Become Financially Independent

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Start From Nothing and Become Financially Independent by Developing Four Qualities
By: Brian Tracy

More than eighty percent of self-made millionaires in America began with nothing or in many cases, less than nothing. I can certainly relate to that because when I was growing up and right into my early 30s, I never had any extra money with which to start a fortune. It seemed to me that there was always enough, if not more than enough bills, to absorb every penny I earned. I was always in debt.

Be Ready For Your Opportunity
And even if a great business opportunity did come along, I wouldn't have been able to do anything with it. As I began studying financial success and self-made millionaires, I noticed that almost everyone around me was in pretty much the same boat. The idea of becoming really wealthy was a distant dream with very little possibility of coming true. You may be in the same situation, with more bills than money or assets. 

Look at the Numbers
The statistics are a little scary. Of 100 people who reach retirement age, according to insurance industry statistics, only one will be wealthy. Four out of the hundred will be financial independent; fifteen will have some savings put aside. And the other 80 will be dependent on pensions, still working or broke - this after a lifetime of well-paid work in the most affluent society in human history. Now why does this happen?

Why People Retire Poor
There are two main reasons why people retire poor. First, they never decide to retire rich. They wish and hope and pray, but they never make a firm, unequivocal decision that they're going to do it. Second, even if they do decide to retire rich, they procrastinate until it's too late. They always have some good reason for putting it off. 

Start With Desire and Decision
If you sincerely want to beat the odds, to achieve financial independence and retire wealthy, there are four critical steps that you must take, all starting with the letter D. The first step isdesire. You must want it badly enough to make an unshakable commitment and to be willing to make sacrifices. The second D is decision. You must make a decision right now to do whatever is necessary, to be willing to pay any price, go any distance, to achieve your goal. PracticeDetermination and Discipline The third D is determination, which is to keep at it until you succeed in spite of all the problems and obstacles you will experience. And the fourth D isdiscipline - the discipline to master yourself to develop the habits necessary for achieving financial independence. Those are the four Ds. Desire, Decision, Determination and Discipline. And you can measure how successful you're going to be in the future by measuring how well you're doing in each of those on a scale of one to ten.

CPF and Retirement

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CPF(Central Provident Fund) savings are for old age needs. It’s thus important to use them wisely. Whether you’re buying a home, spending on healthcare or investing, this holds true.

Is CPF sufficient for retirement? 

Some financial planning experts say that, as a rule of thumb, you need at least 70% of your last annual income to maintain your current lifestyle during retirement.

On the other hand, CPF savings are only meant for basic retirement needs. If you contribute regularly from the time you start work, by the time you retire you should have enough cash to provide a monthly retirement income of 20% to 40% of your last take-home pay, reserved Medisave for healthcare needs, and paid fully for a property that matches your income.

Thus, CPF savings alone may not be enough for retirement, though this depends largely on your retirement lifestyle needs. You’d probably have to have private savings and/or investments to supplement your CPF. And don’t forget – you’ll be better off during retirement if you use your CPF savings wisely now!

Monthly Retirement Income 

“If you contribute regularly from the time you start work, by the time you retire you should have enough cash to provide a monthly retirement income of 20% to 40% of your last take-home pay...”
“Cash” refers to the lump sum amount that you can withdraw at age 55, and it includes the CPF Minimum Sum.
Thus, if you rely only on the CPF Minimum Sum for your retirement income and use your CPF lump sum for other purposes, it’s possible that the monthly retirement income will be lower than 20% to 40% of your last take-home pay.
Longevity risk
This refers to the “risk” that you'll live longer than your income can support you.
In Singapore, female life expectancy at all ages is higher than that of males. Based on 1995 data, a woman at age 55 can expect to live nearly 28 years more to 83 years old, while a man can live about 24 years more to 79 years old.
It’s useful to keep these information in mind as you’re making financial plans for your retirement years.

Uses of CPF

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How can CPF be used?

1. Property
The CPF Ordinary account is approved for the purchase of residential (only for 80% of the value) and commercial properties (only for 70% of the value). Residential real estate includes freehold and leasehold private property (at least 60 years lease remaining) located in Singapore.

You can use the entire funds in the Ordinary account to cover the initial down payment for HDB. For private residential property, you have to pay your initial downpayment in cash. You can use your future CPF contributions to finance installment payments for these purchases. If your monthly contribution does not meet the mortgage instalment in full, you can use funds from the Special account but capped at 6% of your November 1998 salary. However, if in 1999 you did not accept this offer, you will not be able to use the special account.

If you sell your property, the proceeds from the sale of your property must be used to first repay the principal amount withdrawn plus accrued interest to your CPF account. Any remaining balance is credited to you.

How to get the best deal?
Price: Apart from location, price is of course the most important attribute of the property. Check the transaction prices for similar property transaction in the area to make sure you are not overpaying for your property.
Mortgage: The next most important factor is your mortgage. Check with various banks and keep an eye out for any promotions by the financial institutions.

2. Insurance
In addition to the Medishield/Medishield Plus insurance schemes, you can use CPF savings in the Ordinary account to finance the purchase of endowment insurance policies from private insurance companies under the Private Medical Insurance Scheme (PMIS). The full ordinary account balance can be invested in single premium policies.
Withdrawal of funds from CPF is quick once approved, and you can do it via the insurance company.

How to get the best deal?
When you are buying insurance, you should look for the lowest premium with the highest return. To do this, check with a few insurance companies and ask for the range of their products, noting the calculation of premiums and the potential returns.

Tax implications
Proceeds from the maturity of the insurance policies and claims are not taxable. To qualify for tax relief for the annual premium payment, your total annual premium plus CPF contributions cannot exceed S$5,000 a year.

3. Investments
To help you get better returns on your CPF savings, the government allows you to invest your CPF savings through the CPF Investment Scheme. The amount available for you to invest is calculated based on the balance at the end of every month. Each revision includes any new contributions received in your CPF account. In order to invest the funds from your Ordinary Account, you would require a CPF Investment Account. Investing funds from your Special Account, on the other hand, would not require a Investment Account. Withdrawl of funds for purchase or credit of proceeds from the sale of these investments can be done through financial institutions offering the various financial products.

CPF Withdrawal at Retirement Age

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When you hit age 55, you can choose to withdraw your CPF savings in a lump sum, after setting aside the Minimum Sum into your Retirement Account. You can also withdraw your CPF if you leave Singapore and West Malaysia permanently, or if you become permanently incapacitated.
How much you can withdraw will depend on your CPF balance. The rest, after accounting for the Minimum Sum, can either be withdrawn six months later (if you are no longer working) or every three years thereafter.
If you continue to work after age 55, which would be the case for most, you must still contribute to CPF at a lower rate.
If you have not set aside the full Minimum Sum required by age 55, your monthly payments will be reduced proportionally, subject to a minimum for subsistence livingcurrently about $280-$300 a month.
There are, of course, exceptions to the rule.

For example:

- People in an exempted occupation who are required to retire earlier due to the nature of their job, may receive their monthly payments earlier from age 60; but not so for employees who have resigned or whose services have been terminated.

- Pensioners, depending on their monthly pension amount, may not need to set aside the Minimum Sum.

- Married couples may, as a concession, jointly set aside 1.5 times the Minimum Sum (in this case, $90,000: up to $60,000 in property and $30,000 in cash), provided they nominate each other as the beneficiary for the balance of their Minimum Sums.

Supplementary Retirement Scheme (SRS)

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The Supplementary Retirement Scheme (SRS) was set up in April 2001 as part of the Singapore government's multi-pronged strategy to address the financial needs of a greying population.

The SRS complements the Central Provident Fund (CPF). Unlike the CPF Investment Scheme, participation in the SRS is voluntary. Participants can contribute a varying amount to SRS (subject to a cap) at their own discretion. The contributions may be used to purchase approved investment instruments.
One advantage of SRS is that it offers attractive tax benefits. Contributions to SRS are eligible for tax relief, investment returns are accumulated tax free (with the exception of dividends), and only 50% of the withdrawals from SRS are taxable at retirement.

To Open SRS Account
You can open an SRS account at any of the 3 SRS operators listed below:

 Development Bank of Singapore (DBS) Ltd
 Overseas-Chinese Banking Corporation (OCBC) Ltd
 United Overseas Bank (UOB) Ltd

How does it work?
Making contributions
All SRS contributions are to be made in cash at any time before 31st December each year.
To make a contribution, an SRS account must first be opened.

The amount of contribution is subject to a cap. The SRS contribution cap is no longer based on the individual’s actual earned income but on a common absolute cap of $85,000 i.e. 17 months of the prevailing CPF salary ceiling of $5,000. This amount is 15% of $85,000 or $12,750 for Singaporeans and Permanent Residents, and 35% of $85,000 or $29,750 for foreigners.

Making withdrawals from your SRS Account
Withdrawals can be made in any amounts, at any time. However, if the withdrawal is made before the statutory retirement age, 100% of the sum withdrawn will be subjected to the individual's marginal tax rate. On top of that, a 5% penalty will be imposed.
On the other hand, only 50% of the withdrawals will be taxed if withdrawals are made under the following conditions:

 on or after the statutory retirement age prevailing at the time of first contribution
 medical grounds

Withdrawals made upon retirement or on medical grounds can be spread over a maximum of 10 years for optimal tax management.

Setting Retirement Goals

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Effective retirement planning begins with identifying and prioritising your retirement goals. Whether it is to generate enugh income for the desired lifestyle, do lots of travelling, buy a retirement home in another part of the world or even to start a second career or a business, goals identified must be realistic and attainable. Needless to say, the ability to meet basic expenses must be the first and foremost consideration. 

To determine these goals, it is important to first determine the age at which they intend to retire and the financial position they want to be at that time. Whatever those goals might be, it is important to commit them to writing and when those goals are intended to be achieved. This should lead to determining the amount of money one will need in order to retire.
 Deciding when you want to retire is important to your retirement plans as this factor will permit you to know how much time you have to save for retirement.

Many retire at age 55, when CPF savings are allowed to be withdrawn. However, the average life expectancy for Singaporean men is currently 72 and for women 75. With continuing improvement in medical science, the life expectancy will probably be longer. This means that many will need retirement income stretching out to 20 years and more. It is also important to take note that average expectancy is a statistical figure. It is likely that you will live beyond the average and what then? A margin of comfort should be built into your calculations as the worst that can happen is to run out of financial resources.

Another very important factor that one will have to account for will be your choice of lifestyle and the career that you are pursuing now. The quality of your retirement lifestyle will depend on the projected income and expenditure. This in turn, will depend on your ability to accrue income towards retirement in order to have some measure of financial security during your golden years. The gratification from short-term low priority financial objectives might seem more important but it is wise to guard the habit of devoting a portion of earnings towards your retirement planning program.

Retirement Planning Process

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Retirement planning is a critical component of financial planning. As in Financial Planning, the first step is to set retirement goals for yourself. Take some time to consider what you want when you have stopped working and the standard of living you want to have. These goals will set the direction of your plan. However, as with all goals, they may change over time as situations and conditions change. 

The next step is to establish the size of the retirement fund you want, that is how mcuh money you need in order to retire the way you would like? This is a difficult operation because of the many changes that will occur throughout the plan. 

The final step is to formulate strategies to assist you in realising your goals. This usually involves having some kind of savings plan and identifying the types of investing program. Your tax and investment planning is closely related to this phase of the retirement program.
Investments and investment planning will be the vehicles through which you will build your retirement funds. At the same time, making sure that your tax burden is reduced to the minimum will allow you to maximise your retirement funds.

Factors To Consider When Determining Goals

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Financial Goals involve money which can be an emotional issue for families. It is important that one recognises that whatever he decides has an impact on the lives of his loved ones. 

Money is a limited resource for many and deciding how to allocate such monetary resources can cause conflict between spouses, children and even parents. Conflicts can easily arise when two persons of different personality types are involved in a monetary relationship. For example, one spouse may be meticulous with money while the other spouse may be a spendthrift. It is thus important to discuss decisions with those who will be affected by the financial decisions. They will feel that they have been involved in the planning process and are more motivated to see to the success of the plan. 
Even after initial discussion, it is important to have ongoing discussions with family members in order to have them personally responsible for the success of the plan. 

Early involvement of young children in the family with financial planning also helps to inculcate good values where it comes to money matters. This aspect is often neglected by many parents today but is increasingly crucial in a society where 'brand consciousness' is taking precedence over the need to be financially responsible.

Common Retirement Planning Mistakes

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Planning for your retirement is essential if you want to live comfortably in your golden years. One does not need $4 or $5 million for simple retirement even though it would be nice to have that amount. If you set a realistic goal and plan carefully, it makes it possible to achieve your objective. Some of the biggest mistakes that one tends to make are: 

1. Failure to plan. Many of us are so focused on the economic challenges of today that we spare little time to think about retirement. Job security, education costs, insurance bills are all so pressing that setting money aside for retirement seems alomost impossible. Many plan how to spend their weekends but fail to get their act together for this serious phase of their lives - planning their finances for retirement. Some will simply just let fate take its course and decide if they will ever be able to retire. This denial approach has a big flaw in that there will come a time when you simply cannot work anymore due to physical limitations or lack of available jobs.Though one's goals will be constantly evolving, developing a framework which will fulfil your objectives is essential.

2. Relying on CPF solely is not a wise strategy. Studies have shown that many Singaporeans may not have enough CPF savings to fund their retirement. This is because the bulk of our contribution goes to financing acquisition of properties.

3. Hesitating to start a savings program. Time can be both your friend or your enemy. If you start saving early for retirement, the more time you have for your money to work for you. Compounding is the eighth wonder of the world so make full use of it. Start a monthly savings program now.

4. Diversification of your retirement assets is essential to the safety and long term accumulation of wealth. Tailor your portfolio to achieve your financial needs. 

5. Do not ignore the inflation element. Everything costs more over time. Inflation erodes your buying power and is a deadly foe especially for those on fixed incomes like retirees. To continue to enjoy a certain standard of living, the inflation factor must be considered. Loss of purchasing power is hard to deal with even at the working life stage. It becomes more difficult when one is older and not able to work. Thus it is important to factor in inflation when calculating the amount of income needed at retirement.

Your Retirement Nest Egg

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Planning for retirement would be much simpler if we lived in an unchanging world. But this is not the case. Our personal budget and the economy are contstantly changing, making forecasting our retirement needs an arduous task. Nevertheless, one has to plan for retirement and estimating our needs is a necessary component of the process.

There are basically two ways that you can go about forecasting your retirement needs. One is to plan over a series of time frames in the short run. This can be done by stating your retirement income objectives as a percentage of your present earnings. For example, your desired retirement income may be 80 percent of your final takehome pay. Having determined that, you can then set aside the amount needed to reach this goal. It is likely that you will have to revise and update your plan every three to five years.

The other approach is to take a long-term view. In this case, you have to formulate the level of income you would like to receive after you retire as well as the amount of funds you must accumulate to have that desired amount. This approach goes 20 or 30 years into the future to determine how much savings and investment you must do today to achieve your retirement goals. Of course, if expectations and conditions change, you may have to alter these long-term goals and strategies.

Factors Affecting Your Retirement Goals

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To start on retirement planning, the following considerations will need to be addressed:
  • setting retirement goals
  • determining the size of your retirement nest egg
  • how to fund the shortfall
  • addressing insurance and other healthcare issues
Setting retirement goals is important because they give a general direction to retirement planning. The type of lifestyle that you want, for example, the type of travelling to embark on or whether to buy a retirement home are all examples of retirement goals that you may want to achieve. Once that has been identified, the next tasks is to determine how much resource will be required to live out the kind of retirement lifestyle that you want. Next, a savings and investment program will have to be formulated. This involves a systematic savings scheme and designing an investment program that will most suitably meet your retirement requirements. 

There are all sorts of retirement goals - doing more fishing, playing more golf, more travelling, or pursuing some hobby are some examples. Sufficient funds must be available for you to realise these goals. Needless to say, many factors affect your ability to accumulate the needed funds. External factors like changes in the economic environment and unexpected illnesses are not within your control.
 The best you can do is to develop strategies to lessen the negative effects they may have, and that is what planning is mostly about.

Among the factors you have a choice over, the age at which you want to stop working and the kind of lifestyle you want prior to that are two important ones that will have a strong impact on your retirement goals.

Retirement Planning

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Everybody will get old one day. Have you seen some old people living by the roadside, sleeping on one street to another everyday? Have you seen some old people collecting metal cans and paper box from rubbish heap just to make a living? However, there are some old people who are able to retire comfortably, living happily with their children. These are the one of life we want. Why are there some old people who can retire comfortably whereas some need to do dirty jobs or even no place to stay in?
Do you want to see yourself getting old one day, having to pick up ‘rubbish’ to sustain your living? Do you want to live in dignity, live happily with your children and grandchildren, retire comfortably, have no worries about your financial circumstances? Do you want to grow old one day, have no money in your pocket, cannot do what you want, not even money to buy newspaper? Instead you collect old newspaper to earn a living? If you do not want to live this kind of life, then you should start planning now. Start planning for your retirement now. Start thinking of what kind of life style you want when you reach retirement. How much would that cost you. How long do you think you are going to live? The average life span for a female is 79 and that of a male is 74. However, nowadays people are living a longer life. So it is always safer if you calculate a longer life span. When do you want to retire? This means that at what age should you wish to stop working? Multiply the number of years that you expect to live from the day you stop working with the daily living expenses that you assume you will need, this will give you the approximate amount of money you need for retirement. This is just a simple calculation, never take into account inflation rate.
There are various kinds of retirement lifestyle. Some people would want to retire luxuriously. These people would enjoy their life by go round touring different places, enjoying different food, experiencing their life with different people around them. Some people would want to retire having a simple lifestyle. These people just spend their day with not much expenses. Just 3 meals a day, spending time at home, watching TV, or spend time with friends to play some games and so on. They will need lesser retirement income obviously. So what kind of lifestyle you want for retirement determine the retirement income you will need.
Other necessary expenses that you need to consider when calculating your retirement plans is medical funds. When you reach old age, illnesses are more common. Your immunity is not as good as when you are young. You will have more ailments and sickness. You need to consult doctors. All these need money.
Money don’t come in your pocket instantly. You need to save. You need to accumulate your savings. You need to build your wealth by savings, investing and other means you are capable of doing. You can even build a business online that supplements your retirement plans. As soon as you start working, you should start thinking of your retirement plans. If you do that, then life would be easier in the future for you.

Besides the issue of retirement income, 
a very strong focus on creating and sustaining a positive mind set and healthy attitudes for aging and retirement is not to be overlooked.

Defining Your Financial Goals

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The objective of financial planning begins with identifying your personal requirements and this process will help you to establish realistic financial goals. Every individual has different objectives in life and even the same individual will have different financial prereogatives at different stages of his life.
When we are young, our parents provided much of the financial resources to put us through school. It is later when we are young adults that we start to make some of our own money. Financial independence will be an important financial objective at this stage. Even when one becomes more stable with his career and therefore his income stream, he will face the financial challenges of providing for his family. By the time one reaches his forties, he will most likely have peaked in his earning capabilities and financial considerations at this stage will be to make sure there are enough economic resources for retirement needs.

It is important that such goals be stated in monetary terms because utility, which measures the amount of satisfaction that one receives from each dollar spent, is very important to the process of financial planning. It is the is satisfaction rather than the cost that causes an individual to choose an item over anther. It is also important that goals be as speicfic as possible. An ambiguous goal like wanting to start a savings program is too general and often leads to frustration.

One should clearly state what one wants to do and why. A specific goal would be to put aside, say 15 percent of one's monthly income for the next two years to save enough for a down payment for a new car.

Naturally, goals must be realistic as well. This is important since goals form the foundation of a financial plan. If the goals are set too high, they are mere castles in the air and not realising one's goals is likely to cause one to abandon the entire plan. On the other hand, if the goals are set too low, one may not be able to accumulate enough resouces to attain one's material objectives.

Finally, it is important that goals are ranked in terms of their respective priority and a definite target time frame is set to achieve them. It is importan to note that our priorities change and some goals become more important as we progress in life. Thus one will need to have a personal set of goals that is meaningful at each stage in life.

What A Successful Financial Plan Can Do For You?

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Financial planning helps you to evaluate your current financial position, estimate the cost of future financial goals and establish strategies to meet them.

Without a suitable plan, you may run certain risks such as having insufficient funds to meet big future expenses like education costs, down payment for a home or meetin gretirement expenses.

A successful financial plan will help you to :

  • Beat inflation - for money to grow in terms of purchasing power, it has to grow faster than national inflation.
  • Minimise taxes - a dollar less to the taxman means a dollar more in your pocket. Taxes can be minimised by fully utilising your deductions and reliefs and other similar strategies.
  • Manage the unexpected - an emergency fund on top of adequate health and life insurance is essential as a hedge against unexpected events like illnesses or unexpected expenses.
  • Meet your goals - paying for things like your children's university expenses, special hobbies and travel is a result of proper planning.
  • Meet your retirement expenses - financial planning enables you to maintain your lifestyle during your retirement. Starting a savings program as a supplement to your CPF savings might be necessary to achieve this.

Financial Planning Process

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Six Steps Of Personal Financial Planning

Six plus six. There are six elements or parts to personal financial management. There are also six steps to follow to analyze your personal financial circumstances, determine goals and actions to achieve them, and then do it successfully. All six elements are essential to arrive at financial security, and all six steps of financial planning are necessary to arrive at the specific financial goals and objectives that we choose. They are:

Step 1: Where Are You Now? Where are you now as to net worth, income and outgo, and all of the six elements of personal financial management?

Step 2: Where would you like to be---generally? What are your financial needs, the general objectives that you want to achieve for yourself and your family?

Step 3: Where would you like to be---specifically? Now you transform those general objectives into specific goals with dollar amounts and dates tied to them.

Step 4: How can you get there? Then choose an action plan. Brainstorm possible plans of action that could make it possible to meet those specific goals. Then choose the action plan with the highest chance of success, that requires an amount of commitment and effort that you can handle, and with the least damaging consequences if you don't succeed.

Step 5: Carry out your action plan. You have chosen the best plan for you. Now is the time to do it. Don't wait; get started now.

Step 6: How are you doing? Nothing ever works perfectly. Times, seasons and circumstances change. Review your progress and make adjustments and improvements. If something is seriously wrong, go back through the six steps. If the action plan is making the progress you want, then keep it going. Re-do Step 1 each year to chart your progress---particularly the net worth statement.

The Need for Financial Planning

Personal financial planning puts you in control of your life.

Financial security is the confident feeling that you can meet your financial needs present and future.

Why Financial Planning?

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Throughout our lifetime, many actions we take are likely to have a significant impact on our financial position. Our career, the type of accomodation or care we buy, how much of our money to invest and where are just a few examples. Most of the time, we hope that these choices will improve our standard of living and quality of life.
Although our quality of life may depend on factors like the environment, traffic conditions, availablilty of good health care and education, our level of wealth is often viewed as the primary determinant. Having certain material possessions - such as a home with nice furnishings and a big car - or being able to enjoy a holiday in another country is often associated with the good life and a high standard of living. But in a world where change is the only constant, raising one's stnadard of living is becoming more and more difficult. There are many unforeseeable events that will have a strong influence on our lives. Building up a certain amount of defence against these calamities is therefore absolutely crucial. What our parents took for granted - owning a home and having substantial savings for retirement is no longer an easy feat. It may require both the husband and wife to work, which will have a profound impact on the quality of life. 

This makes careful planning of our finances even more crucial in attaining our goals. Through planning, it also enable us to get the highest satisfaction from our money.. Every dollar can be stretched to its fullest purchasing potential. It wold also allow us to accumulate wealth in the most efficient manner. In addition, planning allows us to have a sense of security that will substantially increase our state of wellbeing. Essentially, planning provides a better idea of what we should do with our money in order to reach our financial goals.

Personal Financial Planning

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Personal Financial Planning is all about planning your money — how you manage your money, how you spend your money, how you grow your money, how you maximise the use of your money to achieve your goals in life. The purpose of financial planning is to achieve financial freedom for some people or to have a early retirement.

The process of personal financial planning involves six steps. They are defining your financial goals, developing strategies and plans to achieve your goals, implementing plans and strategies, monitoring the progress, evaluating the results and ultimately revising the plan if necessary.

It is takes careful planning and deep consideration to do a proper financial planning. Knowing what is your financial goals, you have to work out how you are going to achieve that in a period of time according to your desire and income. For anyone to have a proper financial planning, the basic thing to do first is to have a balance sheet, showing clearly the person’s income and expenditure. It is important as this is the only source where the person can analyse his financial status — for example, whether he/she has excess money to get some investments products, insurance, savings, buy house or properties and so on.

Financial planning is not fixed. Every year or so, a person can review their plans. For example, if a person wants to buy a car, he needs to think of whether he has excess savings for car expenses such as car insurance, car loans, car maintenance, car parks fees, petrol cost and so on. Buying a car is not a one time payment. The person needs to think of the subsequent expenses too.

Other consideration of financial planning is investment products such as insurance, unit trusts, stocks and shares and so on. In addition, tax planning, estate planning should be taken into consideration too. There are just too many things about personal financial planning. To read about more information about money, Nations Finance has various articles for your reference. There are articles on credit cards, loans, mortgages, insurance and banking. I like the banking articles. These are How Safe Is Your Internet Bank Account? and 
Internet Bank Accounts – The Benefits and Drawbacks. Nations Finance is your personal financial planning companion!

Who Needs Financial Planning?

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Financial planning is about managing your personal financial situation, thus everyone needs at least basic financial planning. 

A single person may want to establish a budget and think about how to start a savings program. All parents love their children and want the best for them. A young couple expecting their first child will need to re-evaluate their insurance coverage and start an education fund.

An up-and-coming executive with a higher income will have his fair share of financial problems of a different kind. He has to contend with an increased tax burden, which he will want to manage. Where and how much should he invest? Property, unit truts or simply parking the money in fixed deposit? He will need some serious planning.

For an older couple, retirement is probably the main thing on their minds. How much should they save each month to fund their 'golden years'? Will their CPF be enough? Some in -depth planning is required as it would be disastrous if they were to run out of money.

A grandfather will need to worry about how to distribute his considerable estate effectively. How can he minimise estate duty to the government? How can he ensure that he has sufficient income to live for the next 15 to 20 years?

From these examples, we can see that everyone needs some form of financial planning.

Balance Transfer

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When it comes to money, you need to be prudent. Interest rates are important in any investment tools. Interest rates can increase your capital fast, interest rates also can incur a lot of lost to your money. 

Transfering your money from one place to another, trying to reduce your interest payments — that is 
Balance Transfer. Why balance transfer? You own the banks money, you have lots of credit cards payments arrears, all debts accumulating. Every month you are paying the minimum payments when the bill comes. When you never pay up, the bank calls you. 

One credit card is not cleared, another card is used again. Soon all the credit cards limit is reached and you cannot charge to all the cards. However, you still need to pay for what you own to the credit cards companies. You have no money to pay these cards, but you still need to pay interests. Balance transfer helps you to transfer these money to another source so that you end up paying lesser interest rates. Different companies offer different interest rates. 

Owing money is no peace at all. Every month you need to remember to pay back interests amounts to the banks. If you never pay up, the banks call you, remind you and send you letter too. Sometimes the bank wants to cancel your account, ask you to pay them by a due date. This is no joke to these people who owe the bank money. It is all stress for them. If they cannot pay up, they will be declared bankrupt. So their ‘hobbies’ become a habit of searching for low interest rates balance transfer. On top of that, these people need to constantly look for ways to ‘win’ the credit cards company — they want to have their money to make more money, returns higher than what the credit cards are charging, the 24%! They always want to earn the fastest money and ‘big’ money so that they can repay the credit cards money.

In a way, balance transfer is a good way to save money, it can saves a lot of money indeed! In addition, many banks are competing against one another. Some banks even give you free gifts when you sign up for their balance transfer facility! So in the end, these people are saving money and getting free gifts! Just recently, my husband applies for a balance transfer. After two weeks, he received a letter, asking him to go down to collect his free MP3 player! 

Credit Card Saves

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Credit Card is your good pal which you should not miss out when go shopping.

Credit cards have many advantages. One of the obvious advantages of credit card is cashless transactions. This is obviously very useful when shopping and going dining or just going outdoors. You do not need to think of bringing money with you. You do not need to worry about dropping your cash while outing such as playing sports like tennis, badminton and so on. Even better is when you go jogging. You just need to carry one card in your pocket only!

I was shopping the other day with my children. We went to a shoe shop, Bata. My children need to buy school shoes and I need to get my walking shoes as well. All the shoes are fixed price. There were no discount at the store. However, there is a current discounts going on for special credit card holders -- The salesgirl told me that Standard Chartered Card holder can get a 15% discounts if minimum amount of $50 was spent. I thought it was a very good deal! 

Our items add up to be more than $50. I have no credit card. Luckily my husband has the credit card and we managed to saves. We bought three pairs of shoes and the total cost of the items was about $55. Upon presenting the Standard Chartered Credit Card, we get 15% of the total amount, which was $8.25 off. In the end &46.75 was charged to the credit card. Imagine if we do not have the credit card and we need to pay a amount of $55. But with the credit card, we saves $8.25, which for this amount of money, the children can enjoy two cups of Orange Julius!

Besides cashless transaction and getting discounts, credit card also give you the convenience of cash advance and balance transfer facility. Getting the right credit card is important. Not many cards have special promotion or discounts. Different cards have different benefits and rates too. Check out for credit card offers at, a UK comparison site for credt cards. They provide up to date information and comparisons of interest rates, rewards, cashbacks etc. 

Credit cards bring you a lot of convenience and can help you to save as you shop. The more you charge with your credit cards, the more you earn rewards and cashbacks. Nowadays, you can even pay your bills by charging to your credit cards too. However, charging your cards, earning loyalty rewards and cashbacks can save you lots of money only if you are using it wisely. Do not misuse your cards and overspend, otherwise the credit card is going to do more harm than good!

Types of Credit Cards

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Things cheap and dear can be bought these days using credit. With the credit card, the buzzword is “charge it” and you can have nearly everything that your heart desires.
Consumer credit can aid you in achieving your financial goals or it can ruin you financially. The choice is yours. Though credit cards are a convenient way to pay, danger lurks everywhere. Credit cards create a “buy now, pay later” mentality that can lead to overspending and worse, even bankruptcy. Credit cards come in various forms and are issued by banks, finance companies, retail establishments and so on. These are some types of credit cards:

1. Bank Credit Cards
When used widely, credit cards can be an interest-free source of credit, provided bills are paid on time. They offer convenience and flexibility since they are widely accepted at many retail establishments. They are a source of emergency funds since it is possible to obtain cash advances at affiliated banks.
Not all Visa and MasterCard credit cards are the same. The difference in interest rates, in how they are computed and in annual fees can be substantial, from one bank to another.
2. Retail Credit cards
Retail credit cards on the other hand are issued by a variety of businesses including department stores, oil companies and car rental companies. A person who opens a retail charge account can buy goods from that place of business on credit. The cards charge low or no annual fee and many are easy to obtain since they are used as a marketing tool to increase business. Interest is charged on the unpaid balance.
3. Travel and entertainment cards
“Don’t leave home without it”, the American Express advertisement has remained synonymous with this travel and entertainment card in the minds of many people. Travel and entertainment cards or charge cards such as American Express and Diners Club are widely accepted in establishments around the world. Besides the prestige of having these cards, the cardholder has access to cash advance facilities around the world and automatic travel insurance coverage when the fare is charged to the credit card.
4. Debit Cards
Debit cards have been around for some time, especially in America where many banks issue Visa or MasterCard as debit cards. Debit cards look like credit cards, however, instead of sending monthly bills, the bank transfer payments directly from the cardholder’s bank account as soon as it receives notice of charge.
5. Other CardsAt Credit Card UK, your guide to credit cards, you can compare credit cards and apply credit cards online. It is your gateway to credit cards! You can find other types of cards such as Platinum Credit Cards, Balance Transfer Credit Cards, Charity Credit Cards, Loyalty Credit Cards, and so many more. Visit Credit Card Uk to know more types of credit cards available.

As there are a number of factors that affect the billing of credit cards, it pays for the cardholder to be aware of these factors to use them to his advantage. As the billing cycle of the credit card is readily known, the cardholder can extend the length of his credit by using the card on days that will give the longest use of the money without interest. By buying just after the billing date and paying in full just before the due date, the cardholder could potentially obtain up to eight weeks of free credit!
We know that many retail establishments pay charges to credit card companies for the privilege of serving customers who wish to use their credit cards to shop. These additional charges may be included in the retail price. Unfortunately, the person who pays by cash still pays this extra charge. It therefore pays to ask the retail establishment if they would be given a discount if the purchase is made by cash instead of credit card.

Uses Of Credit Cards

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Every time a person buys something, he has a choice of whether to pay for it now or to charge it on his credit card.

Credit Cards or plastic money come in different forms and are issued by banks, finance companies, oil companies, retail establishments, and travel and entertainment companies such as American Express and Diners Club.

Credit cards have grown in popularity since Bankcard was introduced in 1974. Many people have since then spent more than they can earn. A lot of people cannot repay their credit card debts. Living within your means is a constant battle--credit cards make it much harder.

The main credit cards are Bankcard, Mastercard, Debit card and Visa card. There are also cards like Diners Club and American Express.

Credit cards are convenient to use. Its purpose is to save us from carrying large amounts of cash around since they are accepted almost everywhere. Credit cards also gives you money in time of unexpected need(eg. cash advance, when you are on overseas trip).

You can obtain cash advances on most credit cards and pay around 18% to 21% on the amount you owe from the date of the advance. This can be a most useful and economical way to borrow money for short periods because there are no extra charges such as application fees or penalties for early repayment.

One of the best uses for credit cards is when travelling or holidaying. They save the need to carry large sums of cash and it is a comfortin gfeeling to know that if an unexpected emergency arises, such as a car breakdown, there is money available to pay.

Typical terms of credit cards include the following:

* small minimum monthly payments
* small or zero annual fees
* no interest on new charges that are paid on time
* high annualised interest rates

Not all Visa and Mastercard credit cards are the same. The interest rates and annual fees charged by the different cards vary, and does the amount of free credit you are allowed from the date you purchase something.

When used wisely, credit cards can be an interest-free source of credit, provided bills are paid on time. They offer convenience and flexibility since they are widely accepted at many retail establishments. They are a souce of emergency funds since it is possible to obtain cash advances at affiliated banks.

The ease of charging an item is tempting and anyone can rack up big bills without blinking an eye. Responsible use allows one to finance a purchase when cash is temporarily unavailable. But effective use of credit cards means paying off the debt each month. Otherwise, one will be paying interest, in effect adding a significant amount to the price of each item he buys. If one has built up credit card debts, one should establish goals to pay them off as fast as possible.

National Payday provides payday loans and cash advances both quickly and securely at competitive rates. is your source for free payday loans & cash advance loans for your needs!

Credit Card Application

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Recently an agency called me regarding credit card application. They told me that I can have a free credit card, all I have to do is to give them my photocopy of my NRIC (Identification Card). I told them that I am not working, but the marketer told me that it was alright. I was puzzled. I did not believe her. Later she told me that it is special promotion from one of the bank, especially for women. She asked me to try since I do not need to pay for anything. I agreed and she sent the courier service to my house to collect my NRIC and I had to sign the application form.
The special features of the card includes 0% balance transfers for the first six months and for two years the card will be free. However, a few days later I received the marketer call again. She told me that my card application is declined. I had already expected that. I asked for my photocopy of NRIC to be returned to be. They did not return my original copy of NRIC.
It is so stupid of me to trust what the marketer said. Though I know very well that I cannot apply for any credit card (since I am not working), I still never give up the chance to apply for any credit card. Having credit cards 0% can save a lot of money when used correctly. It is very convenient to have credit cards too. However, this incidence has taught me not to be greedy for any credit card anymore. I do not know if the marketer will misuse my original photocopy of my NRIC. I feel so bad and unsecure after that.