Best Investment Portfolio For 2010 & Beyond

Posted on March 27, 2023 by schatzi

The best investment portfolio for 2010 and beyond will hold stocks, bonds, and money market securities. Finding the best investment in each area is not possible or necessary. Coming up with YOUR best investment mix is. Let’s review your investment options.

I’ll keep it simple. If you invest at all you have an investment portfolio, which is simply a list of the investments you own. For example, if you have a 401k plan you probably picked a few different investment options from a list. Most of your choices were likely mutual funds. Even if you knew not what you were doing, you put together your own investment mix, your own portfolio. The question is whether or not this is the best investment mix for you.

If you are like 90% of the investors I’ve known and worked with as a financial planner, you don’t really understand this stuff. That’s why you should be invested in stock funds, bond funds and money market funds vs. individual securities like stocks and bonds. When you own funds professional money managers pick the stocks and bonds etc. for you and a pool of other investors. But you need to pick the appropriate mix of funds.

So, let’s take a look at the securities or funds you might own or be considering, and see if changes might be in order. I say “might own” because most people are not sure what they really hold in their investment portfolio. Sound familiar? Let’s start with your safe investments like bank CDs and money market securities. If you have cash invested in a money market fund, you have money market securities in your portfolio. The bad news is that you are earning very little in your safe investments. The good news is that you have a high degree of safety. Don’t keep all of your money here, but don’t bail out just because interest rates are low, either.

If you are risk adverse don’t be afraid to have 50% (or more if you are retired and older) of your investment mix safely invested. Sooner or later interest rates will go up… which brings us to the next area of investment options you might own. Bonds and bond funds (also called income funds) pay more interest, and billions of dollars flowed into bond funds in 2009 from every-day investors chasing higher interest rates. Check and see if any of your mutual funds fall into this category.

Income funds or bond funds probably treated you OK over the years, but this will change in a hurry when interest rates go up. Interest rates were at highs in the early 1980’s. They were at historical lows in 2009. When rates go up money market funds should be good investments and pay more interest in the form of dividends. Bond funds or income funds will lose money. That’s not a theory. That’s the way bonds work. If bonds or bond funds are a large part of your investment mix, or you are considering long-term bond funds, think twice. The risk is significant. Your best investment here is short-term and intermediate-term quality bond funds.

Now let’s look at the third category of investments you probably own or should own… stocks, commonly in the form of equity funds. These are the investment options that have likely caused you heartburn and acid indigestion over the past several years. There’s more risk here, but greater profit potential as well. The best investment mix for most investors: about 50% in stocks, preferably spread across a VARIETY of equity funds. Conservative folks might want to cut this to 25% or even less, but all investors should be familiar with the variety of equity funds that are available to them.

First, you need a GENERAL DIVERSIFIED domestic (U.S.) equity fund that basically tracks the U.S. stock market’s performance. Then, add a diversified international fund that invests in a broad range of foreign equities. You now have a leg up on most investors who miss opportunity by not investing abroad. You may want to add a small-cap or mid-cap fund that invests in smaller companies, because these funds can outperform in some market environments. Finally, consider non-diversified equity funds that specialize in stock sectors like real estate, natural resources, basic materials and precious metals for a smaller portion of your allocation to stocks.

The best investment portfolio going forward will contain stocks, bonds, and money market securities; but you will need to give your investment mix the attention it deserves. Hold some safe investments, avoid long-term bonds, and diversify your stock holdings. Uncertainty and risk in the investment markets is likely to remain high. When in doubt diversify across the three investment areas and within each of them.

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How to Get Cheaper Life Insurance

Posted on March 26, 2023 by schatzi

Applying for and buying the life insurance policy is just like buying any other thing. Many insurance companies have come up with different types of insurance policies. However, it only adds to woes of people, who get even more confused as how to get a life policy, what policy to choose, and so on. If people follow certain tips, they can locate an ideal plan that is perfectly suited to their needs.

Before applying for life insurance policies, people need to obtain information about the different types of plans and options available. There are four types of insurance policies. These include term life insurance plan, permanent life insurance plan, whole life insurance plan and universal life insurance plan.

People need to understand the benefits and features of the life insurance plans. Apart from this, insurance buyers need to talk with their friends and relatives who have purchased such plans recently. Next, people may log on to Internet and obtain free life quotes from comparison web sites.

Buyers just need to obtain an online questionnaire form, choose the type of desired life insurance policy, and fill the details in it. After filling the questionnaire, click submit tab. And, within few minutes or even seconds your results will appear.

It provides comparison charts of various top insurers. People need to compare the quotes of different insurance companies and select the one that offers coverage at affordable premiums and rates.

Process of Applying For Life Insurance:

After selecting the desired quote, individuals can either approach the insurance agent or apply for the policy online. If people wish to apply for life insurance, they need to approach the local insurance agent. The insurance agent then hands over the insurance form to them. Insurance buyers need to fill the form and attach certain documents along with it.

It may include photocopies, address proof, income proof, bank statements, job offer letter, credit report, date of birth proof, health report, and so on. People need to fill in accurate information, because insurance companies verify these documents. After verifying the documents, insurance companies offer life insurance policies to the insurance buyers.

This is how individuals may get life insurance policies by approaching the local agent. If insurance buyers wish to save time, they may apply for the policy online. For that purpose, they just need to fill the online application form and submit it.

The company’s web site then forwards the application form to the particular insurance company. That company then sends its agent to the buyer’s residence or house. The agent gives the application form to the individual, which he or she needs to fill in. The rest of the process is same as discussed above.

Conclusion:

When filling in the application form, people need to see that they are furnishing the right and truthful information only. If people furnish wrong information or submit manipulated documents, the life insurer does not have to provide them with life insurance coverage.

Moreover, it will become difficult for people to obtain life insurance policies from other insurance companies too. Therefore, see to it that, the details entered in the application form are true. You can get started finding out much different plans may cost with the help of the resources below.

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What Is Franchise Financing?

Posted on March 25, 2023 by schatzi

Franchise financing is the process where a specialist franchise loan origination agency is set-up to address the exact needs of a franchise industry. Most people have recently realized that a franchise is the way to get into business and after finding the best franchise opportunity, some questions arise which are; where to get the working capital, money for financing the franchise and the royalty fees.

It is highly recommended for one to determine his or her net worth, by using a personal balance sheet for listing their assets and liabilities, since most franchise financing lenders will look at various things before financing a franchise business. Mainly they will be interested to know how long you have been working in a certain job or the time you have lived in that location and the records about what you started. Ideally, most lenders look at your income and how you live within that range, since if one cannot manage personal finances it means one cannot manage business finances. Lenders offer services such as; working capital, merchant cash advance; equipment leasing, business and franchise financing.

Equipment leasing is of importance since it allows companies to improve their money positions by equalizing the high costs of business financing. This will help them maintain a strong cash position in the economy and also helps the company to gain tax benefits which improve its flexibility and efficiency that allows companies to renovate there equipment and machines. Leasing equipment also helps in the improvement of cash flow which allows them to limit how much and how often they borrow cash for financing their operations thus reducing their financing costs.

The most essential component for a business to start is the working capital; it covers both operating expenses and upcoming debt payments. Generally, most companies cover a short-term working capital need, which is based on their expected credit card transactions; this form of finance is known as merchant financing. Merchant cash advance involves certain credit card qualifications that a lender requires companies to obtain in order to qualify for an upfront working capital. Other than quick application, merchant cash advance also has other merits like low amount of documentation, that is, one does not require accounting records or business plans in order to secure a loan. It also does not require companies to have collateral, which helps in the reduction of risks to corporate assets.

In conclusion franchise financing helps most dream ideas to come into reality.

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Writing A Business Plan – Four Key Pointers For Success

Posted on March 24, 2023 by schatzi

All businesses, of whatever size or stage in its development, need to have formal business plans in place, prepared by the management and not their accountants, and fortunately there are many now many free business plan templates available on the web to help you in business planning.

Why Prepare A Business Plan?

There are four main reasons why you should prepare a business plan. These are not mutually exclusive, and as the business changes and grows the business plan should be regularly revisited and reviewed since these issues will apply equally well to an established business as to a start up.

The first is to plan in the widest sense. In preparing a business plan you are preparing first and foremost a plan and the process is one of thinking through what you are going to do in the business, how you are going to do it, what are the separate projects that will have to be completed to reach the end goal and when by, what resources you will need to have in place and when, what the risks are and how these are to be managed, and so on.

The second is that from setting out your plan of action you can then assess and understand the likely financial performance and requirements of the business. You can examine the key sensitivities involved in your forecasts and take a view on the financial risks, and potential rewards involved.

This is critical as the third reason for preparing a business plan, which is often seen by some managers, mistakenly in my view, as the real point of the exercise, is to provide it to investors or lenders in support of a request to raise funding.

The fourth reason is that that plan provides an objective benchmark and milestones against which the progress and success of the business can be checked.

So, whatever the initial reason for carrying out a business planning exercise, management should always use the process as a chance to genuinely plan the business, and not just as an exercise to produce a document that is never looked at again.

What Should A Business Plan Contain?

You can now find many examples of business plan templates on the web which will vary in the content and headers they use as there is no definitive list of contents. In general however, a business plan should cover the following items, which will provide a pack in a format that prospective lenders or investors will generally find acceptable.

  • Company details including company number and logo;
  • Contents;
  • Executive Summary a brief summary of the plan covering all areas and being no longer than say 2 pages;
  • History and Current Position;
  • Products or Services;
  • The Market;
  • Operations;
  • Management and Staff including an organisation chart where appropriate;
  • Financial Analysis a summary of the financial projections;
  • Investor or Funder Deal and Exit Plan where the plan is being used to raise finance this is where you set out the proposed support you are seeking and what is in it for the funder; and
  • SWOT Analysis a summary of the strengths, weaknesses, opportunities and threats facing the business.

The plan should also be backed up by appropriate appendices giving the financial information such as historical Statutory or Audited Accounts, up to date management accounts and three year financial forecasts, all of which should obviously tie in with the body of the plan itself. In addition there needs to be the non financial information required to support the plan which will normally include CV’s for each of the Directors and any other key personnel, examples of marketing material, details of the business’s professional advisors and any other supporting documentation that may be relevant such as significant new orders.

To What Extent Can Or Should You Vary The Format?

If you do use a business plan template, don’t hesitate to tailor it to your business’s particular circumstances. Every business has its own characteristics, and each writer will have their own style so every business plan will be different.

Whilst the headings given above are relevant for most businesses, the focus of attention will vary depending on the purpose of the plan and the intended recipients.

If the plan is being written for internal purposes then it may concentrate on tasks such as Marketing or Operations and be used to attribute tasks, set timescales, targets and rewards, and then used to help co-ordinate and monitor an agreed overall agenda.

If you are preparing the business plan to support an application for a loan then the financial and trading data, and in particular the cash flow analysis, will be critical parts of the document. Lenders will be particularly interested in the assets available as security, any other existing borrowing, and will closely scrutinise the detailed financial forecasts.

If the plan is to be shown to potential investors then you will need to be careful that you comply with the requirements of the Financial Promotions Order as failing to do so can lead to criminal penalties. Like lenders, potential investors will review the financial forecasts and proposal within the business plan, but they will also be looking to establish a potential valuation of the business at the time of the proposed exit.

What Makes A Good Business Plan?

As hopefully will be clear from the comment above, this will depends partly on what it is to be used for, however any business plan should be:

Concise – It should be short and to the point;

Comprehensive – a potential funder more likely to provide finance if they are able to clearly understand the product, market, funding requirement, opportunity, the skill sets of key personnel and the financial projections, then if they can’t;

Clear – it should be written in clear plain English, (and be properly spell checked and proof read), but the message or propositions should be clearly stated so that the target audience can understand what it is that you want from them, as well as the all important what’s in it for them;

Owned you must clearly be able to present it and answer questions on it, including on the financial projections and assumptions, from potential backers.

The last point is a critical one. All too often when potential financial backers speak to business owners about the numbers in a plan that has been presented, they receive the answer ‘Oh my accountant put the numbers together for me’, which immediately raises questions about how realistic the forecasts are.

After all, if you don’t understand what the projected financial performance of your business is, the how is a funder expected to believe that you can make it happen?

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