Investment Management

Investment management is the effective management of various securities like shares, bonds etc. and assets like real estate to meet specified investment goals.

Investment management is a large and important global industry in its own right responsible for care-taking of trillions of dollars, euro, pounds and yen. Coming under the remit of financial services many of the world's largest companies are at least in part investment managers and employ millions of staff and create billions in revenue.

Fund manager or investment adviser in the United States refers to both a firm that provides investment management services and an individual who directs fund management decisions.


The provision of 'investment management services' comprises of...

* Financial analysis

* Asset selection

* Stock selection

* Plan implementation

* Ongoing monitoring of investments and lastly

* Effective guidance for investors.

How to get Student Loans easily

Student Education Loans is quite important for college students because its going to decide their future career.
So, if you are thinking about college or student loans in particular, here are some of the important aspects that you have to consider so as to get a good easy student loans.

1. Calculate figures

Calculate the tuition and fees of your desired course. You should also have an estimate of other expenses like travel costs, college text books, room and board, college tuition, personal expenses, and other things.

2. Research about student loans

The next step to take is to look for a student loan that is right for you. All student loans are not the same because not all payment plans are suitable for all. Gather as much information as you can so that you can choose from the options available for you.
Compare and contrast the types of student loans so that you can narrow down your decision process. They are different in terms of payment terms, grace period, or penalties.

3. Choose and manage well

From the different types of student loans mentioned above, choose one or more that is suitable for your needs and your budget. Be sure that once you have chosen the type of student loan that you like, you could actually manage it well and handle the problems that comes along the way.

Student loans were made for two reasons. One is to help the student financially in their quest for higher education, and the other reason is to help them be mature individuals. By having student loans, a student is able to face responsibilities which are really essential once that they step beyond their learning years into everyday life.

Remember though that these loans do eventually have to be paid back, after graduation if not sooner.

Student Loans - Types

Student Education Loans is quite important for college students because its going to decide their future career.

There are five types of loans available for student expenses:

1. subsidized (based on financial need, and the government will subsidize the interest charges until education is completed)

2. Unsubsidized (no financial need, interest accrual starts immediately)

3. Direct PLUS loans (Parent Loan to Undergraduate Student)

4. Private loans and

5. Home equity loans.


-- Financial Need Student Loans

This type of student loan has a low interest rate and is from the federal government for students with financial need. The interest rate in this type of loan doesn't begin until the student has begun repayment of the amount thus making it easier and cheap if compared with other student loans.

-- Non-Financial Need Student Loans

This is quite similar to the financial need student loan, the only difference is that it is not based on the financial need of the family and the interest rate starts while the student is still in school.

-- Federal PLUS (Parent Loan for Undergraduate Students)

This type of student loan is not based on the financial needs of the student. The parents of the child could apply for this type of student loan. It also doesn't consider the family's income or asset when applying for a student loan. The amount of eligibility is based on the educational expense minus other loans, grants and scholarships t he student qualifies for.

-- Private Loans

The ones that are offering this type of loans are usually companies, banks, and financial institutions. These firms provide private student loans for both undergraduate and graduate students. The interest rates in this type of loan are actually high so it is not really recommended for students to choose this type of loan.

-- Home Equity Loans and Lines Of Credit

In this type of student loan, a home equity loan or line of credit is the way homeowners pay for your college education. One possible advantage here is a tax deductible interest.

Loans

A loan is a type of debt.The borrower initially receives an amount of money from the lender, which he has to pay back, usually but not always in regular installments. This service is generally provided at a cost, referred to as interest on the debt. A loan is of the annuity type if the amount paid periodically is fixed.

There are two types of loans

1. A secured loan in which the borrower pledges some asset (e.g. a car or property) as collateral for the loan.
A mortgage loan is a very common type of debt instrument, used by many individuals to purchase housing. In this arrangement, the money is used to purchase the property.

2. Unsecured loans which are monetary loans that are not secured against the borrower's assets. These are available from financial institutions under many different forms and packages like

* Credit card debt

* Personal loans

* Bank overdrafts

* Corporate bonds

The interest rates applicable to these different forms may vary depending on the lender and the borrower which may or may not be regulated by law.

Insurance

While making and saving money is an important aspect of your finances it is equally important to insure and protect these things as well. Accidents and disasters can and do happen, and if you aren’t adequately insured, it could leave you in financial ruin. You need insurance to protect your life, your ability to earn income, and to keep a roof over your head.

Important Types of insurance are...

Health Insurance

If you are an employer you will be offered health benefits, when you decide to retire early or lose your job, it becomes quickly apparent how valuable that benefit was. Generally, when an employer offers health insurance coverage, the premium costs are split between you and the employer.
When you terminate service with your employer, regardless of whether or not it is voluntary, you probably won’t be able to remain on the employer’s group plan unless the termination comes with some sort of severance package. Even then, the duration of coverage is typically limited to a few months.Individuals are not eligible for Medicare until age 65, so if you retire at any point prior to turning 65, you’ll need to find coverage to bridge that gap.

Home Insurance

If you own a home, you probably have homeowners insurance.Its certain that you want to have adequate protection, because your home is probably one of your greatest assets.
Home insurance genrally covers perils pertaining to Fire,Lightning,Wind,Theft,Aircraft,Vehicle,Vandalism,Smoke,Explosion,Volcanic eruption,Riots and Exclusions.You have to make sure that you also consider Earthquakes,Floods,Water damage,Neglect,Intentional loss,Nuclear hazard,Power failure and War when choosing a home insurance policy.

Auto Insurance

Auto insurance is very important and can account for a sizable portion of your monthly budget.There are many companies providing insurance with various quotes.Some of the important things for choosing a good insurance policy are...

* Buy Insurance from a Reputable Company.
* Don’t Under insure at the cost of your life.
* Drive a Less Expensive Car or Drop Some Coverage
* Get Discounts and offers from companies with a clean driving record.

Life Insurance

Life insurance is often neglected but it is one of the most important things. If you don’t have enough life insurance, you could put your family in a difficult situation upon your death.
If you are single and theres no one depending on you,you probably dont need much of insurance.But if you are married you have your spouse chidren and other dependents you got to have a good life insurance coverage that will help your loved ones in case of your death.
Here are a few things to consider while choosing Life insurance

* Financial expenses of your family upon your death.
* Consider of your salary is required to meet your current expenses and how long would your dependents need financial support.
* How much, if any, would you want to leave behind to fund your family's needs or leave an inheritance.

Tax

Taxes are a necessary part of life but they don't have to be a burden.The important forms of taxes are as under...

* Capital gains tax upon sale of a capital asset.
* Corporation Tax levied by various jurisdictions on the profits made by companies .
* Excises Taxes based on the quantity, not the value, of product purchased.
* Income Tax levied on the financial income .
* Inheritance Tax similar to estate tax.
* Property Tax imposed on property by reason of its ownership.
* Retirement Tax.
* Sales Tax levied when a commodity is sold to its final consumer.
* Tariffs or custom duty for import or export of goods.
* Transfer Tax i.e stamp duty charges in contract transactions.
* Value Added Tax i.e Goods and Services Tax.

Tax management is quite important so as to maintain good and healthy financial status.Most important of all is the selection of the right tax saving instruments and making proper investments.
The amount of the tax to be paid is calculated on the nature of investments made, income earned, and the quantum of other incomes like salary, rent from property, interest etc. There are many deductions and exemptions applicable on the net taxable amount, depending upon the source of income. To take advantage of these facilities tax planning is quite important.

Taxes differ from place of residence and the type of income.However there are three basic steps in Tax Planning which would aid a person in making prudent tax plans to reduce their income tax liability and ensure a better tomorrow by making compulsory savings by investing in safe government schemes.

* Calculating taxable income.

* Calculating tax payable on gross taxable income for the entire financial year.

* To either pay the tax without tax planning or minimize tax through planning.

Tax payers can avail themselves of tax incentives as furnished by the government and while making tax planning the exemptions should be taken to consideration.

You can also hire experienced tax attorneys for professional help.

For Smart online tax planning tips check out...
http://www.moneycontrol.com/mccode/news/article/news_article.php?autono=260333

Credit & Debt Management

Credit can be a great financial tool in ones personal life but when it is not used properly it can create serious debt problems.Before you go for a credit find out the difference between good debt and bad debt, and learn how to establish credit and maintain a good credit score.

Here are some of the important features for maintaining a good Credit process.

* Watch Out for Hidden Credit Card Fees.
* Ask for a Lower Interest Rate.
* Find Money to Pay Down your Credit Card Debt.
* Beware of the Warning Signs of Too Much Debt.
* Overcome Bad Spending Habits by choosing Debtors Anonymous.
* Break the habit of Minimum Payment on Your Credit Card for a good credit score in long run.

Eventhough we take utmost care in credit management sometimes we are prone to debt problems.So to maintain good credit n debit processing you need to manage your debts as well.

To get out of debt, you need to

* Assess your financial situation.
* Understand the basics of how credit works.
* Get help of experts when you need it.
* Budget and cut costs effectively.
* Avoid credit and debt mistakes.

Savings

Savings

Personal savings is quite important for a secured future but most people save money as an afterthought. When they receive the income money is allocated to various bills, groceries, rent or a mortgage and other daily expenses and hardly any money would be left for savings.

* Choosing a good Bank Account for Savings

The best thing about savings accounts is that they are completely liquid i.e you can access your money on very short notice. You may be able to go online and transfer money from savings to checking, withdraw from an ATM, or stop into your local branch.

For a savings account, you have to look at the interest rate the bank is providing. You could be earning anywhere from less than 1% up to 4% or more depending on the Bank and type of account. The problem is that many banks only provide high interest rates for significant balances over a certain amount.

When deposits are made into a savings account automatically and regularly you don’t have to think about it and the money is deposited before you have time to worry about expenses or how much money will be left over.

* A better solution for this is Automatic Savings Plan.

Its very easy to set up an automatic savings plan.If you currently have direct deposit through your employer you will find the easiest way to establish this is to have part of your paycheck directly deposited into your savings account as well. This will ensure that a part of your earnings money is saved every time you earn.

In case you dont have a direct deposit there is still an easy option available if you do your banking at a local branch. Typically your bank can link both of your checking account and saving account together and can establish automated transfers between accounts at a regular interval that you select. So whenever you cash your paycheck you can establish an automatic transfer of a set amount of money from your checking account to savings account.

Savings and Investments

Savings in Personal Finance refers to the accumulated money put aside by saving - typically by putting it on deposit - this is distinct from investment where there is an element of risk.

Personal saving corresponds to nominal preservation of money for future use. Although inflation can still erode its real value,a deposit account paying interest is typically used to hold money for future needs, i.e. an emergency fund, to make a capital purchase (car, house, vacation, etc.) or to give to someone else (children, tax bill etc.).

Within personal finance, money used to purchase shares, put in a collective investment scheme or used to buy any asset where there is an element of capital risk is deemed an Investment. This distinction is important as the investment risk can cause a capital loss when an investment is realized, unlike cash saving(s). Some risk applies to savings in a deposit account: real value is lost when inflation exceeds after-tax interest rates, and in extreme cases loss can occur due to bank failure.

In many instances the terms saving and investment are used interchangeably. For example many deposit accounts are labeled as investment accounts by banks for marketing purposes. To help establish whether an asset is saving(s) or an investment you should ask yourself, "where is my money invested?" If the answer is cash then it is savings, if it is a type of asset which can fluctuate in nominal value then it is investment.

Financial Planning for a Business

In case of Business Financial planning will help to achieve its strategic goals and objectives. Generally a Business company creates a Financial Plan immediately after the vision and objectives are set.

The Planning involves each of the activities, resources, equipment and materials that are needed to achieve these objectives with respect to Timeframes.

In General,The Financial Planning involves the following tasks:

* Assess all the possible Business Environment.

* Confirm the Business Vision and Objectives.

* Identify the types of Resources needed to achieve these objectives.

* Quantify the amount of Resource w.r.t labor, equipment and materials.

* Calculate the total cost of each type of resource.

* Summarize the costs to create a budget.

* Identify and Forecast any risks and issues with the budget set.

Implementation of Financial Planning is critical to the success of any organization. It provides the Business Plan with rigor, by confirming that the objectives set are achievable from a financial point of view.

Planning a Personal Budget

A personal budget is a finance plan that allocates future personal income towards expenses, savings and debt repayment.

Importance

A budget should have a purpose or defined goal that is achieved within a certain time period.The more complicated the budgeting process is, the less likely a person is to keep up with it. The purpose of a personal budget is to identify where income and expenditure is present in the common household.

Flexibility

The budgeting process should be flexible; the consumer should have an expectation that a budget will change from month to month, and will require monthly review. Cost overruns in one category of a budget should in the next month be accounted for or prevented. For example, if a family spends $40 more than they planned on food in spite of their best efforts, next month's budget should reflect an approximate $40 increase and corresponding decrease in other parts of the budget.


Budgetting in case of irregular income

Special precautions need to be taken for families operating on an irregular income.People with an irregular income should keep two common major pitfalls in mind when planning their finances:

Spending more than their average income, and
Running out of money even when income is on average.

Allocation guidelines

**The 60% Solution

The 60% Solution suggests on spending 60% of a household's gross income (before taxes) on fixed expenses. Fixed expenses includes federal, state and Social Security taxes, insurance, regular bills and living expenses- like food and clothing, car and house payments.

The other 40% breaks down as follows, with 10% allocated to each category:

Retirement: Money set aside into an IRA (Individual Retirement Account).

Long-term savings: Money set aside for car purchases, major home fix-ups,or to pa down substantial debts.

Irregular expenses: Vacations, major repair bills, new appliances etc.

Fun money: Money set aside for entertainment purposes.

*Another allocation principle is that housing expenses (mortgage or rent) should be limited to 25% of spendable income.

Secure Your Financial Future

Is building a Secure Financial Future akin to rocket surgery ???

Absolutely not— you need to do five key things to get started:

1. Determine your short and long-term financial goals.

Start by taking a comprehensive snapshot of your current situation—your assets, net income, debts and living expenses. Once you’ve done this you can start setting long and short-term financial goals. Decide what lifestyle you want to enjoy between now and when you retire; what retirement lifestyle do you expect to have and what sort of education do you expect to provide for your children.

2. After you've assessed where you are now and where you want to be in
the future take steps to protect your ability to get there--and stay there once you’ve arrived. A major part of your family’s financial program is to insure against major financial loss. There are simply no guarantees against serious illness, accidents or untimely death. So take the steps necessary to insure against loss of life, loss of income and loss of physical assets.

3. Pay yourself first.

Save at least 10% of pre-tax income – more if possible. Pay down your
mortgage as quickly as possible, especially in times of low interest.
In the short term, you'll be better off reducing a mortgage that costs you 6% than earning around a taxable 1.5% (or less) in a savings account.

Maximize your RSP/401K contribution every year and make the contribution at the beginning rather than at the end of the year.
Simply doing that will substantially increase the size of your retirement nest egg when you’re ready to cash out.

4. Avoid credit traps.

If you use credit cards, always pay any money owing before interest is
due. Consider paying off your credit card immediately if you have money in a savings account—as with the mortgage, the interest earned on the savings is certain to be lower than what’s charged by the credit card company. Avoid using credit cards for cash advances.Usually the interest charges are higher for these and the charges begin immediately. If you do carry a balance on your cards try to negotiate a lower rate with the credit card company. If you need money urgently, it's usually cheaper to negotiate a personal loan with your bank or credit union.

5. Protect your family in the event of your death. Make a Will. If you die without leaving a Will in all likelihood the only thing you’ll really leave your loved ones is a bloody mess—one that could take many years and a whole bunch of money to sort out.

Without a Will, the court/government will decide how your property and
possessions will be divided. I would expect there are two chances of them acting in a way consistent with what your wishes might have been—slim and none!

Making a Will doesn't mean the Grim Reaper is about to pay you a visit. It simply means that your affairs will be sorted out in the ways you want and, as a result, you can go about your life with a peaceful mind because your loved ones are protected.

“Don’t try this alone—use a trained professional,” is absolutely the best advice I’m really qualified to give.

Financial Planning Tips

Some Financial Rules Any Professional Should Live By...

While finance can be both very lucrative and rewarding, people should use caution. It takes both knowledge and discipline. The following are some basic financial planning tips any professional should live by for a secured and successful life.

1. Divide every dollar wisely

Money is dived into 4 important "buckets". Make sure you're allocating correctly. These "buckets" are:

• Essential Expenses
• Short-Term Savings
• Retirement Savings
• Emergency Expenses

2. Stay out of debt

In today's society it's almost impossible to completely stay out of debt, however try to keep it under control. Only use credit cards if you expect to pay them off every month. Bottom line - don't spend money you don't have.

3. Property

Property can be a very good investment; however it can also be dangerous. Make sure you make wise decisions when purchasing a home or office. Do plenty of research of the area, as well as the mortgage you get.

4. Get the whole family involved

It's never too early to start learning about money. Teach your children how to save and the value of planning for the future. The lessons learned will never be forgotten.

5. The importance of Insurance

While many people think it's a waist of money, insurance can be a life savor. By shopping around, you'll be able to save on premiums.

6. Family matters

Avoid lending or borrowing money to friends or family. While it may seem like a good idea, it may lead to undue strain on your relationships. It's best to go through financial institutions for these types of matters.

Personal Financial Planning - An Introduction

Can You Plan Your Money the Wrong Way???

If you spend mindlessly you will probably fall into lot of trouble and make quite a mess in your life.In order to avoid money problems in your life you should plan out your personal finances.Financial management is therefore quite important.You have to make goals and devise a budgeting plan to help you achieve those goals. This sounds easy enough, but is it quite so simple?

For those without a financial mind or for those who are afraid of even the word financial, money management scares them. It looks and sounds difficult and they can't imagine themselves successfully doing it on there own.

What if I spend too much on a house and I can't pay my mortgage???
What if I cut back so much on my food that I can't feed my family???
What if I choose the wrong investments and lose all my money???

These are all questions that someone who is scared to manage their money may be asking, and there are many more.You could probably think of a few right now.This is no reason not to manage your money.You are not going to mess it up. Sure, money management and financial planning is not fool-proof, but once you get the hang of it, it is not hard. Once you get your goals down and set up a budget, all you have to do is follow it.

You can't set goals the wrong way. If you have a goal to buy a house in 5 years, you need to come up with a way to afford it. You may decide you need $40,000 for a down-payment. If you save $8,000 a year, or about $670 a month, you can have it. If you invest the money, or put it into a savings account, you will need less, or you will have extra, because your money will earn interest. Even if you didn't know this and you just stuck it in a bank account that earned interest without realizing it, you would have done anything wrong. You would just be happy to have a bit more money when the time came to buy.

A big part of money planning is budgeting. You need to write down what you will spend your money on and spend only on that. Figure out what you need to save and then work around it. The only way you can mess this up is by not sticking to your budget. The worst way you can plan your money the wrong way is by not planning it at all.

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