Many consumers will see the Christmas pinch magnified this year as the UK continues its struggle to escape recession.
While irresponsible lending through credit cards and other lending products contributed to the credit crunch, credit cards should not be ruled out as a tool for helping consumers to get by, as when used properly they can help to ease the pressure that comes with Christmas.
One option is to take advantage of the interest free durations offered on most credit cards, allowing you to spread your annual Christmas spend over a longer period of time, without paying a penny in interest for borrowing.
There are lots of credit cards to choose from, so finding the best card can sometimes seem confusing.
The two most attractive features are 0% periods on purchases and balance transfers. If you plan to use the card for purchases, you should look out for the longest 0% purchases duration, and if you want to transfer existing debt in order to avoid paying interest, search for the longest 0% balance transfer period.
It is also possible to mix the two, allowing you to avoid paying interest on debt transferred onto the card, as well as on the purchases you make using the card. The Halifax all-in-one and the RBS all-in-one credit cards are each offering 9 months 0% on both features, so either would be ideal if this is what you are looking for.
If you simply want a card with the longest 0% purchases duration then consider the BT 0% Purchases Card, offering a 10 month interest free duration.
Alternatively, if you wish to transfer an existing balance while paying no interest for the longest duration, check out the Virgin credit card, with a market beating 16 months 0% on balance transfers.
Whichever card you choose, the golden rule you must always stick to is to always ensure you pay off at least the minimum amount each month, and to clear your balance before the 0% duration expires to avoid paying any interest.
Something else to remember is that credit card companies charge a transfer fee when moving a balance onto a card (usually around 3%), so bear this in mind when looking to make use of this feature.
If you are fortunate enough to be in the position to clear your balance in full each month, then you don't need to worry about 0% offers as you won't pay any interest. However, there are still a number of cards offering rewards every time you use them for you purchases.
Reward credit cards offer special benefits such as cash back, or points earned as the card is used that can be exchanged for goods and services. If used properly, these cards effectively reward you for making your normal purchases.
There are several types of credit card reward schemes to choose from, including air miles, gift vouchers, store vouchers and other goods and services. When used correctly, these cards than be very rewarding. An effective way of making the most of these cards is by using them for as many purchases as you can. These include things like grocery shopping, bills, fuel etc. This way you will be rewarded for things you need to buy anyway.
It can take up to a month to process a credit card application so now is the time to apply to be sure it arrives in time for your Christmas shop.
Saturday, 14 November 2009
Friday, 13 November 2009
Savers to be informed of rate changes
The new European rules will take effect on November 1, and specify that all banks and building societies are required to provide advance warning to customers of reductions to rates paid on bank accounts.
Savings accounts providers will also have to communicate details of rate changes to account-holders when a bonus period comes to an end. This is likely to affect the majority of savers, as most top-paying variable rate accounts now offer introductory bonus rates, which generally revert back to an uncompetitive rate after this period ends.
Account providers have been criticised in the past as many savers are unaware that their account no-longer pays a competitive rate.
The new law follows months of rate cuts to accounts made by providers, often without informing customers, despite the fact that the Bank of England base rate has remained unchanged at its record low of 0.5%.
Two of these - Halifax and Leeds Building Society, recently trimmed rates on a range of their accounts by up to a quarter of a percentage point.
a spokeswoman for the Financial Services Authority (FSA), which will oversee the rules, said: "The changes are aimed at ensuring customers know what is happening to their accounts,"
"The rationale is they are told ahead of time so they can move if they want to."
The new requirements will be rolled out in two stages.
The first stage will come into effect from November, ruling that banks and societies are to give customers at least two months’ notice before making any reduction to rates on most instant access savings accounts and current accounts.
Letters, e-mails or texts must be sent out by providers (depending on the chosen communication method when the account was set up), informing customers of an upcoming rate cut.
The second stage will become effective from May 2010, and will focus on a new notification regime for notice and other instant access accounts, including individual savings accounts (Isas).
These Banking Conduct of Business (BCOB) rules are still to be finalised but are also expected to provide savers with advance notice of cuts made to interest rates.
Experts said that the proposed rules would be a major improvement on existing notification rules.
Some providers already inform savers of rate cuts, but under the industry’s current Banking Code they are not required to do so.
Savings accounts providers will also have to communicate details of rate changes to account-holders when a bonus period comes to an end. This is likely to affect the majority of savers, as most top-paying variable rate accounts now offer introductory bonus rates, which generally revert back to an uncompetitive rate after this period ends.
Account providers have been criticised in the past as many savers are unaware that their account no-longer pays a competitive rate.
The new law follows months of rate cuts to accounts made by providers, often without informing customers, despite the fact that the Bank of England base rate has remained unchanged at its record low of 0.5%.
Two of these - Halifax and Leeds Building Society, recently trimmed rates on a range of their accounts by up to a quarter of a percentage point.
a spokeswoman for the Financial Services Authority (FSA), which will oversee the rules, said: "The changes are aimed at ensuring customers know what is happening to their accounts,"
"The rationale is they are told ahead of time so they can move if they want to."
The new requirements will be rolled out in two stages.
The first stage will come into effect from November, ruling that banks and societies are to give customers at least two months’ notice before making any reduction to rates on most instant access savings accounts and current accounts.
Letters, e-mails or texts must be sent out by providers (depending on the chosen communication method when the account was set up), informing customers of an upcoming rate cut.
The second stage will become effective from May 2010, and will focus on a new notification regime for notice and other instant access accounts, including individual savings accounts (Isas).
These Banking Conduct of Business (BCOB) rules are still to be finalised but are also expected to provide savers with advance notice of cuts made to interest rates.
Experts said that the proposed rules would be a major improvement on existing notification rules.
Some providers already inform savers of rate cuts, but under the industry’s current Banking Code they are not required to do so.
Thursday, 12 November 2009
Pay off cards quickly 'to avoid Christmas debt difficulties'
Aussies planning on funding Christmas by using credit cards are being urged to ensure they pay off the balance as soon as possible.
Those considering how they will fund their expenditure over the Christmas period are being advised to do so with caution.
Chris Whitehead, chief executive of Credit Union Australia, claims that people looking at how they will meet the cost of gifts, food and other seasonal expenditure in the run-up to the festive season should draw up a list of the things they want to buy in advance.
From here they should create a budget to help them figure out how they will pay for such items, something that could mean they are less likely to make impulse purchases.
In taking this action, he tells the Australian Associated Press that people should be able to avoid starting the new year in a significant amount of credit card debt.
"Many shoppers use credit cards to make their Christmas purchases - thinking they can pay the balance off in the new year," Mr Whitehead points out.
However, he claims that although people may be looking to make use of the interest free period deals attached to cards, when such offers end those who have not taken action to make repayments may find themselves "suddenly financially overcommitted".
"The key is to ensure you are able to pay the balance in full each month, avoiding surmountable debt issues," he adds.
And despite recent research indicating overall growth in outstanding card balance has slowed down, "there is no room for complacency and consumers should continue to pay off any existing credit card debt and spend smartly over Christmas".
Shopping around for the best offers on goods was among the tips for saving the Credit Union Australia head also recommended.
His comments follow a study carried out by Access Economics revealing that residents in Southern Australia currently have a strong willingness to spend money, with expenditure in the state due to return to the peaks seen in 2007 by the middle of 2011.
Those considering how they will fund their expenditure over the Christmas period are being advised to do so with caution.
Chris Whitehead, chief executive of Credit Union Australia, claims that people looking at how they will meet the cost of gifts, food and other seasonal expenditure in the run-up to the festive season should draw up a list of the things they want to buy in advance.
From here they should create a budget to help them figure out how they will pay for such items, something that could mean they are less likely to make impulse purchases.
In taking this action, he tells the Australian Associated Press that people should be able to avoid starting the new year in a significant amount of credit card debt.
"Many shoppers use credit cards to make their Christmas purchases - thinking they can pay the balance off in the new year," Mr Whitehead points out.
However, he claims that although people may be looking to make use of the interest free period deals attached to cards, when such offers end those who have not taken action to make repayments may find themselves "suddenly financially overcommitted".
"The key is to ensure you are able to pay the balance in full each month, avoiding surmountable debt issues," he adds.
And despite recent research indicating overall growth in outstanding card balance has slowed down, "there is no room for complacency and consumers should continue to pay off any existing credit card debt and spend smartly over Christmas".
Shopping around for the best offers on goods was among the tips for saving the Credit Union Australia head also recommended.
His comments follow a study carried out by Access Economics revealing that residents in Southern Australia currently have a strong willingness to spend money, with expenditure in the state due to return to the peaks seen in 2007 by the middle of 2011.
Saturday, 7 November 2009
Live Forex Quotes - How Useful Are They?
One thing about the Forex market that you should know about is that there is a massive amount of information out there for you to actually decode when talking about the currency market. When you are looking at the Forex market, there are so many economic indices, price changes, tracking information, swaps and pips - that there is plenty of data for you to actually play around with. While you might think that the first thing you need to do is to get some sort of number crunching software for yourself, or perhaps a trading system, you might be right, but at the end of the day, you need to be able to get call outs to what you need to do.
And this is where the whole concept of the Forex quote is and this really gives you an insight to one of the critical parts of the whole trade currency, which is the price. Price is the driving force for the market and one of the more important indices to the market. When looking at price readings, you need to be on the right market track, and of course being able to know that the price of currency you are backing would increase in time to come, because that is the whole point of the market.
When you are talking about this, the price rates are basically being divided into many sections. The first thing about live Forex quotes is just that they would be able to tell you some of the important indices that you need to know about when talking about real time CFP quotes from all over the continent. Depending on the service that you have signed up for, what you are going to be able to do is to get the quotes based on the region specific currency pair that you are trading in.
Now, how you respond to quotes is of course one of the ways that you are going to ensure that you will at least succeed in the market, and the thing about this is that you are going to be able to make life a little easier for you if you can pair this with some technical and fundamental analysis of your own. This sort of on the fly information can be useful when you do not have the time (especially in the fast paced generation that we live) to find the trade signals on your own, and that's where quotes come in to fill in the blank pretty well.
So, live Forex quotes can be useful, it just depends on how you are going to use them and how they are going to benefit you in the first place. If you look online, you would realise that there are many companies out there that are offering this service. Signing on means you have another channel of information that you can use to make money off the market, but of course, it does take some skill and some experience to be able to use them to their fullest degree.
And this is where the whole concept of the Forex quote is and this really gives you an insight to one of the critical parts of the whole trade currency, which is the price. Price is the driving force for the market and one of the more important indices to the market. When looking at price readings, you need to be on the right market track, and of course being able to know that the price of currency you are backing would increase in time to come, because that is the whole point of the market.
When you are talking about this, the price rates are basically being divided into many sections. The first thing about live Forex quotes is just that they would be able to tell you some of the important indices that you need to know about when talking about real time CFP quotes from all over the continent. Depending on the service that you have signed up for, what you are going to be able to do is to get the quotes based on the region specific currency pair that you are trading in.
Now, how you respond to quotes is of course one of the ways that you are going to ensure that you will at least succeed in the market, and the thing about this is that you are going to be able to make life a little easier for you if you can pair this with some technical and fundamental analysis of your own. This sort of on the fly information can be useful when you do not have the time (especially in the fast paced generation that we live) to find the trade signals on your own, and that's where quotes come in to fill in the blank pretty well.
So, live Forex quotes can be useful, it just depends on how you are going to use them and how they are going to benefit you in the first place. If you look online, you would realise that there are many companies out there that are offering this service. Signing on means you have another channel of information that you can use to make money off the market, but of course, it does take some skill and some experience to be able to use them to their fullest degree.
Friday, 6 November 2009
How to Trade Currency in 4 Easy Steps
If you are going to trade in the Forex market, what you need to do is to get some sort of information on the market and how you are going to trade in it of course. What you need is more than some general information, but what you need to be doing is to find out how you are going to get connected to the market in easy and measured steps.
This editorial will talk a little about how you are going to do this, from the comfort of your own home and without any hassle at all. The first thing you need to do is of course read as much as you can about the Forex market and learn all you can about the ins and outs of the market. So what you can do is sign up for some online courses and basic information on the Forex market, and a good way for you to do this is also to speak to some people who have been trading in the market for some time now. They would be able to give you some good information on how the market works, whether or not you should be trading there in the first place.
The second thing you need to do is to get yourself signed on with a brokerage and what you need to do is to find a reputable one for yourself. All you can do is to research on some of the great brokerages out there and find out which one can suit you for your own needs. Talk to the brokerage of your choice and find out what services they have for you and whether or not they would be able to get you on a market of your choice. The other thing that you need to do is of course to, as best as you can, to actually get yourself onto one of the more reliable demo courses out there.
The great thing about a demo account is that it is able to help you trudge along the market and of course make some insight on how the market works. It is the best way for you to learn because there is almost no risk involved in the first place, because you are not playing around with real money. You are given dummy money but are allowed to trade in live market situations, and you can learn from all the mistakes then and there.
So, these are some of the ways that you can trade currency in just a few easy steps. Of course, the most important thing about this is that you need to hoard as much knowledge as you can on the market and the sort of market situations that are available. This is the way to ensure some measure of success for the market and that you do not end up in the percentile of traders or retail traders who do not make it to be resounding new success in the market.
This editorial will talk a little about how you are going to do this, from the comfort of your own home and without any hassle at all. The first thing you need to do is of course read as much as you can about the Forex market and learn all you can about the ins and outs of the market. So what you can do is sign up for some online courses and basic information on the Forex market, and a good way for you to do this is also to speak to some people who have been trading in the market for some time now. They would be able to give you some good information on how the market works, whether or not you should be trading there in the first place.
The second thing you need to do is to get yourself signed on with a brokerage and what you need to do is to find a reputable one for yourself. All you can do is to research on some of the great brokerages out there and find out which one can suit you for your own needs. Talk to the brokerage of your choice and find out what services they have for you and whether or not they would be able to get you on a market of your choice. The other thing that you need to do is of course to, as best as you can, to actually get yourself onto one of the more reliable demo courses out there.
The great thing about a demo account is that it is able to help you trudge along the market and of course make some insight on how the market works. It is the best way for you to learn because there is almost no risk involved in the first place, because you are not playing around with real money. You are given dummy money but are allowed to trade in live market situations, and you can learn from all the mistakes then and there.
So, these are some of the ways that you can trade currency in just a few easy steps. Of course, the most important thing about this is that you need to hoard as much knowledge as you can on the market and the sort of market situations that are available. This is the way to ensure some measure of success for the market and that you do not end up in the percentile of traders or retail traders who do not make it to be resounding new success in the market.
Thursday, 5 November 2009
What Is Candlesticks Trading?
There are many trading methods out there for you to consider when you are playing in the Forex market and one of them is of course, candlesticks trading, which is a popular method for trading among those that adhere to the Japanese method of looking at prices. One of the best ways to trade is through the price charts that have been generated through this trading method. If you know anything about the Forex market, it is that there are so many ways you can trade in the markets that are the most dynamic and volatile in the world today.
One of the unique things about this method of trading is that it actually provides ways and special cues that you can look at to make price reading and reading the action of the prices all the more easier. In this way, you can actually read the price actions much easier, and you can get an insight into market sentiment with the price actions that are displayed over with the candle sticks chart that you have before you. Of course you need to know that these bar charts are only as useful as your own information on them, so what you need to do is to gain as much knowledge as you can on the whole trading methodology.
Those that use these price actions will be able to predict all sorts of price actions and price trends that you need to know about, even reverse trends that will help you to make some sense of the market. You need to be able to combine with this trading methodology with some good technical analysis, which will augment the entire process and give you the information that you need to make some sense out of the market. Furthermore, you can also know about trade signals and gain a unique insight to how to read the entry and of course, points of exit in the market.
At the end of the day, it is a very visual form of trading which requires you to gain some skill in reading the charts ultimately. The bar charts that you are reading give you a good way to gauge market emotions, and of course you would be able to find specific patterns and ways that you can read into the market. There are many patterns that are available for you to look at and actually make some sense of, so what you need to do is to make sense out of them.
If you need some help on how you are going to trade, then you can look online for some information and of course, speak to traders and brokers who are familiar with this form of trading. This is one of the more significant ways that you can trade in the open market and of course, the best way you can learn this is through a trading course that can give you the option to play around with Japanese candle sticks. Through these trading courses, you'll be able to spot your mistakes regarding candlesticks trading.
One of the unique things about this method of trading is that it actually provides ways and special cues that you can look at to make price reading and reading the action of the prices all the more easier. In this way, you can actually read the price actions much easier, and you can get an insight into market sentiment with the price actions that are displayed over with the candle sticks chart that you have before you. Of course you need to know that these bar charts are only as useful as your own information on them, so what you need to do is to gain as much knowledge as you can on the whole trading methodology.
Those that use these price actions will be able to predict all sorts of price actions and price trends that you need to know about, even reverse trends that will help you to make some sense of the market. You need to be able to combine with this trading methodology with some good technical analysis, which will augment the entire process and give you the information that you need to make some sense out of the market. Furthermore, you can also know about trade signals and gain a unique insight to how to read the entry and of course, points of exit in the market.
At the end of the day, it is a very visual form of trading which requires you to gain some skill in reading the charts ultimately. The bar charts that you are reading give you a good way to gauge market emotions, and of course you would be able to find specific patterns and ways that you can read into the market. There are many patterns that are available for you to look at and actually make some sense of, so what you need to do is to make sense out of them.
If you need some help on how you are going to trade, then you can look online for some information and of course, speak to traders and brokers who are familiar with this form of trading. This is one of the more significant ways that you can trade in the open market and of course, the best way you can learn this is through a trading course that can give you the option to play around with Japanese candle sticks. Through these trading courses, you'll be able to spot your mistakes regarding candlesticks trading.
Wednesday, 4 November 2009
IRAs, Roths, and 401(k)s with Taxed and Untaxed Minimum Required Distributions (MRDs)
IRA and Roth IRAs are two examples of government-regulated retirement savings plans - called qualified plans. Both are generally personal plans you set up at banking-type institutions that you can contribute to and withdraw from yourself. Other examples of qualified plans associated with work are 401(k), 403(b) and their Roth versions- like Roth 401(k).
This article explains which qualified plans have minimum required distributions (MRDs) associated with them and some strategy.
Qualified plans such as 401(k)s, and IRAs were created with specific tax characteristics as an incentive for people to save for their retirement by contributions from their working income.
There are fundamentally two different qualified plan type tax characteristics. I'll call them
* Deductible Contributions then later taxed, and
* Nondeductible Contributions then never taxed
Taxation and Obligations for the owners (i.e. plan contributors) of the plans
The tax characteristics of the 'deductible contributions' type plans are represented by your 401(k) at work or your own IRA. Your yearly contributions to each plan are limited but deductible from your income in the year of contribution. But the income tax of both those contributions and all earnings they create are tax-deferred until you withdraw money from your plan.
Whenever you withdraw from these plans, the withdrawal amount in that year is added to your income to be taxed at your income tax rates. Since qualified plans are geared for retirement, you're penalized with a tax of 10% on your distribution in addition to whatever income tax is incurred if you're under 59 1/2.
Lastly, government-regulations obligate you to make at least a minimum required distribution (MRD) each year from your IRAs after you've turn 70 1/2.
The tax characteristics of the 'non-deductible contributions' type plans are represented by your Roth 401(k) at work, or your own Roth IRA. Your yearly contributions to these plans are limited, but they're not deductible from your income for taxation. So they're taxed. But the advantage now is that they and all their earnings and gains will grow each year tax-free - not just tax-deferred.
Additionally, when you withdraw from these Roth-type plans, the money comes out tax-free. But you must wait to withdraw your money until reach 59 1/2 or be penalized as above.
If you're the owner of a personal Roth IRA, you have no obligation to make any MRDs ever. If you leave your Roth IRA to your spouse, she also has not obligation to make MRDs either.
If you have a Roth 401(k)s, you must make the normal RMDs as those with non-deductible contribution types above, but - like all Roth plans - the money comes out tax free.
What about plan beneficiaries after you die?
All beneficiaries of plans -401(k)s, IRAs, Roth 401(k)s or Roth IRAs - must make MRDs except the spouse beneficiary of a Roth IRA if she chooses to be owner. But remember, RMDs or withdrawals from Roth plans always come out tax free.
How much money must come out in an RMD?
The MRD for a specific year is the value of your IRA (or total of all your IRAs if you have more than one) as of Dec. 31 of the previous year, divided by your life expectancy factor (from IRA table found in Appendix C of IRS publication 590 (online)) for that specific year. So, each year your MRD will change since the value of your IRA will change and your life expectancy will change. A new calculation must be done each year.
You can withdraw more than your MRD, but you're penalized if you withdraw less. You're penalty is a tax equal to 50% of that part of your MRD you didn't withdraw.
Reasons for converting to a Roth IRA Tax free growth and tax free withdrawals forever is hard to pass up. And that's for owners, spouse beneficiaries and nonspouse beneficiaries.
Only the nonspouse beneficiaries need to make RMDs - but they're still tax free ones. And those RMDs are based on the beneficiary life expectancy. So if their young, very little has to be taken out.
It makes good sense to convert any Roth 401(k) to your own Roth IRA for the freedom of not having to make RMDs by the owner or his spousal beneficiary. The conversion is tax free.
Conversion from a 'deductible contributions' plan to your Roth IRA requires you to pay income tax on amount you choose to convert. For 2010 and beyond there's not income limit prohibiting you from making the conversion - as there has been.
Holding money in a Roth IRA keeps it safe from future increases in income tax rates that plague holders of 'deductible contributions' plans.
This article explains which qualified plans have minimum required distributions (MRDs) associated with them and some strategy.
Qualified plans such as 401(k)s, and IRAs were created with specific tax characteristics as an incentive for people to save for their retirement by contributions from their working income.
There are fundamentally two different qualified plan type tax characteristics. I'll call them
* Deductible Contributions then later taxed, and
* Nondeductible Contributions then never taxed
Taxation and Obligations for the owners (i.e. plan contributors) of the plans
The tax characteristics of the 'deductible contributions' type plans are represented by your 401(k) at work or your own IRA. Your yearly contributions to each plan are limited but deductible from your income in the year of contribution. But the income tax of both those contributions and all earnings they create are tax-deferred until you withdraw money from your plan.
Whenever you withdraw from these plans, the withdrawal amount in that year is added to your income to be taxed at your income tax rates. Since qualified plans are geared for retirement, you're penalized with a tax of 10% on your distribution in addition to whatever income tax is incurred if you're under 59 1/2.
Lastly, government-regulations obligate you to make at least a minimum required distribution (MRD) each year from your IRAs after you've turn 70 1/2.
The tax characteristics of the 'non-deductible contributions' type plans are represented by your Roth 401(k) at work, or your own Roth IRA. Your yearly contributions to these plans are limited, but they're not deductible from your income for taxation. So they're taxed. But the advantage now is that they and all their earnings and gains will grow each year tax-free - not just tax-deferred.
Additionally, when you withdraw from these Roth-type plans, the money comes out tax-free. But you must wait to withdraw your money until reach 59 1/2 or be penalized as above.
If you're the owner of a personal Roth IRA, you have no obligation to make any MRDs ever. If you leave your Roth IRA to your spouse, she also has not obligation to make MRDs either.
If you have a Roth 401(k)s, you must make the normal RMDs as those with non-deductible contribution types above, but - like all Roth plans - the money comes out tax free.
What about plan beneficiaries after you die?
All beneficiaries of plans -401(k)s, IRAs, Roth 401(k)s or Roth IRAs - must make MRDs except the spouse beneficiary of a Roth IRA if she chooses to be owner. But remember, RMDs or withdrawals from Roth plans always come out tax free.
How much money must come out in an RMD?
The MRD for a specific year is the value of your IRA (or total of all your IRAs if you have more than one) as of Dec. 31 of the previous year, divided by your life expectancy factor (from IRA table found in Appendix C of IRS publication 590 (online)) for that specific year. So, each year your MRD will change since the value of your IRA will change and your life expectancy will change. A new calculation must be done each year.
You can withdraw more than your MRD, but you're penalized if you withdraw less. You're penalty is a tax equal to 50% of that part of your MRD you didn't withdraw.
Reasons for converting to a Roth IRA Tax free growth and tax free withdrawals forever is hard to pass up. And that's for owners, spouse beneficiaries and nonspouse beneficiaries.
Only the nonspouse beneficiaries need to make RMDs - but they're still tax free ones. And those RMDs are based on the beneficiary life expectancy. So if their young, very little has to be taken out.
It makes good sense to convert any Roth 401(k) to your own Roth IRA for the freedom of not having to make RMDs by the owner or his spousal beneficiary. The conversion is tax free.
Conversion from a 'deductible contributions' plan to your Roth IRA requires you to pay income tax on amount you choose to convert. For 2010 and beyond there's not income limit prohibiting you from making the conversion - as there has been.
Holding money in a Roth IRA keeps it safe from future increases in income tax rates that plague holders of 'deductible contributions' plans.
Tuesday, 3 November 2009
Increasing Your Income
You've got to make money before you spend money. If you think of the kind of financial advice you usually get from financial advisors, you'll probably find that it's pretty much entirely focused on the second half of that sentence: saving and investing money.
That's certainly a legitimate approach, but it's severely limiting. How much can you really save and invest when you're dealing with a limited amount of income? Read on to find out about another approach.
A company's financial situation has two aspects: what comes in and what goes out. Obviously, it's important to keep track of what goes out and make sure you get a fair return on your investment.
But no matter how much you scrimp on expenses, you can only save so much.
So why not look at the other side of the equation--how much comes in? Why not focus on increasing your income? After all, there is really no limit to how much income you could make.
Not that it's necessarily easy, but it's much easier than saving more when there's nothing left to save. That's why I focus on helping my business-owner clients increase their company's income. By increasing the business revenue, more money flows to the household and the net worth increases.
And increasing the business income isn't really rocket science either: think about your own business. Increasing income really comes down to four main functions which are closely connected:
1. Create demand for your products
Improve your marketing functions – get bright ideas on how to create more demand for your services or products. Improve your internet presence, your brochures and company image. Open new lines of communication with your public, such as surveying them to find out what is desired.
2. Promote yourself
Get out there to let people know who you are. Make phone calls, send letters, join referral groups, be active in the community, and get your face known. For the best effects, make sure you're dressing well and smiling. If you do that, people will think, "Hey, I like that person." And we all like doing business with people we like.
3. Sell your products
How well do you close the people who responded to your marketing? You can market all you want, but if you don't close, you aren't going to get paid. Look for ways to improve your sales process: take a course in sales techniques, attend seminars, standardize and drill your sales process with friends to get their feedback.
4. Improve the quality and delivery of your product
You also need to make sure that your products live up to people's expectations. If you don't have good product, you won't survive very long. Look for ways to improve the quality of your product and how efficiently you deliver it to your customers.
All of this may seem outside of what you'd expect from a financial advisor, but if you think about it, it shouldn't be. People come to get advice on how to improve their financial condition, and increasing their income is the most important thing they can do. And if an advisor can help them look at their business and make it grow, that will help them achieve their goals all the more quickly.
That's certainly a legitimate approach, but it's severely limiting. How much can you really save and invest when you're dealing with a limited amount of income? Read on to find out about another approach.
A company's financial situation has two aspects: what comes in and what goes out. Obviously, it's important to keep track of what goes out and make sure you get a fair return on your investment.
But no matter how much you scrimp on expenses, you can only save so much.
So why not look at the other side of the equation--how much comes in? Why not focus on increasing your income? After all, there is really no limit to how much income you could make.
Not that it's necessarily easy, but it's much easier than saving more when there's nothing left to save. That's why I focus on helping my business-owner clients increase their company's income. By increasing the business revenue, more money flows to the household and the net worth increases.
And increasing the business income isn't really rocket science either: think about your own business. Increasing income really comes down to four main functions which are closely connected:
1. Create demand for your products
Improve your marketing functions – get bright ideas on how to create more demand for your services or products. Improve your internet presence, your brochures and company image. Open new lines of communication with your public, such as surveying them to find out what is desired.
2. Promote yourself
Get out there to let people know who you are. Make phone calls, send letters, join referral groups, be active in the community, and get your face known. For the best effects, make sure you're dressing well and smiling. If you do that, people will think, "Hey, I like that person." And we all like doing business with people we like.
3. Sell your products
How well do you close the people who responded to your marketing? You can market all you want, but if you don't close, you aren't going to get paid. Look for ways to improve your sales process: take a course in sales techniques, attend seminars, standardize and drill your sales process with friends to get their feedback.
4. Improve the quality and delivery of your product
You also need to make sure that your products live up to people's expectations. If you don't have good product, you won't survive very long. Look for ways to improve the quality of your product and how efficiently you deliver it to your customers.
All of this may seem outside of what you'd expect from a financial advisor, but if you think about it, it shouldn't be. People come to get advice on how to improve their financial condition, and increasing their income is the most important thing they can do. And if an advisor can help them look at their business and make it grow, that will help them achieve their goals all the more quickly.
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