After our cash flow is positive, then the third priority is to have an emergency fund. When faced with unexpected needs or conditions, emergency fund will contribute a lot.

Well, to save an emergency fund, the product we choose must be a highly liquid product and low risk. Like it or not, the bank saving account is the best place to store your emergency funds. If the ideal target has been reached, you can store the excess money in money market mutual funds, bonds, or even gold investment.

Buying insurance products

Fourth, determine financial goals. The main essence of a financial plan is to have financial goals. The dreams are not financial goals. Investment is also not a financial goal, because the investment is one of strategy to achieve financial goals.

A goal must have a target cost, duration, and strategies to achieve. If not, that's just a work of literature.

Fifth, implement strategies in accordance with financial goals. Well, this part is a challenge for many people who trying to make their own financial plan. But it is not impossible. In fact, the product must be carefully selected in accordance with your risk profile, financial resources, time frame and the desired return target.

Before choosing a product, you must fill out the risk profile questionnaire. It is to find out whether you are a conservative (true saver), moderate (half saver, half investor), or an aggressive (high return seeker).

Sixth, purchase the insurance products tailored to your needs. There are many people have started to buy insurance product. But, there are very few people who know exactly what insurance they bought. Insurance needs also should be a priority because we may not have the ability to pay premiums ideally. The order of compulsory insurance is life insurance, health insurance and general insurance.

Insurance is not an investment! You must fulfill the income-protection needs with insurance, and meet the need to achieve targeted balance with investment.

Every person must be able to have financial planning. By using the right priority, life is more beautiful and prosperous as desired would be more quickly realized.

But the plan is not enough. We need real action. Care about yourself and your family by providing the best for life. Live a Beautiful Life!

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Are you ready to retire?

Retirement may be the longest time in your life without having a job and a fixed income. Retirement planning is a little more complicated because the success of your plan depends not only on how the balance of pension funds accumulated, but also how much you use the money each year during your retirement.

The first step is decided when you want to retire. For those who are working as an employee, aged 45-55 years could be an option. Whereas if you are an entrepreneur or professional workers, you may stop working directly in the age of 60-65 years. For example, Alex is 35 years old and wants to retire at the age of 50 years. Then, Alex has 15 years to collect the pension fund.

After that, decide how long you plan to fund the lifestyle in retirement. That is, until what age do you plan to be financially independent with a desirable lifestyle? Targets are usually determined between the ages of 75-80 years, depending on one's life expectancy.

Next is to determine how much the desired range of the cost of living when you retire. Most easily is using the 100% of the cost of today living.

In general, the costs that will decline at retirement are the cost of transportation, household expenses if the children are married. Meanwhile, the costs that may increase are the cost of health, vacation, and gifts.

Financially free.

The best advice that can be given is to look for passive income to cover living expenses in retirement. Source of funds for your retirement today generally from Social Security, or Pension Fund from your company, and of course your personal assets.

Statistically, those who can live comfortably in his retirement are those who have passive income from investment assets. If all the cost of living in retirement can be covered by a passive income, then you are already financially free, or achieving financial freedom.

Liquidity asset that can provide passive income is a living from the profit-sharing of your bank deposit account, and take advantage of the returns of mutual funds or stocks. Thus, your initial investment fund will never withdrawn.

In contrast, if you choose to have illiquid assets, such as property. Try to keep these assets remain productive, such as rented it. Alternatively, having a business, so you could earn a profit every month.

By reading this article, at least you start to think to plan a wonderful retirement. The next step is to make retirement plan, and implemented appropriate, in your personal financial planning. Remember, most of the income generated at this time is for living prosperity in the future. So, are you ready for retirement?

Live a beautiful life!

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5 tips to manage family finances

Management of household finances is something important to do. With a good management, our future financial goals can be achieved. In general, everyone wants to own a home, get rich, and can enjoy a comfortable retirement. All of these costs money. Money is not everything, but everything needs money. If you can manage the household finances properly, then surely your purpose will be achieved. In this article, I will give tips on managing the family finances.

1. Determine the goals you want to accomplish. With a common goal to be achieved, you will be easier to get there. Without clear goals you will sometimes be tempted to use your money. Write down your long term goals and stick on the wall of your room so that you will keep seeing the purpose.

2. After determining the goals that you want, it's time you define a strategy. You can invest in fixed-income funds that have a lower risk. With the assumption of returns 12% a year then by saving 500 hundred dollars a month you can buy such a big asset or property, or fulfill any of your financial goal.

3. In planning your family finances, you need to know your financial situation, and fix it if things go wrong. Calculate your expenses and income in advance. Here are the rules you should follow:
- Income must be greater than the expenditure

- Total mortgage debt should not exceed 30% of your income. If your salary is 1000 dollar per month, your debts must be below 300 dollar per month.

- Reserving at least 20% of income for investment. If you cannot save money currently, there are two things to do. First to raise revenue, for example by trying a side business as an insurance agent, selling MLM products, or doing business via the internet (internet marketing). The second is to lower your expenses. You can use your credit card when shopping. When the credit card statement came out, you can see where the money came out and tried to reduce these expenses. In this way, your expenses can be reduced. Avoid buying goods that are not important.

- Set aside 5% to buy life insurance for breadwinners. Insurance on children is unnecessary. If a breadwinner dies, then the family will be left in financial difficulty because there is no income from a breadwinner. But if the child dies, the family will have no trouble financially.

- Prepare an emergency fund of six months the amount of spending per month. If you are spending 800 dollars a month, then spend 4800 dollars as an emergency fund. Benchmark of six months can be adjusted with your condition, such as your occupation risk, job prospects and health of family members.

4. The use of credit cards should be properly supervised because there are many people who have problems with credit card debt. Tips in using a credit card:
- Immediately pay off your credit card and do not be late to pay credit card bills.

- Avoid withdrawal, because it has a big interest of about 4% per month.

- If you have credit card debt in several banks, pay a minimum payment in advance of all credit cards. If there is still money left, use it to pay off bills with the biggest interest. Do this until your debts discharged.

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Selecting a financial planner

Ideally, each person develops their own personal financial plan. However, do not be discouraged if you have difficulty preparing a financial plan for yourself. Understandably, the reality is that many of us do not have the time or sufficient knowledge to become a financial planner for our self. There are also people who have difficulty keeping commitments. Well, if so, you can enlist the services of financial planners.

Admittedly, the financial plan is not easy. There are people who can advance the company's finances, but cannot manage finances for himself.

Broadly speaking, financial planners' job is to help clients measure the financial capabilities as well as provide assistance in choosing a financial product or type of investment. You do not need to worry about calculating and projecting the allocation of funds to achieve your financial goals. With the assistance of financial planners, clients have a grip. Not be confused with the issue or what people say.

A financial planner must present his rights and obligations to his client in the first meeting. Furthermore, the financial planner will gather data and information of clients, ranging from basics such as biographical information to financial information, such earnings and expenditures. Then, financial planner will develop the analytical results against his client becomes a recommendation strategy.

The next phase is to implement a strategy that had been prepared. Of course, financial planner is also obliged to monitor the implementation of that plan. Does the client's target have been reached? Or, are there any expenditure items that need to be trimmed?

In the personal financial planning activity itself, there are two of the most important goals, investment and protection. A financial planner must help the client not only achieve one main goal, while others are not achieved.

Limited Offer

If you are interested in using the services of financial planner, of course you have to choose the most appropriate. In addition to knowing basic things, such as the type of service or rates, you also need to understand the relationship between financial planner and financial services companies. Currently, there is an independent financial planner or not related to financial institutions. While there are also affiliated financial planners or working for certain financial companies.

Of course, an independent financial planner has wider latitude in providing financial product advice to clients. The way of work of an independent financial planner does not necessarily identical. There are independent financial planners who are willing to give advice to clients regarding investment products that fit. Indeed, the task of the planner here was limited to give input or advice. The client remains in control.

However, there is also an independent financial planner who prefers to give general recommendations. If clients already have a reference for a product and they asked some advice, then the planner will give.

In terms of cost, using the services of independent financial planners is more expensive than the services of affiliated financial planners. Affiliated financial planners usually work for banks, securities firms or insurance companies.

Of course, an affiliated financial planner will only offer products that are owned by the company where he worked. The cost of his services for free because it can compensate the company.

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5 Obligations in Money Management

Whatever your job, regardless of your income, everything can be better managed to avoid a deficit. A proper money management and personal financial planning can provide the solution of financial problems even build self-reliance. Most people often claimed never to set aside money for savings include less investment. The reason is always because lack of money.

They feel that their monthly earning is still too small to set aside some money for saving, moreover for investment. In fact, the reduction in consumption of goods that are not important with limited financial condition, such as jewelry or clothing that varies model and color, you must have ability to set aside money each month.

Stages that could start in managing your personal financial are as follows:

1. Pay off debt

Although your financial management is already a mess, it's never too late to fix it. Start by setting aside money from earnings and pay existing debt. Debt is your obligation. Unpaid debt will damage your credibility, especially your financial records in bank. You are risking your reputation if the debt is not repaid immediately. Set aside a maximum of 30% of your earnings to pay off debt.

2. Save

Rest assured that regardless of income, must be set aside as savings. Arrange your money of about 10-20 percent of income for savings. In order for this plan can be running, limit the cost of consumption. People are often tempted to buy goods which are not too important to be purchased ,but only because of the influence of a friend or a trend. Strict with yourself and prioritize your mostly and primary needs!

3. Emergency Fund

Provide a reserve fund as an emergency fund. Unforeseen needs will always exist, for example, a disease that must be treated in hospital. Certainly require quite big of cost, isn't it? Set aside a fund of five percent of income. Prepare an emergency fund of up to a period of six months. As anticipated, create a special passive account for the fund. Separate this account from your active accounts that are used for daily needs.

4. Insurance

After you are reducing the monthly needs, paying off debt, saving, and preparation for an emergency fund, use the rest for insurance. Ensure to buy life insurance, especially for householder in your family. Anyone who has the main income to meet the needs of your family, you or your wife, should have life insurance. So if anything happens to him, other family members can still run and financed from the insurance for a specified period.

5. Investment

Investment should be done after all the above obligations have been fulfilled. The simple form, invest your money in gold. However, pay attention and understand the value and quality when it comes to investing in gold. Money for investment funds can be allocated from other revenue sources such as bonus, inheritance, outside the main income. There are many type of investment, risk, and its value at a later date. For that, carefully identify the investment products before selecting it.

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Financial Planning For Retirement - 5 Tips

Never rely on the pension fund that is usually available from the office where you work. That amount would not be tailored to your individual needs. When you compile the pension plans, you must take into account the lifestyle you want and the inflation that you must deal.

Here are some things you can consider in planning for retirement:

1. Examine Cost of Living In Your Retirement

The amount of expenses in your retirement period will depend on the lifestyle you expect. At least you would want adequate financial conditions to pay the basic needs of daily life. You also need to consider in retirement you will not get salary payments again. While on the other hand, the cost to your health care will increase. All of this requires funding, which is quite expensive. That is why retirement planning for 20-25 years is feasible.

2. Price Increase in Retirement

Prices of goods and services tend to be higher because of inflation. Maybe you do not realize this now because you still get a paycheck every month. And salary increases each month may still be offset rising inflation. At the time of retirement, if you don't have a side business, then the savings you have should be able to keep pace with inflation.

3. Determine the amount of funds that must be saved

After researching the cost of living and inflation on your retirement, your next step is to calculate how much money you will need at retirement. A good reference for an estimate of how much you should prepare is about 70% to 80% of the income that you would get before retirement.

4. Investing for Retirement

Different objectives require different strategies to achieve. Over the time you need to adjust and monitor the progress of your funds according to age and changes in investment objectives.

5. Have Protection

In personal financial planning, you should include insurance as protection for the value of your Economies, Health, and Critical Illness and of course makes you comfortable. You, when the less fortunate, having an accident then the insurance that will work for you.

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