How to be Financially Secure: What Every Family Should Know about Financial Security

Family

Every family dreams of being financially secure. It means gaining the freedom to live without worrying about job cuts, redundancies or salary reductions. As bleak as it seems now, it is possible to build financial security.

According to Australian financial expert and author of The Seven Ages of Money (Choice Books), Tim Blue, financial security is built on time, discipline, knowledge and strategy. Here is some useful information he reveals in the book.

Give Time to Build Wealth

Time will help families build wealth through compounding – the effect of reinvesting earnings from investments. Although the return may not be very significant in the beginning, over time it will grow faster and faster.

“This principle works only if you allow enough time,” writes Blue, adding that the longer it works, the more it will benefit investors.

Be Disciplined in Money Matters

Discipline is crucial in money management. Start with saving early and regularly. Pick up some household budgeting tips to make sure there is money to spend and to save. When there is a decent amount to put into investments, resist greed and impatience, warns Blue.

He says that people invest in shares, bonds and managed funds because the value of the investment goes up over time, usually faster than inflation. However, many make the mistake of expecting a big return too soon, especially when they see friends and families making a lot more money in short periods of time.

Greed and impatience often step in here, causing many investors to abandon their well-thought financial strategies. Avoid doing that. Those who really want to be become financially secure need to remain disciplined and follow strategies that were already planned for their families, not listening to somebody else’s hot tips to get rich quickly.

Have Knowledge on Tax, Insurance and Investments

Tax-related matters often seem confusing to many people. But ample knowledge on tax will save the family a lot of trouble. Know the tax breaks and make use of them. Find out what the best tax deduction is for the family. See how income splitting can allow couples to enjoy lower income tax rates.

There should also be adequate insurance for the family. Adequate life insurance, income protection insurance and private health insurance are crucial, especially for families with young children and other dependents.

Before investing, do thorough research on prospective investments, if possible through a registered financial planner. Expect six to12 months before making the first investments. Also, learn to recognize financial cycles – a continuous process that can change suddenly, for better or for worse.

Device Firm yet Flexible Financial Strategies

Building financial security and wealth also requires firm strategies that can be revised when there is real need for it, Blue points out.

He says, “Educating yourself about money should be the core of your strategy. You might start with the finance pages of the daily newspaper.” Financial magazines, financial programs on TV and analyst reports are good sources of reference too.

Financial security is something attainable for every family. To make it happen, allow time to build wealth and be disciplined about saving money and sticking to a well-planned financial strategy. Families should also educate themselves about tax, insurance and investments as well as read up as much as they can about money and finance.

Mortgage Insurance – Useful Tips Before Buying: Help for Buyers of Mortgage Payment Protection Insurance or MPPI

The following is a guest post from Houston, Texas real estate developer and entrepreneur Tracy Suttles.

Mortgage insurance or MPPI normally pays out after a period of 30 to 60 days, thus ensuring that mortgage payments can be made. Mortgage income protection insurance helps prevent debt problems and can stop repossession.

Trawl the Market for the Best Mortgage Insurance Quote

Most people buy their mortgage insurance directly from their bank. The purchase is normally made at the time of getting the remortgage. Money Week Editor-in-chief Merryn Somerset Webb stated that The High Street banks charge up to five times as much in premiums as the few independent providers.”

Using an online mortgage payment protection insurance price checker ensures that the market is trawled for the best price. Alternatively, consult an independent financial advisor (IFA) as they can fulfil the same function, as well as advising on the small print of any policy.

Use MPPI to Cover More than Simply the Mortgage Payments

Whilst paying the mortgage is the main priority, help will still be needed with other bills. It is still necessary to pay for council tax, food etc. Most mortgage lenders will only quote sufficient insurance to cover what is owed to them. Don’t fall into this trap.

Don’t Waste Money on Mortgage Insurance when in Casual Employment

Taking out mortgage payment protection insurance may provide peace of mind when doing seasonal work, but it won’t provide any mortgage cover. The T&Cs of the MPPI policy will seek to exclude cover. It’s pointless taking out mortgage cover in this instance so don’t waste money doing so.

Cheap Mortgage Insurance Isn’t Always the Best

Whilst it is always advisable to trawl the market for the best priced mortgage insurance, don’t be fooled into thinking that cheapest is always the best. Read through the T&Cs to make sure that cover is provided where it is needed.

Time Needed to Elapse before a Mortgage Payment Protection Insurance Claim

All policies tend to pay out within 60 days, but there are many superior policies that will provide help with mortgage payments after 30 days. If the price of mortgage insurance is cheaper, it is quite probable that the deferred period before receiving help with mortgage payments is greater.

Mortgage insurance is the right move as it helps with mortgage payments during times of personal adversity. Always read through the T&C’s before signing up. If debt problems and mortgage arrears present a problem, consult a qualified debt counsellor to identify an appropriate debt solution.

Always remember that mortgage insurance is only one of a number of potential protection policies. Those with young families or mortgages should also consider a life insurance policy, critical illness cover and payment protection insurance.

IRS Tax Debt Settlement Help: How to Deal with Unpaid Taxes

Tax

Although it can be an isolating feeling, many Americans are in need of IRS tax debt settlement help every year. Unpaid taxes are similar to student loan debt in the sense that they cannot be negotiated with a debt relief program. However, the Inland Revenue Service (IRS) provides different methods to help individuals who are struggling to catch-up with back taxes and money they simply don’t have.

IRS Tax Debt Settlement Help

Whilst there are no guarantees of assistance, it may be possible to get tax debt relief in five different ways. The methods are rather involved so it is normally advisable to seek guidance from a suitably qualified professional. Help with unpaid taxes could come from an offer in compromise, instalment agreement, partial payment instalment agreement, not currently collectible or through filing for bankruptcy.

Full & Partial Installment Agreement – Tax Debt Settlement Through an Installment Plan

Whilst an offer in compromise is preferred, those who are able to make a series of instalments to settle unpaid taxes will not qualify. Instead, it is expected that a suitable repayment plan will be structured to allow the money to be repaid. A partial instalment agreement is similar, except that it involves offering the IRS repayments on a set percentage of the amount owed.

Offer in Compromise – Offer to Pay a Small Percentage of Unpaid Taxes

An offer is made to pay the ‘reasonable collection potential’ and not all unpaid taxes. Whilst this may seem like a panacea, only a small percentage of offers are actually accepted. Should it be possible to clear debt via an instalment plan, this form of IRS tax debt settlement help will not be available. It can be a highly complex area so the majority of people choose to utilise the services of a tax professional.

Currently Not Collectible (CNC) – IRS Tax Debt Settlement Help

Should the individual have unpaid taxes that don’t qualify for an offer in compromise or an instalment agreement, currently not collectible status may be granted. However, that individual’s financial status will be monitored by the IRS. Should their financial status change, they will be expected to make payment.

File for Bankruptcy – Clear Unpaid Taxes

It may be possible to clear tax debts by filing for bankruptcy, but the rules are strict. Tax debts that relate to unfiled returns aren’t dischargeable. An attorney should be consulted in relation to the complex qualifying criteria. Other unsecured debts, such as unpaid credit card debt, can also be cleared by filing.

IRS Tax Debt Settlement Help from a Professional

It is important that tax debt relief is sought from a suitably qualified tax professional or bankruptcy attorney. Devising a repayment plan for unpaid tax can be something of a minefield so an expert opinion will help to ensure that the right option is selected.

Receiving a Check Marked Full & Final Payment: Businesses Struggle Because Customers Do Not Pay in Full on Time

law

A partial payment in full and final settlement is frequently used to settle debts with the written agreement of the creditor, in which case it is legally binding.

When a customer is late in making payment this can affect cash flow and can have consequences for the survival of a small business.

If a cheque arrives when payment is very late it may be tempting to bank it immediately even if it is marked in “Full & Final Settlement” and accompanied with a letter stating something like:

“The enclosed cheque is sent as an offer of Full and Final payment. If you bank this then you are accepting this offer and may not request any further payment.”

The business person obviously has a dilemma, if the cheque is not cashed/banked:

  • the business may get no money if the debtor goes bankrupt;
  • the business may have to wait a very long time to receive another payment;
  • the business may already be out of pocket and into overdraft, in desperate need of cash.

Should the “Full & Final Payment” Cheque be Banked?

If the cheque is cashed in the US then the creditor has agreed to the terms and cannot attempt to obtain further payment (Hudson v Yonkers Fruit Company 258 NY 168); not in the U.K.

In England and Wales, each case is judged on its merits but there is enough case law to support a case for disregarding the written comments, banking the cheque and continuing to pursued the customer for the balance owed. The main reason is that a contract requires “accord”, that is, agreement between both parties.

If the business intends to bank the cheque and continue to seek the balance through the courts they should:

  • bank the cheque as soon as reasonably possible;
  • contact the debtor within a reasonable amount of time.

No time frame has been set by the courts; a week or two might be reasonable but two months is not.

Case Law Regarding Full & Final Cheques

1996 The Commissioners of Inland Revenue v Barbara Jane Fry.

This found that a company is entitled to have a procedure for banking cheques and dealing with any attached correspondence at a later date.

1993 Appeal, Stour Valley Builders v Stuart.

A cheque sent as full & final payment could be considered payment on account and claimant could seek further payment.

1966, DC Builders v Rees.

In this case DC Builders not only banked the cheque for but also issued a receipt which said “in completion of the account”. Even so the court decided that DC Builders was not barred from pursuing the balance of its claim because the “accord” had been obtained by Rees by subjecting DC Builders to economic duress.

Bracken v Billinghurst.

In this case the full and final clause was binding because of the lengthy delay before the creditor informed the debtor that the lower payment was not accepted.

Wall Street Bonuses — A Reality Check: Executive Compensation is More than Just Rewarding Ability

bonous

Is the employee or the employer really the decisive contributor to the money they made?

How much were the resources and vast assets of a brokerage company the basis for its ability to earn large bonuses? What really matters in a time of financial implosions is to distinguish between the value of the institution and the value of the individual when contemplating bonus irrationality. There are two ways to measure contribution: total compensation received or opportunity cost measurement.

How Large Bonuses are Justified

Many who read that Wall Street payouts were generous believe the bonuses were tantamount to theft. What exactly is the value of the contribution persons like the senior management at Merrill Lynch who drove that institution into ruin and to the arms of Bank of America while pocketing over $200 million dollars for less than a year’s work? How is value discerned and derived? The Wall Street paradigm is to pay bonuses on an annual basis for production or net measurable benefit to the firm. The system was written by themselves for themselves. Value to the franchise was undefined but payments to management were nearly tamperproof.

Bonuses Do Not Reflect the True Cost of Business

Merrill Lynch, according to USLaw.com, pays representatives on a sliding scale based on annual production that does not include provisions for lawsuits, nonperformance, or success fee payments. Thus, the performance of the individual is not evaluated with respect to harm caused but not realized during the time in question. Nor is harm caused by the internal credit and security services a cause for payment offsets. The net effect is that aggressive brokerage activities are condoned as a cost of doing business. The implicit assumption was, until recently, these costs could never overwhelm the fantastic profits Merrill Lynch made. Thus, the strategy of the firm was to ride a hot market as long as they and the industry trends were profitable.

The Measure of an Executive’s Value is Opportunity Cost

An executive’s value is different from that of the commission salesforce and support staff. Compensation for the latter is directly related to the added value to the company he or she creates. The cumulation of good judgments provides added value to the franchise in terms of stock valuation, name recognition, and increased penetration and profit opportunities. Thus, the true value of an employee is to measure what contribution they make without the benefit of the previous franchise.

Can an executive who is able to take advantage of great leverage able to reinvent themselves when credit is scarce? Can an executive who finds possible opportunities create measures to exploit new and more profitable circumstances without the presence and strengths of the firm? It is final realizable value, not the year end point in time measurement, that determines an executive’s value. Executive compensation is the difference in real profitability that would be lost were he or she not there. Compensation and value are not always related.

Finding or Keeping a Job in the Financial Sector: Economic Crisis Means Rethink Your Strategy

eco cry

Every industry has been hit with the economic crisis, and at this time of year many dread the feared pink slip or lay off. Stay ahead of the game in the Financial industry by rethinking your strategy.

Adjust Your Expectations

The gravy train was nice while it lasted, but it’s over. Forget the $500k salary for now; it’s not about what your think you’re worth, it’s about what the company is willing to pay. Remember, right now it’s about staying in the game and riding out the economic crisis. You’re the product to sell, so think in terms of future assets. What can you offer the company, and what can they offer you for the future. Yes, it is going backwards a bit, but sometimes you must take a step back to pick up the momentum.

Network, Network, Network

Yes, you know this. In fact, probably the Financial Sector invented this! Now is the time to call all of your cards or favours in – who knows who, what’s going on in the industry at your end of the world, etc. Use all your contacts to network to open up any potential opportunities. And follow up on each and every one. Yes, this takes time and effort. But it will prove to a potential possibility that you really are a “go-getter”, and one that would work well for that company.

Contact a Professional Head Hunter

Often Head Hunters know where the job is before the workers do. Make sure though that the one you choose is discrete and confidential. Be honest with him/her – what are your real talents? What is your real salary range? Be prepared to adjust your salary expectations, but don’t sell yourself too short. A good Head Hunter will know the ranges for the work and/or company.

Think Outside the Box

Don’t just look for work on Bay Street – there’s a whole world out there outside of the stock markets. You most likely have an MBA, which means you can work for any business. Start expanding your horizons and look outside of the Wall Street gang. Businesses have to first exist for a stock market to exist – so be part of the start, not the end.

Use your business acumen to find companies that are weathering the economic crisis, then approach them with how you can help. Don’t forget to create your own business plan for how to weather this storm; being prepared is half the battle. Use your financial sense to think about areas you could work in; or even create your own small business or consulting firm. There are many local and provincial/federal government programs that will help get you started with financial loans/grants.

Bottom Line

By rethinking your strategy and looking outside the box, you’ll find those jobs within the Financial/Business Sector. Don’t forget about creating your own job. It’s tough out there, so adjust your expectations of previous compensation.

Business Culture of Singapore: A Primer on Singaporean Business Etiquette

Singapore

Due to Singapore’s rich cultural history, several distinct ethnic groups including Chinese, Malay, and Indian, combine to shape business culture in Singapore. Business travelers must be familiar with the business etiquette of the specific ethnic heritage of their Singaporean counterparts to make the best impressions, but there are a few cultural characteristics that are shared among all of the groups.

Business Meetings in Singapore

According to singapore.angloinfo.com, business meetings in Singapore should be scheduled well in advance, accompanied by a list of the names and titles of attendees provided for the preparation of hierarchical seating arrangements. While punctuality is not extremely important, it is advisable to arrive promptly to show courtesy to the host. Singaporeans may intentionally arrive late to certain events, however, in an effort to avoid appearing anxious or hasty. As with other Asian cultures, such as the Phillipines, international guests should wait to be seated by their host after arriving to a meeting or event.

When sitting, international businesspeople should keep both feet planted on the floor. According to “International Business Etiquette” by Marie Sabath, crossing one’s legs in front of a host or superior is not appreciated. Travelers should also avoid maintaining direct eye contact when speaking or listening, and should never criticize or disagree with a senior member or their own party in front of their Singaporean counterparts; the Singaporeans themselves will never do these things.

Business Attire

Conservative formal business attire is preferred in most situations. White long sleeve shirts with dark jackets are common for men, while women tend to have more options, including conservative skirts, blouses, or pant suits. Due to the generally hot and humid weather in Singapore, however, it is acceptable to leave the suit jacket at home on hotter days.

Chinese Business Card Ceremony

International businesspeople attending meetings with Singaporeans of Chinese descent should expect the same importance to be placed on the ritual exchanging of business cards common in Chinese business culture. Business cards will likely be exchanged between all members of both parties at a meeting, and should be given and received with two hands and a slight nod or bow. Taking the time to thoroughly read over each card, and laying the cards respectfully on the table rather than quickly putting them away will be appreciated.

Employee Relations

Singaporean culture places a greater emphasis on respect for seniority in the home and workplace than western businesspeople may be accustomed to. Singaporean employees will stand when a senior manager enters a room, for example, and will avoid showing disagreement with superiors in public.

There is an emphasis on the welfare of the collective over the individual throughout Singaporean culture, and this can effect the way that Singaporean employees view their employment, as well as the expectations they have for their employer.

Business Gifts in Singapore

Gift giving may be one of the most challenging aspects of doing business in Singapore, since individual cultural heritage comes heavily into play when choosing the types, number, and presentation of business gifts. As a general rule, guests should either present gifts to everyone in attendance during the gift giving, in order of seniority, or privately to individuals. Flowers should be avoided for all groups, since these may be associated with funerals.

It is best to gain an understanding of the gift giving etiquette of the specific cultural heritage of international business counterparts, whether Chinese, Indian, Arab, or Malay, to ensure that the proper etiquette is observed.

How to Run a Successful Hair Salon: Ways to Ensure Your Hairdressing Business Makes Money

hair salon

Gill Foster, owner of New Image Salon in Cape Town, has run her successful salon for eighteen years. These are her top tips for making sure that your hairdressing business does well year after year.

An Attractive, Professional Salon is Essential

  • Cleanliness is vital for a beauty salon, not just for health and hygiene reasons, but also to make the clients feel pampered. Set up cleaning rosters so the staff members know what is expected of them.
  • Implement a no smoking rule for staff and clients.
  • Don’t allow staff to eat or drink in the salon.
  • Background music should not be too obtrusive. Aim for something that will appeal to most of the salon’s clients.
  • Make sure that all staff look professional and groomed. A uniform can make a big difference to the way the salon is perceived by customers.
  • Give all staff training in telephone etiquette to ensure happy customers.

A Good Manager Tracks Staff with a Hairdresser’s Business Plan

  • Use track sheets to help track how much each staff member is earning.
  • Use rosters to help avoid conflict between staff members, and between staff members and management.
  • Be respectful to all staff, and insist that they are respectful to one another and to management.
  • Be good to employees. Holding onto good staff is key to maintaining a successful business, so treat them with respect and be empathetic when necessary.

Latest Hair Products and Styles

  • Staff members need to be stimulated and challenged. To keep them up to date with industry trends, take them to shows and provide training in the latest styles, cuts, trends and products. Investing in good staff is never wasted.

Beauty Shop Business Tips for Customer Relations

  • Aim for punctuality at all times. Nothing frustrates customers more than being kept waiting. It’s essential never to overbook appointments.
  • Attend to the client the moment she walks through the door.
  • Chat to the client about her expectations before she heads for the wash basin. Check her head for crowns or cowlicks, and take the time to find out a little about her and her lifestyle.
  • Don’t tell the client about any personal problems, and never get over familiar with clients. Respect the boundaries in the relationship.
  • Don’t do anything too radical with a new customer. Rather let them gain confidence in the salon before suggesting something unfamiliar for them.

Hair Salon Business Tips for Difficult Economic Times

  • Maintain excellent service
  • Don’t put prices up more than absolutely necessary
  • Do whatever it takes to keep good staff

Following these hints and tips will help most hairdressing businesses reach their goals and maintain that success, even in difficult economic times.

Three Must-Do Tips to Start a Small Business

market research

STOP making mistakes when starting a small business. Pick the best niche, do the research and find success before you start a small business.

A small business is the backbone to the American way. Why not start one right now, make lots of money, and spend only a few hours a week working? STOP! If this were true, we would all own a successful small business, but this is obviously not the truth. In fact, 31% do not survive two years and the failure rate is growing higher each year, due to the economy. So how can the potential small business owner be a success? Just follow these three steps to increase your chances for success.

Idea Generation

The idea for the new small business is key to the overall success. We have all heard “do what you know,” “work in the field,” and “get educated.” What we haven’t heard is that the success or failure of your idea that your small business will be built on, is not about you. It is about your client base and what they might hire or buy. Therefore, it might not be the same thing that you are selling. A future step will help you focus on the right idea but don’t be fooled, not everyone may love your product or service as much as you. So, don’t design it or build it before you complete the next step. And certainly don’t rent space until you have more information.

Research

You’ve thought about an idea for a long time now and know that it will be a success, so why not jump in? You could be wrong and probably are. How do you know? Research, the next critical step that demands doing before you start your endeavor. What do you research?

  • Competitive analysis- Look at all competitors and try to define your idea towards a niche in the market. Call companies in other areas that won’t compete with you and discuss what they have found sells, and where their niche is? View the prices and costs associated with your idea. See what vendors are used and what advertising is done.
  • Find your client base- Do the demographics for your area. Be specific about your clients: age, annual salary, sex, children, nationality, to name a few. Narrow in to where they live, shop and read.
  • Potential clients- Produce a questionnaire centered around your product or service. Simple, straightforward questions are answered easily. Would you use my product or service? What do you use? What do you pay? What is this product or service worth to you? What is missing that you would like available? How do you find these products or services? Is there anything special you need in regards to these products and services? Now that you have a list of 10 or so questions and you know where your perspective client is, go there and ask.

Redefine your idea

By doing the research, a new idea should be developing. A niche that a perspective client would buy for a fair price. If you are still interested then start here. Search out SCORE and find yourself a mentor to help on the way.

Through careful planning and research the perspective small business owner can raise the odds of success and start with an idea that has been defined into a sellable niche for future success.

Small Business Owners: How to Terminate an Employee

small business

Termination of employment or “firing” an employee can be one of the trickiest parts of being a small business owner. While rarely pleasant, it is an integral component of maintaining a cohesive staff and ensuring smooth and productive operations. Understanding your rights, your employee’s rights, and the ramifications of a termination is extremely important to avoiding future legal problems.

Pre-Hire

  • Have an employee handbook and have each employee sign to prove that he received it. Include pertinent information such as absences, tardies, job performance, evaluations, phone use, and anything else that you can identify as a potential employee issue. For ideas and formats, do an Internet search for employee handbook templates specific to your industry.
  • Explain your expectations clearly during the final interview. Make sure potential employees know exactly what they need to do to succeed in your company and what will be grounds for termination.

New Hire

  • Establish a 90-day trial employment period. Let the employee know that his performance will be evaluated at the end of the 90 days and that employment will either be made permanent or terminated at that time.
  • Observe the employee daily in various work situations. Carefully document any issues that occur, especially absences, tardies, and disgruntled customers.

Termination

  • Type up a formal termination letter. Cite specific reasons for the termination, being as specific and objective as possible. Factual statements such as “did not complete Assignment A as scheduled” or “received multiple client complaints regarding poor customer service” is much more credible than “does not get along with other employees.” Remember, this letter may come into play again if an employee decides to claim unemployment benefits (which employers are financially responsible for) or pursues legal action against you. Employers are generally asked by state unemployment agencies to explain why an employee was terminated, and documentable facts showing that termination was due to employee misconduct or refusal to perform work can lead to denial of benefits for the employee.
  • Don’t take the terminated employee’s words or actions personally. Being let go is extremely upsetting for anyone, and there can be tears, rage, or a combination of both. Remain calm and professional and document any behavior that is extreme or threatening. Tell the employee that all of the information is in his termination letter and that you are unable to discuss the matter further. Listen compassionately for a few minutes, but let the employee know within a reasonable amount of time that the conversation is finished.

Post Termination

  • Keep past employment records easily available for employment references and unemployment claims. Be mindful that although an employee did not work out well in your company, he or she may flourish in a different environment. Be as factual as possible in job references.

Careful and detailed attention to both the hiring and termination process can save many headaches and unnecessary financial obligations for the small business owner. Professionalism, documentation, and preparation are the keys to successfully developing the right staff for your company.