Archive for the ‘ISA Savings’ Category

Prosperity & Abundance: Being Willing To Recieve

Saturday, July 30th, 2011

Fantasizing about great wealth is a frequent pastime for many of us. How wonderful it would be not to worry about paying bills, to be able to buy whatever we want, and have the freedom to travel as often as we’d like. It’s a lovely fantasy, but how accurate is it, really?

One mistake most of us make is believing that money will solve all of our problems, and our lives will become smooth and serene. Not true! Having more money might help ease certain struggles, but it will not transform our lives. If anything, having a lot of money will bring on a new set of problems beyond anything we might imagine.

Before we will TRULY be ready to handle increased abundance, we need to foster certain qualities within ourselves:

Self-Worth – We first need to be willing to believe that we deserve better financial circumstances. If we struggle with poor self-esteem and don’t have a positive self-image, we will continue to push abundance away when it presents itself. Though this is largely a subconscious process, we can gather clues from the rest of our lives to determine if this is an issue we need to work through. If we continuously resist positive changes in our lives, in everything from relationships to health habits, we might need to work more on our level of self-worth before we can accept true abundance.

Confidence/Courage – Wealthy people need to be strong people. Why? Because of all the shysters out there who would do anything to get their hands on our money. This could be anyone from close friends and family members to complete strangers and scam artists. If we are timid by nature and afraid to stand up for ourselves, we might subconsciously push prosperity away because we’d feel threatened by all the attention we would receive from others who want a piece of our pie. Wealthy people need to be shrewd, firm and confident about saying “No” when necessary.

Perspective – As mentioned above, money will NOT solve all of our problems. When we don’t have any money, it’s easy to convince ourselves that money holds much more power than it really does. In its tangible form, money is simply slips of paper and chunks of metal. It has no magical abilities. We don’t really want money, we want what money can provide us with! Understanding that money is simply a form of energy in our lives, we can learn to welcome the ebb and flow of financial abundance, and therefore attract more of it without being emotionally attached to it.

Responsibility – Though this is a hard thing to admit, we need to acknowledge the part we play in our lack of financial resources. We need to examine our own spending and saving habits. We need to look at the ways we might be careless with the money we do have, and the ways we set ourselves up to experience lack. If we live paycheck to paycheck and never seem to have enough left over, we might need to explore higher-paying jobs, or other avenues of income generation. We might need to learn how to wisely invest our money so it will grow, rather than continuously leak out of our budget. The truth is, proper handling of the money we do have right now will encourage more money to appear in our lives.

We need to remember that we create the quality of our own lives, moment to moment, and it all begins with our thoughts. If our lives don’t resemble the lives we’d rather be living, we can choose to examine the reasons for it, take responsibility for our actions, and make a commitment to improving our circumstances. While this can be a daunting task, how freeing it is to finally understand that it’s all within our control.

Preparing For Your Golden Years

Thursday, July 21st, 2011

Planning for your retirement is obviously a good idea. The phrase “the earlier, the better” describes what your policy should be for handling your transition from a harried work life to your relaxed golden years. At best, take twenty four to eighteen months to prepare for this significant change in your life.

* Cleaning Up – Try to pay off any outstanding debts or fiscal responsibilities before moving on, especially those that are hedged against your retirement plan. If you don’t, you’ll probably be paying them out of your pension/savings and that is an incredibly bad idea for a retired individual.

* Doing the Paperwork – A year before you retire would be a good time for you to start doing the necessary paperwork for your retirement. Birth certificates, passports and other identity papers should help smooth your transition to a senior citizen.

* Health Care – Always check with the employee benefits department six months to a year before retirement. Ask them how your health insurance will change once you’re not a member of the company. Depending on the answer, you may have to look around for new or additional insurance for yourself. Also, take into consideration any continuing ailments that you may have. Covering them with health insurance is a good idea, since they may take out a significant part of your retirement income.

* Budgeting For Yourself – Check what your income sources will be after retirement. This can be from your employer – with the company’s own pension plan, Social Security and your own personal savings. After that, make a budget that would fit your approaching financial situation. You really need to do this well in advance, so that you may be able to change it for any required adjustments such as paying for new medical insurance and other expenses that may pop up. A year should give you a large enough margin to prepare. If you’re having trouble balancing it all, a financial advisor is a good investment. Try to find one that has a good solid reputation so as to avoid any problems.

* Making a New Tax Payment Plan – Switching from your salary to your retirement income is a big change but you still have to pay taxes for that change. After retiring, contact your tax advisor on what forms you’ll have to submit and how to set up a good payment plan so that you’ll be able to maximize what you can out of your payout from retiring.

Planning For My Retirement

Tuesday, July 5th, 2011

I am eligible to retire from my current job on April 4, 2010. And that is the day that life without work begins.

My retirement will be different than most in that my monthly take home will increase over the years. This is due to a government pension, military retirement and social security.

When I hit 57 years and 4 months, I will be able to call it quits. I will have 5 years working with the US government and will be eligible for a small pension. It will not be enough to live on, but I also have a Thrift Savings Plan (TSP) which is very similar to a 401(k). Unlike the 401(k), I can withdraw my TSP when I retire as long as I am at least 55 years old. I will use this to supplement the small pension.

I also have a 401(k) that I invested in while I was a government contractor for 5 years. I can start making withdrawals at 59 and must have it depleted by 70 .

Once I hit the ripe old age of 60, I become eligible for my US Army Reserves retirement. This will triple my monthly income and make living a lot better. Then, at 62, I can add in my Social Security. I can also defer this until 66 or 70. I will have to crunch the numbers to see which one is most beneficial and find the break even points.

I also plan on selling my house when I initially retire and will use this money to purchase my retirement home in Thailand. Yes, I will leave Hawaii and move to Khon Kaen, Thailand. The cost of living is way less than Hawaii and I will be able to live out my golden years easily.

Add into this mix, I live online and make some money marketing on the Internet. I make money from ads and banners, affiliate hotel rooms, credit cards and a few more. This will provide beer money for me and keep me occupied.

For most retirees, their money starts to dwindle as they get older. For me, at least for the first five years, it increases. Plus, I still have some “gravy money” in my 401(k) and some other investments.

All of this didnt happen overnight. And it didnt happen because I saved for 40 years. Granted, the military retirement is based on 30 years service, but all the rest is over the past 7 years. Contributing to a 401(k) and now to my TSP makes it easy to see that I will be taken care or, and that I wont be a burden on my family.

I look forward to that day when I can walk away from my desk and never have to return. Starting work at age 12 with my paper route and being able to retire at age 57 is a long time but not as long as those who have to wait until 65.

Right now I put in the absolute IRS maximum allowed into my retirement fund and add as much as I can to my mortgage payment in hopes of paying it off early.

It may be hard to save when you are young and plan for retirement, but, trust me, it is well worth it. You want to have everything all set up once your work days are over.

Pertinent Information About Low Interest Credit Cards

Wednesday, June 29th, 2011

The following article includes pertinent information about low interest credit cards. If you don’t have accurate details regarding low Interest credit card, then you might make a bad choice on the subject. Don’t let that happen: keep reading.

If you’re not using a low interest credit card, ask yourself why? This credit card have numerous advantages such as the 0% Intro APR (annual percentage rate) that enables the consumer to save on interest expense. Customers who will be using their credit card to make purchases and take cash advance may be better off with a credit card that offers a low fixed interest rate instead of the 0% intro rate. Knowing what the interest rate will be after the promotional period ends is very important to avoid interest rate surprise. The interest rate customers receive after the 0% promotional period usually depends on their FICO or credit score. Customers who have decided to go with the 0% introductory credit card can use the savings derived from paying no interest to pay down the principal and ultimately pay the loan off much sooner.

The main purpose of low interest credit cards is to transfer balance from high interest rate credit cards to interest free cards to save money on interest expense. They are also been used to make large purchases and important to customers who are planning to consolidate credit card loans and carry a balance each month. Banks charge a fee for balance transfers. Since this fee varies from bank to bank, customers should compare offers to find out which banks charge the lowest fees. Customers with excellent credit can request to have the transfer fee waived.

Many banks and credit card companies advertise low interest credit cards that have many features similar to a standard credit card to entice new customers to apply. Similar features may be cash back, rewards, bonus miles, no annual fee and more. Therefore, comparing credit card features is very important because it allows you to find the card that meets your lifestyle and one that will save the most money on interest expense. Paying your entire outstanding credit card balance on time each billing cycle is the only way to avoid paying interest expense. This may not be financially feasible for many customers due to the fact that they do not have the available funds. Therefore, by using a low interest credit card to make purchases and maintaining a credit card balance will be the next best choice to save money on interest expense.

The amount of interest accrue on your account depends on the interest rate you receive. Individuals with poor credit pay very high finance charges and miscellaneous fees. This situation keeps them indebted to the credit card companies if no action is taken to improve credit score. However, individuals with excellent credit can apply and get approval for a low interest credit card and avoid the burdensome situation of high interest rates and fees. Credit card companies have the option to change the interest rate on your credit card for various reasons such as making late payment, applying for too much credit, making late payments on different accounts or they can change it without any reason at all. Therefore, understanding credit and how to use it wisely is very important.

Many individuals use a low interest credit card to consolidate credit card debts to save money on interest expense. Consolidation is the process of combining several loans into one loan with a better interest rate to lower your monthly payment. Because consolidation will extend the term of your loan it may increase the total amount of interest payment paid over the life of the loan. Debt consolidation is an excellent opportunity to keep you out of bankruptcy and get your finances back on track. Credit card consolidation will simplify your life by making monthly payments to one creditor instead of multiple creditors.

Learning about grace period as it relates to your specific credit card is very important. The grace period is between 20 to 25 days. You have this free period to pay no interest if your payment is credited to your account during that time frame and your account carries no balance. Customers monthly payment must be received by the creditor during this time frame. Learning about grace period as it relates to your specific credit card is very important. Without a grace period in your credit card agreement you will immediately pay finance charges on new purchases regardless of whether you paid your previous month’s bill in full.

The internet is the best source to get information about various credit cards. Customers can compare credit card offers and submit an online credit card application for online approval. Customers with excellent credit can get instant online credit card approval within a few minutes of filling out their online credit card application. Once approved, the customer will receive the credit card in the mail within a few days. This is the fastest and most convenient way to obtain a credit card. Customers should make sure the credit card features fits their lifestyle before submitting an application.

Using your low interest credit card to make purchases and take cash advance may result in paying a very high rate of interest. This is because some low interest credit cards will offer the 0% intro rate for only balance transfers. Therefore, it is very important to read the fine print to know what transactions will be approved for no interest, low interest or high interest. Not knowing pertinent information about your credit card will defeat the purpose of trying to pay less money for interest expense and getting out of debt.

Pensions

Saturday, June 25th, 2011

Pensions are definitely a political hot potato in most countries around the world as population demography changes with an increase in the numbers of retired citizens. Canada is no exception as private pension schemes are being promoted to take the heat off the Governments Canada Pension Plan that many analysts believe will not be able to cope in the future. Please note that any pension payments are classed as income and will be subject to standard taxation rules. Using the services of a professional financial planner will enable you to plan your retirement income in the most tax efficient way.

There are 3 levels of pensions:

Old Age Security

The most basic level of state pension is the Old Age Security payments. This is available as a monthly payment to most people over the age of 65.

Canada Pension Plan (CPP)

Once you are working in Canada, your paychecks will show deductions for the CPP to a set annual limit (approx $1800) (Quebec has its own system). The amount you pay is based upon 2 limits and your employment type (self or employed). The lower limit is frozen at $3500 and the maximum limit (adjusted every year), currently $40,500 you will only pay a percentage of the income between these limits. If you earn $100,000 a year you will not pay any more into the plan than someone on $50,000 a year. These payments will enable you to receive benefits from the plan should you become disabled or retire and, if you die, to your surviving family members.

RRSP

To encourage Canadians to save for their retirement, the Government has given substantial tax breaks to people who pay into Registered Retirement Savings Plans RRSP. The plans are government sponsored but privately administered with management fees charged by the companies that offer them. All capital gains in the plan are sheltered tax free while the plan is in force. Any cash withdrawn in retirement is declared as income on your annual tax return.

There are annually adjusted limits on the amount you can contribute to your RRSP. These are 18% of your previous years Canadian salary to a maximum of $14500. This is where being an immigrant becomes a pain. Basically, you will not have an allowance for the first calendar year you are living in Canada so any payments you make will be classed as an over contribution. You can get away with a $2000 over contribution, but over that you will be taxed. If your employer pays into a company plan that is a benefit for all the employees you will not be penalized just be careful with any voluntary payments.

There are special rules governing the use of RRSP funds. Some plans are locked in and therefore inaccessible until the plan matures. Most RRSP arent locked in and so are available to be withdrawn before plan maturity though penalties and conditions will apply.

Many couples opt to use a spousal RRSP. If one partner earns substantially more than the other this gives a tax break straight away by giving the higher paid partner some of the other persons allowance. The retirement income is evenly split between the two which will reduce the tax paid.

Normal retirement age is 65 though you can work beyond that. Before age 69 you will have several options for more information go to http://www.onestopimmigration-canada.com/Pensions.html

Before You Leave (For newcomers)

The chances are you will have pension schemes in the country you are leaving either private or state run. This can cause a major headache to sort out.

The first thing to do is to ensure that you have up to date information on all pensions you may be entitled to and these plans have your latest contact details. Most pensions will pay out only if the plan holder contacts THEM. You must ensure you have the contact details and let them know you are moving to Canada.

Check and get written confirmation that the pension plan will pay to a Canadian bank account if not you will have to make alternative arrangements

For state pensions, Canada has social security agreements with many different countries regarding qualifying time for state pensions so check these to see if it helps you.

If you choose to transfer to a Canadian plan, check to see how much it will cost and if there are any additional penalties incurred as it may not be worth it. If it is ensure all the ground work is completed before you leave and you have points of contact to deal with to make it a smooth transfer or someone to sort it out if its not! You cannot open a Canadian Pension until you have a SIN (Social Identification Number) so this cant be done until you have landed.

Owning a new car is an expensive business

Monday, June 13th, 2011

According to the AA, the average cost of running a small family car over 10,000 miles per year was 5,611, up from 5,534 in 2006. Depreciation is the main cost issue to consider, accounting for around half the annual running costs.

Fixing your annual costs by renting a car for up to two or three years is becoming more and more popular, according to Ling Valentine (34), the extrovert Chinese immigrant owner of LINGsCARS.com.

This method of financing a brand new car, (commonly referred to by the catch-all phrase “leasing”) avoids increasing interest rates and APRs, by fixing the monthly rental of a new car in a simple, clear figure. This monthly payment can then be compared on a like-for-like basis across a wide range of new cars, something that is almost impossible with the many different “offers” surrounding traditional finance.

“The monthly cost depends on several factors”, says Ling, from her Gateshead ‘World Headquarters’. “First I take the discounted price of the new cars I get from ordering in bulk, often from dealers who need to shift volume to hit targets. Then, I check around a dozen different contract-hire finance providers, who will each value the residual value differently, guessing what the car will be worth to them at the end of the lease term. Finally, I package this together, making sure my own overheads are dramatically less than those of other providers, including the franchised car dealers and car companies themselves. I do not have dozens of expensive glass-palace showrooms to run.”

The result is that LINGsCARS provides, at the touch of a button on a web-browser, a price list of over 400 different brand-new makes and models of cars, all with an easily comparable monthly rental figure. Ling even does something which is unheard of in the new car trade, and lists every car in price order, allowing visitors to her website the ability to compare cars from a 111 a month Chevrolet Matiz to a 735 a month Range Rover. No car dealer in the UK allows that “street-price” comparison, across such a wide range. She lists prices based on annual mileages of 10, 15 and 20,000 miles, suiting most peoples’ use; “You are rewarded for driving less, a very Green way of doing things”, she claims.

New car dealerships often require you to put down a large deposit and then take out a finance deal on a brand new car, or the alternative is to take a loan and write a large cheque. Lings argument is why tie up large amounts of your capital or borrowings in a car? “I only ask for three-months rentals as an initial payment, followed by a direct debit payment every month. For a nice new car costing around 300 a month, such as a SAAB 9-5, or a Kia Sorento 4×4, or an Alfa GT or the latest Honda CRV, that means you only have 900 invested, and you are paying the rest month-by-month as you use the car. At the end of the agreement, the car is simply returned to the finance company, you can’t keep it. You have just paid for the use of the car. It is impossible to fall into negative equity, and there is no lump sum to pay at the end.”

“I would suggest you put your spare cash into your house or your savings, not into a big deposit on a new car, which is a depreciating asset”, says Ling.

The necessary oil and filter servicing is cheap, Ling insists, as the cars are brand new and never fall due for an MOT and are unlikely to need major items like brakes and tyres. She says road tax is fully included for the term; “I deliver these new cars to your door, all you have to do is insure them, service them and put fuel in them”.

Breakdowns, which are unlikely on new cars, are fully covered by the manufacturers warranty. Some AA or RAC type cover is included for at least the first year. A big benefit is safety; new cars have the highest safety ratings and the latest safety equipment built in, an important consideration for families.

Talking about traditional new car ownership, the AA says: “As most owners come to pay their motoring bills, each is more expensive than last year’s undermining claims that cars are getting cheaper to run.”

Ling insists she can change that; “As long as you are credit-worthy and you look after the car like it is your own, you can release the equity in your current car and get into the cycle of changing your car for a brand-new one. You can do this very cheaply, every two or three years”, Ling says.

It is no wonder that in 2007, LINGsCARS rented over 28m of new cars, and that Ling has been awarded “Best non-franchise motor industry website of the year*”. In this Beijing Olympic year, this is one Chinese who is already winning medals in the UK!
* Automotive Management Awards, Feb 2007.