Retirement Planning Tips For Women

A lot of the attention to retirement planning lately has been spent on preparing men for retirement. It's devastating to see that since us women generally live longer than men, nothing is openly discussed about how those savings stretch further to compensate for the additional years women live as a comparative. 

But, if a majority of male baby boomers are having trouble saving for retirement, are female baby boomers in the same boat?

You don't have to answer. I'll pretend you nodded. 

This article will talk about how women can plan for their retirement and start saving for their retirement lives. 

Setting up a retirement plan and saving for your retirement may be many years away for you but, if you start early, especially in your twenties and thirties and do that until you retire in your fifties and sixties, you'll have a much more comfortable retirement than your female counterparts who didn't save anything and now are relying on the government to help them out. 

Planning for your retirement may seem too far in the future but it can be here before you know it and the sooner you start saving the better off you'll be when it sneaks up on you. 

Studies show that there are 60 million working women out there and a little less than half are enrolled in a retirement plan. It will be hard to have a retirement fund if there are no contributions to it. 

Women don't work as long as men do at the same job. This is due to taking time off to care for the family to raise the kids. So women don't build up the required years to qualify for a sizable pension or retirement plan, leaving them with little or no savings from the companies they are working for. 

Women live longer than men. If you retire at 55, you can expect to live another 27 years on average. Men can expect to live another 23 years on average. If you're married and your husband was the bread winner and you have no retirement savings of your own, where will the income come from for those extra 4 years? 

Women also are risk averse when it comes to investing, choosing to invest in conservative investments and bonds which have guaranteed returns but lower overall returns. You'll preserve your capital but you won't have much to show for it when you retire and start drawing on those savings. So the choice is either have more money working for you in low, but safe, investment vehicles as you near retirement or invest more aggressively. 

Either way, women need to read about retirement planning as much or even more so than men because we will be spending more of our life in retirement. Talk to a financial advisor, read retirement planning books and check out all the free resources out there to help you save for your retirement. Most people have less than $USD60,000 saved in a 401k or IRA. The average Australian superfund is $A180k and average UK Pension is 80K GBP. There is no way this will last men or women for 20+ years of retirement. Government are not going to be able to supplement everyone... 

Article Source: https://EzineArticles.com/expert/Chris_Campos/110750 

Learn From Your Investment Mistakes

Every one makes investment mistakes. From the time we were born, we learned from the mistakes we made. As investors, we need to learn from our investment mistakes by recognising when we make them and make the appropriate adjustments to our investing discipline. When we make a losing investment, do we recognise our investing mistake and learn from it, or do we attribute it to some outside factor, like bad luck or the market? To make money from your investments and beat the market, we must recognise our investing mistakes and then learn from them. Unfortunately, learning from these investing mistakes is much harder than it seems. 

Some of you may have heard of this experiment. It is an example of a failure to learn from investing mistakes during a simple game devised by Antoine Bechara. Each player received $20. They had to make a decision on each round of the game: invest $1 or not invest. If the decision was not to invest, the task advanced to the next round. If the decision was to invest, players would hand over one dollar to the experimenter. The experimenter would then toss a coin in view of the players. If the outcome was heads, the player lost the dollar. If the outcome landed tails up then $2.50 was added to the player's account. The task would then move to the next round. Overall, 20 rounds were played. 

In this study there was no evidence of learning as the game went on. As the game progressed, the number of players who elected to play another round fell to just over 50%. If players learned over time, they would have realised that it was optimal to invest in all rounds. However, as the game went on, fewer and fewer players made decisions to invest. They were actually becoming worse with each round. When they lost, they assumed they made an investing mistake and decided to not play the next time. 

So how do we learn from our investing mistakes? What techniques can we use to overcome our "bad" behavior and become better investors? The major reason we don't learn from our mistakes (or the mistakes of others) is that we simply don't recognise them as such. We have a gamut of mental devices set up to protect us from the terrible truth that we regularly make mistakes. We also become afraid to invest, when we have a losing experience, as in the experiment above. Let's look at several of the investing mistake behaviors we need to overcome.

 I Knew That 

Hindsight is a wonderful thing. Looking back, we can always say we would have made the right decision. Looking again at the experiment mentioned above, it is easy to say, "I knew that, so I would have invested on each flip of the dice". So why didn't everyone do just that? In my opinion, they let their emotions rule over logical decision-making. Maybe their last several trades were losers, so they decided it was an investing mistake and they become afraid to experience another losing trade. 

The advantage of hindsight is we can employ logic as we evaluate the decision we should have made. This allows us to avoid the emotion that gets in our way. Emotion is one of the most common investing mistake and it is the worst enemy of any good investor. To help overcome this emotion, I recommend that every investor write down the reason you are making the decision to invest. Documenting the logic used to make an investment decision goes a long way to remove the emotion that leads to investment mistakes. To me the idea is to get into the position where you can say "I know that" rather than I knew that. By removing the emotion from your decision, you are using the logic you typically use in hindsight to your advantage. 

Self Congratulations 

Whenever we make a winning investment, we congratulate ourselves for making such a good decision based on our investing prowess. However, if the investment goes bad, then we often blame it on bad luck. According to psychologists, this is a natural mechanism that we, as humans possess. As investors, it is a bad trait to have as it leads to additional investing mistakes. 

To combat this unfortunate human trait, I have found that I must document each of my trades, especially the reason I am making the decision. I can then assess my decisions based on the outcome. Was I right for the right reason? If so, then I can claim some skill, it could still be luck, but at least I can claim skill. Was I right for some spurious reason? In which case I will keep the result because it makes me a profit, but I shouldn't fool myself into thinking that I really knew what I was doing. I need to analyse what I missed. 

Was I wrong for the wrong reason? I made an investing mistake, I need to learn from it, or was I wrong for the right reason? After all, bad luck does occur. Only by analysing my investment decisions and the reasons for those decisions, can I hope to learn from my investing mistakes. This is an important step toward building genuine investment skill. 

Luck Becomes Insight 

The market is comprised of a series of cause and effect actions, which are not always transparent. This cause and effect has created some interesting behaviors by some very successful people. I am sure you have heard of many "superstitions" that people hold to be true to help them perform well. 

As humans we tend to think that luck is insight. We fail to analyse effectively the situation and the real reason for our success or failure. In investing this behavior will lead to ruin. To help overcome our natural tendency, we must document our investing decisions and then assess the results. This assessment process helps us learn from our success and from our failures and is critical for each of us if we hope to become successful investors. 

Learn from Investment Mistakes 

To help avoid investing mistakes, what should you document before you make an trade? I like to look at three categories regarding a stock I am considering. 

First, I look at a series of fundamental information such as earnings yield, return on capital, revenue growth, insider holdings, sector, and free cash flow. The fundamental information helps me identify if this is a good company with growing earnings, good management and has potential. 

After reviewing the appropriate financial information including SEC documents, I identify the risks inherent in the company. These risks might include competition, market share, insider transactions, and any litigation that the company is experiencing. You need to try to identify every possible risk and assess them critically. 

Finally, I look at the chart of the stock, seeking to identify support and resistance zones. This gives me potential entry points, exit targets, and the trailing stop loss. I complete these sections with a written trading strategy describing how I expect to make my trades. All these investment factors should be documented before making a trade. Once the trade is complete, I review them to see what I can learn so I can avoid any investing mistakes in the future.

To learn from our investing mistakes, we need to document our actions before we make the decision. We also need to be honest with ourselves when assessing our results. As we have seen, it is quite easy for each of us to put on rose-colored glasses and think we are better investors than we really are. We need to assess critically our investing abilities without distorting the feedback we receive from our decisions. Those of us who are able to learn this valuable skill will benefit greatly. Those of us who are unable to apply this learning will be destined to mediocrity at best and likely lose much of their capital before they quite investing.

 Article Source: https://EzineArticles.com/expert/Hans_Wagner/33314 

Understanding The Most Important Investment Concepts

It's always good to have at least a basic foundation of fundamental investment knowledge whether you're a beginner to investing or working with a professional financial advisor. The reason is simple: You are likely to be more comfortable in investing your money if you understand the lingo and basic principles of investing. Combining the basics with what you want to get out of your investment strategy, you will be empowered to make financial decisions yourself more confidently and also be more engaged and interactive with your financial advisor. 

Below are a few basic principles that you should be able to understand and apply when you are looking to potentially invest your money or evaluate an investment opportunity. You'll find that the most important points pertaining to investing are quite logical and require just good common sense. The first step is to make the decision to start investing. If you've never invested your money, you're probably not comfortable with make any investment decisions or moves in the market because you have little or no experience. It's always difficult to find somewhere to begin. Even if you find a trusted financial advisor, it is still worth your time to educate yourself, so you can participate in the process of investing your money and so that you may be able to ask good questions. The more you understand the reasons behind the advice you're getting, the more comfortable you will be with the direction you've chosen. 

Don't Be Intimidated by the Financial Lingo 

If you turn on the TV to some financial network, don't worry that you can't understand the financial professionals right away. A lot of what they say can actually boil down to simple financial concepts. Make sure you ask your financial advisor the questions that concern you so you become more comfortable when investing or alternatively teach yourself as there is plenty of resources on the Internet such as Tick Tok, Youtube, Facebook groups and Instagram. Your can also follow podcasts, listen to Audio books or pick up a hardcopy.

ISA's, IRA's and Superfunds Are Containers to Hold Investments-They Aren't Investments Themselves 

The first area of confusions that most new investors get confused about is around their retirement vehicles and plans that they may have. If an investor has an individual retirement accounts, a retirements plan at work, you should understand the differences between all the accounts you have and the actual investments you have within those accounts. Your ISA, IRA, Superfund or 401(k) is just a container that houses your investments that brings with it some tax-advantages. 

Understand Stocks and Bonds 

Almost every portfolio contains these kinds of asset classes. If you buy a stock in a company, you are buying a share of the company's earnings. You become a shareholder and an owner at the same time of the company. This simply means that you have equity in the company and the company's future - ready to go up and down with the company's ups and downs. If the company is doing well, then your shares will be doing well and increase in value. If the company is not doing well or fails, then you can lose value in your investment. 

If you buy bonds, you become a creditor of the company. You are simply lending money to the company. So you don't become a shareholder or owner of the company/bond-issuer. If the company fails, then you will lose the amount of your loan to the company. However, the risk of losing your investment to bondholder is less then the risk to owners/shareholders. The reasoning behind this is that to stay in business and have access to funds to finance future expansion or growth, the company must have a good credit rating. Furthermore, the laws protects a company's bondholders over its shareholders if the company goes bankrupt. 

Stocks are considered to be equity investments, because they give the investor an equity stake in the company, while bonds are referred to as fixed-income investments or debt instruments. A mutual fund, for instance, can invest in any number or combination of stocks and bonds. 

Don't Put All Your Eggs in One Basket 

An important investment principle of all is not to invest all or most of your money into one investment. 

Include multiple and varying types of investments in your portfolio. There are many asset classes such as stocks, bonds, precious metals, commodities, art, real estate, and so on. Cash, in fact, is also an asset class. It includes currency, cash alternatives, and money-market instruments. Individual asset classes are also broken down into more precise investments such as small company stocks, large company stocks, or government issued bonds. 

The various asset classes go up and down at different times and at different speeds. The purpose of a diversified portfolio is to mitigate the ups and downs by smoothing out the volatility in a portfolio. If some investments are losing value at some particular period, others will be increasing in value at the same time. So the overarching objective is to make sure that the gainers offset the losers, which may minimize the impact of overall losses in your portfolio from any single investment. The goal that you will either have with your financial advisor and/or robo advisor to help find the right balance between the asset classes in your portfolio given your investment objectives, risk tolerance, and investment time horizon. Unless you choose to undertake your own research and create your own portfolio. This process is commonly referred to as asset allocation. 

As mentioned earlier, each asset class can be internally diversified further with investment options within that class. For example, if you decide to invest in a financial company, but are worried that you may lose your money by putting everything into one single company, consider making investments into other companies ( Company A, Company B, and Company C) rather than putting all your eggs in one basket. Even though diversification alone doesn't guarantee that you will make a profit or ensure that you won't lose value in your portfolio, it can still help you manage the amount of risk you are taking or are willing to take. 

Recognise the Tradeoff Between an Investment's Risk and Return 

Risk is generally looked at as the possibility of losing money from your investments. Return is looked at as the reward you receive for making the investment. Returns can be found by measuring the increase in value of your investment from your original investment principal. 

There is a relationship between risk and reward in finance. If you have a low risk-tolerance, then you will take on less risk when investing, which will result in a lower possible return at any given time, relatively. The highest risk investment will offer the chance to make high returns. 

Between taking on the highest risk and the lowest risk, most investors seek to find the right balance of risk and returns that he/she feels comfortable with. So, if someone advises you to get in on an investment that has a high return and it is risk-free, then it may be too good to be true. 

Understand the Difference Between Investing for Growth and Investing for Income 

Once you make the decision to invest, you may want to consider whether the objective of your portfolio is have it increase in value by growing overtime, or is it to produce a fixed income stream for you to supplement your current income, or is it maybe a combination of the two? 

Based on your decision, you will either target growth oriented investments or income oriented ones. U.S. Treasury bills, for instance, provide a regular income stream for investors through regular interest payments, and the value of your initial principal tends to be more stable and secure as opposed to a bond issued by a new software company. Likewise, an equity investment in a larger company such as Apple is generally less risky than a new company. Furthermore, Apple may provide dividends every quarter to their investors which can be used as an income stream as well. Typically, newer companies reinvest any income back into the business to make it grow. However, if a new company becomes successful, then the value of your equities in that company may grow at a much higher rate than an established company. This increase is typically referred to as capital appreciation. 

Whether you are looking for growth, income, or both, your decision will fully depend on your individual financial and investment objectives and needs. And, each type may play its own part in your portfolio. 

Understand the Power of Compounding on Your Investment Returns 

Compounding is an important investment principle. When you reinvest any dividends or other investment returns, you begin to earn returns on your past returns. 

Consider a simple example of a plain bank certificate of deposit (CD) that is rolled over to a new CD including its past returns each time it matures. Interest that is earned over the lifetime of the CD becomes part of the next period's sum on which interest is assessed on. At the beginning, when you initially invest your money compounding may seem like only a little snowball; however, as time goes by, that little snowball gets larger because of interest compounding upon interest. This helps your portfolio grow much faster. 

You Don't Have to Go at It Alone 

A Financial Advisor or Robo Advisor can give you the investment guidance that you need so that you don't have to stop yourself from investing in the market because you feel like you don't know enough yet. Knowing the basic financial principles, having good common sense, and seeking guidance along the way can help you start evaluating investment opportunities for your portfolio and help get you closer toward achieving your financial goals. 

Article Source: https://EzineArticles.com/expert/Yulian_Isakov/836688

Top 10 Keys To Successful Real Estate Investments

When dealing with real estate investments there are many steps to go through before investing. Here are my top 10 keys to a successful real estate investment. 

1) Education 

If you are not experienced in real estate investments the very first thing you should do is to get educated. Take the time to find out what all of the risks are in the investment type you are interested in. Find others that can help educate you on the investment type, which are not involved in the transaction you are doing specifically so there is no conflict of interest. Buy educational material, get connected with online groups and go to multiple seminars in order to continue your education

2) Goal Settings 

If you do not have a goal lined out for your real estate investments how do you plan on getting there? Most investors buy one property, or invest based on emotion rather than having a set goal in mind. For example, you could have a goal of obtaining $30,000 per month in passive rental income from your investments through buying single family rental homes and apartment buildings. Your goals should be clearly defined and should include protections and risk mitigation techniques to make sure it is a stable viable plan that can be obtained

3) Building Your Resources

You WILL NOT become a successful real estate investor without resources. In real estate resources include, capital investors, property leads, team members and much more. For this you must expand your relationship base. Real estate is a team sport so if you do not build your network, you cannot build your team

4) Building Your Team 

In order to make your investments work you must build your team. Some of the team members you need are Real Estate Agents, Brokers and Bankers, Private Lenders, Appraisers, CPA's, Attorney's, Affiliates, Inspectors, Property Managers and Contractors. There are much more but it's pretty impossible to name them all. It takes quite a bit of time to develop your team and make sure they can be relied upon. Building a team is the most important aspect of investing other than your due diligence on the investment itself

 5) Due Diligence

Before investing in any real estate asset your due diligence is crucial. You need to analyse the market your investing in, the market timing relative to that market, the specific neighborhood, the market value of the investment, the cash flow it produces, the rental income it should bring in, all of the expenses related to the investment and much more. 

Inspections should be done as well as review of all of the backup documentation such as leases and contracts. Think like an auditor, review all of the backup information provided by the seller and verify it with an outside source as much as possible. I hear horror stories all the time about how people lost money in real estate. After inquiring as to what happened I can say that 99% of the time the investor did not do or know how to do the right due diligence on the investment in the first place. 

6) Property Management

Property management can make or break your investment. If you do not have a competent property manager that actually cares about your investment and your success you will have a losing investment. 

Most managers are bad at some of the basic management functions such as accounting, rent collection, tenanting, leasing and background checks, repair calls and taking care of the tenant. By far the most important and biggest problem is communication with the owner of the property. 

Communication is crucial because without communication the investor cannot make decisions regarding the investment and lack control. Property management also needs to be structured based on performance, meaning, they get paid if it's occupied only, not when it's vacant and there are incentives in place to optimise performance. 

7) Marketing 

If you do not know how to market for property, capital, property sales, and resources you will not be successful in real estate. Marketing and sales is one of the most important parts of any business. 

During economic problems and recessions most companies cut back on marketing when it's most important to increase your marketing efforts. If there are less investors, buyers, and resources available because of the economy, there is more of your competition going after your resources. So in order to attract those resources before your competition you have to market more. 

Marketing and sales is a business all in itself so getting educated on marketing strategies is imperative to your success. If you do not understand it or start to learn about internet marketing you will not gain the market share you deserve and will not be as successful. 85% of buyers go online first for investments. 

8) Treat Your Investments As a Business 

Most investors buy one real estate investment and do not fully utilise all of its capabilities from a business perspective. If you own one property or 50+ properties you should be treating it as a business. Be sure to keep track of ALL of your expenses related to the investment, the due diligence you did, travel costs you incurred, etc so that you can get a deduction for those items against income from other sources. 

These types of expenses can happen annually and a percentage of your personal expenses can be used as a tax loophole in order to deduct more against your active income from your job. Your biggest expense in life is your taxes. It is the government's job to find more creative ways to tax us. It is our job to find creative ways to legally not pay taxes. If you are not winning against the government, start to educate yourself on key tax saving strategies. 

9) Legal Protection And Tax Structuring 

It is crucial that you protect yourself from financial predators. There are people out there that will sue anyone they possibly can. It's really important to obtain insurance or put your assets into a proper entity so that you are not liable in frivolous lawsuits. 

Please consult your individual tax advisor to go over your specific situation. Also be sure to keep yourself separate financially from the investment or entity you hold the investment in so that you do not pierce the corporate veil. If you co-mingle your funds there is a very real possibility that in court your legal entity protection that you worked so hard to setup is worthless. 

10) Investing In Sustainable Investment Types 

Invest in asset types and real estate investments that are sustainable in the long run. Look closely at the cash flow included in the investment. 

Flipping can be much more dangerous than investing for cash flow because you typically have a payment on a flip investment that is not covered fully by the rental income and if you get stuck with the property you find yourself in a negative cash flow situation and can only sustain as long as you have money in the bank that can make that payment. Many people lose a lot of money trying to flip property, not knowing fully what they are doing and the risk they are taking only to lose a significant amount of money. 

On the other side when you are investing for cash flow only invest in quality assets. Typically if you invest in low end assets in your market you get low end tenants also. What I consider a low end tenant is someone that does not pay the rent on time if at all, causes damage to your property and is a nightmare to deal with. This happens quite frequently in low end property for a particular market. 

You want to invest in quality long term assets that are going to produce positive monthly cash flow and make you a great return on investment after you have been conservative with the numbers. I truly believe if you do these things along with increasing your financial IQ you will be successful if you work hard for it. 

Most of the wealthy individuals in the world work hard for their money and are constantly evaluating their financial situation and investment goals. Putting a personal budget together and reviewing it monthly, creating additional income sources, implementing tax savings strategies, protecting your money from financial predators and constantly educating yourself are the keys to becoming wealthy. 

Article Source: https://EzineArticles.com/expert/Mathew_P_Owens/916588 © 2021