How to Save in Times of Economic Recession

January 18, 2009 by Dmitry G
Filed under Economic Recession

Economic recession is gripping the country. This can be seen in the job losses and the rapidly increasing cost of living in the United States. This is perhaps why the upcoming elections is all the more crucial as it would determine just who will be “unlucky” enough to preside over such a messy economic condition. But politics aside, there are ways to survive the economic recession while the race to the elections is still going on. Here are some tips on how to deal with this cashless scenario.

1. Don’t waste food
Food like veggies and bread may not be as expensive as other products such as meat, fish and rice but this does not mean that you can waste it or throw the food away. Teach your kids to get only the food that they can eat and if they want more, they can always get a second helping. This way, no food is wasted especially now that you can’t afford to throw away food.

2. Plan your meals
Plan your meals ahead by making a dish schedule at home. This will allow you to determine what to buy at the groceries at a particular time. Having a schedule also allows you to know how much is needed so that you will not be buying more than you can chew literally.

In planning meals, make sure also that you include dishes that is more or less similar in ingredients. That way, you can buy in bulk for the rest of the week, which is less costly, but will be able to use the ingredients in multiple dishes.

3. Learn to recycle food
Food can be eaten the next day. Just put it inside the refrigerator after eating and then reheat it the next day. Make sure though that you use serving spoon for the dishes to avoid spoilage. Practice clean hygiene too when you are eating to also minimize spoilage.

If your family do not want to eat the same dish for the next day, be creative and whip up a new dish using the old one that you cooked. Some people fry or grill the dish or use the dish as an ingredient into another dish. It’s up to you.

4. Walk!
With the rising prices of gas, a kilometer can cost you a lot! So, bring out those rubber shoes and prepare to walk those blocks. If you are just going to visit a neighbor or just buying bread from the local store a couple of blocks away, use the trip to do some brisk walking. Doing this will save your money and will also save you from illnesses. Remember that walking is a very good exercise. Not only does it help in building the muscles in the legs and in keeping people fit, it also strengthens the lungs and the heart.

5. Save on water and electricity
You may not realize it but you may be paying more for your utilities than most people with the same number of people in your households. So, don’t waste those water and electricity. Turn off the lights when you leave the room or when you are going to sleep. Put your television sets in sleep mode or on automatic shut off. When it comes to water, shut off the faucet when you are soaping your hands.

That way, you are not wasting money paying off utilities that you are not actually using. This will go a long long way when it comes to dealing with economic recession.

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Your Financial Journey to Successful Retirement

January 17, 2009 by Dmitry G
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The rules of retirement have changed forever! Whether you like it or not, you can no longer depend on a pension from your employer or expect that social security will be there when you need it most. Once in retirement, the biggest risk is running out of money and there are many obstacles along the way ranging from inflation to longer lifespan. For some, retirement is in the distant future and is lodged deep in the back of your mind as you make room for more pressing day to day issues. For others retirement might be right around the corner and has claimed such a large share of your thoughts that it’s difficult to focus on anything else. No matter what your retirement time horizon is you absolutely must develop a retirement strategy and start saving for it now. Successful retirement planning will require hard work, sacrifice, and dedication.

Let’s face it, most of us will not be getting a cushy pension and social security may be there to cover some minor expenses but will not provide you with the financial security that you and your family deserve. So what can you do to be prepared for that big day? Let’s review the various retirement vehicles available to you.

One such option is an Individual Retirement Account (IRA). Traditional IRA’s are a great choice because your contributions are pre-tax dollars that grow tax free until you withdraw the funds in retirement. Imagine the amazing result of compound interest growing tax free! This is such a great deal that the Government puts restrictions on who can contribute. Generally high earners are limited or restricted from contributing. Most folks expect that their income will decrease when they retire so in that case all those pre-tax contributions you made during your earning years will be taxed at the lower tax bracket when withdrawn in retirement. An IRA can be opened at most banks and brokerage firms.

Another great retirement savings vehicle is known as a ROTH IRA. With a Roth, you pay taxes on the contributions, but upon retirement when any withdrawals are tax free. This is an awesome option for anyone who expects his or her tax bracket to be higher in retirement then it is right now. Higher taxes in retirement may not necessarily be due to higher retirement income, they can also result due to changes in the political landscape and laws governing taxation. The scenario of higher taxes in your future is very possible so the Roth IRA is the best vehicle to mitigate that risk. A ROTH IRA can also be opened at most banks and brokerage firms.

One of the most popular and powerful type of retirement accounts is the 401k. The 401k is a lot like an IRA with the major difference being that 401k’s are most commonly offered directly through your employer. What’s so great about the 401k you ask? I have two words, employer matching. Once you are eligible for a 401k plan at work, most employers will match as much as fifty to one hundred percent of your contribution usually up to six percent of your pay. Let’s look at a simple example. You contribute six percent to your 401k and your employer matches your contribution with another six percent. That is 100% instant return on your money and a total contribution of 12% of your pre-tax pay. Since your contributions are pre-tax and are deducted straight from your paycheck you won’t even miss the money. If you are eligible for a 401k plan at work and have not yet signed up, what are you waiting for?! GO sign up now.

The Keogh plan is another type of IRA that is suitable for self employed people. Self-employed small business owners may also be interested in Simplified Employee Pension Plans (SEP). This is another type of Keogh plan that people typically find easier to administer than a regular Keogh plan. Both of these plans have similar features as the IRA with additional benefits geared toward self employed individuals.

In each retirement vehicle, you have the option of investing in stocks, bonds, mutual funds, certificates of deposit, or money market accounts. These are the basic options available in most plans. But which plan is right for you? The answer depends on your personal situation and may consist of any one or a combination of several retirement savings and investment accounts. Whichever retirement investment you choose, just make sure you choose one! Please, do not depend on social security, company retirement plans, or even an inheritance that may or may not come through! If your situation is complicated you may need to speak with a financial planner or accountant to help you with these decisions. Secure your financial future by investing in it today.

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Stocks Trading And How To Achieve Success

January 17, 2009 by Dmitry G
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Money is the root of all evil but still, you can’t deny the fact that you need money in order to survive in this world. Without money, you can’t buy food, shelter, clothing, and the other necessities of life. If you want to live comfortably, you must have a stable source of income. Aside from your job, you can also earn additional income through stocks trading.

If you want to be successful in stocks trading, you must be involved in day trading because that’s one way of earning huge profits. For those people who don’t like long term investments, day trading might work for you. By investing in day trading, you can expect the profits to be reflected in your account the soonest possible time. This is also the reason why day trading is very much popular these days.

Like other trades, day trading also involves risks. If it is possible to earn huge profits in one day, the chances of losing huge investments are enormous as well. As a trader, you’re not expected to remain active at all times. Did you know that with a very good negotiation strategy, you can earn huge money in seconds, minutes, and hours? That is indeed possible but it will take time. You should not rush things when you’re studying the market. Take your time because after careful and thorough market analysis, you can make a good deal. It’s up to you whether you will only make one transaction per day or several transactions.

Studying market trends is also very important. Some value of stocks tends to rise continuously and if this is the case, a trader may buy the stock with the hope of selling it at a much higher price later on.

Before making any transaction, there are things to consider like:

1.Stocks can be very unpredictable. If you want to buy a stock and hope to sell it at a higher price, you need to monitor or check the computer often. Frequent observation is needed so that you can make an informed decision. Your internet connection should be reliable so that you won’t lose in any of your transactions.

2.Beware of day trading because even if you earn huge profits today, there is still a possibility of losing even a larger amount in the days to come. If you’ve committed mistakes in the past, you need to learn from them. Risking your investments is not a good idea so try to be very careful with all your transactions, online or offline.

3.You must be patient. Again, you must always take your time and don’t be hasty with your buying or selling decisions. If you’re unsure of a certain transaction, get out immediately.

Indeed, day stocks promises a lot of profit to those who are willing to take risks but this doesn’t mean that they can simply make uneducated decisions. Investing in day stocks requires careful thought and analysis of the market trends, along with other factors.

Try to consider the things mentioned earlier especially of you’re into day trading. Beginners need all the help they can get because day trading is not very easy. Gather as much information as you can about day trading. You can find a lot of information about stocks trading online. Start your research now so that you will know how to conduct day trading and understand the processes involved.

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Variety Really is Key to Retirement Success: 8 Different Types of Investments

January 17, 2009 by Dmitry G
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What are your goals, dreams, and aspirations? Are you concerned about your financial future? Do you need to put your kids through college? Do you want to retire while you can still do more than rock in a chair? Do you want to ensure your children the financial advantages that you lacked while growing up? Do you want to live a reasonably comfortable retirement without a lot of financial worries? If you are reading this article, I can only assume that your answer is yes, yes, and yes!

Although many people realizing the importance of saving and investing for their future, many folks really have no idea how to go about investing their hard-earned money, or even the different types of investments that are available. If your idea of investing involves a piggy-shaped ceramic jar or the underside of a mattress, fear not. Below you will find information about the different types of investments available right at your fingertips.

1. Savings Accounts and Money Markets: Savings accounts and money markets offer very little return; in fact, although they are technically not a form of investment, they do play an important role in managing your liquid cash assets. They are certainly a great way to get started or teach your kids the process of saving.

2. Certificates of Deposit: Certificates of Deposit, or CDs, are similar to savings accounts, except they pay better interest and provide limited liquidity. The reason for the higher interest rate is simple: when you open a CD at your local financial institution, you agree to leave the money there for a set amount of time; generally, the shortest amount of time is six months, but you may agree to a term of one year, two years, or even five years. Typically the longer you agree to keep the CD, the higher the interest rate. CDs can be redeemed prior to agreed upon term but you will be assessed an early withdrawal or termination fee. One way you can minimize these fees is to ladder your CDs with various maturities to achieve higher yields and increase liquidity.

3. Bonds: When you invest in bonds, you are actually lending money, usually to a municipality, government agency, or a public company. Bonds are believed to be more risky than CDs but less risky than stocks. They are often used to provide income rather than growth.

4. Stocks: When you buy stock, you buy a piece of the company and any rights that go along with partial ownership. The way to make a profit with stocks is to buy low and sell high or to receive stock dividends. Stocks can be quite risky and are usually bought with a long term horizon with an objective of growth.

5. Mutual Funds: When you invest in mutual funds, you are joining a group of others who are also investing in the mutual fund. Basically, you and the others share the cost of hiring a professional to manage your assets, and most mutual funds include a variety of different investments, such as high-risk, long-term, short-term, stocks, bonds, and the like. They believed to deliver the highest level of diversification and can be used to manage risk.

6. Real Estate: When you invest in real estate, you may be purchasing with the intent to re-sell at a profit, or you may be buying property to use as rental property. Traditionally considered a sound investment, the real estate market is currently a buyer’s market. The biggest advantage of real estate is the use of leverage. But remember that leverage is a powerful force that can work for you or against you. Also real estate is generally an illiquid asset. There are a lot of fees involved in buying and selling so you really have to know what you are doing. It can also become a liability if you cannot sell or rent the property quickly.

7. Foreign Currency: The Forex market is a currency-trading market that is open all the time and accessible via the Internet. With Forex, you trade currency pairs for other currency pairs in the hope that you will trade for currency that has more value.

8. Insurance: Some people choose to use life insurance as an investment. Insurance can be one of the best tools to help you plan for retirement income or transferring wealth to your heirs. An insurance agent or financial advisor can help you choose the right one.

Of course there are other different forms of investment, such as investing in a startup company or some other form of business. But as you can see a variety of types of investment can add spice and diversification to your financial future. The first question you should ask is “what are these funds for?” This will help you determine your risk tolerance and time horizon for the funds in question. Once your goal is defined, you can use the investment options above to find the best match.

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