Personal Finance by a leading Financial Planner for the Secondary School Students. Yes, educate them early.

Many intelligent people has no financial education.
This video is an excellent introduction to personal finance.
Well worth spending time to go through the 12 videos in a couple of hours which will benefit you for a lifetime in your financial planning and management.
You will learn the core knowledge of financial planning to accomplish your goals.

Define and set your goals.

Your goals should be SMART
Specific
Measurable
Attainable
Realistic
Time bound



Related:
Compounding
http://myinvestingnotes.blogspot.com/2013/04/compound-interest.html

10 rules for multiplying personal wealth

http://business.rediff.com/report/2009/jul/09/perfin-10-rules-for-multiplying-personal-wealth.htm

I have the privilege of teaching financial planning courses at local colleges and adult learning centers.

One of the things we do in class is recite and write down a set of rules I hope each student can learn to live by.

Here are a few key rules to remember:

Rule 1: Be systematic, unemotional and diversified

This is the very first rule we touch on right from the beginning. There's a popular bumper sticker that says, "I'm spending my grandkids' inheritance."

That whole idea just frustrates me. In some ways, our society's personality is such that if we can spend our money before we die, we've lived a great life. But you can't do that.

Rule 2: Never spend principal

That's the second rule. Inflation has gone above 10 per cent in the US economy five times, and I'd bet you it will happen again.

Rule 3: Never borrow money to buy a depreciating asset

Almost everybody does this at some point. But as soon as possible, and definitely by retirement, you have to get back to a cash basis.

How many people know what a $30,000 car bought on credit costs them at age 25? In retirement dollars, at age 65 and assuming a hypothetical 10 per cent return, that financed car could cost as much as $11,314 a month in potential income. Forever!

So, do you or your children understand what an "investment" in a car really costs you? Yes, I know we all buy cars. But try to imagine what would happen if I got every 25-year-old to forgo just one car purchase and invest that same amount of money in their long-term retirement goals. What a huge difference that could make to their choices at retirement!

Rule 4: Never save money in a spending account

Keep separate bank accounts for saving and spending. You have to save in savings accounts. If you truly want those savings to grow, use an account that helps you leave the money at work, rather than a "slush fund" that's easy to dip into.

People tell me they are saving $545 a month in an account. Yet when I ask them how much they have accumulated after seven years of doing this, their answer is often $1,123 because they spend out of that same account.

It is not a save-to-save account -- it's a save-to-spend account! If you know you're not naturally a disciplined saver, make it harder to get at the money. You'll be doing yourself a favor in the long run.

Rule 5: Use half, save half

Every time you pay off a debt, get a pay raise, get a bonus, or have any excess cash, have fun with half the money, and put the other half toward your long-term goals.

This is one of the best rules, especially for younger people. By following this rule consistently, in ten years, most people are amazed at how much they can save.

Whether you save or not has nothing to do with how much money you make. Either you save or you don't. It's a habit. Make a habit of investing half of any windfall, big or small, right off the top.

Rule 6: Always use matching money

For example, your employer's 401(k) matching program (in India [ Images ], the employer's matching Providend Fund Contribution, for example).

Do whatever you must to take advantage of matched contributions in a retirement plan. You can't afford not to take the free money.

Hypothetically speaking, if you invest $100 take-home pay in a taxable investment (25 per cent tax on growth) at an assumed 10 per cent return, you would potentially have $135,586 in 30 years (sales charges and fees not included).

If you put the same $100 into your 401(k) that is 100 per cent matched, now you have $150 a month saved because of the tax savings.

Meanwhile your boss adds $150 because of the match -- and it grows tax-deferred, too! Using the same hypothetical return scenario, we have $683,797 to live on -- five times as much wealth with the same work.

Sometimes being smart with our money is a phenomenal advantage. This is a classic example of where investor behavior, not investment performance, makes a huge difference in your long-term wealth potential. You can hate your boss, or plan to quit, but you must take advantage of the matched money.

Rule 7: Do not spend more than you make

This should seem painfully obvious, but people often have no idea how much they're really spending and what relationship that has to how much they make.

In making a budget people often cannot account for 30 per cent of the money they earn and where it goes.

If you are just a little more vigilant, you can significantly enhance your long-term ability to reach your goals.

A budget doesn't happen by accident; it takes practice and is an ever-changing tool in our financial planning. Practice makes perfect. Although "perfect" is never the ideal word for a budget, it does have more meaning and usefulness the longer we practice its use.

Rule 8: Never leave undivided real property to joint beneficiaries

Lots of things are more important than money. Family is probably at the top of the list. If you want a vicious family feud on your hands, breaking this rule would be a great place to start.

Imagine a farm that gets left to four sons: One has farmed it for 20 years; one is an environmentalist and wants it to be a park; one is broke and needs money; and one could not care less about it. Who will get wealthy from this plan? The attorneys. And the kids and grandkids will probably hate each other forever.

Remember that 'equal', 'equitable', and 'fair' are three different words with three totally different meanings.

Rule 9: Never name co-trustees or co-executors of your estate

This one goes right along with the undivided property rule above. Next to poor planning, litigation can be the biggest financial drain on an estate.

Minimize the number of trusted decision-makers, and you'll reduce your chances for litigation. What's more, the entire process will be easier and more efficient with one decision-maker.

Rule 10: Above all --

--Be happy with what you have, and it will lead to both unbelievable financial success and personal (not mere financial) wealth!

[Excerpt from The Invincible Investor: 10 Top Financial Planners Reveal the Secrets of Loss-Proof Investing(www.visionbooksindia.com/details.asp?isbn=8170947456) Published by Vision Books.]

Introduction to Financial Planning

Personal Finance - Part 1 of 12

The Financial Planning Timeline...in 90 Seconds or Less

Financial Planning Introduction

Review regularly.
Adjust financial goals.
Be prepared to act when situations change.

When is the best time to plant a tree? 20 years ago.

So, when is the 2nd best time to plant a tree? As soon as you can!

Basics of Wealth Management PPT

http://www.slideshare.net/thadeshvar/basics-of-wealth-mgt

The Wealthiest Life - Start In The Right Direction

Have you ever thought that your life could be better? It can be!

Start In The Right Direction

Most people step towards wealthy living with great anticipation, looking to everything that will change for the better. This is positive thinking but let us look at two principles that will ensure that your wealth dreams actually become a reality.

Two Keys To Living Wealthy

There are two keys to having the best life you could possibly hope for! 

• We must dream big dreams and 
• then commit to small steps that will lead us towards opportunities.

Dream Big

You were not meant to wake up in a year, or five years, and be in the same place that you are today. Dreams are the essence of life progress. Your dreams have the capacity to energize your present and future progress.

Take a pen and paper and write down all the improvements that you would like to see happen in your life. Take time to imagine your best life; see the end (the big picture). Then visualize the necessary changes taking place to propel you in the right direction.

Opportunities for advancement are awaiting each of us. Sadly, few experience the reality of these opportunities manifesting in their lives because they don't see them coming. Dreams open the hidden doorways to future life change.

If you have big dreams, you will eventually live a big life!

Commit To The Small

A very wise man once said, "Hope deferred makes the heart sick, but a longing fulfilled is a tree of life." - King Solomon (The Book of Proverbs Chapter 13, verse 12)

I have watched people grow extremely bitter as they have allowed their lives to stagnate for decades, simply because they would not take some simple life changing steps.

Experiencing another year will not necessarily change your life unless you commit to personal change in specific areas. Without making selective changes to our life patterns we will most likely remain in the same state for decades. This is a sad truth for many!

Each small step you take to change your life will activate opportunities in corresponding areas. For example, if you lose weight, your self-esteem will rise, your attitudes will brighten, your emotional and physical appeal will advance and you will attract greater relationship opportunities.

Think about how you will move forward emotionally, relationally, physically and financially by making simple adjustments to your lifestyle.

5 Steps Towards Wealthy Living

1. Don't spend what you don't have. If you can't afford something, it's not your time to buy right now.

2. Brainstorm monthly for one creative idea to generate more wealth in your business, or personal finances!

3. Position yourself around people who have a higher net worth than you and ask sensible questions to help you increase financially. Do this at least once a month!

4. Keep track of your daily income and expenses. By making this a daily habit, your finances will never get out of control.

5. Start giving to others and form this as a habit in your life. What you do for others will happen for you in increased measure. This is a principle practiced by rich philanthropists.

If you will dream big wealth dreams and take small steps towards those dreams, doors of opportunity will open in your life for riches to come in!

You can have a wealthy life. Why not start on the path today.

Article Source: http://EzineArticles.com/6890105

The Wealthiest Life
By Dr Carmen Lynne

Talk More About Money

Money can be a hard topic to talk about, but having open conversations about finances with your loved ones can be important to both your future and theirs.

One of the most important gifts you can give the children in your life is a healthy attitude about money and the tools to make sound financial decisions. Teach children living in your home how to manage money on a small scale through weekly allowances, saving for a coveted toy or working on the family budget. Have honest conversations with adult children or grandchildren this year about money mistakes and successes that you have made during your life. Take the time to listen to any concerns or questions that they may have. (To learn more, see Teaching Your Children About Money.)

If your parents are senior citizens or nearing retirement age, talk with them about their financial wishes as they age and get a clear picture of their finances. You should also make sure that you or a close family member has all of their financial account information and a copy of their will to alleviate stress if they pass away.

While it is easy to view financial resolutions as a one-time goal or something to check off your list, spend time throughout the year measuring your progress and making adjustments. Think about any personal financial goals that you have and create additional resolutions that are meaningful to your situation.

http://www.candofinance.com/debt-management/resolutions-to-improve-your-fiscal-health/

A retirement horror story

By Barbara Whelehan · Bankrate.com

Friday, October 14, 2011

Posted: 2 pm ET

More than half (54 percent) of full-time workers from ages 21 to 64 participated in their employer's retirement plan last year, according to a report released earlier this week by the Employee Benefit Research Institute. Among all workers, including part-timers, the participation level was 40 percent.

That means a lot of people slip through the cracks.

The phenomenon extends overseas in England. More than a third of nonretired adults no longer pay into their plans, according to a Prudential survey. Nearly one out of three who don't participate (27 percent) say they just can't afford the contributions.

The fact is, they can't afford not to make them.

Frightening true story

What happens if you don't do any retirement planning and you have little savings to fall back on?

Let me tell you a story about my eccentric friend Jeanette, who many years ago received a Master of Fine Arts degree from the Hoffberger Graduate School of Painting at the Maryland Institute in Baltimore. During most of her career she worked part time as an art teacher. She's also a talented artist in her own right whose works are being sold by an art gallery in Naples, Fla., though she hasn't seen any proceeds from recent sales. She doesn't want to press charges against the gallery owner because if she does, she says, her name would be mud in the art community. "No, you don't understand the art world," she says each time the subject comes up.

Between her pension and Social Security, Jeanette's income amounts to $900 a month. When her mother passed away some 20 years ago, she left Jeanette her condo and a small portfolio of stocks, about $50,000 worth. Over the years, Jeanette slowly liquidated the stocks, spending the money on necessities. Six years ago, she sold her condo at the height of the real estate boom and bought another cheaper one outright for $85,600 in a different area. The reason for the move? She thought her neighbors were trying to gas her. Jeanette is plagued by delusional thoughts.

Three weeks ago she was evicted from her condo. While movers hauled her furniture and all her possessions to the parking lot, two police officers seized her, put her in a "cage" and brought her to the psych ward of a local hospital. She had been "Baker Acted," involuntarily committed for detention so that psychiatrists could evaluate her mental health. I received a call from her that evening. "Barbara, you've got to come pick me up. I have to get out of here," she said urgently.

It wasn't that easy. They wouldn't let me take her anywhere, not even to look for alternative housing. The hospital's case manager wouldn't talk to me until Jeanette signed a form, which Jeanette was reluctant to do. It took me a week to convince her to sign it. Her stubbornness is exasperating.

When we finally talked, I told the case manager that Jeanette didn't belong in a locked ward, and she didn't belong in an assisted living facility either. That was where the case manager was trying to place her. Jeanette didn't go along with the idea. She said she didn't want to eat prepared food in a dining hall; she wanted to cook her own food. And she didn't want to give up her Social Security check to live in a facility. That would mean she'd have no way to make car payments. And if she gave up her car, it would be like giving up everything.

A couple of days after I talked to the case manager, Jeanette was released. Our mutual friend Louise picked her up and took her to a nice, but inexpensive, hotel.

Why was Jeanette evicted? It turned out she had ignored a $6,000 plumbing bill, which over time, due to fines and penalties, escalated to $15,000. She paid her bills, but that one she had dismissed, telling herself she had been singled out by the condo board. There was no proof the leak came from her apartment, she'd told herself. She ignored the bills, and then years later, the eviction notices. In her mind, it was all a big scam.

Now she feels she's really been scammed. She lost her paid-for condo to the condo board in a foreclosure for a judgment of $11,337.20. Prices for comparable units are on the market for around $35,500.

Getting back on track

Over the past couple of weeks, Louise and I have been trying to help her straighten out her finances and find housing. Her stuff had been put into storage, paid for by her brother in New Jersey. Jeanette can't go back and live at the condo; the board won't let her back in. Apartment rentals seemed out of the question, at a minimum of $665 a month. Luckily, a friend of a friend found a one-bedroom apartment for $410 a month.

On Monday, Louise and I accompanied Jeanette to visit her broker, and she sold the last of her stock -- 461 shares of Merck, 12 shares of Comcast, and three shares each of AT&T and Verizon. She got roughly $15,000 from the sale.

Jeanette is living on the edge and it's only a matter of time before she runs out of resources. This is what retirement looks like without retirement planning, but who's to blame for this? She's always lived a frugal existence. She was lucky to get an inheritance. But one big unexpected bill -- and her inability to take it seriously -- were all it took to throw her life off kilter.

Read more: A retirement horror story | Bankrate.com http://www.bankrate.com/financing/retirement/a-retirement-horror-story/#ixzz1hOmvKUww

How can a financial planner help me?

Financial planners offer advice on a wide range of financial topics. In most cases, you will pay either a flat fee or an hourly fee to work with a financial planner.

How can a financial planner help me?

A financial planner will show you how to:

• Set realistic goals and take steps to achieve them
• Decide what type of insurance you need
• Save for your children’s education and training
• Plan and save for retirement
• Build an estate to leave to your family or for other worthy causes
• Save and invest in smart ways that reduce your taxes

What will I talk about with a financial planner?

http://www.theglobeandmail.com/globe-investor/investor-education/chapter-2-what-does-a-financial-planner-do/article878954/

“They did not plan to fail – they just failed to plan.”

Why Don’t Most Financial Planners Plan Finances?

Written by Ed Rempel on Oct 20, 2009
filed under General Finance

“If you don’t know where you are going, you will wind up somewhere else.” – Yogi Berra

We went to a fascinating conference a couple weeks back that showed the inner workings of the financial planning industry in Canada. It was the first annual Financial Planning Week in Canada, so all the “experts” met for a day to discuss how the industry is misunderstood. “Financial planning is still about selling” is the title to Jonathan Chevreau’s article.

While many financial planners claim to do financial planning and provide holistic advice, very few actually provide comprehensive planning with written financial plans, as taught in the CFP courses.

The issue is best highlighted by Alan Goldhar, Professor of Financial Planning at York University and Manager for the Ontario Public Trustee. The Public Trustee takes over the finances for people that are mentally unable to make financial decisions. They have taken over more than $500 million in investments for 10,000 clients, most of which had a financial planner, broker or bank advisor. They interview the client and the family and then send in a team to obtain all financial documents.

The shocking fact is that, of the 10,000 clients they took over, none had a financial plan! Not one!

We have reviewed the finances for about 2,000 families and found the same result – none of them had a proper written financial plan prepared in Canada.

Alan Goldhar also teaches Finance at York University, where he says most financial planning students don’t bother completing the CFP designation, because “the industry has jobs for salespeople, not for professional financial planners. It’s like graduating from medical school and then being allowed only to check temperatures and change band aids.”

Cary List, CEO of the Financial Planners Standards Council (FPSC), says: “The single most common misunderstanding about financial planning is that it is all about investing.”

First, to make the issue clear, a financial plan, as defined by the FPSC, is a written document customized for you that gives you complete advice on all areas of your finances, including:

1.Cash Flow- Helping you understand how you spend your money.
2.Debt/Asset Management – Structuring your debts and your assets in the most effective way.
3.Life Goals, including Retirement Plan – Identify your financial goals in detail and strategies to help you achieve them.
4.Income Tax Planning- Determine most effective strategies to minimize tax over your lifetime.
5.Estate Planning- Determining the most effective way to transfer your assets to your beneficiaries.
6.Risk Management- Determine your needs for insurance and which type is the cheapest/most effective for you.
7.Investment Management- Recommending the strategies and investments appropriate for your plan and keeping you focused on your goals.

In short, it is a complete “road map” to the life you want that allows you to make decisions with your overall plan in mind, instead of making each decision on its own. A plan is not an investment projection, a questionnaire, a goal based on a rule of thumb, or a document with nice graphs printed out in 15 minutes or less.

From experience, we find that the benefits of having and following a plan are far more significant than people realize – and far more significant than Investment A vs. Investment B. For example, the main reason most Canadians will retire at a much lower standard of living than they want is because they never figured out how much they need to invest or what kind of strategies/investments they need to reach their goal.

Just keeping you focused on your goals alone can be the most obvious benefit of a plan. Anyone that lost focus and sold investments since last fall has wiped out years of gains.

“They did not plan to fail – they just failed to plan.”

Why is the industry focused on sales, instead of financial planning? What needs to happen so that Canadians will get real professional plans from their financial planners?

Here are the main suggestions at the conference for why most financial planners don’t plan finances:

1.Blame the public – Financial planning is misunderstood by the public. Most people think short term and do not understand why they need a financial plan. Canadians do not ask that their advisor to do a comprehensive, written plan for them.
2.Blame the schools – Financial education is not taught in schools, even though it is a basic life skill.
3.Blame the industry organizations – They have not effectively educated the public on the need for a plan. They also have a confusing list of degrees, instead of focusing on the CFP designation.
4.Blame “financial planners” – Most advisors focus on the investments or insurance that make them money and consider financial planning to be unpaid service work.
5.Blame the banks, insurance companies and planning firms – They have not been able to figure out a good business model that includes financial planning.
6.Blame the regulators – They focus regulation on products and disclosure related to products, and do not make allowances for advice that is part of a comprehensive plan.
7.Blame the government – There are no national restrictions on who can call themselves a “financial planner” or “financial advisor”. Those that do not write professional financial plans and have the qualifications should have to call themselves what they are: “mutual fund salesperson” or “insurance rep”.
8.Blame the industry –The industry has effectively taught the public that most “financial planners” are just salespeople. Most people have met with or know a “financial planner” and the planner did not do a plan, but mainly just tried to sell them a mutual fund or insurance.

What do you think? Why don’t most financial planners plan finances?

Ed Rempel is a Certified Financial Planner (CFP) and Certified Management Accountant (CMA) who built his practice by providing his clients solid, comprehensive financial plans and personal coaching.

http://www.milliondollarjourney.com/why-don%E2%80%99t-most-financial-planners-plan-finances.htm

Investment primer charts path for beginners

Investment primer charts path for beginners

Get a Financial Life: Personal Finance in Your Twenties and Thirties, By Beth Kobliner, Fireside, $16.00, 336 pages

By Kerry Hannon, Special for USA TODAY

Sometimes the very best books are the simplest. And that's the beauty of Get a Financial Life: Personal Finance in your Twenties and Thirties. It offers the fundamental ABCs of how to manage your money.

Originally penned more than a decade ago by Beth Kobliner, a former staff writer for Money magazine and financial columnist for Glamour, the revised and updated new edition, is a model personal finance primer. Its return to the bookshelves couldn't come at a better time for a new crop of young people beset by today's financial meltdown.

The latest version delivers a dose of present day reality. For example: "It's easy these days to write off the idea of contributing to retirement savings accounts like 401 (k)s," Kobliner writes. "You've heard scary stories of people losing half their life savings in the chaos of the market. …You don't feel like you have any money to squirrel away. … You're off the hook, right? Wrong.

"401(k)s are the best savings opportunity you can possibly have — in this or any economy. And not taking advantage of them while you're young is a huge (and costly) mistake," she writes.

She goes on to discuss how 401(k)s are "supersmart savings accounts" that "offer terrific tax advantages that allow your money to grow exponentially fast."

Aside from the occasional au courant nod to collapsing investment portfolios, in general, Kobliner sticks pretty close to her original recipe of straightforwardly defining basic financial terms, such as mortgage, mutual fund and money market accounts.

After all, she's addressing an audience she presumes is clueless, or at the very least, one that has given little thought to these matters. That is until now, when they're holding a diploma and $25,000 in student loans and credit card debt, looking for a job in this tight economy, living on an entry-level salary or hoping to buy a first home.

Kobliner's a gentle guide, carefully walking her money neophytes through the nuts and bolts of personal finance — from health insurance, paying off debt, contributing to retirement plans to building an emergency cushion, investing in stock and bond funds, finding your credit score and improving it, buying a house or car. She even dabbles in income tax strategies.

There's no magic formula for taking control of your financial life here, but rather frank meat and potatoes money management moves that have proven the test of time.

To help readers evaluate whether their current saving and spending habits are "right on track, wildly off base, or somewhere in between," she lists a few tried and true financial rules:

•Your debt payments (not including your mortgage) should be less than 20% of your monthly take home pay.

•Spend no more than 30% of your monthly take-home pay on rent or mortgage payments. This might not be reasonable, if you live in a major city like New York or Miami, but in a small town or city, it works. No matter where you live, it's something to shoot for.

•Save at least 10% of your take-home pay each month. It's critical to think of your savings as a fixed monthly expense that's part of your budget, just like your car payments or rent.

One good way to start saving is with $50 a month in an automatic investment plan, she advises. Some no-load mutual funds will waive or lower their minimum initial investment requirement if you sign up for their plan. With these plans, you can have a fixed amount "siphoned off once or twice a month from your checking account and funneled into your mutual fund." You can set this up online with your initial investment.

"After that, you won't have to do much except sit back and watch the money accumulate," Kobliner writes. Fingers crossed.

If you serve or have served in the military or have a parent who did, she suggests USAA (www.usaa.com) as a good savings option. "It offers some low-cost actively managed bond and stock index funds, charging just 0.19%. It will also waive its usual $3,000 minimum if you sign up for its $20 per month automatic investment plan."

While Kobliner presents a sweeping course on personal finance, she's not fooled into thinking she has given her readers all there is to know. Tucked into the back of the book is a handy section, called Further Reading. It lists books she tells her friends to read which range in topic from investing to insurance to taxes and debt. She includes interesting blogs and message boards such as Get Rich Slowly (www.getrichslowly.org) and free online pamphlets and publications on subjects including choosing a credit card, how to build a better credit report and dispute errors — all available from the Bureau of Consumer Protection (www.ftc.org).

There are just a few key steps you need to dig out of debt, jumpstart saving, and plan for the future, Kobliner writes with assurance. "Once you nail these easy concepts, you'll be on your way — in good times or bad."

Kerry Hannon is a freelance writer based in Washington, D.C.

http://www.usatoday.com/money/books/reviews/2009-04-07-financiallife_N.htm