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Recent Financial Planning & Management Articles

7 Things you need to know before you invest in a Mutual Fund

Posted October 12, 2008 by Bernz

1) Know what you will use the money for. List your goals and determine if they are short or long-term. By doing this you have an easier time making other investment decisions.

2) Determine your risk level. Think about whether you’ll lose sleep over worrying about the possibility of loosing your principal or the uncertainty of a fluctuating market.

3) Consider whether or not you can do without the money you’ll be putting in your investment and how long you are willing to leave it untouched. This of course depends on your goals. Plus, the longer you have a mutual fund the more you’ll incur fees and other costs.

4) Account for sales charges and fees. The costs of having your mutual fund professionally managed eats into your profits. Avoid mutual funds that charge front-end or load fees. These are expenses deducted from your initial investment that will have an impact on your returns.

5) Choose a particular fund style. Mutual funds are categorized into three: growth, value, and blend. Growth stocks are shares in companies which are generating profit at a face rate. Value stocks are shares in companies who may be experiencing rough financial times, and they’re bought at a cheaper price for that reason. Blended funds are a combination of growth and value stocks.

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Posted in Mutual Funds | No Comments »

Fund Vocabulary. Demystifying important investing terms

Posted October 11, 2008 by Bernz

Now that you’re familiar with mutual funds, you’ll want to get comfortable with some of the common terms used when dealing with them.

As a reminder, a mutual fund is a large compilation of individual stocks.

Stocks – Shares a company sells to fund future business growth. When you purchase a share of stock, you own a fraction of the company.

Diversification – Different kinds of stocks: growth and value, as well as stock representing large, small, and mid caps.

Money manager/portfolio manager – A person or team of people who decide what stock to purchase, sell, and hold.

Index funds –Funds not managed by a financial professional. Instead these funds track existing marketing indexes such as the Dow Jones Industrial Average and Standard & Poors 500 Stock Index. Note: Index funds traditionally out-perform managed mutual funds because investors don’t have to pay fees and other costs that reduce earnings.

The Dow Jones Index – An index composed of thirty stocks.

Standard & Poors Index – is made up of 500 stocks of big companies

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Posted in Investing Basics | No Comments »

3 Step Retirement Planning

Posted October 11, 2008 by Bernz

Better retirement planning begins with understanding the basics. Now that you’re aware of a few things you can do to start saving and generating more income. Here are 3 easy steps to determine how big your retirement fund will need to be.

1. Determine how much money you will need to maintain your current lifestyle. It helps to also consider what luxury items and activities you will be willing to part with in case your nest egg comes up short.

2. Project your income. Include social security, pensions, annuities, other personal investments as well as any potential earnings from a part time job, consultant fees, or other miscellaneous income streams. Find out the amount you can expect to receive in Social Security income here.

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Painless ways to cut expenses and save for retirement

Posted October 11, 2008 by Bernz

Building a steady saving and investment system is critical for retirement income planning. I won’t lie. It can be tough for late savers to get motivated. That’s why I thought I’d give you more tips so that you can see how painless cutting back can be. Choose any or all of the retirement fund boosters below you’ll be pleased with how simple it is to stretch your cash, cut expenses, and build your retirement savings.

Nip the cable. Netflix offers a great 4.99 deal for movies. But your public library has them for free. Another free alternative is to view movies and T.V. programs from liketelevision.com.

Read your news and entertainment online. Magazine and newspaper subscriptions, along with the cost of buying at the stand cost on average $24 dollars a month. Eliminate this expense without loosing value by reading your news and entertainment online. You’ll also avoid commercials which create more spending urges.

Rent out your garage. This is an income stream rather than a way to save money. What the heck. Take the funds and contribute them to your savings. Put a sign in your yard, post it in area grocers, dry cleaners, at community colleges. And of course Craigslist.

Rent out a room. Aside from your garage, that is. Got a spare bedroom (if your college kid comes home twice a year, you’ve got a spare room). What about a sewing room. Dining area with a door. Rent it and start earning and save big.

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Posted in Investing Strategies | 2 Comments »

Are you a late saver? Try these 4 tips to rev up your retirement fund

Posted October 10, 2008 by Bernz

1) Sum it all up.

Calculate your spending for all of your major monthly expenses. The easiest way to do this is through online banking. Just go through the past 3 months of your online statements and total expenses for food, medications, mortgage and housing expenses, transportation, and credit card payments. Estimate how much “walking around money” you can get by on and then cut that amount 25%.

If you don’t bank online consider doing so—even if you use a credit union—this way you have a quick and easy way to track and calculate spending.

2) Create additional income sources.

If you already work full-time, find out if over-time pay is an option. Also think about what skills in your current job you can use to start an online business. Jobs like virtual assistants, editing, and tutoring have very little overhead and are easy to start up.

Perhaps you have a hobby that can bring in additional earnings. Are there books, tools, or vintage clothing that you can sell online through eBay, Amazon, or other online auctions? You could also make anywhere from $50 to $200 just by participating in focus groups. Find these opportunities on Craigslist or a keyword search “focus group companies”.

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Posted in Retirement Planning | 8 Comments »