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Mar 152015

Who Needs Life Insurance?

By |March 15th, 2015|General Personal Finance|Comments Off on Who Needs Life Insurance?

One of the most common questions asked about life insurance is “who needs life insurance?” The answer is actually more complicated than you may think. There are many factors that will go into determining whether it would be a good financial move to obtain a life insurance policy. Most insurance companies have a wide variety of different life insurance policies available and using an insurance comparison website like InsureChance will allow you to view many of them at a glance. Here are some of the groups that would benefit from having a life insurance policy covering them.

Married Couples

Every married couple should have some type of life insurance policy covering them. If both parties work outside the home, the life insurance policy should be used to replace employment income so that the surviving spouse can maintain the same standard of living without financial hardship. If only one spouse works outside the home, they should definitely be covered by life insurance because the loss of their income would be devastating to their family. The spouse that stays at home should also be covered so that the costs of childcare and other expenses for things that the stay at home spouse took care of can be paid without placing the entire burden on the shoulders of the surviving spouse.

Homeowners

It is important for homeowners to have life insurance so that their home will not revert to bank ownership if they were to die before the mortgage on the home is paid off. The beneficiary of the life insurance policy can use the proceeds of the policy to pay off the rest of the mortgage and retain possession of the home. Having this type of life insurance can help keep your home in the family. Mortgage life insurance can be an option for homeowners who are denied regular life insurance for medical reasons.

Business Owners

It is also important for small business owners to purchase life insurance. A life insurance policy can ensure your company remains in business after your death and provide for your employees in the event that the unthinkable happens. The last thing that you want to do is leave several families in dire financial circumstances due to your unexpected death. Check out several different types of life insurance policies to see which ones fits the needs of your small business the best.

Mar 142015

How Trading Online Currency Works

By |March 14th, 2015|General Personal Finance|Comments Off on How Trading Online Currency Works

The foreign exchange market is undoubtedly one of the most gripping and fast-paced markets in the world of finance. It also happens to be the most liquid market in the world and it is this aspect which sets it apart from other markets. In recent years, online traders across the globe have increasingly acknowledged forex as an area to be exploited thanks to its accessibility and potentially lucrative financial rewards. Investors who are involved in trading currencies will be aware that the process involves making a prediction on small movements in the global economy and buying and selling accordingly. They can then utilize up-to-the-minute exchange rate data to conduct an analysis of currencies using economic forecasts to acquire a good understanding of the currency’s real value.

Online currency trading has become immensely popular with around $5 trillion forex trading taking place across the world every day. While many people regard forex as the realm of bigger institutions such as banks, the advent of the internet has made it accessible to average individuals who have spotted its potential as a means to making financial rewards.

Prior to becoming involved in online currency trading, a trader should understand exactly how forex transactions are carried out. Online currency trading is basically trading currencies across the internet and is otherwise known as an OTC market (Over The Counter). This basically means there is no centralized location such as the NYSE from which trading activities take place. The advantage of this is that traders wishing to get involved can do so wherever in the world they are located.

Online currency trading differs from the more traditional ways of transacting financial instruments in that most trading activities are essentially ‘do-it-yourself’.  With just a computer and internet access, a trader will be able to work out what, when and how much to buy quite simply with just the click of a mouse. With speed being of the essence, a trader’s orders can then be executed immediately via an online broker’s platform.

Trading currencies always takes place in pairs and are referred to as ‘currency pairs’ with each currency having a specific abbreviation assigned to it. This can be illustrated with a popular currency pair such as USD/JPY which denotes the strength of the U.S. Dollar against that of the Japanese yen. The first currency in the pair is referred to as the ‘base’ currency whereas the second currency is referred to as the ‘quote’ currency. There is a huge range of currency pairs and experience will dictate which ones are likely to present better opportunities for profitable trading. All the major pairs have the USD either as a ‘base’ or as a ‘quote’ currency whereas the minor pairs do not include the USD. The majority of traders are involved in trading the world’s seven most liquid currency pairs including the EUR/USD and USD/JPY and 3 commodity pairs such as the USD/CAD which account for over 95% of all speculative trading. Taking into consideration the comparatively low number of trading instruments made up of only 18 currency pairs and crosses that are actively traded, the forex market is far more concentrated than the stock market.

To help traders determine potentially profitable trades, traders will find a series of special tools provided on a broker’s online trading platform. Once a trader has conducted an analysis of the forex market, transaction activities may be automated via the trading platform. It is the ease by which this can be done that has made online currency trading increase so dramatically over the other financial activities previously chosen by traders.

Online currency trading also happens to be the most popular way of trading binary options. The main reason for this is that currencies are particularly reactive to short-term movements brought about by the release of important economic data, presenting frequent trading opportunities. Many traders will, for example, be familiar with trading on data releases such as the U.S. Consumer Price Index (CPI) which can be illustrated in the following example. News of a decrease in this index will likely negatively impact the U.S. dollar. If we assume a positive resolution to Greece’s EU debt situation, this will positively impact on the Euro so a trader could capitalize on this situation by placing a ‘CALL’ option on the EUR/USD currency pair. If the trader makes the correct decision, the trade will end ‘in-the-money’ and he will make a profit.

Overall, online currency trading is an exciting and potentially lucrative way to trade and traders wishing to set out on this path are recommended to use the services of a regulated online broker such as Banc De Binary.

Mar 132015

How to Effectively Escape Debt

By |March 13th, 2015|General Personal Finance|Comments Off on How to Effectively Escape Debt

4b34aa6bc8a542738c9bb93307b862acAre you drowning in debt? Or perhaps need a few suggestions regarding the most effective ways to get yourself out of debt? Part of the process may require filing bankruptcy, such as chapter 7. This will allow you to get your debt under control while you figure out how to handle your finances moving forward. Knowing what chapter 7 entails, and ways to conquer that mountain of debt, can help get you back on the right track.

What is chapter 7?

chapter 7 is a bankruptcy proceeding where a bankruptcy trustee gathers, then sells, the debtor’s nonexempt assets. Proceeds from these sales ultimately go towards paying off creditors. Investors who take the least amount of risk are often paid first, followed by unsecured creditors. Any investors involved are traditionally paid off last. The goal of chapter 7, or any type of bankruptcy, is to free oneself from debts in order to start fresh. It’s important to remember that while most people or organizations file for chapter 7, some types of debts cannot be discharged. In addition, bankruptcy discharges don’t get rid of a lien on a property.

How do I Conquer Debt?

There are many ways to conquer debt, some of which are quite simple and straightforward. In some instances you can start to reduce your debt immediately. If you’ve filed for chapter 7 bankruptcy, you will generally receive plenty of assistance in paying off your debts. However, it’s never too late to learn vital do-it-yourself methods for getting out of debt and handling your own finances afterwards. Some helpful ways to conquer debt include:

Create a budget. Establishing a budget gives you a clear idea of what your monthly income and expenses involve, and how much you can afford to spend per month. Once you’ve written down your income and expenses, establish categories for monthly spending such as groceries, travel, health, and utilities. After completing your chart, spreadsheet, or other form of documentation, it’s time to closely examine your budget and determine areas where you can cut costs.

Pay off your biggest debts first. It may be tempting to pay off your smallest piles of debt first, but you’ll do yourself the biggest favor by paying off the most expensive debt first. This is particularly true for credit cards, where you can often sort the interest rates from highest to lowest. Start by paying off your debt on the credit card with the highest interest rate first. Once this credit card debt is gone, you can focus on paying off your lower interest cards.

Organize your debt: Organization is key to helping you determine effectively pay off your outstanding debts in the most effective manner. There are generally two approaches to take, the first of which involves listing debts in order from smaller to largest without paying any attention to interest rates. You may find it encouraging to start from the smallest numbers and work your way up. Another method is laddering, or listing your debts from highest to lowest interest rates. Using this method will enable you to save the greatest amount of money in interest over time.

If you’re searching for a fresh financial start, filing for chapter 7 can be the best solution. Taking the plunge and filing for bankruptcy can ultimately help you improve your credit score and keep possessions that matter most, such as your house and car. Aside from eliminating debts you can’t pay off, you can use this time to conquer debt and stay debt-free in the future.

Mar 112015

5 Investment Ideas for Retirement

By |March 11th, 2015|General Personal Finance|Comments Off on 5 Investment Ideas for Retirement

54d658dc84aa44889a24d1ec821d75fbAs people are planning for retirement there is that inevitable fear of running out of money. Will we enjoy retirement without outliving our nest egg? Have I saved enough for this?

Sometimes it is best to keep a little extra income on the side but how can this be done? If this will be your first time investing then this is for you!

Here are five investment ideas for retirement.

Immediate Annuities

Its purpose is to produce income and that is what you need in retirement. When you know that you can get a check every month, guaranteed, is very comforting. It may not sound so appealing in numbers but at least you don’t have to worry about your money running out and you could invest the rest of your assets a bit more aggressively.

There are two types of annuities, fixed immediate annuities and variable immediate annuities. Some may offer income that’ll increase with inflation but this means that you will be receiving a lower monthly amount.

Immediate annuities can be a good solution for those that don’t have other sources of guaranteed income or for singles with long life expectancy.

Bonds

When you buy bonds, you loan money to the government, corporation or a municipality.

The borrower agrees to pay you interest for a set amount of time and when the bond matures, the principal is returned to you. This can be another source of steady retirement income. You can buy bonds for the income they produce or the guaranteed principal you will receive when they mature. Don’t buy them expecting high returns or making a gain in capital appreciation.

Rental Real Estate

Rental properties can provide a steady source of income but you should also be prepared for maintenance costs. Before you buy a rental property, you will need to calculate all the potential expenses that may arise over the time frame you think you will own the property.

Don’t go and start investing in real estate just because you want to join the bandwagon. Make sure you do your homework, read books on real estate investing, talk to experienced investors or join a real estate investment club before jumping in to the investment property business.

Gold IRAs

A Gold IRA is an individual retirement account. Gold is stored in several forms whether coins, bouillons, bars or other goods. It is a viable and profitable venture since precious metals are a stable asset in the market, despite inflations and fluctuations, it is just increasing steadily all throughout.

It doesn’t rely on overall performance of other assets and only requires very simple arithmetic calculations to see its potential and how it can grow over time.

Safe Investments

You will want to keep a portion of your retirement fund in other safe alternatives. The primary goal of a safe investment is to protect what you have rather than generate income. This could be an emergency fund and it should not be included in as an asset to produce retirement income. This is a safety net, so that you will have a back-up, should something unexpected happen in the retirement years.

If you are unsure with what to do with your money, stash it into a safe investment while you take time to think things through and make an educated decision.

Not all of these ideas may be for you, so it’s best to check out things first. A lot of people rush to put their money into an investment because they feel like their money should not be sitting in the bank and this is not exactly a wise decision.

Making thorough and well-informed investments take time. Educate yourself or ask advice from advisors. No one should pressure you into making a quick investment decision. If you feel that you are being pressured then walk away from it. That person may not have your best interest in mind.

Mar 102015

It’s All About Creating Income

By |March 10th, 2015|Blog, Personal Finance Tips|20 Comments

I was listening to talk radio the other day (because pretty much all music these days is freaking miserable) and there was a guy who was trying to sell his “get rich quick with real estate” program.

I wasn’t very interested in his real estate program, but I was really interested in his philosophy on money, because he summed it up better than I’ve heard it summed up before. He is successful because while everyone else is trying to build savings, he has been building income.

When he said that, it hit me. We are all trying to build income; most of us just do a really crappy job of it.



Savings = Income For the Future

A lot of people who save for retirement are thinking about reaching some magical number. Maybe it’s $1 million. These people think that if they can just save $1 million then they’ll be rich.

But what are they going to do with that $1 million once they stop working?

They are going to use it as income!

Instead of getting paid $50,000 a year from their job, they are going to pay themselves $50,000 a year out of their $1 million of savings. So while they think their goal is to have $1 million, their real goal is to be able to make $50k a year without having to show up at a job. (feel free to substitute different numbers if your goals are different from $1 million or $50k a year)

The secret to retirement is not savings; it’s income!

Lots of people worry about saving millions of dollars. If you generate passive income, you won't need so much in savings.

Income Is The Real Goal

So now that we’ve come to the realization that the goal is not a big pile of money, does this change the approach?

income

photo credit: flickr.com/stevendepolo

To answer that we need to know if it is easier to save $1 million or to generate $50,000 a year of passive income? Neither one is easy, but I think it’s worth trying for the passive income. If I had a trick to get that much passive income today then I’d probably quit my job. However, here are a few places to start:

Dividend Income – If you have been building savings then you probably already have some dividend income. It might not be much, but every bit helps. If you have $10,000 in high yield stocks getting you 4%, then that’s $400 a year on top of any gains (or losses) you might get from the stock price.

Rental Property Income – If you can buy a house with cash and rent it out, you can earn 100% of the rent (minus maintenance costs) as passive income, which is $12,000 a year if your can pull in $1,000 a month. Even if you have a mortgage on a rental property, any positive cash flow is passive income.

Loaning Money – One way to build income is to loan money via peer-to-peer platforms. There are two major ones: prosper.com and lendingclub.com. The peer-to-peer industry has had problems with growth and has recently moved away from its emphasis on the individual investor. However, both prosper and lendingclub allow you to automatically reinvest your interest payments. Also peer to peer lending generally has return that higher that bond coupon payments or stock dividends. This blog has covered lending club extensively, how much you can make with it, a lending club profit calculator and how lending club makes saving easier.

A Website – I make about $400 a year with pay-per-click ads on this website, while I have done zero SEO and have very few advertisements. If you take the time to build a website and monetize it more than I do this one, it could definitely give you $1,000 a year or more as long as you make semi-regular updates (which you can pay someone to do). You can also start a successful email marketing campaign which can help generate traffic to your site.

Own a Business – Maybe you can start a business and then pay someone to run it for you. Think about owning a restaurant and just coming in once a month to make sure no one has burned it down. You could own any kind of business as long as you are willing to trust someone else to run it for you while you just pocket all the profits. This one takes the most work, but the earning potential is essentially unlimited. You can check out 29 Ways to Make Money from The Penny Hoarder to come up with a side business idea.

Building Income is Worth a Shot

So as you can see above, it’s not easy to create a large amount of passive income. And all of the ways to generate income (except potentially owning a business) require that you have money to begin with. In summary, building passive income is freaking hard!

But so is saving millions of dollars.

And while $1 million might run out one day, a steady stream of $50k a year is never going to dry up. You just have to wait for that next payment to come in and you have money to spend yet again.

Readers: What are you doing (if anything) to build yourself some passive income?

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Mar 92015

Budget Bedroom Blinds: A Good Night’s Sleep Doesn’t Have to Cost the Earth

By |March 9th, 2015|General Personal Finance|Comments Off on Budget Bedroom Blinds: A Good Night’s Sleep Doesn’t Have to Cost the Earth

Once upon a time blinds were an almightily cheap option for our windows and in most cases, they were merely a piece of fabric attached to a system. Now, advancements in the industry mean that the general consensus is that they are almightily expensive. Fortunately, this still isn’t always the case.

Admittedly, the window treatments industry has progressed at a rate which was probably once seen as impossible. However, it still retains budget products that can satisfy the needs of most consumers and as the title of this guide has suggested, they can certainly satisfy the need of the person who just wants a good night’s sleep.

thousand blinds
Let’s start with one of the simplest products; the blackout blind. This is the window treatment that can block out all natural light that threatens to peak through the window. As countless studies have proven, one of the main ingredients for a good night’s sleep is pure darkness – so something as simple as a blackout product can achieve this relatively easily. Due to the fact that these products have been on the market for such a long period of time, the costs are low and you can therefore get your forty winks without splashing out an arm and a leg.

Of course, a good night’s sleep isn’t all about darkness. For some people, it might be related to sleeping in a comfortable temperature. Particularly if you reside in a hot country, the process of tossing and turning and embarking on a general battle with the duvet because of the heat is one that is frustrating to say the least. While in extreme cases you might need to tap into something like an air conditioning system, it’s also possible to manage the problem through smart window treatment options. The blackout blind can again work wonders as this can block out the heat during the day, while if you want to permit at least some natural light to filter through in the daytime choose something like a solar shade.

It’s also possible to control another sleep-defying factor via the windows; this time involving noise pollution. As we all know, glazing is the thinnest part of our property so this also means that it’s the easiest route for noise to find its way through. Most modern window solutions are able to combat this though and if we turn to the insulated shade, this is probably the most effective way to block out most of the distractions from the outside. If you’re on a tight budget, a single cellular approach will work, while those who want to drain almost every last little bit of sound should consider a thicker alternative.

As you can see, blinds are one of the easiest ways to tailor your bedroom to become a sleep-haven. Additionally, it’s still possible to achieve this with most of the budget blind solutions – meaning that you really don’t have to spend the earth for a good night’s sleep anymore.