Financial Ideas by Thomas

Archive for the ‘Financial Security’ Category

The third major force on that committee, Benjamin Franklin was a man of ideas and ideals. He was not an ideologue. Benjamin Franklin was a man of principles – just as John Adams and Thomas Jefferson were. However, his principles grew from ideas and ideals, not from an ideology.

John Adams and Thomas Jefferson were familiar with Benjamin Franklin and his patient ways from years of interaction. They both respected his wisdom. As they were also men of ideas and ideals, they willingly laid down their ideological swords and took up the battle for American Independence with ideas and ideals as their primary weapons.

About fifty-five new Americans met in Philadelphia in 1787. Among them were James Madison, George Mason, Alexander Hamilton, George Washington, and Benjamin Franklin. Their goal was to debate the Articles of Confederation and draft a new constitution for the fledgling United States of America.

Only those who invest become financially prosperous. To acquire great wealth, you must be ready to take on great financial problems. Most people are financially stagnant, because they avoid financial problems. There are different categories of investors: There are those who seek problems. Some seek answers, while the third categories are those who know nothing. To become financially prosperous, begin to acquire the skills needed by business owners and investors, and seek to solve bigger problems… because inside every big problem lies huge financial opportunities.

As the global economic crisis is raging, and the U.S stock continues to fall dangerously, Warren Buffet, the Billionaire Investor, did something incredible. He started buying U.S stock, saying, “They are good investment” He equally advised other investors to buy U.S stocks. His formula for investment was: when stocks are falling, and people are selling their stock due to panic in the stock market, go ahead and buy. Warren Buffet went ahead to predict that these same U.S stocks that people are avoiding like plagues would rise again in the next seven to ten years.

All Inclusive Holidays to Greece

There is a simple but undeniable truth in the financial consulting and wealth planning industry that Wall Street has kept as a “dirty little secret” for years. That dirty little, and nearly always overlooked secret is THE WAY YOUR FINANCIAL ADVISOR IS PAID DIRECTLY AFFECTS THEIR FINANCIAL ADVICE TO YOU!

You want, and deserve (and consequently SHOULD EXPECT) unbiased financial advice in your best interests. But the fact is 99% of the general investing public has no idea how their financial adviser is compensated for the advice they provide. This is a tragic oversight, yet an all too common one. There are three basic compensation models for financial adviser – commissions based, fee-based, and fee-only.

Commission Based Financial Adviser – These advisers sell “loaded” or commission paying products like insurance, annuities, and loaded mutual funds. The commission your financial adviser is earning on your transaction may or may not be disclosed to you. I say “transaction” because that’s what commission based financial advisors do – they facilitate TRANSACTIONS. Once the transaction is over, you may be lucky to hear from them again because they’ve already earned the bulk of whatever commission they were going to earn.

Since these advisers are paid commissions which may or may not be disclosed, and the amounts may vary based on the insurance and investment products they sell, there is an inherent conflict of interest in the financial advice given to you and the commission these financial advisers earn. If their income is dependent on transactions and selling insurance and investment products, THEY HAVE A FINANCIAL INCENTIVE TO SELL YOU WHATEVER PAYS THEM THE HIGHEST COMMISSION! That’s not to say there aren’t some honest and ethical commission based advisers, but clearly this identifies a conflict of interest.

Fee Based Financial Ad visor – Here’s the real “dirty little secret” Wall Street doesn’t want you to know about. Wall Street (meaning the firms and organizations involved in buying, selling, or managing assets, insurance and investments) has sufficiently blurred the lines between the three ways your financial adviser may be compensated that 99% of the investing public believes that hiring a Fee-Based Financial Advisory is directly correlated with “honest, ethical and unbiased” financial advice.

The UK is going through a period of austerity drive the like of which we have rarely seen before. Faced with a national debt of billions the Government is launching cuts in the public spending which will result in the loss of thousands of jobs in the public sector, with further unemployment in related businesses in the private sector.

The UK has the highest level of personal debt in Europe; credit cards, store cards, loans, mortgage arrears all create a cocktail of depression, despair, fear, and hopelessness, which leave those affected feeling trapped in a cycle of poverty and hopelessness from which there seems no escape.

If you find you find yourself in debt you will now have to make some tough choices:

1. Do you have a debt reduction plan?

You need to have a plan for getting out of debt. The reason for this is that most people struggle with trying to pay off a number of debts all at once and simply get nowhere, almost like a revolving door. This simply compounds the problem.

So here is some advice for your plan:

• List your debts in a schedule including your mortgage, credit cards, loans and overdrafts, credit zone, hire purchase and any other financial liability.

• Prioritize your debts by firstly identifying those which failure to pay may result in you losing your home or going to jail; Council Tax, Income Tax, and your Mortgage are your most important debts and must be your number one priority for payment come what may.

• Secondly, failure to pay utility bills such electricity and gas (but not water) will result in loss of service so these are the next priority.

• Debts such as credit cards, overdrafts, store cards and loans are also important, as failure to pay these can damage your credit rating but they are not important as those above. Do not therefore be intimidated by threats of legal action from credit card or loan companies, stick to your plan.

2. What can you do without or reduce?

To clear your debt you may need to undergo a period of austerity where you set about reducing your spending, and refining your budget so you look at your spending and see where you can make cut backs. Sky TV, eating out, foreign holidays may all have to be sacrificed in the short term to help you get out of trouble.

3. What can you sell?

Do you have things you do not need which could be a potential source of income? There is an ever increasing market for the disposal of unwanted items which can raise additional income. eBay, car boot sales, and the classified sections in the local papers are a few of the ways you can sell unwanted goods. Make a list of all your assets and get selling.

You may think that such an exercise is a waste of time, however, the reality is that any money you can raise, no matter how small, that you can put towards tackling your debt is worth it.

4. Can you find a secondary income?

You may need to seek short-term additional employment to supplement your income. The recent growth in the areas of network marketing and internet businesses provide a host of opportunities for secondary income. There are also the more obvious routes to getting a secondary income such as overtime, a second or part time job or letting a room in your home; do not rule anything out.