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Month: August 2016

Finance Advice that Could Benefit You in Later Life

Finance Advice that Could Benefit You in Later Life

With the UK economy still in recovery and a volatile stock market, many people are more concerned than ever about securing their financial futures.

Whether you are just starting your career or looking to retire in a few years, there are steps you can take that may pay off down the road.

The following is essential financial advice that could benefit you in later life.

Know Where All Your Money Goes

This starts by making a detailed monthly budget and sticking to it.

There are all kinds of apps and programs available for organising your finances.

Simply making a budget and paying attention to it on a regular basis will cause most people to more carefully evaluate their spending habits.

Many people are amazed to see just how much they spend each month on non-essential items when everything is carefully tracked.

Spend Less Than You Earn

While this may seem obvious, it’s extremely difficult for many people to live by.

Living within your means will translate into avoiding most types of debt, not paying high interest rates, and being able to save consistently until retirement.

Spending less than you earn will be a lot easier after making a budget and knowing exactly how much income you’re bringing in and what expenditures must be paid each month.

Save for Retirement

Whether you’re 23 or 53, you should be considering saving for retirement.

It’s not too early to start, even if you’re in your twenties.

Start an IRA and contribute the maximum amount. Once you’re past 50 the amount you can contribute increases.

It’s important to think about taking advantage of every financial opportunity, especially taking a look at the pension options available in your workplace.

The advice is often to contribute as much as you can to these types of employee based retirement programs – but be sure to be well informed before making a commitment.

Pay off Debt

It should go without saying that it’s smart to carry as little debt as possible.

So which should be a priority, saving or paying off debt?

Mathematically it almost always makes sense to pay off debt before adding to your savings.

This is especially true of high interest debt that can’t be deducted on your taxes. On the other hand, paying a traditional mortgage loan early will only reduce the outstanding principal and the interest.

Paying extra won’t lower your overall monthly payments, which is what happens with most credit cards when you pay down the overall amount.

You should also pay off private student loans before government loans.

Diversifying Investments Can Be Safer

Not having all your eggs in one basket often means your money is safer.

It’s usually recommended to have a variety of assets that includes cash investments, stocks, and bonds. But even within these primary groups diversity can help.

For example, you could include both corporate and government bonds in your portfolio.

There could also be bonds with different maturities and ratings.

Diversifying can also mean investing in real estate or even a hobby such as collecting art.

It’s sometimes a good idea to have tangible investments that don’t rely on the volatility of the stock market.

Make an Appointment with a Financial Advisor

This is often the first step many people take when getting their finances in order.

Knowing what types of debt to carry and which investment plans are right for each individual isn’t always easy to determine.

It’s important to choose an advisor with extensive experience working with a variety of clients, but equally looking for a company that clearly cares about its customers is important.

Social media can be a great way to find financial advisors so look for companies that regularly post useful information and have a big, engaged following. A quick look on Facebook returned Fisher Investments in the UK, a finance company who has over 10,000 followers and post commentary on current economic conditions. You can also look to financial publications, like the Financial Times, who post their top-rated advisor list and timely news articles. It’s information like this that can help finding information when looking for an advisor that fits your financial needs and goals.

You can also look to financial publications, like the Financial Times, who often post top-rated advisor lists and timely news articles. It’s information like this that can help finding information when trying to find a suitable advisor.

Appropriately managing your income can allow you to remove the stresses of debt and pension concerns when you retire, so start making a plan and apply the advice that is most suitable to you, your work and your lifestyle as soon as possible.

Alternative Funding Options for Your Business Venture

Alternative Funding Options for Your Business Venture

You probably guessed it – the option to which business venture funding alternatives are most sought is getting a bank loan. While making for a seriously bitter pill for entrepreneurs with a bright idea to swallow, the bottom line is that in order to get financed by a bank, especially for something like a business venture, you pretty much just have to prove to them that you don’t need the money you’re trying to borrow from them. That’s perhaps a huge contributing factor to the failure of many businesses which showed a lot of early promise. It’s perhaps also the main reason why many entrepreneurs take their potentially world-changing bright ideas to the grave.

There are however some alternative options for funding your business venture, most of which are actually much better than anything the bank would offer you in any case. Sadly though, entrepreneurs tend to turn to these alternatives only when they’ve been shot down by their favourite traditional bank.

Angel Investors

I’d personally say that angel investors are the best choice for seeking funding for a business venture or for the development of a new idea. This is because angel investors can sympathise with the up-and-coming entrepreneur, qualifying as angel investors by virtue of having been up-and-coming entrepreneurs or founders themselves. Still, if an angel investor doesn’t go on to give your idea or business the thumbs-up, it doesn’t necessarily mean it’s a bad idea which won’t work. There are many angel investors who just get sick at the thought of having turned down an opportunity to invest in a start-up which has since blown up beyond their wildest imagination.

Angel investors will generally point you down other avenues of getting funding if they themselves aren’t in a position to invest as well, so never pass up on an opportunity to solicit funding from an angel investor.

Crowdfunding Platforms

Crowd-sourcing start-up capital for your business venture is perhaps right on par with getting an angel investment, with the only area in which I think it falls short being that of an angel investment effectively coming with the mentorship of the angel investor, someone who is likely an experienced entrepreneur themselves with lots of insight to share and an established network to help grow your business through. Otherwise crowdfunding as a means through which to source capital for your business is a very popular way for new businesses to get up-and-running. Contributors come in various shapes, forms and sizes, some of which will just contribute outright without expecting any form of ownership or return on investment.

CSI (Corporate Social Investments)

Corporate Social Investments make for another great banking alternative to getting some funding for your venture. Their only drawback is that a legitimate CS Investment is extremely hard to come by. Essentially, companies which would otherwise be subjected to hefty taxes look to off-set paying such high taxes by giving away money to fund the development of other businesses, companies, start-ups, communities, etc. With this particular method of getting funding for your business, the hard work entails building up networks and then getting identified as a possible candidate for a CSI. You’ll probably have to wait a very long time to get any indication that you may possibly be in for such an investment, which would probably put the brakes on the development of your idea or the growth of your business while you wait.

R&D Tax Breaks and Rebates

If your idea or core operational structure of your business falls in line with anything the government has earmarked as a targeted area of development, perhaps the funding you so desire can come in the form of a Research and Development (R&D) tax break. What happens is as a result of the outcome of your idea or business possibly solving a problem the government has or one which will address the needs of a very large number of people, the government provides the funding for the research which goes into the development of that idea.

R&D tax breaks are also quite hard to come by, something which is attested to by the fact that you probably have to go through a traditional financial institution like a bank to apply for R&D tax breaks and rebates.