Thursday, September 6, 2007
Creating Your Own Wealth and Managing Your Finances
Copyright © 2005 Steve Brown
21st Century Wealth
http://www.21stcenturywealthcreation.com
Personal finance is a scary subject for some people because it
conjures up all sorts of personal fears about budgeting, managing
investments and buying Vs renting a home. Fear and anxiety are
common responses to the topic of personal finance regardless of
an individuals level of education or experience in other areas,
particularly business. As a result, many people avoid dealing
with their personal finance issues until they are almost at
crisis point and in serious credit or debt trouble.
But before you can make any decision about your personal finance
or take any action regarding your finances,wealth or lifestyle
you should obtain a firm understanding of your current financial
position. Surprisingly, many people have only a vague idea how
much income they actually bring in each month and then how much
they actually spend each month and whether there is a positive
difference between these amounts that are in you favor.
So the first thing to do is assess you financial situation.
Gather together all of the information and documents that will
give you a picture of your financial position. Tally your net
worth, including real estate, superannuation, monthly income and
all other assets. You may be pleasantly surprised by the total.
Then, set yourself up a budget by listing all of your expenses.
Be completely honest and dont leave anything out. If you cheat
on this you will only be cheating yourself. List everything
including luxury items such as take out, cosmetics, magazines and
movie tickets.
While a budget is absolutely the first step to taking charge of
your personal finance, this is by no means the only step you will
need to take. You can investigate other services in the
marketplace, such as electronic bill pay, investment counseling
and seeking out hints and tips for financial health. Electronic
bill pay or BPay as it is more commonly known, is particularly
useful for people who tend to be disorganized or who
procrastinate on keeping their bill paying in order. You can even
arrange for your bills to arrive by e-mail rather than through
snail mail. You then pay them electronically, by direct
withdrawal from your bank account and the transaction gets
processed straight away.
Once you have assessed your budget and established a regular and
efficient bill paying mechanism, you might feel that you are then
brave enough to investigate other areas of personal finance such
as investments and stocks and shares. Once again, the Internet
can be an invaluable resource, allowing you to thoroughly explore
all of the different options and strategies available. You can
find all sorts of useful references about investments such as
term deposits, managed funds, purchasing stocks and shares and
participating in share clubs. You might like to start simple
though and merely open a short term savings deposit account so
that you can deposit from your pay check each week or month.
This way, in no time at all you will begin saving for your next
goal whether it be for a car, holiday or some minor surgery.
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Steve Brown is the owner and webmaster of
21st Century Wealth, a premier resource for wealth information, news and invaluable
wealth and lifestyle education. For more information, go to:
http://www.21stcenturywealthcreation.com
Life insurance without life value: why young people are snubbing financial advice
This article is written by a 27 year old female (borderline Generation X / Y) called Rachel. Rachel spent six years at university, has no outstanding debts with the exception of government student loans. Rachel also has no pension plan, no life insurance, savings or property investment. Despite reports of average starting salaries for graduates beginning at £18,000, some even at £25,000, Rachel started on £14,000 three years ago, despite gaining a First Class Honours and offering extensive work experience.
This isn't therapy through Microsoft Word, but it's not uncommon to read reports of "apathetic youth" in the media. For driven young graduates who didn't quite land where they expected – it is a little frustrating to be branded "ignorant", when it is already difficult working off university debts and fighting your way onto the career ladder in a very competitive market.
What is the point of having independence in old age, if you cannot experience it in youth? That is not to say young people should be encouraged or supported in their debateable extravagance, only that we remain unconvinced by old age. We may have seen our parents lose money in shares or private pension funds, or get divorced and lose money through property. We may be worried about global warming and in an age of suicide bombers, we may not even be confident about how much control we have on our lives anyway. With so much choice on what we can do, but so few people empowering us with confidence, we may well rebel for years to come – chopping and changing until we find something that fits or until we get tired.
It's too easy to brand young people as apathetic just because they haven't got pensions or life insurance. Smug thirty-somethings who received full grants, graduated in a less competitive market and bought property when the house market was low are quite happy to "tut tut" at their twenty-something shadows in their lack of financially savvy experience, but today's twenty somethings are being squeezed from all angles:
* Student loans replace university grants
* Commercialisation of university life, with banks and credit card companies actively courting student customers
* High property prices
* Very competitive job market
What we need are comprehensive financial research sites that provide information which directly relates to our circumstances. Websites such as moneynet with their product price comparisons and finance guides (especially the student finance guide) –do go most of the way, but we want something that also takes into account our aspirations, situations and will go the distance. We're not adverse to pensions, life insurance and mortgages, but if we're going to splash out lots of dough, it has to be a reasonably reliable investment and we remain unconvinced from we've seen so far in provocative, panic-stirring media.
It's true that products such as life insurance would at least protect our families from our debts and that's important, but with regard to pension, who's to say that in our old age, we may not revert back to student lifestyles – living in communities and on budgets.
Resources:
Google and the search command "define: generation X" or define: generation y" for age reference
The source of inspiration for this article!
About Rachel:
As well as the information in the article, Rachel writes for the personal finance blog Cashzilla. Please feel welcome to comment on any of the article, Cashzilla may bite, but Rachel doesn't!
Web: Cashzilla personalfinanosaurus rargh!
E-mail: rachel@positiveinterest.com
Choosing a Mortgage Lender
Choosing a Mortgage Lender
Just as there are many types of mortgages and mortgage deals to
choose from, there are also many sources where you can go to get a
mortgage. Your key choices are to use a mortgage broker, a more
general financial adviser, or shop around yourself and go direct to
the mortgage lender. For many people, choosing a lender means
finding a mortgage company offering the lowest APR rate.
If you decide to use an adviser you can choose between a specialist
mortgage broker and a general financial adviser. A general adviser
will look at all your financial affairs if you want, not just your
mortgage. As opposed to lenders who can only offer their own
products, an adviser can look at the whole market for you and
consider mortgages from a number of lenders. Advisers can also offer
you advice and information tailored to your needs. In the UK, All
firms or Individuals arranging or advising on mortgages must be
authorised to do so by the Financial Services Authority (FSA). If
you are unhappy with advice from an authorised firm you usually have
the right to complain and may be able to claim compensation.
As an alternative to using a financial adviser, you can arrange a
mortgage directly with a lender – like a building society, bank or
specialist mortgage company. A lender will only recommend their own
mortgage products although they may have several you can choose from.
When choosing a lender, you should consider the competitiveness of
the lender's rates, their fees and penalties, their customer service
and their reputation. You'll also want a lender you can trust, and
someone you can work with effectively. Remember you'll have to deal
with this company for many years to come.
1. Building Societies
Building societies are mortgage experts, they offer specialist
advice and they usually offer very competitive rates. Many national
ones have a branch in most major towns and cities while the smaller
ones tend to specialise in catering for home buyers in particular
areas. For example, the Cambridge Building Society specializes in
helping people who live in Cambridgeshire.
2. High Street Banks
Banks usually have years of lending experience and they have more
branches and greater coverage across the United Kingdom. Their
standard rates tend to be higher than those of building societies
but they often offer the best introductory offers on mortgage deals.
Some of the big banks now have special arrangements with building
societies where the building society is the one that handles all the
mortgage business for the bank.
3. Specialist Mortgage Lending Companies
Specialist lenders lend to a particular type of niche market. Many
of these specialise in providing mortgages for people in special
circumstances who would not normally be offered a loan by their bank
or building society. This includes people with adverse credit, the
self-employed, part-time employed and those purchasing overseas
properties. Many mainstream lenders have established specialist
subsidiaries for non-standard mortgages such as these. You may have
to deal with them over the phone, by mail or over the internet as
most of them do not have a wide network of branches across the
country.
4. Insurance Companies
Some insurance companies offer mortgages and other financial
products together with their range of insurance products. They may
sometimes offer certain deals in association with other financial
institutions such as banks but they do not specialise in this area
and they may not necessarily offer the best rates.
5. Intermediaries and Mortgage Brokers
Instead of going directly to the lender for a mortgage, you can
approach an advisor or broker to search the market for the best
mortgage deal for you. Some intermediaries are tied to particular
lenders and they may only offer products from their lender. Others
are independent so they have a much wider market to choose from. A
credit broker is a firm or person who introduces you to a lender for
the purpose of borrowing money. The task of the credit broker is to
obtain the loan you require on terms that are acceptable to you.
Whatever you decide, it's important to understand how mortgages are
regulated and sold in the United Kingdom. Buying with advice puts
you in a stronger position to complain and get compensation if you
later discover that the mortgage is unsuitable. You can read some
more articles about mortgages at:
http://www.commercial-mortgage-guide.org.uk/mortgages/
© Copyright 2005, Bwalya Mwaba writes for the The Commercial
Mortgage Guide. Visit our website for mortgage related news,
articles, tools and more:
http://www.commercial-mortgage-guide.org.uk/
This article may be reprinted online as long as all the above links
are active and clickable and this author box (byline) is not edited.
