AIA Chiangmai

To find money to invest for your future, you need to make sure that your outgoing expenses are less than the income that you are receiving. You need to develop an excess that you can have free to invest.

Now before you start to think.”well I don’t have any excess leftif I was earning more money.then I would have some free”. Let me dispel this mythand tell you that it is a known and excepted fact that the amount of money that people earn has little if any bearing on whether or not they have an excess left to invest. The only way to create an excess it to spend less than you earn, instead of spending all that you earn.

Even doctors and lawyers, who earn well over $100,000.00 per year, often end up at retirement with little more Net Worth than factory or office workers.

Net Worth is calculated by deducting the value of all the liabilities or loans you have from the income-producing assets owned to give you the net value of your income-producing assets.

Why aren’t high-income earners retiring wealthy? Why don’t they end up with a greater Net Worth than someone on a low income? It is quite simple. Human nature seems to dictate that whatever anyone earns.they spend.some even spend more than they earn and charge it on their credit card.

The higher your income growsthe more you spend and the only way to get out of this cycle is to realise that it is happening, and make a concerted effort to reverse this habit.and to begin reducing your expenditures so that you can free up money to invest.

The best way to do this, is to try the 10/90 plan. This plan simply means that as soon as you receive your pay.you put aside 10% of it for investment.and then use the other 90% to live off of. Put aside the 10%, and then pay all the bills and do the grocery shopping.and then after that whatever is left over you can spend.

Most people do it the wrong way aroundthey pay the bills, do the shopping and spend what is left over, never leaving any left to save or invest. By taking the investment money out first you will alleviate the temptation to spend it.

The road to wealth is not determined by how much you earn, but by how you utilise the income you have and how much you save and invest.

You need to take control of your finances. One of the best ways to start having more control over your money is to find out where it has all been going, and then amend your spending habits to allow you to live within the 10/90 plan.

If you write down a list of your monthly net income, then in another column write down a list of the essential items that you have to spend money on. You should be able to work out an average for telephone, gas, electricity, insurances and rates, from your previous bills. Work out an average of how much is spent on grocery shopping and petrol. If there are any other necessary utilities include them as well. Then deduct the second column from the first - and this will give you the maximum potential savings for each month.

It can be quite startling how high this figure can be and make you wonder where all the extra money went.

Another good learning experience is to simply write down for a fortnight every dollar spent and write next to it what it was for. You will soon find that there are a lot of unnecessary expenses, often caused by impulse buying, where you have spent money on items that you neither needed or really wanted, and could easily have gone without.

When you can begin to recognise these areas, and start to consider whether or not you are spending your money wisely, before you hand it over, then you will be beginning to take control over your money and are well on the way to embarking on your investment journey, which will enable you to have a financially secure future for you and your children.

Debra Lohrere is an author of several books on property investment and how to create financial security. Please visit. http://www.debra.lohrere.com/home.shtml

Debra Lohrere works as a Commodity Trading Logistics Administrator. She previously spent over ten years working in an Accounts Administration position with her primary roles being collections and financial forecasting. She also ran her own computer retailing business for many years.
Knowing the vital importance of cash flow in business led her to begin investigating the benefits of personal investments. She decided six years ago that it was time to start taking control of her personal finances and begin building a wealth base for her future.
She began researching the powerful medium of property investment as a means of bringing financial independence into a reach and began to build her own property portfolio.
Within the space of four years she was able to go from renting a house, to owning her own home and three investment properties, while having contributed very little of her own money to secure these.
She built up a large base of contacts with fellow property investors, which has proved to be an invaluable source of information.

Tags: budget, budgeting, Finances, invest, investing, investment, Money, retirement, wealthbudget, budgeting, Finances, invest, investing, investment, Money, retirement, wealth

Share This

Filed under: aiachiangmai03 | No Comments »

A lot of people hate budgeting, or just plain refuse to budget, thinking it unpleasant and restrictive. Actually a good financial plan, including a budget, puts you in control of your finances, rather than the other way around.

The first step is the hardest: figuring out what you spend every month. If you have records of what you’ve spent over the past couple years, go back and take a look at how much you spent and what you spent it on. If you don’t have such records, over the next month or two keep a record of everything you spend - and I mean everything! Gas, food, the magazine and the pack of gum you bought at the newsstand - everything. That should not only give you a good starting point in terms of what it costs you to live during the month, but where the money’s going. You may well find areas where you can cut back without feeling seriously deprived.

Once you’ve figured out what it costs to live, break the expenses down into daily, monthly, other periodic expenses, and incidentals. Daily expenses include gas for the car, food, medicines, toiletries, cleaning supplies, pet foods and other pet supplies, and so on. Monthly expenses include rent or mortgage payments, car insurance, car payments, utilities, et cetera - any bill that you pay regularly each month. Include credit card debt in those payments.

Other periodic payments may include homeowner’s insurance (if you pay it once or twice a year instead of monthly), license renewals, car registration and inspection fees - payments that need to be made regularly, but not necessarily once a month. (Include birthday, anniversary, and holiday gifts and cards in this category; they come around every year!) Incidentals include one time payments for purchases that are not likely to recur: pots and pans and other household items, ski equipment and supplies, etc. If you have car and health insurance requiring deductibles and / or co-pays, consider depositing those amounts in your incidentals account; that way, if you’re in an accident or end up in a doctor’s office, you’ve got the cash on hand to pay for the expense.

Once you’ve figured out how much you spend on average, monthly and yearly, put together a budget based on the different categories. Remember to create a budget based on what you actually spend, at least initially, rather than what you think you should spend. (Don’t forget the lottery tickets, if you buy them regularly!) If you have credit card debt, budget for more than the minimum payments, and pay down your balances, highest interest rate first.

Don’t forget savings; if at all possible you should be putting money away regularly for yourself. Aim first for a contingency fund of from eight to twelve months of living expenses, then think about investing elsewhere. Do you want to buy a home, or know you’re going to need to replace your car? Set up a separate category for those goals.

Now’s the fun part! Once you know what you need to budget each month in each of these broad categories, set up bank accounts dedicated to each category. Research the banks in your area first - banks vary widely in terms of the finance charges they levy for the services they provide. Try to find a bank that doesn’t impose a finance charge if you drop below a minimum balance. Some banks even offer free checks, or a rebate on your first check order.

You might choose to open a checking account with a debit card attached for the daily expenses; a checking account and a savings account for the monthly expenses (you can earn a little interest by depositing your money into the savings account and then transfer to the checking account as you need to pay bills), and either a savings or checking account for the periodic and incidental categories. Maybe you want the convenience of a debit card on each of your accounts; if so, go for it!

If you want the convenience of transferring money from any account into any other account, set up all your accounts at the same bank. If you’re like many people and are concerned about the money being too easily accessible, pick a couple different banks, so that your daily expenses money is separated by a few miles from the monthly expenses money. (You can always write out a check from one account to another if you really need to transfer money.)

Deposit the appropriate amount of money into each account required based on your budget for each category. If you get paid weekly, deposit a quarter of the monthly deposit each week, and so on. Your employer may offer direct deposit of your pay into banking accounts; if so, arrange for the correct amount to be put into each account, and then use your debit card to withdraw spending money from your daily expenses account.

Finally, sign up for Internet banking; most if not all banks and credit unions offer this service, which makes it easy to check on balances and transfer money from account to account. Also consider attaching your monthly expenses account to their Bill Pay service, which allows you to pay bills electronically rather than with paper checking. More and more banks are offering this service for free.

Once you’ve got your budget set up and your accounts established, it’s easy to maintain. You don’t have nitpick every penny, because you’ve got it all organized in an easy system, and you’re in charge.

Aldene Fredenburg is a freelance writer living in southwestern New Hampshire and frequently contributes to Tips and Topics. She has published numerous articles in local and regional publications on a wide range of topics, including business, education, the arts, and local events. Her feature articles include an interview with independent documentary filmmaker Ken Burns and a feature on prisoners at the New Hampshire State Prison in Concord. She may be reached at amfredenburg@yahoo.com.

Tags: budget, Financial planningbudget, Financial planning

Share This

Filed under: aiachiangmai03 | No Comments »

So that bucket of bolts you drove throughout high school and college has gasped its last exhaust-filled breath. It’s done. That means you’re in the market for a new car. Soon you’ll brave the treacherous world of the car lot. Be careful, it’s a jungle out there. Eager salesmen hover like vultures, ready and willing to separate you from your hard-earned cash.

Once you decide on a car, you’ll then have to survive the depths of the dealership, where finance managers lurk at every cornerpen and paper in hand, waiting for you to sign on the dotted line. But don’t worry, with a little prior planning, you can get that new car without breaking the bank.

First off, you need to make a decision: buy or lease? If you like to drive a car until it diesand with today’s autos running well past the 100,000 mile markthen you’ll probably want to buy. However, if you see yourself in a different ride every couple of years, then leasing might be the right option for you. In a lease, you’re essentially renting the car for a pre-determined amount of time (usually three years). During that time, you’ll have to keep the car in tip-top shape and only drive it for an agreed-upon amount of miles per year (usually around 15,000). After your lease is up, you can purchase the car at a residual price or start a lease on another car.

Once you decide on buying or leasing, it’s time to figure out how you’re going to pay for it. First, decide how much you can afford to spend on a new car. As a good rule of thumb, many experts suggest that you spend no more than 20 percent of your net income per month on a car payment and other related auto-expenses.

Next, decide how you want to pay for it. Once you’re on the lot and fall in love with your dream car, the salesperson will do everything in their power to get you to finance the car through the dealership. Auto financing is a big money industry, and car manufacturers would be remiss to not take advantage of it. Financing with the dealership is tempting, as it’s the quickest way for you to drive off the lot in your new set of wheels.

But buyer beware, dealers know that buying a car can be a mentally exhausting experience, and finance departments will often add hidden fees in the paperwork for services or features you don’t want (e.g., extended warranties, service agreements, etc.). Dealerships also offer attractive financing deals like rebates or low interest rates, but many of them depend on your credit scorewhich you should always know before you even step foot on the lot. You can check your credit score and correct any errors by visiting www.equifax.com, www.experian.com, or www.transunion.com.

If you want to be a truly empowered car buyer, then secure a loan through a bank, credit union or other lending institution before you buy. You’ll generally get a lower interest rate than what the dealership can offer you, and you’ll essentially become a “cash buyer”. This means you’ll have more negotiating power on the total price of the vehicle, lower monthly rates, and no chance of the dealerships finance department sneaking in any hidden fees into a finance contract. Most lending institutions, upon approving your loan, will give you a check that can be made out to a dealership. Negotiate the price of the car along with tax and licensing fees, and off you go.

Whether you lease or buy, finance through the dealer or through a separate lending entity, always read every contract that requires your signature thoroughly. Make sure the figures in the contract are correct and that you understand all of the charges included. Also, if at any time you should feel pressured by a car salesman or lending agency, walk away. Remember, you are the buyer, therefore you have the power.

Happy hunting!

Joe Kenny writes for the Personal Loans Store offering cheap loans and offer more information on car loans and other loan topics available on site.
Visit Today: http://www.ukpersonalloanstore.co.uk

Tags: auto, budget, car, charges, cost, fees, Finance, insurance, interest, Loans, mobile, motor, payauto, budget, car, charges, cost, fees, Finance, insurance, interest, Loans, mobile, motor, pay

Share This

Filed under: www.aiachiangmai.com 0102 | No Comments »