Building Financial Success In The New Economy!

Sounds daunting to some...A FINANCIAL PLAN.

Is it something that you must have tons of money to possess? Something that you pay a broker thousands of dollars to maintain and manage? Is it a portfolio in which you hope to do well, but every time the market crashes causes you to twinge in horror?

NONE OF THE ABOVE!

A financial plan is simply this... A way to get where you want to go in life, without doing it the hard way.

Many people want the same thing financially- a secure retirement, peace of mind in case of hardship, and perhaps a little extra cash, perhaps to spend or maybe to leave for their children once they are gone. The question is, how do we accomplish that in the most effective way without having to create a startup company that will someday become the next Google? (Don't get me wrong, that would be nice too)

By gathering together sound financial principles, then organizing them in a fashion that fits" you and your individual needs, you can accomplish the goals that you've always wanted to reach and do it better than the Jones'. Remember: If you always do what you've always done, you'll only be where you've been." Another way to express the same sentiment is this: "If you only do what everyone else around you does, you'll only end up in the same postion as them."

What am I getting at here? The way that most americans have been preparing for the future and the present when it comes to their financial planning is lacking. That is evident in the current condition of the economy as a whole. if Americans as a whole were more financially literate, I'd argue that we wouldn't be in the mess we are in today. So, stop doing what you've always done!

This is a new and ever-changing economy, and if we are going to succeed, we must be willing to change with it. We must be willing to effect strategies that will overcome these market ups and downs, protect our families, and provide us with peace of mind. THAT is a financial plan.

The question is... What does your's look like? Want a second opinion?

Check out my website at www.josiahknows.com and contact me directly for a no-cost or obligation review. Your money and your future will thank you!

Property, Stocks, Gold, Insurance... Everybody's looking for the upper hand in the investment arena. But with so many choices, how can anyone find the best investment for them?

There are several fundamentals that make up a good investment, but the first thing to realize is that there is no one investment or company that can do everything for everybody- it just doesn't exist. You've heard the saying- different strokes for different folks? That applies to the financial world more than most because we find that although many may tout whatever their particular "favorite" strategy or investment is, the "best" for you is always dependent on what you are trying to accomplish. While many spend their time trying to diversify, time the market, and use whatever the most popular strategies that happen to be filling up the blogosphere at the moment- the reality is that most don't understand the basics of what makes a good investment in the first place.

What is considered an investment? In the broad scope of things an investment is anything that can, of it's own volition or with some help from an outside source, provide a future benefit or value that is greater than the current benefit or value. In other words, putting in something, to gain something greater down the road.

When applying this term to the financial world many tend to get excited because they imagine some type of Holy Grail of investments that will somehow take them from their current status to huge future gains within a short time and with little effort. But if things were that simple, there wouldn't be a worldwide market for people promising the next best thing.

Instead let's focus in on 5 fundamental principles that lead to finding a good investment. In the first article in this series we'll discuss the aspect that many focus on. Although it is given primary importance to many, it is only part of what makes a good and balanced investment.

Rate of return:
-This is the "hot button" topic that many are familiar with when searching for their "best" investment. How much interest am I earning? Although by no means the only fundamental for a good investment, it is vital that one's rate of return be sufficient to meet the goals they are trying to accomplish. With inflation historically averaging 2-3% over the past 40 years, depending on what time frame you check, a savvy investor must return an rate of interest that meets or exceeds this amount if they are to, at the very least maintain their purchasing power over time. Another fundamental to consider is that, generally, the higher the interest rate the higher the risk of loss.

In Part 2 and Part 3 of this article we'll review 4 more aspects of a prudent investment that many don't consider, but are key to any good long term investment. To read the rest of this article go to http://www.josiahknows.com/2011/12/05/what-makes-a-good-investment-part-2/, or, to make it easier, just click on the picture. =)

Call me a pessimist, but as I see it the majority of us seem to be procrastinators. I know this doesn't sound as pleasing as we might like since we seem to be constantly moving, working, doing- living a faster paced life than we have ever experienced in years past. But before you discount yourself from this generality ask yourself something honestly: How many of those activities are reactive and how many proactive?

Take for instance the topic of retirement. Are we saving now, in a proactive way, so as to reach the goal we are looking for- the security of our "Golden Years"? Or, are waiting to react to a harsher reality that we've waited too long and now it's too late? How Late is too late to begin saving for retirement?

The answer goes back to the analogy of the marble, the softball, and the beach ball.

If I asked you to put a marble in your pant pocket right now you could easily slip it in and continue on with your day, hardly even noticing it was there. In fact, at some point throughout the day you may even forget about the marble altogether, though you are still carrying it around with you.

If, however, I asked you to put a softball in the same pocket and carry it around with you it would become very apparent very early on just how cumbersome it is. If you could even fit it in your pocket, you would notice all day just how much it stretched your pants, dug into your leg, and got in the way of your daily activities.

Now, try to imagine using that same pocket to carry around a beach ball. Go ahead, try. Blow it up, get it nice and round then try sticking it in your pocket. You might say, well that's altogether impossible right? Might as well just give up on that one because it's already a losing proposition.

But these three options are what saving for retirement is really like. If started early, and in small steady amounts, saving for retirement can be a cinch. Putting away a little each month can be almost forgettable as it grows undetected and supplies you with that lifestyle that you always wanted in the golden years.

But wait a few years and that marble sized deposit easily becomes the size of a softball and you'll notice every time you make the payment to invest in your own future. Can you do it? Yes. But every month of every year you'll notice that it impedes on your overall lifestyle, as the amount you deposit must increase dramatically to catch up for all the years of lost compound interest earnings. You may cringe every time you make the deposit and become weary at the slow rate of growth you are earning, not having the available time horizon to be as patient as you should be.

But wait too long and you'll be stuck with the beach ball. An impossible scenario in which even if you tried you wouldn't be able to make that deposit, at least not enough to ensure your security during retirement. Because of this you become despondent over the whole mess and think- "What's the point? I'm not going to make it anyway, why save now?" You'll be working for the rest of your life and hope that when you get older your children love you enough and made better decisions than you so that they can care for you when you can no longer participate in the workforce.

So what is the "magic" number of years? Find out the answer in part 2 of this series. To read the rest of this article, just click on the picture or go to http://www.josiahknows.com/2011/11/14/marble-softball-or-beachball-how-late-is-too-late-part-2/

So, you've read all of the books on retirement planning, you've gone over the countless blogs, and you now understand the benefit of investing in a tax-advantaged environment. The Roth IRA's and Equity Indexed Life Insurance policies make so much sense now that you see the advantage of not giving the government 30% of your income once you hit retirement age, which is when you'll need it most. You understand that you may not necessarily be in a lower income tax bracket when you retire, as many have assumed, and that the effect of inflation means that you will require more income to survive on the exact same lifestyle you have today.

But my company offers a 401k. I also know I should diversify my investments. How do I know whether or not I should take advantage of my company's 401k to accomplish part of my diversification? Good question.

To answer it we'll need to review briefly the benefits and disadvantages of a 401k. In part 1 of this article we'll consider the benefits, and we'll consider some of the disadvantages in part 2 to have a balanced viewpoint.

Benefits:

-Non-taxed contributions and Tax-deferred interest earning

- Deposit into 401k structured in your check so you never see or spend the money first (out of sight out of mind)

Potential for matching by the employer
Keeps money out of reach until retirement so that it can't be spent frivolously
Now when examining the benefits against the disadvantages we find that "benefit" of non-taxed contribution and tax-deferred interest earning actually creates the first disadvantage- the tax "avalanche" that will be waiting for you when you retire. So, when considering this benefit I don't put a whole lot of value in it, considering that it creates a bigger problem for me later. I mainly included it so that certain nay-sayers wouldn't come back to me later and tell me I was being up front about all of it's benefits.

As far as the "out of sight out mind" benefit, and the "keeping money out of reach" benefits, these are very important to consider. You will have to be able to ask yourself something honestly. What kind of saver are you? How much does your being able to retire actually mean to you? If you know that no matter what you do you are likely to spend your contribution that should've been set aside for retirement, then these are two benefits that you will want to consider closely. If you can't protect you from yourself, then these are two benefits that need to be an integral part of your savings program.

In Part 2 of this article we'll also examine the disadvantages of the 401k program to be sure that you can make a balanced decision when it comes to your retirement needs. To read part 2 just click on the picture! or go to http://www.josiahknows.com/2011/11/21/is-my-companys-401k-worth-investing-in-part-2/

Here it is, the beginning of a new year. Spring is coming soon, flowers will soon bloom and tax time is right around the corner. So what should we all know about being ready for 2012, and can we make sure to get the most from our tax refund?

Well, the answer may not be exactly what you think. To find out the answer, first we must answer what exactly is a tax refund?

An Income Tax Refund is a check issued back to you by the the Federal or State government refunding to you an amount of money that you had paid during the year prior, but was in excess of the required amount after your current deductions were processed. These deductions may include your standard deduction, dependent deductions (such as minor children), mortgage interest deductions, and more. Due to these deductions that are claimed by you on an annual basis, the government basically decides that you paid too much during the course of the year, and they give you some of your money back by issuing you a refund. This makes you feel like you just won the lottery, or at least a well paying slot machine, which you then use to go on vacation or put a down payment on that new car you've been eyeing.

In the meantime, ask yourself: "On all this money that I've given to the government over the past year that was mine in the first place, how much interest have they paid me to have held my money for so long?"

The answer: Zero.

It's true. Getting back a refund from the government when doing your tax return is like having a 12-month CD in which the bank kindly offers you a completely stable interest rate of 0% guaranteed, with full maturity on April 15th. What a deal right?! (I write this knowing that the CD's for most is getting something near to zero anyhow... =)

Doesn't sound so good when you put it that way huh? Ok, so what can we do? I thought we were going to talk about maximizing our income tax refunds?

In view of the foregoing, the best way to maximize your income tax refund, making the most bang for your buck is to not get one at all! Yes, you read correctly, not getting a refund helps you to get the most out of your hard earned dollar. How?

Not getting a refund basically means that during the course of the year you have not overpaid the government in your income tax, which then translates to a slightly larger amount on your pay stub throughout the course of the year. Assuming you have the self-discipline to recognize the value in this increase in your monthly pay, this money can then be used throughout the course of the year to finally begin that monthly savings plan that you have sorely needed to begin. You may be able to put a little away for your children's college fund or your retirement, or even just put it into a savings account to increase your overall liquidity to plan for those unexpected emergencies that inevitably occur instead of charging it to a credit card. Even in the latter scenario you will have saved a few bucks in interest which translates to more money in your pocket rather than sitting in the wallet of Uncle Sam for the year and paying you no benefit in return.

Just think about it, and if and when you decide that you're ready to make the leap, talk to your tax preparer about how to adjust the amount of dependents you currently claim at your job to maximize your monthly income and come out with little to no refund at the end of the year.

It's your money, you should be able to decide what to do with it while you earn it.

For more info contact me at: josiahknows.com

Here is an article from the Glowan Group on Improving leadership skills and making progress in 2012:

Well, here we are in another new year and, as always, it's a good time to, review our progress, check our direction and set some meaningful goals for the year.
For those of you looking to improve your leadership skills, gain insights into areas where you can improve your performance and that of your organization and be prepared for what the new year may bring you, taking a skills inventory is a great idea.
Here are some simple steps for getting started.
Use the structure of:
Where have you been?
Where are you now?
Where do you want to go?
How are you going to get there?
By when?
Ask yourself the following questions:
1.  In terms of your management skill set, where would you gain the most from improving your performance?
2.  In terms of your leadership skill set, where would you gain the most from improving your performance?
3.  How will you measure your increased skills and outcomes?
4.  Who will be your accountability partner for this year?
5.  What resources are you going to need to accomplish your goals?  (learning programs, coaches, agreement and interactions with your manager, etc)
Once you have set specific goals for your 2012 learning plan, put them in writing and share them with your accountability partner.  Then schedule regular (at least ever other month) meetings with that person and launch into your learning program for the year.
 
Remember, your learning program cannot be separate from your regular work but rather a part of that same work.   If you wait to "find time" for your personal development, you'll never do it.  You must "make time".