The Importance Of Personal Finance For Your Retirement

It is never too early to start planning for your retirement. In fact, the sooner you start saving and investing for retirement, the better off you will be.

There are a number of important factors to consider when planning for retirement, but one of the most important is personal finance. Your personal finance situation will have a big impact on how much money you will have to retire on and how long your money will last.

There are a few key things to keep in mind when it comes to personal finance and retirement planning:

Savings: It is important to start saving for retirement as early as possible. The sooner you start saving, the more time your money will have to grow. If you wait until later in life to start saving, you will likely have to save more money each month to catch up.

Investments: Another important factor to consider is how you will invest your money. There are a variety of different investment options available, and it is important to find the right mix for your situation. You should work with a financial advisor to help you determine the best way to invest your money.

Debt: Debt can have a big impact on your personal finance situation and your ability to retire. It is important to pay off any high-interest debt before you retire. This will free up more money each month that you can use to save for retirement.

Retirement Income: When you retire, you will need to have enough income to cover your living expenses. There are a number of different sources of retirement income, including Social Security, pensions, and investments. It is important to have a mix of different sources of income to make sure your needs are covered.

Taxes: Taxes can also have a big impact on your personal finance situation. It is important to understand the tax implications of your retirement income and investments. This will help you keep more of your money in retirement.

Personal finance is an important consideration in retirement planning. By taking the time to understand your personal finance situation and make smart decisions, you can ensure that you have the money you need to enjoy a comfortable retirement.

How Personal Finance Can Help You Save Money

Money is tight these days. Whether you are struggling to make ends meet or you are just looking to save a little extra, personal finance can help. By learning how to budget, invest and save, you can make your money work harder for you.

Budgeting is the key to controlling your finances. By tracking your income and expenses, you can see where your money is going and make adjustments to ensure that you are spending within your means. A budget can also help you to identify areas where you may be able to save money, such as by eating out less or cutting back on unnecessary expenses.

Investing is another important aspect of personal finance. By investing your money, you can grow your wealth over time. There are many different ways to invest, so it is important to do some research to find an investment strategy that best suits your needs.

Saving is also essential for building your financial security. By putting away money each month, you can create a nest egg that can be used in case of an emergency or for future goals, such as retirement. A savings account can also help you to earn interest on your money, which can further grow your wealth.

Personal finance is all about taking control of your money and making it work for you. By budgeting, investing and saving, you can improve your financial well-being and secure your future.

Personal finance is all about making smart money choices in order to achieve your financial goals. It can help you save money by teaching you how to budget and manage your money wisely. By learning how to save money, you can put yourself in a better financial position and achieve your financial goals sooner.

There are a few key things to keep in mind when it comes to personal finance and saving money. First, you need to have a clear understanding of your financial situation. This means knowing what your income and expenses are, as well as your assets and liabilities. Once you have a good understanding of your financial situation, you can develop a budget.

A budget is a tool that can help you track your spending and ensure that you are living within your means. It is important to remember that a budget is not a diet; it is a guide to help you make informed choices about your spending. When you develop a budget, be sure to include a savings plan. This will help you set aside money each month to reach your financial goals.

In addition to developing a budget, there are other personal finance tips that can help you save money. One of the best ways to save money is to live below your means. This means spending less than you earn. Another way to save money is to make wise choices about your purchases. When you are able to save money on your everyday expenses, you will have more money available to save for your future goals.

Personal finance is all about making smart money choices. By learning how to save money, you can put yourself in a better financial position and achieve your financial goals sooner.

What Are The Different Types Of Personal Finance Policies?

There are four main types of personal finance policies: debt management, investment, saving, and spending. Each type of policy has its own set of rules and guidelines that dictate how you should handle your money.

Debt management policies focus on helping you pay off your debts and avoid taking on new debt. Investment policies focus on helping you grow your money by investing it in stocks, bonds, and other assets. Saving policies focus on helping you put away money for your future goals. Spending policies focus on helping you control your spending and stay within your budget.

Which type of policy is right for you will depend on your own financial situation and goals. If you’re trying to get out of debt, a debt management policy will be most helpful. If you’re trying to save for retirement, a saving policy will be most helpful. If you’re trying to grow your wealth, an investment policy will be most helpful. And if you’re trying to control your spending, a spending policy will be most helpful.

No matter which type of policy you choose, the most important thing is to stick to it. Personal finance is all about making smart choices with your money, and the best way to do that is to have a plan in place.

There are many types of personal finance policies, but the three most common are debt, savings, and investment. Each one has different benefits and drawbacks, so it’s important to understand all three before making any decisions about your own personal finance.

Debt:

Debt is often seen as a bad thing, but it can actually be a useful tool if used correctly. Debt can help you buy a home, start a business, or pay for an education. The key is to only borrow what you can afford to pay back, and to make sure that the interest rate on the debt is lower than the rate you could earn by investing the money.

Savings:

Savings are important for two reasons: to have money set aside for emergencies, and to have money to invest. The key to saving money is to make it automatic – set up a direct deposit from your paycheck into a savings account, and make sure you don’t touch it unless it’s an emergency.

Investment:

Investment is how you can grow your money over time. When you invest, you’re buying something – stocks, bonds, mutual funds, real estate – that you expect will go up in value over time. You can also invest in things that will provide you with income, such as rental properties or dividend-paying stocks. The key with investment is to start early and to diversify your investments so that you’re not putting all your eggs in one basket.

Personal finance is a complex topic, but understanding the basics of debt, savings, and investment will help you make the best decisions for your own financial future.

My Mother’s Day Menu Plan

As in all holidays, I like to have an array of beautiful food, but I’m always about saving money, and making it easy!

I don’t plan the menu completely until the new sales ad comes out. So for Mother’s Day, it’s the same. All I’m really looking for in the last few days is produce sales. Typically, I already have everything else that I’ve been investing in, in terms of staples and freezer foods, and even refrigerated items. So that makes it cost much less than it would if I ran out and bought everything now.

I have the meat in the freezer, already bought on sale and with coupons weeks or even months before. But I can opt to invest in more meat this week, which is a good idea to check sales, as they’re great in holiday weeks. This week, rib eyes are on a great sale. I’ll go ahead and invest and freeze. But I already have ribs and tri tip, which Greg wanted to do in the smoker. I’ll pull out some bacon, thaw and fry for the salad. I also had some whole chickens in the freezer, that I planned to butterfly and grill. But, this week’s Vons (Safeway), has wild Coho salmon. And I love that! So I think I’ll splurge for Mother’s Day and save my chickens!

I already have all the non-produce things I need for my menu, since my menu is planned around what I  have. I already have BBQ sauce, marinade, mayonnaise, ranch dressing dip mix, balsamic vinegar, extra virgin olive oil, brown sugar, etc. I even have some refrigerator items I’ll use, gorgonzola cheese, hummus, plain yogurt, etc. All bought at a great price over the last few weeks or months. This is what I call ”investing” in groceries, simply buying blue items on our Grocery Game LIST before I need them. In doing that, blue items are usually about 67% off the regular price. The opposite of “investing” would be “need shopping”. So much of what I will use for Mother’s Day, if bought this week, “need shopping”, would cost me three times more.

So to recap, I didn’t know what my menu items would be until I saw the produce sales offerings, and finished my ideas for side dishes and appetizers, based on what I have and what produce is on sale…

So now I know what I’ll buy this week: Corn on the cob (on sale), lettuce etc. for salad (already have gorgonzola, bacon, balsamic, olive oil). I’ll buy the strawberries (on sale), and make a sweet yogurt dip with brown sugar (already invested in those). For appetizer, raw veggies (on sale) with ranch dressing (already invested in it). I see artichokes on sale. I may also steam them, chill them and serve them cold to dip in the ranch too! It’s one or our favorites! Three friends are bringing other sides.

So easy, and easy on the budget when your grocery shopping lifestyle is centered around the concept of investing!

Happy  Mother’s Day! 

Buying a home is better than investing in gold. But how do you get started?

Wondering how to begin investing, but uncertain about how the economy is going to go, and therefore, how stocks will do? Gold and real estate are a couple of your investment options if you’re not too excited about stocks.

Gold is a hedge, one investors use as backup against the dollar. If the dollar doesn’t do well vs. other currencies, the logic says gold will be a strong commodity that fetches demand around the world. But, if the dollar does well, gold isn’t going to yield great returns. Essentially, gold and the dollar compete against each other. Real estate, on the other hand, is a long-term investment that many view as safer than gold.

There will always be a demand for real estate, no matter what the dollar does. True, you can lose on real estate. But that’s if you sell when property values are lower than they were when you bought the place. You can always rent your house out, creating steady income, until the right time to sell comes along. Real estate is your smartest investment, for one because it gives you positive cash flow. But if you buy gold when it’s valuable, there’s a chance the dollar won’t tank to the same extent again. But more than that, there’s good chance you would’ve made more money on stocks or real estate.

Need any more convincing? The housing market is healthy–it’s not in a bubble like it was when the Great Recession hit. In 2016, foreclosure rates were the lowest they’ve been since 2000, and June saw property values appreciate at a rate of 5.7%, which means there’s good demand. In general it looks like lenders and buyers have learned from mistakes that led to the housing crisis. Barring some sort of unforeseen housing market disaster, the recovery can (and should) continue. Even if there’s a big collapse, this guide will help you stay away from an investment that will ruin you.

If you’ve still got your heart set on bullion, people have discovered gold in their backyards with a metal detector. In one case, US Army postal inspectors used a military-grade detector to uncover $153,150 worth of gold. So if you buy a house, there’s always the chance you’ll strike two kinds of paydirt, the practical real estate investment kind, and the shiny yellow kind.

Evaluate what you can afford

Essentially, you want to find out which properties you can afford that are going to deliver the best long-term value. There are multiple types of real estate you could invest in, but since this is your first time, I’m going to concentrate on residential real estate. Invest in a home, and you can live in it and rent out the other rooms as well. That way, your tenants make your mortgage payments for you. Once you’re ready, you can move somewhere else and begin to really take advantage of your property’s full earning potential.

The other scenario is you have a family. In that case you’re still making a good investment, because down the line, once you’ve paid off your mortgage and hopefully made some improvements on your home, you can either sell for a profit or become a landlord. Either way, you’ve made a secure investment that will pay off.

Check your credit. If your credit history is bad, do your best to fix your credit score by paying off any outstanding credit debts and debts on other loans. Check to see if there are any errors on the report, and if so, dispute them. If you have any accounts in collections, set up a payment plan to get them out. If you’re in the position to do so, pay off a credit card completely and leave it open. Have a reliable friend add you as an authorized user on their credit card. Next, find a mortgage lender and get a pre-approval letter.

A property in need of renovation can be a solid investment for your money. An FHA Rehab Loan covers both the cost of the mortgage and the cost of renovations. To qualify for one, you must do the following:

  • Find a fixer-upper house in need of rehab
  • Find a qualified lender
  • Meet the lender’s minimum credit score requirement, debt-to-income ratio requirement, and provide proof of income

After the loan is approved, your lender sets up a Repair Escrow Account, and you must begin renovating within 30 days of closing and complete renovations in less than six months.

Particularly if you have great credit and property values are high in the surrounding area, a Rehab Loan could help you flip a house (meaning you fix it then sell it) and make a great short-term return on your investment.

Research the market in your area

Your research into the right home can take multiple forms. A good realtor does all the research for you, and can lead you to properties in your price range in neighborhoods where value is likely to appreciate. Online, you can do all your own research first through sites such as Zillow and Redfin. Look into areas with low crime rates, less inventory than more, and access to desirable resources, such as shopping centers and parks. Once you’ve found an area you like, a realtor will help you get the best deal, and the seller will pay realtor fees. If it’s for sale by owner, ask if they will pay your agent’s commission fee.

Finish the deal

Once you’ve found the home for you, find out what documents your lender needs, provide them, get your loan, and make your offer. Sign a contract with the seller, complete your mortgage application, close the transaction–either through your agent or the seller–and get the keys to your new home.

Keep the place up over the years and make improvements. The value will go up, and you’ll have an investment on your hands that leaves you secure and ready for retirement.

Food Stamp Budget

Sometimes it’s hard to live on a budget. In 2009, the national average allotment for a family of four was $275.53 a month, or about $68.88 a week. See this article: http://news.yahoo.com/s/ap/20100414/ap_on_re_us/us_fea_food_living_on_food_stamps#mwpphu-container The basis of the article seems to center around meal planning. But is meal planning smart shopping? NO!

Think about it… Whenever you’ve written up a grocery list of things you “need”, how much of it was on sale? I would venture to say about 20%, if even that. By contrast, if you would have purchased the things your family likes or needs when it was on sale a few weeks or even months ago, now you have a scenario where you never pay full price of any food, except for fluid milk. That’s what we call “investing”.

So the question is how to get past the week to week, or hand to mouth confines of living on food stamps or any food budget for that matter? How can there be room to “invest” when there’s nothing left over? As the article mentions, food stamps are intended to augment, not completely meet the needs of the entire the food budget. But, for many families, that may be all they have! So can a family of four live on $68 a week? Most Grocery Gamers are reading this and saying, “of course”! Nevertheless, we spent some time with The Grocery Game databases to take a look at that prospect. I wasn’t surprised to see that yes, it can be done. And there should even be room to invest a little, which makes for more options and even more value down the road. And more investing over time, when you breathe a sigh of relief…

The keys to making it work remain the same. Stack the deals using sales and coupons and any other incentives. Eliminate waste with creative leftovers. Incorporate at least one meatless dinner around dried beans, which are very healthy and full of fiber. I would even advise two or three of those bean meals in the beginning to make room for more investing. Making some sacrifices on what you “want”, to get what you “need” in the first few weeks will pay off and begin to snowball. Note: “Investing”, which we used to call “stockpiling” is a Grocery Game concept that has been proven over and over again for hundreds of thousands of families. It works.

I’m not saying it’s easy, and my heart goes out to those who are living on less. But if you’re in that boat, just know that lots of Grocery Gamers are doing it for $50 a week. Our message board is full of those testimonials, which is also a great place to learn and get brass tacks advice. I was in that boat for many years, with a $35 a week budget for my family of four. That’s how I learned to play The Grocery Game. You can do it.

Pay Off Student Loans or Save for Retirement?

Today it’s not uncommon for college graduates to owe $50,000, $100,000 or even $150,000 in student loans upon graduating.  Unfortunately, it’s commonplace given the escalating costs of tuition and students taking more than four years to complete their education.

Students loans are the necessary price to pay for opportunities and the possibility of career advancement.  But be warned, once you assume these loans it becomes your responsibility to manage them effectively and “do your homework.”

If you’re like most of us, you didn’t hesitate to take out loans your first year of college because you were filled with the optimism that a college degree would provide you with more than enough income to meet your living expenses, save for retirement, and quickly pay off your loans.  But reality isn’t always so kind.  Now you realize that between taxes and inflating living expenses there’s not as much money to spread between paying bills and saving for retirement as you had thought.  You’re faced with a decision.  With your limited income, should you pay off your students loans or save for retirement?

If this isn’t a question you’re asking yourself, it should be.  You know that your loans won’t repay themselves, but at the same time you need to maintain a lifestyle and try to put some money away for retirement.   There’s just not enough money to go around and the question becomes one of balance, and finding out where every dollar of your income will be put to its best use.

You have three options:
Option 1: Pay off your student loans now and save for retirement later.
Option 2: Save for retirement now and make only the minimum student loan payment required.
Option 3: A combination of paying off your student loans and saving for retirement at the same time.

Though always painful to watch your money go, the decision between the three options is easy and comes down to pure math.

Review each option to decide what’s right.

Let’s review each option so you can decide which is right for you.

Option 1: Pay off student loans now and save for retirement later.

Paying off students loans before starting to save for retirement is a common mistake a lot of college grads make. The reason is simple. When they took out their large student loans a few years ago they convinced themselves the debt would only be temporary and would be paid off within the first few years after college. In other words, their goal was to erase the loans and forget they ever happened ASAP. I know this mindset because it was mine not too long ago. Another popular reason college grads decide to pay off student loans first and save for retirement later is because they want to get out of debt before saving for retirement. This is very idealistic and not very practical. If Americans waited until they had no more debt to begin saving for retirement no one would be able to retire!

But, there is a time when it makes sense to pay off student loans immediately and save for retirement later.  This is a smart decision when your student loans are charging interest greater than 8%.  The long-term investment return on the stock market is roughly 8%, so if you’re paying more in interest than you’re earning on your investments, your money is best used paying off your high interest loans first and investing in retirement later (but not too much later).  If you have multiple student loans with multiple interest rates, only pay off your over-8% loans first and put any excess money towards retirement.

Option 2: Save for retirement now and make only the minimum student loan payment required.

You should consider this strategy if the interest rate on your student loans is less than 8%. If the stock market returns 8% over the long run, and the interest rate you’re paying on your student loans is less than 8%, then your money is best used being invested for retirement rather than paying off your student loans. And when you factor in the benefits of tax deferred growth provided by retirement plans, it makes an even stronger case that you should invest your money for retirement and make only the minimum student loan payment.

Option 3: The compromise: A combination of paying off your student loans and saving for retirement at the same time.

Remember, all things in moderation.  If your student loans have an interest rate that is between 6% and 8%, you may want to consider a compromise between paying off your student loans and saving for retirement.

Example: Your $30,000 student loan (at 6.5% interest) requires you to make a minimum monthly payment of $200.  You find that after you make the minimum monthly payment and pay your other bills, you still have $100 left over from your paycheck at the end of each month.  You should consider putting an additional $50 towards paying off your student loan (because the interest rate is between 6% – 8%), and put the other $50 into your retirement account.

You’re also allowed a small tax deduction for interest accrued on your student loans if your income is under $55,000 (single) or $110,000 (married), which provides an additional benefit.

Final words of caution…

For your student loans (unlike other debt), if you can prove you don’t have the wherewithal to make your monthly payment, many lenders will let you temporarily put your student loan payments on hold – known as deferment or forbearance. This usually occurs if you’re facing unemployment or have high medical bills. But be careful, many times your interest will continue to accumulate during this time. You should check with your student loan provider and make sure you understand the fine print in your loans.

Compound interest: why it is considered one of the most powerful tools in finance

Compound interest may seem like a tricky concept to grasp. But investing your time in this topic will help clarify how your initial savings amount can grow into thousands of dollars down the road.

Compound interest defined. 

Compound interest is the interest the investor earns on his original investment (or savings), plus all of the interest earned on the interest that has accumulated over time.

That’s a lot of interest!

Here is another way to think of it:  Compound Interest = Interest Earned on Interest

This video helps make sense of how you can earn interest on interest, and what that means for the money in your account. The video also illustrates the benefits of earning compound interest rather than simple interest.

Compound interest is a marvelous thing—starting to save now for the future, your retirement, and other big financial goals, can mean hundreds, thousands or millions later in life. It does matter whether you start now, or in ten years. Getting started early on your saving, or investing, can mean tens of thousands of dollars in difference, literally.

What can you do now?

1. Prioritize. It is important to prioritize. If you’re buried in consumer debt—paying off your balance each month should be the top priority.

2. Research rates. Your financial institution provides a list of accounts and rates on accounts. 

3. Start saving. Open a savings account or a share certificate with your credit union where you can earn compound interest on your initial deposit. 

Take care!

How to Get the Most Out of Buying Your First House

When you’re young, buying a house seems either daunting because of the sheer amount of money you need or like a hassle that will tie you down for the future. No more freedom to go anywhere you want, and hello responsibility. But here’s the thing about buying a home: it’s better than investing in gold. In fact it’s one of the best investments you can make.

You have a couple of options: buy a house, make some improvements, and flip it, or buy a house and settle in for the long term until property values really appreciate. In the future you could decide to stay there because you like it, or sell it and find a better place. Flipping the house right away is more of a gamble, but it can definitely pay off.

Flipping a House

Typically, when people want to flip a house they buy a “fixer-upper.” The house in need of repairs can only rise in value—unless the neighborhood is extremely crime-ridden and the other houses are low quality. Even then, improving the fixer-upper from the ground up can make a positive impact on the neighborhood, and value will go up because you’re investing money into it.

Here are some things to consider when you’re flipping a house for a profit:

  • To actually make good money, you’ll want to buy low in a market where values are rising
  • You need good credit to make this happen—pay off all debts and find out what it takes to raise your score if it’s low
  • You need cash for a down payment
  • If you qualify, you could take take out a Home Equity Line of Credit (HELOC)
  • The better the location, the better off you are when it comes to making a profit
  • As an investor, you’ll pay a higher interest rate on a loan
  • You’ll need to be educated on the real estate market, financing, negotiating with the seller, doing repairs and working with contractors, and which repairs really increase a home’s value

There’s a lot to flipping a house, but if it’s a game you want to play, there’s a ton of cash in the right market.

Once you’ve made your renovations, one big part of selling a house fast is staging. When you’re staging the home, you’re getting rid of all clutter. Locate furniture in such a way as to make it aesthetically pleasing—balance the amount of furniture in each room, float it out away from walls, and make sure each room only has one purpose. Optimize lighting by making sure no furniture is in front of windows. You can place mirrors in rooms strategically to increase natural lighting. When you’re arranging everything in rooms, find the most attractive focal point and arrange around it. Use art, rugs, pillows, and decor to make colors pop. Read some books on feng shui and see what you can do.

Flipping houses isn’t for everyone—in fact very few people can really do it successfully. Another option for making money from your first house is to rent it out.

Renting Out Your House

Being a landlord comes with its fair share of headaches, but it can become a way of generating passive income. Just like it sounds, this is income you earn without doing anything. Once you’ve paid off the mortgage and can afford to pay other people to do repairs, every cent you earn from rent is completely gratis.

Millennials make up a huge chunk of the rental demographic. There are definitely some things you should consider when renting to millennials:

  • Don’t discriminate based on age: If a millennial doesn’t make enough to afford the cost of living in your house, that’s good reason not to rent to them; but if you don’t rent to them because you’re young too, and you know how unreliable people your age are, that’s illegal
  • Make your subletting terms clear: Millennials may want to make some side cash through AirBnB or another vacation rental, make sure they clear it with you beforehand
  • Consider pets: You’ll be more competitive at attracting millennial tenants if you allow pets
  • Make sure everyone’s on the lease: They may want to move in roommates without you knowing
  • Prioritize green housing: Millennials prefer environmentally-friendly housing with things like solar power, ENERGY STAR appliances, and electric car charging stations
  • Prioritize safety: Up-to-date maintenance and renovations will ensure safety and attract good tenants

These considerations apply to all tenants, regardless of age. That said, if you make the place attractive to millennials, you’ll have a huge pool of tenants to choose from. You know from your own experience this is a generation of renters.

Like being a house-flipper, being a landlord isn’t for everyone. In the long term, you’ll get a lot more enjoyment out of turning your first house into your first home.

Living in Your First Home

Once again, this is daunting, but it doesn’t have to be if you take it one step at a time. Here are the big financial considerations for first-time homeowners:

  • Keep an eye on your budget: You’ve got mortgage payments to make, so don’t blow too much money right away on renovations, furniture and decor.
  • Make sure insurance is covered: You need more than homeowner’s insurance; maintain life insurance, disability insurance, and car insurance payments.
  • Make sure to get tax deductions and credits: There are tax breaks for first-timers; if you have to pay an accountant because of all the paperwork and limited time, do so—it’s worth it.
  • Maintain savings: You never know when an emergency will hit, so keep a savings pillow of at least a couple grand beneath you.
  • Keep records: Keep receipts of all purchases for your home, so you can maximize tax write-offs.

This last one is more important than it seems at first. If you have precise records on renovations and remodeling expenses, you’ll know exactly how much more the place is worth when it comes time to sell. With this baseline number and current property values, you’ll be able to determine a good asking price for the property.

As you continue on in your first home, make renovations you can afford and maintain the place to the utmost. There will come a time when property values are higher than they were when you made your purchase. That’s when you want to put your house on the market. There are absolutely no regrets if you put a positive effort into this. In the end, you’ll be ready to retire in a better place than you started.

Life Insurance Something To Consider For Anyone

Most people prefer not to think about insurance whenever possible. Almost everyone prefers to avoid mention of life insurance. The Houston Chronicle, however, lays out some of the basic principles behind life insurance and the keys to a cost-effective policy.

While most younger Americans are willing to accept the sense behind health insurance, many see life insurance as a concern for another time when there are children to worry about. Last year, research and consulting group LIMRA released a survey showing life insurance coverage had dropped to a 50 year low, with 30 percent of households having no policy in place. Between 1999 and 2009, the American Council of Life Insurers notes that the the number of policies fell by 3.8 percent.

Life insurance, however, can help protect spouses and family members just as effectively. This is particularly important given the amount of debt many Americans now accrue at a young age, a fact that is often ignored when considering potential expenses after death. Life insurance policies can go toward providing for dependents, but they can also help with debts like mortgages and expenses incurred such as burial.

The strongest argument in favor of investing is the likelihood that many people will eventually invest and the price only ever goes up with age. The Chronicle cites data from accuquote.com suggesting a healthy 35-year-old can get a $250,000 policy for as little as $160 per year, compared to $505 for a 45-year-old or $945 for a 50-year-old.

The key is to purchase a term policy, which can offer low rates for a fixed period, generally for 20 years. Longer-term plans, such as universal or whole life insurance offer benefits for those who pay in and live past certain points. These policies can prove profitable, but policy holders must meet a certain level of investment or face reductions in benefits, leaving the returns on investment constantly at risk.

“Using costly insurance contracts primarily as investment vehicles is generally inferior to purchasing low-cost, term life policies and investing the difference yourself,” Rande Spiegelman, vice president of financial planning for the Schwab Center for Financial Research, told the Chronicle.

Despite the potential benefits and the relatively low cost at young ages, life insurance does not always make sense. Without substantial expenses or vulnerable dependents, a policy can prove an unnecessary complication.

How to Approach an IPO

Investing in a newly public company can prove difficult for many inexperienced investors, according to The Associated Press. But some basic tips can help prepare people for what to expect.

The biggest difficulty for most initial public offerings is that for companies just going public there is no open record of their finances to this point. Even with long-established companies, it can be difficult to know much about revenue, costs and profits without explicit financial releases.

The track record for IPOs of late has proven generally poor as well, with more than half of all newly public companies this year trading below their initial offering prices. Of course, anyone investing in an IPO must understand that the chances of losses are relatively strong for most companies, in part because prices rise so quickly with the early surge of demand but also because of the volatility in the wake of this frenzy.

In general, people pay substantially more in the first few days after an IPO than in the weeks following, on average about 11 percent higher when they first hit the open market. Those purchasing directly from the company will also face their own costs, as that is generally impossible without a brokerage account with one of the banks conducting the IPO, the so-called underwriter. These banks impose a variety of rules in order to participate in an IPO, generally designed to target specific clientele, and individual investors must investigate these requirements carefully in the lead up to the desired IPO.

“It’s a rigged game,” David Menlow, president of IPOfn Financial Network, told the AP. “Underwriters rule the roost, and they make the rules for who they’re going to do business with.”

Of course, this highlights another of the major keys: understanding the IPO market itself. This industry utilizes a large number of specialized terms that can be lost on newcomers. Learning to read the actual meanings of terms like underwriter, aftermarket – the share available on the exchange after the IPO – and a “greenshoe option” – an allowance for selling extra shares given high demand – can prove the difference between a profit and a loss.

Of course understanding the market from the company’s perspective is also important. The AP notes that investors should look to companies with high sales and declining costs, a longer pedigree or hopefully profits. Yet CNN notes that companies have many ways of presenting their financials more positively before an IPO than they would appear normally. This can prove difficult for a company, which will quickly come under unreasonable expectations, but the temptation for a dramatic IPO can often prove overwhelming.

Zynga’s Mark Pincus a Critical Figure in Upcoming IPO

Of all the companies still planning to go public during the remainder of this year, online gaming company Zynga is easily the biggest name. According to Bloomberg, the company also boasts the biggest personality behind it.

Zynga chief executive officer Mark Pincus, unlike the heads of many young technology companies, is an experienced veteran of the technology sector, and even of the IPO market.

The 45-year-old Pincus first came to Silicon Valley in the mid-1990s at the forefront of the dot-com era. He founded two different online companies, one of which was ultimately sold and the other of which became a major investing force in the industry.

Even as he led these companies to substantial success, he also created tension within the companies, drawing the ire of his board of directors at one point. However, the experience offered Pincus experience in negotiating that secured him an investment in Zynga from Google and, eventually, the strong support of Facebook as a feature of the massive social networking platform.

Pincus’ earlier experiences also left him with a drive to retain control of his company, however, and Reuters reports that a special class of stocks provide him with 37 percent of voting power in the

Global ETP inflows hit new record during first three quarters of 2012

Money flowed into exchange-traded products (ETPs) at a record rate during the first third quarters of 2012, according to data provided by independent research and consultancy firm ETFGI.

Net inflows
The net inflows into ETPs, which include exchange-traded funds (ETFs), exchange-traded commodities and exchange-traded notes, reached an all-time high of $188 during the nine-month period, according to ETF Daily News. The sum surpassed the previous record of $170 billion going into these vehicles during the first three quarters of 2011 by $18 billion.

Total assets
The total assets that these ETPs had under management rose to a new all-time high of $1.86 trillion during the period, compared to the record of $1.76 trillion that was set at the end of August 2012, the media outlet reports.

Data provided by the independent research and consultancy firm reveals that the total assets held by these ETPs worldwide have increased from $1.53 trillion since the beginning of 2012, which represents a 21.7 percent gain, according to the news source. These numbers come from 4,690 ETPs and 9,626 listings, which are offered by 204 providers and traded on 56 different exchanges.

Of the $1.86 trillion that is held in ETPs, U.S. investors account for 70.1 percent of this total, with Europe representing 18.8 percent and Asia Pacific taking up 3.9 percent. Once these areas have been accounted for, 7.2 percent remains.

Competition among providers
The market for ETPs remains staunchly competitive in the face of robust expansion, and the top three providers of these financial instruments repeatedly draw more than 60 percent of the market’s assets, net new assets and trading volumes, the media outlet reports.

“ETF competition is about getting the product mix and the ETF Eco System right and not just low costs.  We will see some movement in the relative size of the industry heavyweights and while benchmark, performance, trading, liquidity and product structure will continue to be key considerations, costs as we see from the US will be an increasingly important component,” stated Deborah Fuhr, managing partner at ETFGI.

The rising amount of funds flowing into ETPs comes after a 2006 survey predicted that over the next decade, the preferences of investors would change and they would mostly choose to put their assets into financial instruments providing passive investing strategies, according to The Financial Times.  

How to effectively plan for retirement

While the recent bear markets that equities have experienced during and after the financial crisis have certainly not helped to lift the values of the portfolios held in retirement accounts, a recent Bloomberg opinion piece argues that the way humans are inherently wired is a bigger problem.

Immediate Gratification

Rick Kahler, who is a certified financial planner based in Rapid City, South Dakota, told the news source that people are essentially programmed for “financial defeat.” He said that people have a tendency to choose whatever option is the most emotionally appealing at the time.

He uses an example of putting $5,000 into a trip to the Bahamas or putting that money into an individual retirement account so that it can be withdrawn for a retirement that is 10, 20 or 30 years down the line, according to the media outlet.

William Meyer, founder and managing principal of investment research firm Social Security Solutions, emphasized the costs that can be generated by the desire for immediate gratification, the news source reports.

The market expert noted that more-than two-thirds of people who claim Social Security benefits decide to claim these benefits at an age as low as 62, according to the media outlet. Married couples might end up losing up to $100,000 as a result of taking these benefits early.

He added that “if you wait to claim until age 70, you’re locking in a benefit that is 76 percent larger.”

More effective retirement planning 

There are various ways that investors can overcome their natural wiring and therefore do a better job of planning for retirement. One potential problem that people can overcome is a tendency to buy securities when they are highly-visible and also experiencing high prices, and also sell these financial instruments when they have lost substantial value.

This problem can be overcome by utilizing the strategy of dollar cost averaging, which involves investing the same amount on a regular basis. This is the opposite of making efforts to time the market.

Diversification

Many people also have a tendency to make an effort to pick out stocks that outperform the market. In a market with high correlations, attempting to do so frequently results in failure. Instead, people can diversify their investment portfolios in order to control volatility. Diversification is a strategy that involves picking securities that have the lowest correlation possible.

This opinion piece was released shortly after a recent U.S. Securities and Exchange Commission survey revealed that a substantial fraction of retail or everyday investors know very little about basic financial instruments such as stocks or bonds. 

Energy ETFs offer investors exposure to energy sector

Energy exchange-traded funds (ETFs) can be useful to investors as they offer both diversification and exposure to the energy sector.

There are currently less than 20 funds that provide exposure to the energy sector, according to The Street. Although these securities can provide some diversification by investing in energy stocks, the sector is not without its challenges. Energy stocks suffer from volatility stemming from surging prices from 2008 to 2011.

These ETFs are based on indices from providers such as Dow Jones, Standard & Poor’s, MSCI and Barclays, the media outlet reports. Some of them seek to obtain better performance through active management.

Motley Fool and The Street have both provided recommendations in order to simplify investing for individuals who want to trade these securities. The Street has provided 10 recommended ETFs which are ranked based on factors such as liquidity and expense ratios, and its number 1 recommendation was PowerShares WilderHill Clean Energy ETF (PBW). This ETF is based on the WilderHill Energy Index and generally focuses on renewable sources of energy. Motley Fool recommended the Energy Select Sector SPDR Fund (AMEX:XLE) as its top pick.  

ETFs versus mutual funds

There are ten times as many exchange-traded funds that offer appealing results than mutual funds, investment strategist David Trainer recently told MarketWatch.

Trainer, who is also the managing partner of hedge fund adviser Novo Capital Management, LLC, stated that the performance granted by many actively-managed mutual funds do not make up for the higher expenses. Investors could just as easily invest in passively-managed exchange-traded funds (ETFs) that have low fees. Actively-managed funds are not superior in terms of the equities they pick or the returns they generate.

Trainer conducted a “bottom-up” analysis of funds that evaluated the securities held. His analysis utilized ratings of stocks provided by independent research firm New Constructs and also evaluated the total costs associated with investing in the funds. This research concluded that investors who chose to invest in ETFs instead of mutual funds have less need for concern as mutual funds have higher costs and a worse selection of stocks.

Mutual funds usually contend that they charge higher fees due to the benefits of actively managing stocks. However, Trainer’s research indicates that the stock selection is superior to using a passively managed index in only a few cases.

Mutual funds and ETFs are a few of many potential financial instruments that can be used by young investors to diversify their investments.

Food Stamp Budget

If you are a housewife, the discounted price at the shopping center is usually the one that you pay attention to. Especially if you are tasked with managing your household shopping.

Sometimes it’s hard to live on a budget. In 2019, the national average allotment for a family of four was $275.53 a month, or about $68.88 a week.

Think about it… Whenever you’ve written up a grocery list of things you “need”, how much of it was on sale? I would venture to say about 20%, if even that. By contrast, if you would have purchased the things your family likes or needs when it was on sale a few weeks or even months ago, now you have a scenario where you never pay full price of any food, except for fluid milk. That’s what we call “investing”.

Food Stamps That Matter

Courtesy : amp.businessinsider.com

So the question is how to get past the week to week, or hand to mouth confines of living on food stamps or any food budget for that matter? How can there be room to “invest” when there’s nothing left over? As the article mentions, food stamps are intended to augment, not completely meet the needs of the entire the food budget. But, for many families, that may be all they have! So can a family of four live on $68 a week? Most Grocery Gamers are reading this and saying, “of course”!

Nevertheless, we spent some time with Impactloud databases to take a look at that prospect. I wasn’t surprised to see that yes, it can be done. And there should even be room to invest a little, which makes for more options and even more value down the road. And more investing over time, when you breathe a sigh of relief…

The keys to making it work remain the same.

Courtesy : image.freepik.com

Stack the deals using sales and coupons and any other incentives. Eliminate waste with creative leftovers. Incorporate at least one meatless dinner around dried beans, which are very healthy and full of fiber. I would even advise two or three of those bean meals in the beginning to make room for more investing. Making some sacrifices on what you “want”, to get what you “need” in the first few weeks will pay off and begin to snowball. Note: “Investing”, which we used to call “stockpiling” is a Grocery Game concept that has been proven over and over again for hundreds of thousands of families. It works.

It’s Not Easy but You Could Join In The Grocery Gamers

Courtesy : http://2.bp.blogspot.com

I’m not saying it’s easy, and my heart goes out to those who are living on less. But if you’re in that boat, just know that lots of Grocery Gamers are doing it for $50 a week. Our message board is full of those testimonials, which is also a great place to learn and get brass tacks advice. I was in that boat for many years, with a $35 a week budget for my family of four. That’s how I learned to play Impactloud. You can do it.