Forkids Business Guidelines

Today many people don’t have even the basic understanding of personal finance. They don’t know how to set up a budget, how to manage their money.

The main reason behind this is that money management is not taught in schools and colleges. Educational institutions create graduates who are trained for productive work under the supervision of a boss, but do not know what it involves to manage their own personal finances. Though such graduates have done many courses on finance and accounts, still many of them struggle in maintaining their own personal finances and are not able to manage money and create wealth for their future needs and obligations.

After the completion of your education, you get a new degree, a new job, and a new sense of independence. But to get financial peace i.e., what to do with money, how to manage it – you need to have knowledge on personal finance.

Knowledge of principles of saving, investing and spending money wisely avoids mistakes from ignorance
There are certain principles of money you should understand. The sooner you understand them, the fewer the mistakes you will make with money. There are people who live their entire life but never discover the principles of money, the fundamental rules of saving, investing and spending money. If you understand and follow those principles, you can avoid mistakes and you will be able to deploy your surplus properly.

Good saving, investing and spending habits help a person become financially comfortable
For this, you first need to setup a budget plan and you should by and large stick to it. The personal budget is something that helps a person control his/her wasteful expenditure. Many people simply avoid this and continue to spend wastefully. Personal budgeting helps you in improving your financial situation. An effective budgeting starts with understanding spending habits and the most important thing is to evaluate how you spend and where your money is going out.

Awareness on the purpose of financial instruments helps in taking care of your and your family’s needs
It protects and enhances your lifestyle. Not having knowledge of financial instruments will lead into financial mismanagement. It requires right decisions while using financial instruments which help take care of your and your family’s needs. Don’t invest just by seeing your neighbor, friend or relative. Understand the financial product, its performance, benefits, implications, etc.

Money does not solve all problems. But not having any money is a big problem
Many people wrongly assume that if they earn a good salary, all their financial worries will be solved. Money may not solve all your problems, it cannot buy happiness. At the same time, if you don’t have money, you cannot afford to pay for your living expenses.

Let us take an example, to make you understand money better. Money is like chutney. Focusing only on money is stupidity, like eating only chutney in your meals. Adding chutney to a meal can enhance the overall experience of the meal. Similarly, having a little money helps you have a better quality of life.

Finally, there are other things more important than money. Don’t lose sight of them
“Paying yourself with your time” is as important as money. Personal passions, personal growth, physical health and many more things can be included in this list. Having a lot of money is not the only thing in life – there are many billionaires who live a miserable life despite having billions.

Not doing what you know is same as not knowing anything. There is no benefit of knowing the principles of financial planning if you cannot execute them. You need to execute not once or twice, but continuously. When you inculcate the habit of following the fundamentals of money, you will be financially well settled.

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Starting a new business means that you have to practice good strategy, especially if you really want to make sure that you’re going to be in business for a long time to come. It’s better to make sure that you really can focus on getting all of the different components of your new company in place right from the very beginning. Most commonly, this means that you need to line up strategic partners that are really going to help you take your business to the next level.

A print management company is the best strategic partner you can get when it comes to your business. Here’s why, in a nutshell: they can help you create a true marketing funnel that will last for as long as you want it to last. When you’re trying to build a proper company, image definitely matters. It’s all about presenting the right front that tells people that you’re going to be in business for the long run. Today’s customers really want to make sure that you’re focused on being in business for a long time. The more that you invest in your business at the very start, the more likely it is that your customers will take you seriously.

This means having printed materials that actually look professional. While it’s true that you can probably get marketing templates and blueprints from consumer stores around you, it doesn’t really have the same appeal. So what you really need to do here is make sure that you get printing fulfillment services that are as professional as you want your business to be.

At the end of the day, printing outsourcing is truly a lot less expensive than you think. When you weigh all of the benefits of outsourced print management against the cost, you’ll find that the benefits are just too great not to take full advantage! Check it out for yourself!

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Understanding how online banking works efficiently is easy. It is in part a question of time management. Traditionally people have struggled through traffic and other city hazards to queue during office hours. The time actually spent transaction business might be less that a minute or a few minutes but getting to the consultant sitting behind a desk could take hours.

By contrast the page of one’s computer or smart phone can be accessed in the course of a few seconds and the necessary transaction completed in the time that would be taken to walk into a building and join a queue. Time during the working day does not have to be set aside for traveling and standing because transaction can be done at any time of the day or night, when convenient.

Firms have different corporate approaches to their customers. Some treat clients as nuisances and others do their best to offer professional services. Similarly, some sites are very much more friendly and helpful than others. It is wise to investigate before registering.

It is necessary to create a profile with a particular firm before commencing. This can be a sticking point for those who do not belong to the generation of people used to transacting exclusively with computer systems and no human interaction so some time might be invested in a consultant behind a desk or at a telephone number. The profile can include several accounts of different types and almost all business on these accounts may be economically accomplished without setting a foot inside a building.

Credit card accounts are usually run through specialist companies but banks act as agents for these companies. Credit card accounts can be included on the profile of customers who run their accounts through the bank that acts as an agent to the particular card company. There may be some restriction on how funds are withdrawn but usually it is possible to transfer funds into them instantaneously.

The prevalence of online banking has streamlined business for both debtors and creditors. Accounts may be paid directly into relevant accounts and funds may also be received economically and quickly into accounts. In some cases banks offer special services such as accepting international payments through money transfer companies and even paying traffic fines online. It is possible to pay recurring monthly accounts by means of scheduled payments on particular dates.

Many people who are reluctant to move away from traditional banking are motivated by fear. They are afraid that their personal information may somehow be available to others and that there could easily be fraudulent activity of which they are unaware. The need to be assured that the same accounting and banking practices operate as they have done traditionally. The difference is that particular clients have access to their personal information just as bank officials always have had.

To know how online banking works is to know that the same banking practices apply to accounts as has traditionally been the case. The difference is that clients now have access to their personal information and can complete personal transactions. The fact that this information can be checked frequently and for no cost means that a greater degree of personal vigilance is possible, making banking even safer than it was before.

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There are two types of income to fully understand if you want to start your way to becoming financially healthy. No matter what your job is, whether you are a bookkeeper or a company director, everybody gets at least one of the two types of income so it is equally important to understand them.

Active Income

Active income is the reward from participating in an endeavor that used your time, skills and effort. Usually seen in a form of paychecks, incentives, and commissions, it means actively involving oneself to be able to earn money. An example is a person selling pancakes. If he sells today, he gets paid. If he doesn’t, it means there would be no income for him.

Residual Income

Residual Income is the reward one gets from passively participating in an endeavor. It is the income from capitals and assets or money-generating activities. It is also called passive income. A person with this type of income still receives money even while he is asleep. A good example is an online marketer that has a 24/7 website where he gets clients from all over the world to sign up for his services. He gets paid for being passively involved in the process of earning money.

Why do we need to have residual income?

If you will ask people if they want more money, most of the time the answer is a big “Yes”. One of the motivations nowadays is wealth. We want more cash. To be wealthy, we have to know what the word means. Is being wealthy having a million-dollar bank account, owning the hottest cars and travelling around the globe? In fact, wealth is simpler that what we think: Wealth is simply being able to pay for your chosen lifestyle without the need to ever earn an active income again.

Wealth is absolutely not about the dollars in the bank. If a person has a million dollars, travels the world endlessly, buys expensive cars without enough residual income to sustain his lifestyle, his millionaire life can be gone too soon.

So why do we need to focus on our a passive income source instead of just having more cash? It’s because passive income can take care of our needs and wants for a long period of time under our chosen lifestyle. If you want to live a life like the filthy rich, then you have to find residual income streams that will give you dividends and cash rewards which are enough for your new-found luxuries. Keeping a good cash flow of passive income is the key to wealth.

In short, the first thing to do is to be clear in what kind of lifestyle you would like to achieve. This is actually what most financial advisors would ask a client during the first sessions of working with them. What kind of lifestyle would suit you? What exactly are you aiming for?

Once that question is clearly answered, the next step it to search for opportunities to be able to get that lifestyle and sustain it. Look for information around you about tried-and-tested residual income sources that you can use to get you where you want to go, which is true wealth.

With the proper marketing system in place you can create Residual Income.

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Fixed income unit trust is touted as the safest asset class in unit trust investment. But is it as safe as fixed deposit? The answer is NO. Fixed deposit is a risk-free investment vehicle which guarantees you the return. Fixed income fund does not. So what is the financial workings behind a fixed income unit trust?

Fixed income fund invests in bonds. In this article, the terms fixed income fund and bond fund will used interchangeably.

Bond

Bond is a fixed income securities. If issued by private sector, it is known as corporate bond. It is considered a debt instruments to raise capital to finance expenditure or working capital, without diluting the ownership rights (unlike shares).

From investor perspective, they will lend an amount of money to the bond issuer, and in return they will get a predetermined rate of return (coupon payment, usually within 5 to 10 percent) from their capital annually/semi-annually/quarterly. In addition to this, the capital will be repaid to the investor when the bond ‘matures’, normally within 1 year for short-term bond (aka Treasury Bills) and 10 years for long-term bond. The initial committed principal may be less or more than the final capital repayment, the former known as discount bond and the latter as premium bond. In short, investor is guaranteed to be compensated in periodical coupon payment in addition to the value of discount of the bond ‘price’.

Systematic risk

Systematic risk refers to the investment risk associated with the local and global economic conditions. This, more often than not, is the primary risk for government bonds.

The net asset value (NAV) of a bond fund which largely consists of a portfolio of government bonds fluctuates according to the economy. This type of risk is something no one can control, but perhaps more predictable. You will know an economic recession is looming in the horizon by keeping up to date with a lot of economic indicators such as interest rate, purchasing manager index and business condition index.

Government bonds are almost similar to risk free investment, unless you are living in nation like Greece where government could default on its nation’s debt. United States, for example, has a sterling bond rating of triple As until it is downgraded this year.

Unsystematic risk

The more unpredictable risk inherent in a bond fund is unsystematic risk. This type of risk relates to an organization or corporation which issues the bond. It is more likely for a company regardless of its size, if the company is being mismanaged. The analogy of it is this. I accumulate a sum of money from my family members and purchases bond from you. You are the corporation which issues me the bond and I am the mutual fund itself, while my family members are the bond unit holders (investors). You take the money to gamble, and in the end losing all of it. As a consequence, you can neither repay me the principle nor the periodic coupon payment. The fund goes down the drain along with the investors’ money when the bond issuer defaults on its financial obligations.

How to mitigate the risk

Whichever bond fund you choose to invest in, take time to read their financial reports twice a year. One is annual report, issued after the end of the fund’s fiscal year, and another one is interim report. This may sound tedious if you are not a finance guy; but trust me, this is something you can do in 30 minutes. You probably spend more time planning for your vacation, what is the rationale of not spending a fraction of that time flipping through the annual reports when your money is at stake here?

Focus on the bond holdings of the fund. See if the objectives and mandates of the fund has changed. The mandate can mean the lowest grade bond category a fund manager can hold or buy for the fund. Any bond has its own rating which reflects the credit worthiness of the bond issuer. In layman terms, the higher the rating, the least likely bond issue is to default. The rating is evaluated independently by agency such as Standard & Poor’s. Ensure that all bonds held in the fund are of investment grade (BBB and above). Any bond holdings below this grade are considered junk bonds and should be a red flag. Redeem your cash and look for some other funds instead. It is not worth to risk your money in junk bonds which may promise higher yield.

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According to a recent study, the human life span is currently at 65 years on average. This means that by the age 60, death is nearly saying hello to you. If we will really think about it, our stay on earth is too short. Now the question is, how would you like to spend your life? Wouldn’t it be a miserable situation to be working still on your last days? Or, until your hair is already gray and while everyone else is enjoying a holiday in some tropical island?

Certainly, you want the best for yourself and for your family. But the problem is you don’t know how you are going to save for your future with all the expenses and the current economic crisis. Another thing is you’re not sure if you can still handle another part-time job because you’re already way too busy with your full-time job plus you also need to spend some quality time with your loved ones.

Here is the good news. You can work less and earn more cash. Yes, it’s possible and it’s called passive income. If other people are able to do it then how hard can it be? First off, passive income means earning from an investment that does not require you to be involved directly with the process. How do you that?

Here is a quick list of online activities that online marketers use to earn passive income from the web:

Affiliate programs. Choose a product that sells like hot pan cakes in the internet marketplaces. Set up a website and use SEO techniques to drive highly targeted traffic. Make sure to install a shopping cart and a payment method to encourage buyers to shop through your affiliate links.

Create your own digital products. You can write an eBook, you can make an informational video or audio, you can invent a special plugin or software, you may develop a mobile app, etc. The best thing about doing these things is that you will only have to spend a few hours or days to accomplish the task but the license and distribution fees that you are going to receive will be lifetime.

Referrals. Make-money sites like Hits4pay and Odesk pay users for referring new advertisers to the system. In Odesk, for example, once your referred contractor has reached an income of $1000, you will receive a commission of $50.

These three methods are just a few examples on how you can earn passive earnings from the internet. There are other ways to make a living without doing much and without spending lots of time. Be a multi-tasker and explore the different techniques to earn online. Most importantly, enjoy your youth and plan for an early retirement.

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