Cure Your Financial Lack: Basic Factors to Consider for Becoming Financially Free

Most people can do better financially. Most of us if not all of us meet opportunities on a daily basis that are intended to change our financial fortunes for the better but are unable to recognize them in their camouflaged state. Opportunities of devious magnitudes happen to all men. We are programmed to see and hear only those things that we want to see and hear. What will happen if we can learn to freeze this approach to life and unfreeze the conscious expectation of everything we need to become what we should be, that is, if we fully comprehend and have visualized what we should be? Nothing happens by chance! You have to want it and want it very bad.

There is always a starting point to everything and a first time with which to experience things. If we do not start we’ll never get anywhere and the worst that can happen is retrogression. Our dreams which are linked to our desires differ in magnitude. Some people desire to be wealthy and others desire to be well to do, that is, to have their needs met. Some actions have to be initiated for these things to manifest. It is only when you are consciously conscious of who you want to become and what you want to achieve that you will begin to take appropriate and relevant actions to achieving your goals. We all have something to give to others which we can do in exchange for something. This is how battering came about and was highly effective. It was all about meeting the needs of others. Think about what you can do to meet the needs of others and receive compensation for doing that and you will have found an income generating system.

For those who are already earning an income, there are some things you can begin to consider to improve your financial status. Make sure that you cover the basic stuff first before considering moving to the next level of financial freedom. Personal financial management is the first hurdle to cross before attempting total financial freedom. If you acquire basic skills for personal financial literacy and manage your personal finances well, you’ll then find business finance management very interesting. The skills of saving, investing, and making your money grow for your future financial needs and of protecting your income are the basis for proper financial planning. Everyone can cure their financial lack.

The quest to be financially healthy requires that we be disciplined, responsible, knowledgeable and understanding. Financial literacy is the most important set of life skills that we all need to survive and be successful in the modern world. This is the set of skills that has been acquired by very few people hence there are only few financially successful people in the world today. The lack of this skill results in many people finding it extremely difficult to manage their financial affairs and to successfully plan their financial future.

If we spend all our money today we’ll have no provision for tomorrow and we’ll have to work extra hard just to survive. If we save some of our money today, we’ll have something for tomorrow. This is how serious saving and investing a portion of our monies today is. Put your money to good use and let it generate more money for you. If you spend all your money today, then you are giving away your future financial freedom. We cannot just hide our heads in the sand and hope that the future will take care of itself. We have to force ourselves to make hay while the sun is still shining, when age, time, health and resources still allow us to do so. Choosing not to take heed of the advice of the wise will be downright ignorant and foolish.

Personal financial management is the launching pad for personal financial freedom and paves a way to personal wealth. We have to start by acknowledging that we are not going to be young forever, that we are not going to be strong physically and mentally forever. We are not going to be able to work forever even though we may wish so. Working, as a business owner or employee, requires strength and energy and aging might be a limiting factor. You need to prepare for an event or time when you will be unable to work any longer. This calls for you to protect your personal income in case you die, become disabled or retire due to old age. You have to consider life and disability assurance while you are still working either as a business owner or employee to protect yourself and your income. Not considering this advice is purely being irresponsible. Consult your financial adviser and engage him or her on this issue. Do the right thing, plan your personal finances. There should be enough money available to pay off debts and in the case of disability, to make changes that will help you cope with your new situation.

You have to understand the negative effects of inflation on your savings so that you can craft strategies to counter it. For example, an inflation rate of say 5% a year will half the buying power or value of your money in 10 to 15 years’ time. In other words, if it costs you US$125 a month now to buy your groceries, you will need US$250 to buy those same groceries in 10 to 15 years’ time. Time is the most important factor when it comes to saving and making money grow. The longer time you save, the more interest you will receive out of your savings.

Money grows when it is used to make more money. However, investing money is not a sure bet, it involves huge risks. The objective of investing is to make more money. Your goal should be to maximize the returns on your investments with less risk on your capital. It starts from searching and researching companies, funds and business sectors you wish to invest in. There are many different ways of investing money in the economy and each of these different ways has its own levels of risk and return unless you open an investment account with a financial institution (bank). Work on your action plans for short-term, medium term and long-term investment strategies.

While it is extremely important to invest in reputable companies, the reputation and integrity of your financial adviser is extremely important. Do not take your adviser’s advice at face value. Go for a second and even a third opinion and do more research. You cannot afford to believe only what your adviser is telling you. Trust is not enough as it will not guarantee you your returns. Research and scrutinize documents before committing yourself. Never put all your eggs in one basket regardless of how tempting it might be.

It is extremely important to have a will. Will allows you to register your wishes in writing so that when you pass on, you may have this document speaking for you. Failure to do this will result in your possessions going to people you never wished to have them or going to the state (intestate). Any person of 16 years or older who is mentally capable of understanding what he or she is doing can make a will. Estate laws differ from country to country. Please check laws relevant to your country. Banks, lawyers and trust companies (most of them are insurance companies) can assist with the drawing up of a customer’s will. Ask your banker or financial adviser about the process of setting up a will.

Regardless of how prosperous your business and investments are today, you have to provide in advance for the needs of your growing age and the protection of your loved ones. A budget is a plan that deals with the future allocation and utilization of various resources with regard to different organizational activities over a given period. Budgeting is a disciplined way of spending your hard earned income. It is a tool used to translate future plans into quantitative terms.

Remember that the wealth you are trying to create is not only for you, it is for your second, third and fourth generations. Budget your expenses in such a way that you may have money available to pay for your necessities. You must also make provision to pay for your entertainment without spending more than ninety per cent of your earnings. Make provision for giving to deserving charities in the ninety per cent available for you to spend. It is important to get used to giving as it is a spiritual and universal law that binds all of us. Make sure that you invest the ten per cent of your income to give you excellent returns. Guard this ten per cent with all diligence for it is a seed that has to generate wealth for you.

About the Author: Basi Malatji is the founder and president of Dinatla Business Development Consultants, a strategic training, development and marketing services firm that specializes in helping entrepreneurs, individuals and managers to realize their potential. With more than 15 years of senior management level experience in banking, business development, consulting and training, Basi offers valuable tips on self- development. His experience through interacting with junior managers, entrepreneurs and business owners has lead him to write books on financial literacy and entrepreneurial development. He has also written articles which are available at some of the major Ezine platforms.

6 Reasons You Don’t Need a Financial Health Coach

Is a financial health coach a luxury only the rich can afford? Or, can expert financial advice even help those who are living paycheck to paycheck?

What is a Financial Health Coach?

A financial health coach is a personal financial expert that understands budgeting, debt, savings, credit, providing for college, retirement, spending money wisely, and organizing an individual’s financial future. They are not financial planners, tax specialists, stock brokers, CPAs, or financial gurus.

They will explain how money and debt works, and provide pertinent information so individuals or businesses can make their own prudent financial decisions. They are teachers and advisers, not salespeople.

What is Financial Health?

Being financially healthy can mean different things to different people, but there are some basics that apply to everyone:

– Financial responsibility – understanding the basics of personal (or business) finance and being able to take care of your financial needs.

– Financial Literacy – being able to make sound financial decisions based on available information.

– Financial independence – being able to make and implement your own decisions – sometimes with the help of an adviser, but often on your own.

– Financial security – having peace of mind that you have the money to support the basics of life, enough to provide some luxury, and plenty to provide for the bigger events in life – college funds, medical needs, and retirement.

6 Reasons You Don’t Need a Financial Health Coach

1.Now, financial health coaches cost money, and one lesson you will learn from one is to not spend money unnecessarily. So, before you shell out some of your hard-earned cash on a financial health coach, let’s see if you really need one.

2. Is you household on solid financial ground? Do you have a household budget and are able to stick to it month to month? How about the financial health of your business – is your financial budget working? If all is well with your budget, then you can probably save the money and put it into a family vacation or fixing up the house.

3.Have you put money away for a college fund? Have you begun funding your retirement account? Do you know the best ways to save for these very expensive needs? If so, you probably don’t need a financial health coach.

4.Do you notice how other people live a feast or famine lifestyle and are constantly on a money roller coaster? Do you realize how fortunate you are to be on a level path to financial success? If this describes you, then you can skip the financial coaching.

5.Do you have a defined investment philosophy and understand your own personal risk tolerance for investing? Do you have a customized lifelong plan to guide your spending, funding, and investing? If you already have this, then your financial health is better than most, and you can do without a financial coach.

6.Do you make a billion dollars each year. Are you a billionaire? According to Forbes, there are 1,826 billionaires in the world, so chances are you are not one of them. Perhaps if you have billions of dollars, you are financially savvy enough not to need help. However, since you are likely not one of those lucky 1,826 individuals, you should seek out help so you can do the most with your money – whether its millions or thousands.

Become a Financial Health Coach

It’s easy to see that most people need a financial health coach to manage their money and save for big ticket items like college and retirement. It’s easy to see that becoming a financial coach would be a great side gig or career. If you enjoy financial matters, like helping people simplify their lives and achieve their financial dreams, it might be time to look into the world of financial coaching. You’ll be helping yourself, and in a position to help countless others reach their financial dreams.

The Category-Killing Definitive Financial Advisory Business Model

The business model for financial advisors serving individuals and families has evolved over the past 35 years but clients have now made it clear what they prefer and a definitive business model has now emerged. When most “financial advisors” first entered this business in the 1980s, and prior, as an advisor to individual clients, what we call “retail clients,” the role was more or less a sales position. For many financial advisors it still is a sales position, but a superior client-driven business model now exists. Back in the 1980s many “financial advisors sold investment securities for commissions. Others in may have sold insurance products or various services such as tax preparation or estate planning legal services, but things were very fragmented for the client. An affluent client typically had to build their own team.

By the 1990s many financial advisors become interested in financial planning as a service. So we saw many advisors pulling their clients financial affairs together through financial planning, but most were still compensated by commissions. What most advisors didn’t realize was that charging a client a percentage of their “assets under management” (AUM) was actually a form of “commission.” Charging for AUM implied that you would only advise, or were only compensated to care about, those assets for which you were charging your fee. Often left out of the conversation were local bank accounts, which were frequently quite large, as well as investment accounts managed by others, real estate investments as well as variable insurance products which other advisors had put in place for a client. Seldom did these disparate advisors for a client speak to each other or coordinate issues.

By the year 2000, a select category of high-end fiancial advisor recognized this coordination problem and began insisting upon establishing a comprehensive written lifetime financial strategy for every client. These select financial advisors realized that to begin comprehensively coordinating a client’s personal financial affairs there was significantly more time and work involved. To many advisors it became clear that “if we are going to offer a whole lot more value to each client we will only be able to serve a few clients.” To do it right, we came to believe that one advisor could properly serve a community of less than 100 Ideal Clients. The obvious solution was, and is, for an advisor to establish an exacting Ideal Client Profile, along with a substantially increased fee for service. A fee completely disconnected from any form of product sales, and no longer selling “Assets Under Management” money management services. As we observed these select advisors’ revenues rapidly soar so we began researching what the affluent really wanted from a financial advisor relationship. By 2010 the definitive model became quite clear and it’s a paradigm shift from the past models.

Today, financial advisors can still select the business model they prefer and not every client wants the same thing, but for affluent Potential Ideal Clients a preferred business model is now evident. As the number of affluent Potential Ideal Clients is growing every day and you contemplate your future business model consider what “the affluent” are hoping for today in their relationship with a financial advisor.

Simply stated, the new paradigm is an advisor who is “on top of everything all the time.” A highly proactive advisor who seems to be “ahead” of every issue, and fully understands each client’s perspective. An Advisor who can, and does, represent a client before others and attends every financial meeting with other financial professionals. An advisor who has no ulterior motives, earns nothing from products, and discloses every potential “conflict of interest.” Proffers a culture of complete transparency when it comes to how everyone involved with a client is being paid. Finally, the affluent of today value a financial advisor who is willing to coordinate everything. Rather than coordinating pieces & parts, this is an advisor who coordinates all personal financial affairs, including, and especially, the other financial people (accountants, lawyers, financial planner, money managers, insurance people, etc., etc.). An advisor who recognizes that the greatest value provided is the time being saved for an Ideal Client who has other things to attend to which matter more than money.

Be prepared, many affluent do not even believe advisors like this exist and have a hard time believing they could ever find an advisor who is both able & willing to effectively provide this type of relationship at any price. So you’ll have some convincing to do. Unfortunately many Potential Ideal Clients have likely encountered advisors in the past who have offered (promised) many of these things, but in the end, did not deliver. So if you jump into this river be prepared to fully deliver or perish. Affluent clients are smart and quickly discover the truth; but in the end this model is quite simple and elegant. Luckily, this new paradigm-shifting model is as much an attitude as it is a process. There’s no software required for your client to know and feel you’re protecting them, paying attention, coordinating everything and are exposing every potential conflict.

Potential Ideal Clients are willing to pay a substantial flat fee for this Comprehensive Financial Service if, and this is a big ‘if,” they are convinced all of these elements are in place and you can “deliver.” What if you had 75 Ideal Clients each compensating you $50,000 per year for you to coordinate their personal financial affairs, to get their “financial house” in perfect order, and keep it that way forever? If that appeals to you, then you should consider this “category killing” paradigm-shifting business model since, at present, most financial advisors are neither able nor willing to enter into a client relationship like this. The opportunity is enormous

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Financial Analyst: A Profitable Career Option for Finance Jobs!

In the current job market, the hottest job position that is more in demand is of financial analyst. A person who can meet the new expectations of the employers in the finance area will surely find more employment and professional growth opportunities.

Who is a financial analyst?

A financial analyst also known as a business analyst is a person who is involved in monitoring the financial movements of a company. The main task of an analyst is to evaluate a company’s financial risk and drafting financial forecasts. With the assistance of these analysts, companies can make well-informed financial decisions, develop cash flows, debt strategies and maintain their budgets.

Industries that demand financial analysts

There are several industries, which require a person for handling various finance related issues. Some of these industries include:

Accounting and Auditing services industry
Aerospace and Defense industry
Banking industry
Biotechnology/Pharmaceuticals industry
Business Services industry
Computer Software/Hardware industry
Construction industry
Consumer Packaged Goods industry
Education industry
Electronics, Components, and Semiconductor industry
Energy and Utility industry
Engineering Services industry
Financial Services industry

Financial Analyst Job Duties:

Evaluate an organization’s financial risk and prepare a report describing financial forecasts, financing options and capital management strategies
Assist in preparing a company’s budget
Determine cost of operations by collecting and analysing operational data
Identify the present financial status of the company by analysing and comparing actual results with plans
Establish various policies and procedures related to cost
Recommend various solutions to improve and manage financial status by monitoring and identifying financial trends
Maintain database by collecting, verifying and backing up data
Develop automated accounting applications with an aim to boost productivity
Keep financial information confidential
Work with company officials to gain a better insight into the company’s prospects and management?

Educational qualifications:

In order to get into this job position, one must have an undergraduate degree in finance, management, economics, statistics and administration. Having certifications and a graduate degree can notably enhance an applicant’s prospects. Furthermore, an internship during studies can be really fruitful in the long run.

Skills required:

Various skills required to become a successful analyst include:

Excellent communication skills including both verbal and written
Detailed understanding of companies
Superior analytical and organizational skills
Project management skills
Ability to create financial models
Ability to work independently and take sound decisions
Better understanding of financial and quantitative concepts
Must be able to manage multiple tasks, projects
Knowledge of computers and other latest technologies

Salary overview

In India, the average salary of a financial analyst is in between INR 3,00,00 to INR 4,00,00 per year. As the experience increases in this job position, the chances of higher income also increases. Furthermore, knowledge of various factors like risk management or control, valuation, SAS, SAP financial accounting, financial modeling, etc, can fetch you a smart salary.

Conclusion:

A financial analyst job is definitely the most lucrative career choice, especially for those who are very good at analyzing financial concepts. An experience in this profile will provide you high income and other benefits. However, strong competition is expected for this job position. A deep understanding of the roles and skills and financial terms along with a relevant experience can boost your chances for getting the job.

Financial Advisor Experience – 7 Questions You Must Ask!

A critical key to successfully selecting your financial advisor is know what questions to ask. The painful truth is most consumers of financial and investment planning services don’t ask some of the most basic questions when finding, interviewing, and choosing the right financial advisor for their specific needs and financial goals. Rather they tend to be wooed by flashy signs on imposing buildings, fancy decor, ultra-slick TV ads and impressive titles. Choosing the wrong financial advisor however can lead to financially disastrous consequences for you and your financial security – and those flashy signs, smooth marketing campaigns, and embellished sounding titles are the least of what you as a consumer should be concerned with.

The problem stems from the Wall Street machine and their monstrous marketing budgets. Wall Street firms label their salespeople “Financial Consultant” or “Vice President of Investments” (I know, I had both titles at points in my career) – remarkable job titles to say the least, and most certainly comforting in nature to the consumer. They piece together emotionally provocative marketing campaigns with catchy slogans and striking logos. They advertise their spectacular investment products and financial planning services on TV, on the radio, and in the most popular trade magazines.

The sordid truth is the Wall Street machine engages in this “financial pornography” to wow and woo you, to impress you, and to give you comfort in the quality of their advice and value of their investment products before you even walk in the door. In reality, the flashy signs and chic titles mean nothing.

Checking your financial advisors background, credentials, philosophy, compensation and experience in the financial services industry can quickly weed out the “less professional” financial advisors – and effectively simplify your decision making process in finding the right financial advisor.

One of the most important “qualifiers” of a professional financial advisor is their level of experience in serving client’s financial needs and helping them accomplishing their goals. Notice I didn’t say “length of experience in the business”. Length of financial services industry experience may mean little if anything, because a financial advisor may have 20 years of experience which may include years of nothing remotely related to serving clients financial needs.

There are plenty of financial industry jobs which may give the impression of real-life “in the trenches” client services experience, but in reality these jobs aren’t much more than administrative, managerial, or sales in nature. To choose the right financial advisor, focus on asking the right questions, and expect thorough answers:
How long have you been working directly with clients as their primary financial advisor?

How long have you been recommending investment and insurance products?

How long have you been actively and consistently creating financial plans for clients to help them achieve their financial goals?

What is your training background, and where did you learn how to diagnose, manage, and solve your clients financial problems?

How many years did you spend training for your position as a financial advisor?

What firms have you worked for in the capacity of a financial advisor?

How many written financial plans have you created for clients?

Those seven questions will garner the majority of information you’ll need to make an informed decision on your financial advisor’s experience level. But just what should their answers entail? In terms of acceptable financial advisor experience, I would argue the following:

A minimum 3 years of experience. Anything less is a threat to your financial future you can’t afford to take. Financial advisor’s can intern (or act as a para-planner) with more experienced financial professionals working with clients directly, and should do so for at least three years before taking on the primary role as your financial advisor. Given the volatility and uncertainty of current times, it’s easy to make a case for 10 years or more of practical, real-world experience. You wouldn’t lay on the operating table for open heart surgery knowing your doctor graduated from medical school yesterday would you?

A college degree. This is a new requirement for NAPFA (the National Association of Personal Financial Advisors, NAPFA.org) registered financial advisors. While a college degree isn’t the “be-all end-all”, it shows dedication to training and increasing your knowledge early in life – a trait which commonly caries over throughout your career.

A CERTIFIED FINANCIAL PLANNER™ (CFP®) or Chartered Financial Consultant® (ChFC®) designation. Both credentials show substantial dedication to being among the best in the financial services field. Both credentials are difficult to achieve and require ongoing continuing education to maintain. Both credentials illustrate the experience and training so vital to your financial success.

20 written financial plans. Many “financial advisors” don’t do written financial plans (but many “financial advisors” are that only in title, and are actually salespeople in practice). Regardless of whether you need a written financial plan or not (not every client needs a written financial plan), your financial advisor should understand how to create one and have reasonable experience in doing so. You may not need that open heart surgery, but don’t you want your cardiologist to have the experience requisite to making a wise decision when you have chest pain?

Experience is but one primary component of excellence in financial advice and superior client service. There are many other facets of a financial advisory practice that are important. In the end however, don’t you feel more confident you’ll be able to reach your financial goals knowing that this isn’t your financial advisor’s “first rodeo”?

Take the time, ask questions when you interview a financial advisor. Require and expect thorough and reasonable answers. Doing so will help you achieve confidence that you’ve found an experienced financial advisor able to deliver excellence in financial advice!