Employers: Never Underestimate the Importance of Retirement Plans

As a business owner, you have a lot of things to worry about. But you shouldn’t let various stresses and tasks allow you to forget about the wellbeing of your employees.

Even the most loyal of your workers won’t be with you forever. At some point, people are going to start retiring. It’s important that you make sure they’re duly compensated for all their time. The threat of retirement isn’t the only reason you should focus on retirement planning, though...

The edge over the competition

A lot of businesses out there don’t really put a lot of focus on retirement plans. This can give you an automatic edge over them if you are engaging with retirement plans. However, you shouldn’t allow yourself to become overconfident because of this. You need to remember that larger companies have entire departments dedicated to retirement planning. Smaller businesses need to pull out all the stops to compete!

Retirement plans as perks

A good retirement plan is often seen as a great “perk” of a company. This is prevalent in the US, where it’s considered up there with health care and dental plans. (Of course, most of the world isn’t as primitive as to force taxpayers to rely on their jobs for such things!) Elsewhere, they’re considered an essential part of any good employment package. Retirement plans shouldn’t be treated as rare benefits, like extra days off or gym memberships.

Your contribution

Where you are in the world will often determine how much you need to contribute to an employee’s retirement fund. It will also determine how you do it. Wherever you are, it’s vital to understand this information. If you don’t get to grips with the contributions you need to make, then your employees may suffer for it. It’s essential that you’re making correct contributions. Many employers work with companies who can help them manage this sort of thing. Such companies include NSF Super.

Helping employees understand

Of course, if it’s only you who understands how the retirement plans work, then that’s a little unfair! In many companies, the retirement planning is actually incredibly one-sided. Employees may be left in the dark about the whole thing unless they actively seek information. You need to ensure that your workers know exactly how these plans will affect their future finances. Because that’s what we’re dealing with here, after all: their future safety and comfort! If possible, you should be allowing them access to retirement planning tools.

The golden handcuffs

Retirement plans are often seen as a great way of seducing people towards working for you. But they’re also a way to encourage employees to stay on at your company. Financial allurements such as this are often referred to using the phrase golden handcuffs. They reduce turnover, helping prevent employees from jumping ship to another company. However, the implication with the word handcuff is that these things are the only things keeping an employee at your company. Reducing turnover should be a priority, and retirement plans help do that. But an employee should want to stay because they feel valued and enjoy their job. Don’t just rely on these sorts of benefits to keep employees put!

Understanding the Impact of Death on Family Finance

I’m going to kick off this article with a fun little exercise: spend a little time thinking about your death.

See? I told you that was fun. So what did you think about? Did you give any thought at all to the financial ramifications of your death? Of course, they’re not going to be consequences that you suffer. But the people you love may be affected by this more than you think. You may think that it’s not something you should worry about too much. But this is a mistake.

Late last year, I had to deal with the passing of a loved one who had no preparation in this area whatsoever. Even without loads of assets, the financial consequences were complex, tiring, and long. They’ve been ongoing for nearly a year, in fact. Is that really what people need to be dealing with after your death? You may think that they’re capable of dealing with financial complexity. But I think it’s fair to say that they’re going to be at least a little distracted at the time they have to deal with all of this.

So, in case you hadn’t guessed yet, I was joking about the whole “fun” thing earlier. But that doesn’t mean you should avoid giving this whole thing some serious and prolonged thought.

The importance of life insurance

The way some people try to sell life insurance sometimes makes it sound like something you don’t need that much. Some will try to convince you to buy it by using scare tactics. What if you fall off a ladder and break your neck? What if your office sets aflame and engulfs you forever? You start to think that those things aren’t likely, so you skip life insurance.

But life insurance is very important, especially if you have assets you need to protect. Don’t expect any life insurance policy to be completely sufficient for providing for loved ones after your death, though. Further measures should be used.

Dealing with the will

When someone dies, the people around them tend to assume that there’s a will. But a will isn’t something that just exists; it has to have been carefully created by the deceased! (Before they become deceased, of course.) And that’s not exactly a barrel of laughs, which might explain why a lot of people don’t actually have one.

It’s vital that you look into developing a will as soon as possible. It’s not exactly as easy as making a list of your possessions and writing down who you want to get what. It can be a bit more involved than that. But if you work with solicitors such as those at Wilson Browne, it can be less complex.

Where help can be found

It’s important to know that there is financial help available to those who have lost a partner. However, the first thing that needs to be looked into are the numerous benefits that were set up by the deceased. There’s insurance, of course. But there are also retirement plans, payable on death assets, and labor union payments to think about. The fact that these will come into play upon your death is something you should consider going forward.

How Investing Your Money Can be Fun

There are all kinds of reasons for you to invest your money. It’s a sensible thing for people to do if they want to make themselves more financially secure in the long-term. But there are other people who simply do it for fun. Investing can be fun, and you don’t even have to do it to make money. Of course, making money is the ultimate aim of making investments. But there is much else besides that. Read on to find out how investing your money can be a lot of fun.

There’s a Competitive Edge

When you invest, there is always a slight competitive edge to it. You want to do better than anyone else and prove that you understand investing better than others. If you know other people who are also investors, this is truer still. You can turn it into a competition and measure your success against your friends and how their investments are doing. It doesn’t have to be a direct competition though; it can simply be a friendly rivalry that adds another dimension to it. Everyone likes a bit of competition in their life, so this could be the ideal thing to provide it. It’s not just sport that offers you this.

You Get the Joy of Learning a New Skill

Investing is not something that comes naturally to you. It doesn’t come naturally to anyone. It’s a skill that is learnt just like any other. Think of it like learning to ride a bike or play a musical instrument. It’s the same principle. And there is always that feeling of enjoyment and satisfaction when you manage to pull off a successful investment. That pride and satisfaction you feel is part of what makes investing so much fun for you. There is no other feeling quite like it. So, learn the skill and enjoy the pride and achievements that come with it.

Risk Fuels Adrenalin

When you take risks, you get that rush of adrenalin through your body. That’s what the thrill of investing is all about. This is the same thing that makes gambling or any thrill-seeking sports fun too. When you take a risk and make an investment, your body creates a chemical reaction. It’s part of human nature, and it’s one of the things that means investing is enjoyable to us. And you can’t really argue with science. Try it out and see if that adrenalin-fuelled rush appeals to you at all. It’s not for everyone, but it’s good to see how it makes you feel at least once.

Investing Requires Thinking and Strategy

If you’re the kind of person that enjoy strategy games, such as chess, then investing could be for you. It’s about more than numbers and throwing money around. It’s about using your brain and thinking carefully about the best move to make. Every investor eventually develops their own strategy that helps them to win and get to where they want to be. This is what you will have to do as well. Not everyone finds this kind of strategic thinking fun, but many people do. If you’re the kind of person that loves nothing more than to challenge your brain and come up with strategies, give investing a try.

There Are So Many Options to Explore

There is not only one type of investing that you can try out. There are so many different types out there, and you can try them all. So, if you find that one kind of investing is not really for you, don’t despair. If you are tired of buying and selling shares, you could try something new. If you have the capital to make it happen, why not invest in homes? Buying homes, making changes to them and selling them again can be a lot of fun. Or there are things like forex trading. This is complex but great for people who like numbers. Contact a forex broker if you’re interested in it.

It’s Always Fun to Make Money

Everyone likes to make money. And at the end of the day, that’s what investing is all about. The eventual aim is always to make money and beat the system. So, if you want to invest, then this is as good a reason as any. You’ll be able to make money and get a little richer. There are not many people on the planet who don’t get some kind of enjoyment out of doing that. And when you combine it with all the reasons mentioned above, it makes investing a great way to spend your free time. You should at least give it a try and see what you think of it.

A Question Of Balance: Building The Perfect Investment Portfolio

One of the things you will also hear from professional investors is that building a balanced portfolio is vital to any investment plan. But how do go about finding balance when you are just getting started? We’re going to spend today discussing how to do it, and explain some of the essential steps you will need to take.

Balance is not just about your investments

The first thing to understand is that a balanced and successful portfolio is not just based on your investments. There are plenty of other factors at play here, from your personal financial situation to the length of time you have to grow investments. It’s not only about what assets you have, but it’s also about your everyday savings and ability to take on financial risks. Your home and work life is a big factor, too. Will you have the time to dedicate to making your investments work harder, and will it affect your ability to work or be a great husband, wife, or parent?

Defining your strategy

Once you understand your ability to invest - and everything that goes along with it - you can start planning your strategy. If you are comfortable and have plenty of savings, for example, you might wish to pursue an aggressive, high-risk strategy. If you have limited funds, however, it’s going to be safer looking into bonds and fixed-income securities. In general terms, the more risk you can afford, the more aggressive you can be.

Choosing the assets

The next step is to choose the perfect assets for your circumstances. Not every investment opportunity is going to be a good match. Take stock picking as an example. You need to have a thorough understanding of the industry you want to invest in if you want success. There is help available, of course. As the guys from Primary Stock Trading point out, there are plenty of stock picking newsletters you can sign up to. Each of them has their success stories, but you should always be careful and read reviews before handing over any cash. It’s the same principle with other investment opportunities and schemes - always know the market.

Creating the balance

Now the strategy is in place; it’s time to work out you ideal investment opportunities. It’s all about playing the percentages here, so plan your entire investment budget and divide it all up into sections. You might have 50% of your funds in riskier investments, for example, with 30% of fixed income assets and the rest in cash or equivalents. You will also need to create a diversity in the type of investment you have. For example, you might want to invest in a little property but also look at stocks and bonds. The wider scope of investments you have, the more protection you will have if an industry tanks.

OK, so that’s all we have time for today. We hope this has highlighted some of the issues surrounding building a balanced portfolio. Good luck - and feel free to offer any advice if you have it!

Bridging Finance: The Best Way To Buy Your Next Home?

So, you’ve found the home of your dreams. It’s within the budget, in a great location, and really feels like somewhere you and your family could live happily. There’s just one issue though; your current house. Even if you haven’t found a buyer, you don’t need to pass on this great opportunity. You may want to consider a bridging loan; a short-term loan which bridges the gap between selling your current home and buying the next. Here’s how it would work…

One of the most frustrating things home buyers can run into is bad timing. You intend to sell your home, and you’ve found another that’s absolutely perfect, but the dates for the sale and purchase settlement are spaced apart! In this scenario, a bridging loan will deal with the cost of the new property for this brief period, and the sale of your current home will pay it off. Here, most banks will increase the home loan you’re currently on, and then change all the collateral of your old home over to the new one after the sale. This sounds straightforward enough, but you still need to be careful. The bank will usually need a new valuation on your current property and the one that you intend to buy. To make sure you’re totally covered, it may be worth seeking some extra legal advice.

Even if you’re not looking to sell and buy around the same time, bridging finance could still be a good idea. When you have the cushion of the bridging loan, you’ll be able to take your time with the search for your next property, and have the confidence of knowing that you’ll be able to pay for it when you find the right property. If you’re looking for a bigger home, a more valued location, and an all-round upgrade, then this could be the answer to your prayers. Some people without this kind of buffer are pressured into putting their home on the market long before they’re really ready. If you end up in this situation, you’ll be at a serious risk of clutching at cash for houses, when you may be able to get a better deal. Although an open-ended loan gives you more leeway, be aware that it’s still a short-term thing. The majority of banks will give you six months to sell, or a year if you’re building a new home.

“That’s all well and good”, you may be saying “but what if the bank shoots me down?” If your bank is keeping their purse strings tight, then mortgage brokers may be able to secure funds from a more willing bank, or talk to another reputable lender. As with a lot of other financing options, the bank will probably operate a lower interest rate than a private lender, so make sure you take this into the equation. If you are going to reach out to mortgage brokers, see if you can still get a hold of the one who moved you into your current home. They’re typically more helpful if you have an in already.

The Different Ways Of Loaning Money And Which Is Best For You

If you need to loan money, there are various different kinds of loans out there. Before you can determine exactly which kind of loan you need, there are various things you need to consider.

For a start, you need to think of how much you’ll need. Some loans over cover a small amount, while some are intended for the long term. Short term loans often carry higher interest rates, and you can get charged a lot for not paying back in time. Longer term loans keep this into consideration- while you’ll still pay interest, it will be a slow increase over time.

There is also the consideration of what the loan is for. Some loans are designated for specific purposes- for example, Student Loans. Some are for business, usually requiring a high borrowing amount paid off over a long time. There are also personal loans, which are usually low, short-term loans with no prerequisites for usage.

Secured vs Unsecured Loans

There is also a difference in the security requirements between different loans. Secured loans mean your assets will be taken into account. If you fail to pay back the required amount in due time, your home and other assets may be repossessed to pay off the amount due.

Secured loans generally require a lot of paperwork to be done. They are generally used for long-term, high-amount loans, such as mortgages or business loans. As more assurance is given that they will be paid back, they are able to borrow more and given more time to do it.

Unsecured loans require much less assurance. However, they do require you to have a high credit score to prove you are trustworthy. The approval time for these is generally much faster. However, you may have to pay more interest. These are generally used for personal loans, for example a loan to pay off a car.

Open-End and Closed-End Credit

Closed-end credit is when the amount of the loan is paid in full to the borrower. The borrower must pay back the full amount of the loan, plus interest. Whatever they have paid back, they can not withdraw again. This means that if they find they need more money than they originally thought, they would need to take out another loan.

Closed-end loans may be preferable for people who know exactly the amount they will need. If they are certain of what they need and when they will be able to pay it back, a closed-end loan shouldn’t be a problem.

Open-end loans give borrowers much more flexibility. They will have access to the full amount of the loan, but only take what they need. Additionally, they only need to pay interest on the amount they have borrowed, as opposed to the full amount. They can also withdraw money they have paid back. Open-end loans are better for people who may need to borrow money, but are unsure of how much and when. Credit cards often involve an open-ended line of credit.

Different Kinds Of Loans

There is a wide array of different kinds of loans out there for different purposes. Here are some of the most common ones.

Signature Loans

Signature loans are a kind of unsecured loan. They depend on the good faith of the borrower, as opposed to being tied to any assets. Signature loans are a kind of personal loan and can be used for any purpose.

The amount you can borrow and length of time to pay it back can vary greatly with signature loans. Because of this, they are a good choice for a great deal of purposes. While you can get signature loans from a bank, there are companies that supply online signature loans, expediting the process.

Because signature loans are unsecured, interest rates can be high. Failure to pay them back can also damage your credit score. However, if you’re confident you will be able to pay them back in due time, they can be a great option for a personal loan.

Payday Loans

Payday loans are short-term loans with some of the highest interest rates. They are commonly used for people who need to make a purchase instantly, but will be able to pay it back when they get their pay check.

Because of this, they are amongst the fast and easiest to get. Many companies provide instant payday loans, and no security is required. They are often used in emergency situations, when money is required instantly but will be paid back in a short time.

Payday loans can be problematic and aren’t recommended for long-term purposes.

Mortgages

One of the most common loans, mortgages are designed for people buying houses. Because buying a house is such a large investment, a mortgage allows borrowers to pay it off in the long term.

Since they are long-term loans, mortgages have amongst the lowest interest rates of any loan. However, they do require security. If a borrower falls behind on their periodic payments, they risk having their house foreclosed.

Mortgages can be a big commitment. It’s important to be sure you want to buy a house before taking one out. People may decide they want to move in a few years, or they may wish to travel. In these cases, renting may be a better option. Buying a house with a mortgage should only be done with absolute certainty.

Student Loans

Designed for people planning to go into higher education. Student loans are intended to cover tuition costs for students enrolling in college or university. Some can also cover the living costs of a student travelling away from home to study.

Student loans can differ depending on the country you’re from. In the UK, student loans are largely provided by the government. In America, multiple organisations provide student loans, and students may have to compare companies to find the best deal.

Student loans are usually designated to cover the years the student is studying. They are usually paid off in the long-term, taking a periodic portion of the student’s earnings after they graduate.

Business Loans

There are various ways to get funding for a business. Short-term or long-term business loans can be taken out at banks. This usually involves a meeting where business plans are presented to ensure it’s a smart investment.

Businesses can also use investors, who they pay back later on down the line when their business is up and running. Business owners can compare business loans to find out the best way to finance their business.

Entrepreneurs heading into the business world can also find Start Up Loans or grants to fund their operations.

Financing

Similar to loaning, financing allows you to make a purchase upfront and pay it back later. Financing is common in car purchases. It has also become common in various online stores, particularly for expensive purchases like computers or smartphones.

Financing usually involves paying back small monthly payments to cover the full cost of a purchase. Financing can sometimes involve interest, meaning you’ll pay more than you would have upfront. Financing can be useful for people who want to make a large purchase and pay it off in smaller instalments.

Borrowing From Friends or Family

You can, of course, always borrow money the old fashioned way. Borrowing money from a friend or family can be quick and easy. However, they are not obligated to give you anything and loaning from close ones can strain personal relations.

You may be free from interest, but paying them back is important. If you don’t pay back a personal loan legal action can be taken against you, even if it is a family member you borrowed from.

Overdrafts

Many banks provide overdrafts on their debit and credit cards. This means when you don’t have money, you can instantly pay using your card and pay it back later.

Banks usually provide a limited interest-free overdraft. Some let you go past the limit if you’re willing to pay interest. Every bank is different so you should compare accounts before deciding which to go with.

Student accounts generally provide large overdrafts to help with the living costs of studying. Overdrafts are a good way of borrowing instantly and as long as you don’t surpass your limit, there shouldn’t be any drawbacks. Just be sure not to make a habit of going into your overdraft.

Personal Loans

Personal loans come in various different types, including some of the ones listed above.

In addition to getting personal loans from independent or online lenders, they can also come from the bank. Prerequisites of personal loans can differ depending on how much you need and how long for. Some may require security while some may be easier to get.

There are many ways out there to borrow money, so if you need to take out a loan be sure to make the right decision. Be sure to loan responsibly- it is always best to manage your own personal finances and only borrow money when you absolutely need to.