Are you where you want to be financially? Or are you moving in the right direction at least? Chances are that you’re not there yet, or at least not getting there as quickly as you’d like. Read on for two more keys to taking control and achieving your financial goals. There are actually six things you need to do to get on the right track financially.
The first is to set goals and create a comprehensive plan to get you there. The second is to keep that goal in mind as you make investment decisions. But that’s just the beginning. The next set of two dealt with protecting your assets, which you have to do while you’re alive — and after you die.
Here is now the last set of two of the key elements you need to deal with before you can be sure you’ve covered your bases: Both of them deal with plugging your money leaks. Yes, you’re leaking money left and right. You’re probably throwing away thousands of dollars every year in interest payments, and I would bet you’re paying far more in taxes than you may need to. So let’s look at those last two in detail:
1. Get Out of Debt
Debt is the greatest barrier you’re likely to have to your financial freedom. The interest you pay on the things you buy is simply a transfer of wealth from you to the financial institutions.
What this means is that you’re paying far more for the things you buy than they are worth — and you may be paying for them months or years after they’ve outlived their usefulness. This is no way to get wealthy. In fact, it is mathematically impossible to increase your wealth by paying more for things than the value they actually bring to your financial well-being.
If you have a mortgage on your home or other income properties, that’s fine. This may make sense in a well-designed strategy. But everything else should be owned outright. And, cut up the credit cards-they are not your friends.
Living on credit has become the American Way and, ultimately, it lowers the standard of living of those who depend on it. It guarantees that we’ll remain in debt forever, unless we take drastic steps to eradicate this cancer from our lives.
2. Get Control of Your Taxes
How much are you paying in taxes? I bet that you’re paying far more than necessary. I would even argue that income taxes are to some degree voluntary in nature because you can control how much you pay. This may be news to you, but read on to see how it works.
The Internal Revenue Code is full of tax benefits that you can take advantage of as a business owner. Of course you’ll need to know about them and also know how to structure your affairs so that you can benefit from them.
Every dollar you pay to the IRS unnecessarily is one dollar of your hard-earned profit that is not going toward your own goals. Talk to a financial advisor who does advanced planning in this area to learn of some of the opportunities that may be available to you. And there are some really good ones.
This is one money leak that you can plug immediately. Doing so will allow you to invest the money you save, or, as the case may be — use it pay off your debts ever more quickly. Either way, plugging your money leaks can quickly put you on the fast track to growing your wealth.
By: Christopher Music
Posts Tagged ‘Financial Goals’
Financial Planning Strategies – 2 Keys to Plug Your Money Leaks
January 3rd, 2010Plan Your Financial Goals Or Get A Financial Planner To Help You!
January 1st, 2010
Times are changing very rapidly that it is difficult to catch up. You can only survive in this competitive world if you are constantly paced with time. In a matter of minutes, you may lose your job, your money and your life will become miserable if you do have a concrete plan on your financial goals.
When you have a good financial plan, you can be rest assured that you will not be very affected in the event where you lose your job. with sound financial knowledge, you can also hedge yourself of being in a financial difficulties.
The best time to plan your financial goals is when times are good. When the economy is doing very well, you can plan your financial goals more effectively. In financial planning, you are mainly looking at the big ‘picture’. If you do not have the necessary skill in financial planning, you can always engage a financial planner. Just make sure that you financial planner is certified and comply with the law.
Firstly, you have to have a good risk planning. Risk planning is often overlooked as it is an expense in your balance sheet. However, risk management is essential as you cannot predict the future and you have to be proactive for any changes. Risk planning needs differ with the life cycle that you are in. at different life cycle, you have different needs; young/early career, mature/ household formation and career, prime years, nearing retirement and retirement.
Everyone knows that you have to have money to make more money. in order to make your money work for you , you have to have an investment planning. Do not be intimidated by the word investment, as a matter of fact, you have to appreciate the word investment and put in extra effort in learning how to have a good investment planning. Personally, I do not believe in short- term investment or short term investment gains as financial planning itself is a long term plan.
You also need to have a good tax planning so that you do not have to spend extra money on unnecessary taxes. An accountant can definitely give you this leverage.
The main gees of financial planning is retirement planning. Everyone will have to go through this phase of life and having a comfortable retirement years is very important. In Singapore, the government had implemented a compulsory savings just for retirement. If you are not living in a country whereby the government does not have a system for retirement, you really need to have good retirement planning. A certified financial planner will know the method to calculate how much you need to have for your retirement.
Estate planning is also very important. Although some may think that is a taboo, estate planning is a must have for anyone. The reason is very simple; you want to let your dependents inherit your wealth effectively without any extra expenses and rivalry. I urge everyone to have a good and updated financial plan because you will never know what lies in front of you.
By: Nurazrin Suhadi
A Walk Through of Financial Planning Process
December 26th, 2009
As an adult, almost every decision you make, mostly has to do with money: your diet plan, your education & career goals, a family vacation & etc, all involve financial planning component to it. Hence financial planning is important to your life; success or fail to plan your financial will impact your life related to money, whether you chase after money (if you are in debt) or you make the money work for you (if you invest your money to increase your net worth).
Many people don’t plan to fail but they fail to plan; either they don’t know the correct financial planning process or they are chartered procrastinators who have thousands of excuses not to get started their financial planning process. Don’t let the procrastination to be your obstacle to get started your financial planning to secure for tomorrow. The bottom line for everyone to plan their financial successfully is to know the process of financial planning and know how to get started; here are six areas of financial planning that we will review together. Please note that these areas are all interrelated. What affects one area impacts the others as well.
1. Goal Settings
In your financial planning process, you can always get started with your financial goals setting. You should make your goals realistic so that they will be achievable. In order to set a realistic goal, you need to know your financial situation and the project future financial ability. Takes out all the important documents such as mortgage agreement, bank account fixed deposit, car loan contract & etc; based on all these information, compile a list of your current debts and assets. And from there, estimate the timeline when you will paid off these debts and make a projection of your future incomes. You set your goals based on these results at a realistic and achievable level.
2. Risk Management
Common method of risk management is using insurance to protect your assets from a loss that you couldn’t afford on your own. Insurance is a financial product that will give you a piece of mind. The insurance company will try to make you whole if you suffer a loss. Insurance coverage for assets, disabilities, sickness and even life is an important element that you should include in your financial planning process to minimize the potential risk of loss.
3. Tax Planning
Are you taking advantage of all tax benefits Uncle Sam has to offer? Although Uncle Sam has always has his hand in your wallet because he wants his fair share, but he also offer tax benefits for you, so you need to know how to take advantage of these benefits. The goal of tax planning is to help you minimize your federal income tax liability as much as you are allowed by tax law while saving for retirement.
4. Retirement Planning
When you are at age 25, retirement will seem so far away. At 25, you will think 60 are old, but when reach 60, you think 85 are old. Retirement planning should begin with your first job. So you need to figure out how much to save from now so that you will reach you goals of retirement later. There is never too early to start planning for your retirement.
5. Investment Planning
In your financial planning process, you should think of how to increase your asset net worth and achieve your financial goals with what you have right now. Investing is a tool you can use to achieve your financial goals that you set for yourself. All investments come with certain risks; you need to understand how much risk you should be taking with your investment to achieve your goals.
6. Estate Planning
Life journey will end one day, but many people try to avoid thinking about. The fact is no one will get out of this world alive, so you might as well plan for it. There is a need to protect your assets from Uncle Sam and to have things get in order for your loving family that you will left behind later.
In Summary
Financial planning is important to your life; success or fail to plan your financial will impact your life related to money. The six areas of financial planning that we just reviewed are all interrelated. Hat affects one area impacts the other areas as well, you should be aware of these areas and ho they impact your financial strategies.
By: Cornie Herring