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Considering our invest goals is our very first step towards a successful investment. In order to choose your best investment option, you must determine the investment type that suits your requirements. Both investing and saving need to be defined ahead of all other things; in comparison to a long term engagement like investing, saving is an engagement for a short period.

Expenses like going out on vacations, paying fees for college tuitions, making a down payment for your home and buying a car are included within your saving goals. When it comes to savings, certain conventional investments may seem inappropriate as their value tend to fall with time. For successful asset management, you may seek guidance from an experienced financial adviser. CDs or online savings accounts that yield high returns may be considered as good options to secure your long time savings. You must compare various interest rates offered by online banks.

A proper financial planning takes all long term goals into accounts e.g. college tuition, inflation, retirement and other common investment objectives. Investing and saving are two categories that college tuition listed under them. The time frame you’ve selected will determine the group under which you’ll place each of them. Investments worth an intermediate length may demand more risks. For instance, you may take more risk towards investing money saved on your daughter’s college fund when he’s 10 years old than when she turns 18.

Pick the right investment vehicle

Your asset management plans turn successful once you pick the right investment vehicle after considering all major goals of investment. Remember, it’s not about jumping to the most lucrative offer that comes your way. You may begin with options that seem more interesting and funny like brokerage accounts, college saving funds, 401k plans and IRAs. Investment plans are usable only when they possess certain incentives or tax breaks for your benefit. Through your retirement years, you may enjoy tax breaks only when you choose retirement plans with tax advantages initially e.g. 401k and IRAs. For college savings you may opt for Coverdell ESAs and 529 College Savings Plans.

Open your investment account

An investment accounts needs to be opened as soon as you pick your investment vehicle and analyze your investment goals. It will just take a few minutes for you to start an IRA or get enrolled your 401k; it’s almost that simple. Opening your brokerage account could just be another option for you. It’s really simple to open your investment account; all you need to do is to fill out your information, sign it and shift funds to the account. Picking the best investment option often depends on identifying your investment types correctly!

In a perfect world, investments would constantly go up at a predictable and measurable rate, unaffected by variables or unwanted outside influences. Unfortunately, though, the world is far from perfect and the actual volatility of a financial asset or investment is subject to a myriad of influences. Some are welcome, some not so, but one thing is certain, over time the value of an investment such as a piece of jewellery or a fine work of art will change. This in turn will have a direct bearing on the type of insurance you will need to take out to protect that asset – and how much it will cost you.

Educating clients about risk

For insurance brokers, there is now more of a need to educate clients about the risks involved in protecting their assets. Charles Hamilton-Stubber of Aon Private Clients sums it up: “Investment volatility has meant families are placing more emphasis on protecting their tangible assets. In turn, the role of the insurance broker has become key to insulating wealth by educating and boosting understanding on tackling risks. As confidence has been lost in some elements of the financial services, insurance brokers are in a strong position to respond and offer effective advice on protecting wealth.”

What this translates as is that as we lose faith in perhaps what were seen as greater risk/return options before the financial crisis hit, the shift is more towards what are regarded as more ‘stable’ investments, such as fine art. For those who manage larger private insurance programmes (such as those with annual premiums in excess of £40,000 [or $66,000]), one of the best ways to risk assess is through the use of a ‘risk audit’.

Risk audits

Risk audits are a process of reviewing expenditure on insurance (which includes tangible assets such as property or fine art, liabilities and personal wellbeing), cross referencing them with their current insurance portfolio to find out if the existing arrangements are adequate and then finally offering practical solutions and advice in how to maximise coverage whilst minimising risk.

In recent years, the size and complexity of insurable assets amongst wealthier clients has changed. However, there may still be a disparity between the level of cover provided by existing insurance and the true worth of the assets. In addition, the increased risk to a client’s wellbeing (particularly if they travel extensively in what can be regarded as ‘high risk’ areas) could mean that their existing insurance is insufficient.

So it is up to the broker to ensure that their client is kept fully informed of the potential for their insurance to struggle to keep up with the volatility in value of an investment. It also needs to be pointed out to the client that there may be gaps or even overlaps in coverage, especially if policies have been taken out with different insurers. In this instance, the client could end up paying far more in premiums than they need to.

It’s also key to read the small print. While this may seem like generic advice, in some cases the wording of a policy may be outdated or even inappropriate for the risk being insured. Clarity is key, and so the overlying advice has to be to check those policies on a regular basis, especially if circumstances change, to ensure that they are current, offer the best coverage and that the client is actually getting what they’re paying for.

For a long time now, we have become very used to living off credit. This is unfortunate as we may find ourselves out of our depth, having totted up a huge bill and struggling to make the repayments on a monthly basis. And the trouble is it is just too easy to do. Credit card companies are continually offering us card after card and, being only human, particularly if we find ourselves short of cash one month; it takes just a few minutes to apply. OK so our immediate cash flow problems are resolved but what about the bigger picture? Maybe it is time to take a fresh look at our borrowings before our total debt is larger than we can manage.

But if it is not to be credit card, or even bank overdraft, what exactly are the options? Agreed that it is sometimes impossible to manage on our salary alone, particularly when unexpected debts knock our carefully planned budget for six. On paper, it may all look rosy. Our income is in excess of our expenditure and we should even be able to save £50 a month. But like most well-made plans, it doesn’t always work out like that. The £50 gets swallowed up by sundry expenses like lunchtime snacks and trips to the supermarket. The end result is no savings, so that when the car breaks down or the bike needs a service, the funds just aren’t there to cover the cost.

As we can see, credit cards can be a wolf in sheep’s clothing. So how about looking for something different that will not land us with long term, ever increasing debts? An internet search for ‘payday loan’ will bring up the name Wonga. But if you have never heard of Wonga or ‘payday loans’ then you can be excused for wondering what on earth this is all about. It’s a very simple process. Unlike credit cards and similar types of borrowing which let us borrow large amounts and pay back over extended periods, payday loans have to be paid back, in full, within 28 days or less. At first glance you may think that this is not so good. After all, with a credit card you can pay it back over years can’t you? But think again. The longer you borrow the money for the more it costs you. A payday loan can work out cheaper as there is no option to spread the loan over a longer period.

Added to that, a Payday Loan truly is fast and can be in your account within minutes. Once you have repaid it in full, the debt is gone. Wiped out. No horrific huge sum of debt stockpiling into the future. No worrying about monthly repayments. It really is worth thinking carefully before you take out another credit card to shuffle your debt from one card to another. Once you have gotten used to the new way of dealing with your money shortages, you should find it refreshingly simple and easy to use. Bye-bye credit cards!

In the UK the Archbishop of the Church of England has struck out at pay day lenders calling them “morally wrong”. Unfortunately after bashing the pay day loan industry it transpired that the Church had invested over $7 billion of its pension funds in a company which had then supported a pay day lender. Indirectly therefore the Church had invested in a pay day lender! The very industry it regarded as sinful. It seems they were suitably embarrassed.

In response to the Archbishop’s attack the pay day lender in question, Wonga, who is also a pay day loan provider in Canada (see www.Wonga.ca), created and released a very clever, tongue in cheek, advertisement based on the 10 commandments – the Wonga version is the 10 commitments. The aim of the advert is to better educate people when interpreting the Church’s comments about pay day lenders. It sets out the promises the company makes to its borrowers and highlights the fact Wonga is a responsible lender. Probably the Church is a little unhappy that the debate and the new advertising campaign has certainly given the lender even more publicity – the adverts have of course been reported upon by the media thus resulting in free advertising and increased publicity for the company.

Further, far from sounding like the loan shark the Church has tried to portray pay day lenders as, the Wonga advert pretty much agrees with what the Church has had to say on the issue of pay day lending. The lender stated it was transparent about the price of its loans, carried out thorough credit checks and froze interest after two months to protect defaulting customers. It also said that it welcomed competition.

The pay day loan industry in the UK is not regulated like it is in Canada. Many politicians, charities and other organisations are calling for regulation but do not have the solution – the Archbishop is at least trying to push forward an idea. He is proposing that Credit Unions work from church premises to offer similar loans at lower interest rates – his idea is to push pay day lenders out of the market. This certainly sounds like a challenge. For a start he wants to find church members to volunteer as staff at the branches. This may be a big hurdle in terms of attracting customers. The average church goer probably does not reflect the average pay day loan customer. No one wants to be judged when taking out a loan.

A recent study indicated that the average age of a church goer was 61. Anglican leaders have warned that the Church of England will cease to exist in 20 years because elderly worshippers will die. As a result of this the Church presently has an urgent national recruitment drive to attract more members.

Just recently the Rt Rev Paul Butler, Bishop of Southwell and Nottingham stated that teachers should not illustrate math lessons with examples of “profit and loss”, or encourage children to save in order to buy bikes or toys Instead, lessons should focus on the math involved in giving donations to charity, saving for an overseas project, or even “tithing” – giving 10 per cent of one’s income to the Church.

When the Church is making statements like this you have to wonder whether it is the Credit Union/pay day loan “solution” is one part of its necessary recruitment drive. Pay day loan providers want profit, the Church wants people in seats: both have their own agenda.

Although the Rt Rev Paul Butler might not think it important, educating children about profit and loss and savings is all part of money management. This is vital in today’s society – Surely it is better money management which will reduce the need and desire for pay day loans.

Refinancing is a great option that homeowners have especially when mortgage rates are lower than what they already have in place. Can refinancing a mortgage eliminate debt? The reality is that refinancing a mortgage cannot eliminate debt, although using a refinance to reduce debt can be a very successful financial strategy.

When refinancing, the homeowner is basically turning in the existing mortgage for a new loan. The new loan can have a different rate, a different term and a completely different program. Normally, borrowers will try to obtain a lower mortgage rate and/or a lower term, if possible. In most cases, the standard fixed rate mortgage is chosen even when refinancing from an adjustable rate mortgage. Fixed rate mortgages offers borrowers security by knowing that the same mortgage payment will be in place for the entire term of the loan.

Debt consolidation is often done when refinancing. By doing so, the borrower is combining the balances of other debt, such as credit cards, loans, etc., and adding it to the mortgage balance. While this increases the funds needed for the mortgage, the other debt is paid off at closing. The debt is not eliminated, it is simply moved to another debt vehicle which is the new mortgage.

Moving other debt to a new mortgage can only be done if the borrower has enough equity in the home. The homeowner must also qualify for the refinance according to the lenders guidelines. This type of loan is considered a cash-out refinance and will generally have a higher mortgage rate than a no cash out loan. The new mortgage will include the funds that are necessary to pay off the other debt. The debt amount is then part of the new mortgage and is paid as part of the the monthly mortgage payment for the full term of the loan.

By utilizing a debt consolidation refinance, many homeowners are able to free themselves of the burden of carrying an overabundance of debt that must be paid on a monthly basis. This debt usually carries a higher interest rate which can make multiple monthly payments uncomfortable. Adding these expenses to a refinance often results in a more cost effective budget for a homeowner because the total debt payment is usually reduced. The end result to the homeowners is typically a better monthly cash flow.

In order to reap the benefits of a debt consolidation through refinance, homeowners must make it a goal not to incur additional debt. With less debt, a homeowner’s financial stability will can often remain intact which leads to added security in case a hardship should arise. The savings recognized from a mortgage refinance can be accumulated or used in lieu of credit cards. This is the beginning of the path to financial freedom for many homeowners. However, incurring additional debt expenses after the refinance can lead a homeowner to repeating the process with multiple debt consolidation loans which, in the end, will not be cost effective.

Everyone dreams of the day when there will not longer be a mortgage payment to make. While it may seem so far away, time does move quickly and, with careful planning, it will be a reality faster than you think. Planning a refinance with debt consolidation will also help a homeowner reach their goals of eliminating overwhelming payments on a monthly basis.