Seek Investment Advice and Have a Good Plan Ready for Your Retirement

retirement (Photo credit: 401(K) 2013)

Maybe you have just recently entered into the workforce, and retirement seems like it's so far away. Despite this feeling of yours, it's important to seek out investment advice and start to plan for retirement. Why is this necessary so early in the game?

Knowing Your Options

One of the reasons why you should start looking into some advice is because you do may not really know what all of your options are. For example, let's say that one of the options in which you are interested requires that you start early on in your career to have a sizable amount of money for when you retire. However, if you do not look into such a plan early on, then you might not be able to get all of the benefits from it.

Backup Funds

Sometimes, situations arise in life that we really have no control over, and the only way to deal with them is to have a large sum of money. Some types of retirement funds, 401ks, for example, allow you to start working toward these types of goals right now. For example, let's say that you really needed some money a few years down the road, and you have a decent amount saved up in your 401k. You are usually able to take a loan out against yourself to get you through the situation.

Reaping the Benefits

At some point, you are probably going to retire. Even if you really love the job you have, a time may very well come when you are simply unable to do the job to the best of your ability anymore. While this time may seem to be so very far away, it is wise to start planning for it now. You do not want to reach retirement only to feel regret about the way you have handled your financial affairs. Yes, it might be a difficult way to think about the future, but at least you are being smart and being prepared.

Professional Advice

The other part of this equation is to look for professional advice as opposed to using only what is being presented in front of you. So many different possibilities exist, and it's hard to learn about all of them by yourself unless you are a professional in the field. Therefore, you really need to make this conscious effort to learn about the different possibilities that stand before you and to choose a plan that works for your situation. Certified financial planners and accountants are the people who can really help you out when it comes to sorting through all of this information and picking the best programs.

As you can clearly tell, the time to get started on a plan for your future is right now. The longer you wait, the less time you have to save up money and make an exciting and appealing retirement situation for yourself. No matter how young you are, it's never too early to start planning for the future in a smart and logical way.

Author Jason Harter is an accountant who also works in the finance department of his firm. He deals with the payout of the retirement funds, and is an expert on how to use those funds most efficiently. Jason obtained his BS in Accounting Online degree.

Confused About Retails Bonds? Learn How to Start Investing

Interest Rates (Photo credit: 401(K) 2013)

With interest rates on savings accounts still rooted to rock bottom, many people are looking for alternative places to invest their cash to get a decent return.

One such option is a retail bond. Not everyone will have heard of retail bonds and they may well sound like a complicated financial instrument but in reality are relatively straightforward. They allow the individual to control the level of risk they are exposed to.

If you think you might be interested in investing in retail bonds and want to know more, read on to find out more.

Retail bonds: the basics

A retail bond is simply a way of investing your money in a certain company, which not only returns your capital at the end of an agreed period, but also pays you interest along the way.

Cash flow can be tough for a company to raise and when it comes to growth and expansion, an injection of capital is needed. One way of getting this is to create a series of bonds that investors can buy. The company offers a guaranteed interest rate in return for the use of the cash for the agreed period. The concept really is that simple.

The amount of interest offered will depend on the size and stability of the company. Large organisations such as Tesco might offer bonds with an interest rate of around 5-6% whilst a smaller, less secure business might have to give an investor around 10% in order to be sufficiently attractive. As a general rule, the higher the rate of interest, the more risky the investment is.

How do I buy a bond?

If you already have an investment portfolio, the chances are that you have either a wealth manager or a stockbroker who executes deals on your behalf. They will be able to purchase a retail bond upon your instructions.

If you are new to investing, it is possible to set up an account with a stockbroker on an 'execution only' basis, which means you will not be receiving advice or management services. This will be the cheapest way for you to get your foot onto the ladder.

When you are ready to purchase your bond, there are several factors you need to ensure you have carefully considered. How long you want your money to remain invested for, the level of risk you are willing to accept and the return you are hoping to receive are all key and will help to determine your choice of company to purchase the retail bond from.

Once you think you may have identified a suitable target - research, research, research. A company that offers a higher interest rate will be at a greater risk of going bust or defaulting on the debt, so think very carefully before ploughing your money in.

To summarise, retail bonds are very accessible to the general public even though they may not be the most well-known way to invest. However, with detailed planning, research and clear goals, it is possible to secure a much better return on your money than with a bank.

Samantha Wood is an experienced finance writer but wishes she had more money to invest. To keep up to date with the latest opportunities and news, Samantha uses sources such as Investing In Retail Bonds.  

Top 10 Tax Tips For The Self-Employed

(Photo credit: patrick h. lauke)

Self-employment is a tough road to go down, but luckily there are a few things that you can benefit from. Self-employed individuals will have a different tax status to those who are employed by someone else. As a result, you are going to want to take a look at your taxes and see what you can do when it comes to making the most out of your situation.

Determine Your Net Income

Your net income is the income that you receive after all of your business expenses have been deducted. This can be done after a year of working to determine what you are most likely to earn.

Keep a Record

Make sure to keep a record of everything that you earn. Knowing how much you earned every week or month will allow you to figure out the proper rate at which you will be taxed.

Calculate Estimated Tax

Try to determine what percentage of your tax you are going to have to pay. Deduct this from your net income and you will have an idea of how much you owe.

Expenses for the Home Office

If you have a home office, then you will be able to make it a tax-deductible business expense. Remember that you are not able to deduct more than your net business profit.

Get an Accountant

Having someone to take a look over all of your expenses is a great thing. On top of this, you can also deduct what you pay from your accountant as a business expense.

Remember to Report

Making over $600 from a client means that you are going to have to report it to the IRS. When this happens, your client is going to give you a 1099-Misc.

Set Up a Separate Account

Get a separate account where you will be able to put all of your estimated taxes in. This is much easier than scraping for the money at the end of the year.

Keep a Track of All Business Expenses

Business expenses can include anything that you use in order to carry out your business. These can include your computer, your desk, your phone and your Internet connection. Make sure to keep a track of everything in this regard.

Remember to Pay Quarterly

You do not pay your taxes on a yearly basis. Instead, you pay every quarter of the year. This means you have to make sure that you have everything organized.

Keep Everything Together

Get files for all of the necessary expenses and tax records that you are going to need. Organizing all of this properly will ensure that you know what is going on when the time comes to pay.

Being self-employed can be difficult for many reasons, but it is always a good idea to keep on top of your tax returns. There are a number of things that you can also do for tax relief, so make sure to take advantage of them if you can. This way, you can ensure that you make the most out of being self-employed.

If you are interested in more tax relief tips, the author recommends you visit OptimaTaxRelief.com

Energy Efficiency: Understanding How a Window Upgrade Can Save You Money

You know winter is arriving when the temperatures begin to get frigid. When the temperatures begin to drop, many homeowners will begin to turn their heating systems on and the colder it gets, the harder the system needs to work which increases energy bills. The good news is, by utilizing replacement windows; you can significantly decrease energy use as well as the cost of home heating.

Energy Saving

 
Energy efficient windows help to make your household more comfortable as compared to older drafty windows. This means you are able to not only live comfortably, but save on your electricity and gas as well. There are several ways that efficient windows work in saving energy. Your windows make up a central part of your household's architecture and it can be really simple to go about your daily activities without giving them a second thought. As the energy costs climb, however, the time is now that you want to pay more attention to them and seriously consider an upgrade to more energy efficient windows. In both function and construction, windows like these are different than regular windows and will help you to save a bundle on both your heating and cooling expenses. Below will help you understand how energy efficient windows work to save you on energy costs.

Hurricane Resistant

Upgrading to hurricane rated windows involves several steps. First, assess your current windows for compatibility and evaluate which buildings codes apply based on your location. Next, choose windows that are specifically rated for hurricane resistance, ensuring they meet standards such as those set by the American Society for Testing and Materials (ASTM) or undergo tests for impact resistance. Installation is critical; it often requires professional help to ensure proper sealing and structural integrity. Always check local regulations and possibly seek permits before starting the project.

Window Frames

 
The frame of a window can be made from fiberglass, wood, vinyl, composite, aluminum or another metal. Even though they all have their own particular advantages and disadvantages, it is recommended that you go with vinyl, composite or fiberglass to get the most benefit. Aluminum is heated easily and therefore does not make a great insulator. Due to contraction and expansion, efficiency problems exist with wood frames, so vinyl-clad or fiberglass is a good choice. However, if you decide on vinyl, depending on your house requirements and climate, it is best if you go with the insulated version for the best thermal insulation.

Window Glazing & Insulated

 
There are many different options when it comes to selecting your window glass, such as heat-absorbing tints, gas fills, double or triple glazed insulated, spectral selective coatings and reflective coatings. Double or triple glazed as well as storm windows allow air and space between panes. This will lower the U-factor and the SHGC or solar heat gain coefficient.

Gas fills

 
Argon is the most common gas used and is fairly inexpensive. Krypton, although more expensive, is also a common gas used and works better at decreasing the U-factor of a window.

Heat-absorbing tints

Tints come in different colors like green, blue, bronze, gray or black. Tint does not lower the U-factor of a window, but you can add spectral sensitive coatings and inner glass layers to help with that. Bronze and gray help to reduce light and heat while green and blue allow for more VT or visible transmittance, but with only a slight reduction in heat transfer.

You can save money each month with energy efficient windows. In some cases, newer windows have helped people to become net energy gainers. Typically, energy efficient windows will have a payback period of around 2 to 10 years. In new installation, their initial cost is higher but can be offset by giving you the ability to get a less expensive and smaller heating and cooling unit. More durable, energy efficient windows will end up costing less in the long run due to lowered replacement and maintenance costs. Plus, you will be more comfortable all around and a fully insulated home. Places like Central Scotland Joinery can help you select the best option of energy efficient windows for your home and install them for you too.

How Does a Novated Lease Work?

A novated lease is a type of car lease that an employer gets on behalf of the employee. The employee, in turn, pays for this lease with their income before taxes are taken out. Novated leases are incredibly beneficial for both the employee and employer, though of course there are certain disadvantages there as well. For jobs that need a lot of on the job travel, a novated car lease is likely the best way that the payments can be handled. 

How Does A Novated Lease Help The Employee?

With a novated lease, the employee never has to worry about making their car payments. The car payments are automatically deducted from their paycheque pre-tax. Not only does this mean they don't have to track the lease payments, but it also means that they can get a better car for less money because they don't have to pay tax on the amount. Employers also tend to have deals with automobile companies to lease cars by volume. That means that the employee has more savings because of the company's better rates.

Rather than other types of employer lease, the employee does keep certain rights over the car because the employee is making the lease payments. The employee gets more choices of car than in a traditional employee lease agreement, and the employee gets use of the car when they are outside of work. The employee can even keep their vehicle if they leave the company by transferring it to another company. 

How Does The Novated Lease Help The Employer?

On the employer's behalf, though the lease is financed through the company the employee still makes the payments. This means very little out-of-pocket cost for the employer. All the employer has to do is secure the lease, and manage the payments from the employee's paycheques. Because the employee is saving money on the lease, the employer can consider the lease a perk that the employee gets, and so save money on salaries.

Employers that need to have their employees travel during office hours save significant funds over providing company cars. Company cars would need to be purchased and retained by the company and not leased, or leased at a higher amount. The novated lease, by contrast, incurs no more cost on the behalf of the business. 

What Are The Drawbacks To A Novated Lease?

Because a novated lease is still a lease, the standard problems with this type of lease still applies; at the end, neither party will own the vehicle, which means that the employees are purely paying an expense and not gaining an asset. This said most novated lease companies will offer easy paths to ownership which will still work out as more cost effective for the vast majority of customers. This normally involves paying a fee at the end of the lease to purchase the vehicle outright

This article was written by the team at Novated by Fleetcare, independent Australian novated lease providers with offices all around the country.

Learning To Make Better Financial Decisions

Whether you value material things or you simply like knowing your bills are paid, money matters. Dedicate the necessary time to find out as much as you can about finance, so that you can remain in control and avoid stress. The information in this article is designed to help you understand and effectively manage your personal finances.

Review your income as well as how much you spend so that you can then formulate a budget. Figuring out how much money you make in a month is where you should start. Include second jobs and other sources of money in your income calculations. The foundation of any budget is ensuring that you spend less than you earn every month.

Home Expenses & Loans

Now, you should write down all of your expenses. You will want to include everything you pay on a quarterly and annual basis too. This would be things like insurance, vehicle maintenance, or regular household upkeep. Included in your list should be incidentals such as entertainment, food, and even the cost of hiring a babysitter. Try to make a very through list to ensure you are aware of absolutely everything you spend.

You should be able to establish a budget now so that you know exactly how much income you can generate. Look over all your regular purchases and decide what is and isn't necessary. For instance, instead of spending money by eating out, you could easily cook something at home, and save money. Examine your spending patterns in search of other ideas to trim costs and keep your money in your pocket.

There are things around the house that you can repair or upgrade that will help reduce your utility bills. A brand-new, energy-efficient dishwasher or washing machine can save you a load of money on your water and electric bills each month. An excellent replacement for a tank heater is a water heater that is either on-demand or in-line. This will decrease your water bill. In addition, you should look for leaky pipes, because they could be causing your water bills to be higher than they should be.

Think about buying energy efficient appliances to take the place of your current models. It will save you a lot of money if you use appliances that use up less energy. Also remember to unplug any appliances that have a constant light going whenever you are not using it. These little lights can really use electrical power.

A good percentage of the heat lost in your home is through the walls and ceiling. Avoid high utility bills by making sure these areas of your home are well insulated. Spending a little money now will save you lots of cash down the road.

Follow these tips to establish a good budget. This will help you save money. Reduce your utility bills with new Energy Star qualified appliances. You will have better control of your finances by doing this.

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