really-simple-ssl domain was triggered too early. This is usually an indicator for some code in the plugin or theme running too early. Translations should be loaded at the init action or later. Please see Debugging in WordPress for more information. (This message was added in version 6.7.0.) in /home/towerfinancial/public_html/wp-includes/functions.php on line 6131Avada domain was triggered too early. This is usually an indicator for some code in the plugin or theme running too early. Translations should be loaded at the init action or later. Please see Debugging in WordPress for more information. (This message was added in version 6.7.0.) in /home/towerfinancial/public_html/wp-includes/functions.php on line 6131There are two basic personal financial statements that everyone should prepare, or have a financial advisor prepare, at least once each year; the cash flow statement and the balance sheet.
This process is a critical first step in financial planning. Tracking your financial position and progress gives you a great feeling of control — you know where you are going financially. It helps you to make wise decisions about financial matters.
“Cash Flow” is how you spend your money. A cash flow statement is an ongoing financial document which tracks sources of income, uses of income, and the difference between the two (surplus funds which should be invested towards future financial objectives.)
If you keep a budget, you are, in essence, keeping a running cash flow statement. By tracking your cash flow on a monthly basis you will be better prepared to meet your financial needs:
Your balance sheet is a snapshot of your personal net worth.
Total Assets less Total Liabilities equals Your Net Worth
Total Assets: A list of current estimated value of your assets might include the following: cash in banks and money market accounts, cash surrender value of life insurance policies, IRA & Keogh accounts, pension and 401(k) accounts, real estate, and personal property. Add them up and you’ll have a figure that represents your Total Assets at the moment.
Total Liabilities: Next, make a list of your liabilities, which might include the following: mortgage, bank loans, car loans, charge accounts, taxes owed, college loans, etc. Add these up and you’ll have a list of your Total Liabilities. Hopefully, it’s less than your assets!
Your Net Worth: Your personal net worth is the difference between your total assets and your total liabilities.
As the control you gain through cash flow management turns into increased savings, your success is reflected in an increasing net worth. The process of preparing personal financial statements will bring you closer to controlling your personal finances and accumulating sufficient assets to meet your objectives.
Material discussed is meant for general illustration and/or informational purposes only and it is not to be construed as tax, legal, or investment advice. Although the information has been gathered from sources believed to be reliable, please note that individual situations can vary therefore, the information should be relied upon when coordinated with individual professional advice.
© Copyright 2015 AgentQuote.com
]]>In preparing for this year’s tax filing you should begin to organize tax records including year end investment statements, capital gains and losses from asset sales, transaction records from real estate transactions, interest and dividend records for the year (1099s), payroll and withholding statements (W-2s), records corresponding with deductible expenses such as property taxes and insurance, business income and expense records, etc.
At least once each year you should gather your insurance records together and review the adequacy of your coverages. Be sure to evaluate all coverages including life insurance, disability insurance, homeowners insurance, auto insurance, liability insurance, renters insurance, etc.
All your difficult to replace legal and financial documents should be stored in a safe and fireproof location. Consider renting a safe-deposit box at your local bank or credit union, or purchase a fireproof lockbox from your local office supplies outlet. Documents you should store include wills, trusts, powers of attorney, titles of ownership (your home, cars, etc.), Social Security cards, birth certificates, photographic negatives, list of personal possessions, etc.
Does your will still fairly reflect your personal wishes for the distribution of your assets? Have the personal or financial circumstances or your beneficiaries significantly changed over the past year? Have you considered a gifting program to move assets from your estate to those you wish to enrich? Have you reviewed your estate plan in light of changing estate tax laws or changes in your personal financial position?
Consider estimating your federal and state income tax liabilities periodically to ensure proper withholding levels and quarterly estimated tax payments. This will prove especially important if you sell significant assets during the year or experience large swings in your income level. Consider maximizing your deductible expenses and savings such as qualified retirement plans, charitable giving, deductible expenses, etc. Be careful to meet all IRS dates and deadlines for withholdings and filings.
Consider increasing your long-term saving and decreasing your debt. If you are not maximizing your tax-deductible employer sponsored retirement plans and your individual tax-advantaged saving plans you should evaluate your monthly cash flows with a focus on increasing your monthly saving. The other side of your balance sheet, the liabilities side, is equally important in maintaining a healthy personal financial position. Every effort should be made to completely eliminate the need for short-term debt (credit cards and debit balances) and to efficiently manager your long-term debt (mortgages).
Simplifying your financial holdings can eliminate much of the drudgery of financial record keeping. If you have credit cards you do not use, cancel them and eliminate the extra statements. Consider consolidating your credit lines to the greatest extent possible. Review your investment holdings for non-performing assets or redundant accounts and consolidate your investments.
Although you may be able to think of more exciting ways to spend your time, organizing your financial records and planning your financial future will pay huge dividends in the long run. Do what you can on your own and seek professional advice from a trusted advisor where additional work needs to be done.
Material discussed is meant for general illustration and/or informational purposes only and it is not to be construed as tax, legal, or investment advice. Although the information has been gathered from sources believed to be reliable, please note that individual situations can vary therefore, the information should be relied upon when coordinated with individual professional advice.
© Copyright 2015 AgentQuote.com
]]>The relationship between time and money provides the foundation for virtually every financial decision you will make. Whether you are saving money for a future event or considering a loan to pay for a current financial need, you will be greatly impacted by the time value of money.
This is true for two main reasons. First, a dollar received today can earn interest or appreciate in an investment account, thus increasing it’s value with time. Second, inflation impacts the value of your dollar. As the price of goods increases with time due to inflation, the value (or purchasing power) of your dollar decreases.
Whether you are saving for retirement or a down payment on a home, college funding or dependant care needs, you will be greatly impacted by a few simple time value tips.
Time Value Tip #1: The longer you have to prepare, the less your objectives will cost. Assuming that you are able to invest your savings and earn a positive return, you will always be better off saving for your goals in advance. Not only will your savings earn interest, but the interest you earn will also begin to earn interest. This is called “compounding” and was referred to by Albert Einstein as the “ninth wonder of the world.”
Time Value Tip #2:The higher the interest rate you are able to secure on your savings, the faster your money will grow. Generally speaking, the amount of risk you are willing to take on your investments may help determine your estimated long term rate of return. The longer you have to save for your goals, the more risk you take on your investments, and the greater potential rate of return you should expect. There is no guarantee that taking on more risk will lead to higher return potential.
Time Value Tip #3: It is usually better to postpone paying taxes on your investment proceeds. When you have the choice, you should usually choose to delay paying taxes on investment proceeds as long as possible. This is because as long as you have your investment’s growth in your hands, you can continue to earn more interest on that potential for growth (see “compounding” above.) Once you pay the taxes, you will never earn interest on those lost funds again. One way to postpone the payment of taxes is to invest in “growth” oriented assets, as opposed to interest oriented assets. Another is to use qualified retirement plans whenever possible. There is no guarantee any objective will be met.
Time Value Tip #4: Factor inflation into your long term plans. When preparing for long-term financial objectives, you must factor inflation into your plan. Planning for such cost increases will help ensure that your saving level is sufficient to meet your objectives.
Material discussed is meant for general illustration and/or informational purposes only and it is not to be construed as tax, legal, or investment advice. Although the information has been gathered from sources believed to be reliable, please note that individual situations can vary therefore, the information should be relied upon when coordinated with individual professional advice.
© Copyright 2015 AgentQuote.com
]]>In selecting a broker, invite several real estate brokers to tell you what they would deem to be a fair selling price and explain their commissions and fees. They’ll probably do this for free. You will also want to ask about their past experience in the area.
Most home sales are through agents and brokers. But if the market is a “sellers market”, if your home is sharp, perhaps you will want to try selling it yourself.
It doesn’t hurt to do minor repairs and cosmetic touch-ups prior to showing your home to potential buyers. We hear a lot about “curb appeal” — how a house appears from the street. Is it attractive enough for a buyer to even want to come in and look? If there are major repair problems, you may have to lower your price in the end. Maybe what you think is important to do to fix up the house will not appeal to the buyer — she’d rather do it to suit her own taste.
By definition, the value of any asset is whatever a buyer and seller can agree upon when both parties have access to all the relevant facts. With homes there are several ways to get a “starting point” from which to begin this process.
A good first step is to see what similar houses in similar locations in your community have sold for in the recent past. A local real estate agent will also have a lot of information about recent sales in your area. Don’t be overly impressed by the “asking price” of comparable homes, look to actual “sales prices” as your best guides. You may also want to enlist the help of a professional home appraiser — for a cost of between $200 and $400 an appraiser will prepare a detailed evaluation of the estimated value of your home.
If it is the economy — national or local — you can’t do much about it. If no one is expressing any interest in your home, or it simply does not sell, you could consider the following:
Selling your home may take time and patience, but it deserves your most detailed attention as it is one of the largest transactions you will undertake in your financial life.
Material discussed is meant for general illustration and/or informational purposes only and it is not to be construed as tax, legal, or investment advice. Although the information has been gathered from sources believed to be reliable, please note that individual situations can vary therefore, the information should be relied upon when coordinated with individual professional advice. Please talk to a real estate professional for advice on your situation.
© Copyright 2015 AgentQuote.com
]]>Unfortunately, very few of us feel prepared to meet our ongoing financial obligations and objectives. Worries about money have become one of the greatest anxieties of our day.
Because our lives and goals are so different, there is no turn-key solution for managing ones finances and meeting financial goals. We can, however, identify several steps successful people take in planning for and meeting their financial goals.
We call these steps “Life Cycle Planning” because each step can be tied to the attainment of certain life defining events that almost everyone goes through.
Human Capital is a person’s ability to turn their skills and abilities into a livelihood. The development of these skills and abilities helps us maximize our income potential in a competitive marketplace.
In our early years, usually between age 19 and 25, we set ourselves on a course that largely defines our Human Capital potential. Each of us makes an investment in Human Capital, whether we realize it or not. For some this is an investment of time, gaining experience and skills on the job. For others it is an investment in trade school or college.
It should also be noted that although our greatest focus on Human Capital development is in our early years, this is an investment we should continue to make and assess throughout our working careers.
Once our “Human Capital” investment begins to pay dividends in the way of earnings, we must begin to develop and apply management skills to our newfound earnings.
Without managing our expenses, our wants and needs will invariably outpace our ability to earn. By implementing some form of budgeting we can begin to set our sights on saving and meeting our longer term financial objectives.
A beginning budget can be as simple as setting aside a predetermined percentage of our earnings each month for saving, spending what is left until it is gone, then spending nothing more until next month.
As our budget begins to pay off in a healthy savings account, we begin to wonder how best to apply our limited savings to our unlimited needs and wants.
Without exception, the first financial need we should meet is to have an emergency fund. An emergency fund allows us to cover unexpected short term needs using cash instead of leveraging our future earnings through costly loans.
As a general rule of thumb, your emergency fund should be adequate to maintain your standard of living for six months.
A major disability, the loss of a family breadwinner, a fire in your home, a major medical problem for a family member… the most dramatic emergencies can seldom be planned for through personal saving.
Although such tragedies can create devastating individual financial hardship, the financial risk of such events can be shared by very large groups of families and individuals through insurance.
Life insurance, disability insurance, property and casualty insurance and major medical insurance all have a place in our Life Cycle planning.
Once we have accumulated sufficient funds to cover our emergency needs and purchased protection against financial risks, we can begin saving for our long-term goals in earnest.
Material discussed is meant for general illustration and/or informational purposes only and it is not to be construed as tax, legal, or investment advice. Although the information has been gathered from sources believed to be reliable, please note that individual situations can vary therefore, the information should be relied upon when coordinated with individual professional advice.
© Copyright 2015 AgentQuote.com
]]>Some form of budgeting is a necessity if you hope to meet long-term financial goals. One’s ability to control debt is often a good measure of the success of their budgeting methods. For some, a budget is a detailed process of tracking each source and use of their money. For others, it is as simple as setting aside their savings first, then using the remainder for day-to-day living expenses.
For years, studies have been undertaken by all manner of institutions to find out if people feel like they are able to live within their means. Virtually every study has shown that in our society we not only are not comfortable living within our means, but that the vast majority of us feels that we would need just 10% more income to do so. If we just had that extra 10% we would save for our children’s college, we would save for retirement, we would prepare for tomorrow. Perhaps the most interesting revelation from these studies is that how much money we make does not impact the results of the surveys. The person earning $10,000 per year feels they need just 10% more, the person earning $100,000 feels they need just 10% more. The key is not in how much we earn, it is in how we use it.
Our money is like arrows that we can shoot at targets. We pick the targets we shoot at, then decide afterwards whether or not we picked the right targets. Hopefully, over time, we begin to get a good feel for which targets we would like to hit with our arrows. The sooner that we learn that we have a limited number of arrows, the better we learn to select meaningful and lasting targets. Short term targets like expensive clothes, cars and vacations must be balanced against long term targets like college funding for our kids, an emergency fund, and retirement saving.
As our stage in life changes, our targets should change as well. No one can tell you which targets are right for you, but there are several principles that should be followed by every wise individual. Principles like:
Everyone knows what it feels like to spend unwisely. Our feelings of regret are strangely absent when we first make the unwise purchase, or the investment we don’t understand. But we soon know with a certainty that our hard earned resources would have been so much better used elsewhere.
Material discussed is meant for general illustration and/or informational purposes only and it is not to be construed as tax, legal, or investment advice. Although the information has been gathered from sources believed to be reliable, please note that individual situations can vary therefore, the information should be relied upon when coordinated with individual professional advice.
© Copyright 2015 AgentQuote.com
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