Financial advice for teen

The rich people son's often get financial knowledge from the parents. They can manage the money better since they are teenager. As a teenager, you can follow the advice to make your life better.

1. Learn about budgeting
Your mom or father give allowance for monthly or for daily. It is no problem whether your parents give the allowance, you have to save the part of allowance.
Calculate what your needs such as lunch, bus fare, book, notes book, handphone voucher, cloth, and others. List the spending on your notes and the type all the entries on spreadsheet. 
The amount of spending should be balance with the allowance. As a teenager, you can seek out the new income. Sell the used bottle or can to the recycle shop.
Today the teenager can make money easily with internet. They can blog and make dozen or hundreds dollar.  It will not takes the times to blog. You need only one to two hours a day.

Photo by : Onemoneydesign
2. Saving the excess allowance
Do not return back the allowance to your parents. You are better to save the excess money for other things. Perhaps, you want to buy iPad or new notebook. There are some book or dvd that you like but you have no money. You can save some money and buy it. 
Save the money in the cash box or piggy bank. The piggy bank will be full if you save constantly. Remove the money from the cash box to the saving or investment. Ask your parent to invest your money at equity, mutual fund, ETF, and others. You can buy precious metal too and save it to your parents.
3. Financials goals
The teen should have a goal? The short term goal is the goals that you can reach in one year. Example: You want a new skateboard, or chicken coop at the backyard. Write the goals in your diary or blog.
As a teenager, you must have a ideal. Some teenager are confused to choose the ideal that is fits with them.Consult the ideal with your parents, teacher, or friend. They may direct you to right ideal.  Some kids ideal is to become a doctor. The teenager can help the father to enlighten the medical school fee that is very expensive. Find the scholarship to support the medical education fund. Borrowing from student loan may be not a good idea. You will difficult to pay off the debt.

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Financial Planning for freelance worker

A Freelancer is not same to employee. The Freelancer does not receive month paycheck like the employee does. Sometimes they get money twice in a month but sometimes they get nothing in a month. The freelancer often get more money than the employee receive. It is because the company does not need to pay the insurance, the health benefit, retirement fund to the freelancer. The freelancer must pay those benefit with their own money.
The freelancer face with uncertainty income, uncertainty benefit, and uncertain future. They have to make well preparation to face with the future. Here are financial planning for the freelancers.

1. Set most of your income to your future. The freelancer has no retirement fund and they must realize it. Collect as many as you can for your future. The money can be used for the big expenses such as medical bill, kid college, house and others.
Some freelancers trust to retirement fund. They can take the benefit when they need the money.
2. Saving and invest the money
Save the mot of your income. You will need the money someday. Invest the money on stock that can give high profit. If the freelancers still young, they can take the risk. Some stock is also good for long term too.
3. Find other income sources
Most freelancers open a business that has relate with his experts. For example: The website designer often found IT company who provide the IT service. They can ask other designer to join the company. The business might be other income source for you if your business success.
The freelancer may work for other people. You can teach at the university or school. It will not disturb your schedule because you just need two or three hours for teaching.
4. Set the tight budget
The freelancer must be a simple man. They do nor want to extravagant the money or overindulgence. They must realize that they are far from financial freedom.
Surely, you do not need to be misery. You can still donate some money or help the close people near you.
5. The freelancer should have a shelter
Like other people, the freelancer should have the house. The freelancers may be difficult to get the mortgages due they do not have salary. The bank might not approve the mortgage propose. If you can get the mortgage, you can save the money and pay the house cash.

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How to use salary to reach financial freedom

Only few employee can reach financial freedom due they just have little salary. Sometimes the salary is not enough for them because the cost of living is higher than the salary. No matter how much your salary, you can use it to reach financial freedom.
Do not trust to people who say the employee cannot reach financial freedom. Create some action to use your salary.

1. Saving the part of salary
Even you just get hundreds dollar from your boss, you should save little money. Saving is important for emergency fund that you can use whenever you need.
Saving keeping the value of your money and keep pace with price of goods. Due the downturn economic, the goods price are increasing.
Some employee saves money for the business capital. Founding a business needs money to buy the material, to hire the employee, to market the business. 
2. Invest wisely
little money that you invest can grow to abundant money. The investment is very important for your future too. When you retire, you wan withdraw the money.
While you still receive the money from boss, you can invest it to risky investment. Despite the bad economic, little stock can generate more money. In China, the stock return has hit double digit return. You will never find the stock at other place. Seek out the investment at the new emerging country such as Brazil, Russia, and India.
3. Education
There are so many employee who enter the college or university or college. You should choose the marketable subject such as accounting, management, IT, nursery, and others. Those major can make more money than others subject.
After graduated from the college, you can ask the boss to increase your salary. The boss may consider your education to raise your salary. If your boss do not care to what your requirement, you may find other boss.
4. Setting the goal for future
What is goal for the short term, middle term and long term. The goal can encourage you to work more hard. The goal should be match with your salary.

5 Ways to save money on Food

The food is the component of the cost of living. We cannot live without food and we should buy food. However, we can save on food. The method can slash our budget for hundreds. You may save the money for pay off the debt or invest to the profitable investment.

1. Do not Eating out often
Some family often go to restaurant or cafe. At least they need $ 300 a month for it. They are difficult to reduce to eating out. Perhaps the mom or father are not clever to cook the food. They can reduce eating out from six times a week to three times a week. It may slash $150 per month.
2. Bring Lunch pack to your office
My father did not like the restaurant food. He brought the lunch pack that contain my mother cuisine. He like my mother food very much. The home food is more health than fast food. My mother not used to use MSG, dye, and preservation. With the lunch pack, we can slash $10 a day, meaning you can slash $250 per month.
3. Coupon
Despite the coupon does not give food much, It can slash little dollar  a month. The coupon are printed from the company that want to promote the product. The company give a sample product when you buy their product.
The company also give rebates or discount to the buyer. Sometimes the coupon give discount 20%, 30%, or 40%. Not every time, the producer give discount.
You can find the coupon on Facebook. Sometimes we can get the coupon on twitter too. Seek out the coupon from any media. A bottle of ketchup or a slice of pizza may be meaningful for you. 
4. Buying in bulk
The supermarket or grocery usually offers the cheaper product for buyer who want buy in bulk. However, we cannot save money for specific items. Example: Buying a bread in bulk may be not profitable for you. The bread is expired and few days, and you could not eat it.
The meat or chicken boneless could be saved for weak. Consider the amount of meat that you need with the refrigerator's space.
5. Produce food on your backyard
Plant fruit tree on your backyard. In four or five years, the apple will have fruit. You can slash little dollar from it. In great depression, the people raise the chicken at backyard. We can also raise chicken to get fresh meat and fresh egg.
Photo by : GoldenEel

The Envelope Budgeting: Help You to Make a Strict Budgeting

By using envelope budget, you may decrease some unnecessary spending.

When we receive paycheck or honor from our boss directly, we receive the money inside the envelope. Some people who give money in envelope. People often save the money inside the envelope to protect the air that could damage the money. The envelope also keep the money from bad people. When you let the money up the table, the other person may grab it.

The envelope budgeting is a simple budgeting and cheap. We do not have to buy a software to make the budget. Perhaps this budgeting has been found hundred years ago.

The envelope can be used for budgeting. It helps us to strictly in money spending. We allocate the money into various kind of spending. We have to determine what kind or the category of spending in a month. We are hoped not to spending more money than the money on the envelope.

The strength of the envelope is that it can reduce your spending. Perhaps, you will use cash rather than credit card. You do not need to pay the credit car interest or credit card fee.

The envelope can remind us to strict the money that we spend. When we see the empty envelope, we should not use other envelope to replace the empty envelope moreover our salary.
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Use your previous record to list your spending. Name each envelope with spending item. Then, put the money as you have allocate before. The amount of money base on your previous month and your estimation. Example: your budget for cinema is $ 50 per month. Inser the $50 into the envelope. You can make other envelope to keep some money.

Here are the example of the spending:

Mortgages $800

Electric bill $100

Water bill $50

Telephone bill $75

Food $375

Gasoline $200

The weakness of the envelope system is that you need to provide some envelope. The envelope is also easy to damage. You should need envelope that is not expensive. A piece of envelope just 10 penny.

You should saves the envelope to the wardrobe or to the safe place. Keep the envelope far from our kids or other people.

Due to advance technology when people often do not use cash, This budgeting is an old fashion budgeting. However, some software company developed enveloped budgeting software. This software may help you to build an envelope budget but it is reduce the essential of envelope budget. The software do not use cash but credit card or others.

Fundamental Investment for Financial Planning

When we read any article about financial planning, we often meet investment. Investment is an important element of financial planning because it can help us to materialize our planning. Some money that we have invested at the investment will grow. Here are the fundamental investment in financial planning.

1. Match to goal
The investment should match with goal. We can invest fro short, middle, and long term. If you want invest for 20 years next or for your kid education, you may invest your money at blue chip stock or Dvividend Reinvestment Plan. Your money will multiply over many times.

2. High risk, High return
Most investment is risky. You dare to take the risk for the higher return investment. On the other hand, the risk adverser will not get higher return. For example, we will not receive much money by investing our money on certified deposit or saving account. The interest rate is less than a percent while the inflation is high. On the other hand, the stock investor who dare invest at China can get double digit return. Some Chinese stock has hit double digit return. 

3. Portfolio
Share or diversify your asset to various investment. Do not invest at low risk investment or high risk investment only. Put the money in one basket is too risky and it will not make so much money. Example: Your money in saving account or certified deposit will not give you much return whereas your money decrease. The rate may be lower than inflation rate and you still pay the administrasion fee, atm fee, and other fee.
When one of investment decrease, others investment may increase. You will still get benefit even the market is worst.

4. Low cost and Low tax
Find the cheap investment. Notice the transaction fee and other cost when you invest your money. Try to minimize the cost so you will get so much return. For example: the no load mutual fund is free charge.
Consider the tax when you invest too. The investor should minimize the investment tax. You can consult to your financial adviser for it.

5. Pay yourself first
Having received money from boss, you invest the money directly. Then, you pay the debt. The investment will pay you at the future or when you need much money.

How to manage money better

To become a rich man or welath man, you have to able to manage your money better. Some people who has high salary cannot manage the money well. They buy anything and they do not think about their future. In the mid of month, the salary has gone. They are forced owe money to other people to fulfill the daily necessity. Day by day, the debt increases and they bankrupt. Here are the some stesp to manage your money better:

1. Create a cash flow budget
The budget depict what cash flow come from and what cash flow goes for. This budget help you to fulfill what you need. The budget keeps your cash inflow equals with cash outflow. The cash inflow should be enough for paying what we needs. If the cash inclow is not enough, we can decrease the cash outflow or increase the cash inflow. 
What you plan to buy next month? You can write in spending post. Dou you have money enough to buy the stuff? If your income is high, you can buy it. If, on the other hand, your income is small, you can cicil for couple month. For example, you want buy a $ 500 bicyle for kids but you just have $ 100 a month for toy kids. Set a side $100 for five month. You can buy your bicycle to your kids after five month.

2. Save the money before spending
Some people cannot save their money whether they have high salary. They have wrong method for saving, for example: They save money at the end of the month or they save after spending. They never allocate to save their money. 
You should allocate at least 10% for saving. If you have more money, you can save higher than 10%.

3. Buy what you need not you want
Some people always materialize their want without considering the money. They want buy X Box, Plasma TV, Games, and other whereas they have not enough money. Off course, human need entertanint but they have to consider their finance.

4. Settle the debt soon
After get paycheck, you have to pay the debt soon. If you late to pay it, the creditor may charge you fine. Your debt will increase and you will be difficult to settle it.
Before borrow the debt, you need to consider the pros and cons. For what you borrow the money?

5. Emergency Fund
Emergency fund is very important when you need money immediately. With emergency fund, you do not have to borrow money from brother, sister, parent, and neighbor. Allocate six or more times your daily necessity for emergency fund.

What is net worth

Henry whose has jaguar cannot claim that he is richer than Smith whose has no Jaguar. We should calculate the net worth of the jaguar owner and the people whose has no jaguar. Henry lease the Jaguar to a car company for five years. Henry has no right to sell the jaguar unless he settle the lease.
Henry is a manager in a good company that produce microchip. He has one house in the urban area that price is $ 50,000. Henry got much paycchek from the company. He get at least $ 10,000 each month. Henry also save money for his emergency fund. He realizes that he will need when he got sick. He has cash $ 60,000 in various assets such as mutual fund, cash, and other. Henry invest the money to stock market that the value reach a million dollar. He diversifies the investment into various investment such as stock, bond, mutual fund and others.
On the other hand, Smith is a freelancers. He just work when someone need his service. Smith is a financial consulting and blogger. The clients just pay him $ 2,000 a month. Smith receive money lesser than Henry. He just has Honda car that price is only $5,000. Smith is a low profile man. He has no credit card and he has no debt to other people. He buy the small house cash.
Smith also has business. He found a printing company. They serve some company and print some book. He also saves the money to the stock market and he has $ 50,000 gold.
To compute the net worth, you have to sum of all the asset. Then sub it with the liabilities. Sum the Henry's asset house $ 50,000, emergency fund $ 60,000, and $ 10,000 investment equals $120,000 assets. Sum the Smith's assets Honda car, $5000; gold $, 50,000; $ house, $ 25,000, investment; 30,000,  in the printing company equals $ 85,000 equals $195,000. Smith has no debt so the net worth is equals $195,000. Meanwhile henry has debt that he should pay $20,000. The net worth is total asset $120,000 minus total liability $20,000 equals $ 100,000.
The Smith net worth is higher than the Henry. Smith is richer than Henry. Smith prefer to live blow the mean. He are not tempted to buy jaguar though he can buy it. People may respect Henry than smith due its car but smith is still the richer.

How to finance kid college

A kid needs to go to university so they will have a better life. They have opportune to get a good jobs If they pass the college. They might get manager position and get wealth.  Unfortunately, Sending the kid to a college is not easy because its fee is expensive especially in private college or the best college.

You can start allocate money when your child is born. Calculate the approximately cost of college. Find information about cost of college and forecast the cost with present value. 

Do not use the money for anything moreover useless things. You should be disciplined with kid college money.

Here is how

1. Saving part of your salary to the account that dedicate for your child college. Consider the amount of children. More children,more money.

2. Invest early for long term investment like value investing. Buy some blue chips stock and get dividend for it. Create a portfolio of stock for your college kid. Reinvest the dividend to the stock or other investor. You can redempt when your child enter the college.

3. Buy asset that dedicated to your children college. For example: buy a house and hire it. You can collect the rent fee for your child college. Someday, you can sell the house if you have no money to finance your kid college. In my country, the parent buy some farm crop to support their child college. They use or hire the land to other people. The parent will sell the land if only the child need college fee. 

4. Buy precious metal like gold, silver, platinum and others. Precious metal value is stable and it may good for your child investment. It can help us to protect us from recession. In bad recession the gold value could increase many times. I suggest to buy certified gold bar. Buy it and safe it at deposit box.

5.Encourage your child study hard so they can get scholarship. Scholarship can help to light the kid  college. Some university, foundation, and company offers full scholarship that pay the college fee, book, apartment, and others.

By studying hard, they have a good future and they can work at any company.

6. Order your kid to get freelance jobs if your money is less. Someday, they will be able to fund his or her college. The cons of jobs is that jobs can disturb the kid college.

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How to Set Financial Goal : It determine your future

The financial goals is a part of the financial planning. We should make to create a good financial goals to reach our the wealth. Without a financial goals, you will loss in a trying to reach the wealth. Here are the steps to create a financial goals:
1. Create a specific goals
Most people want to reach wealth. It is now wrong but the financial goal is not specific. We do not know the wealth definition. Every people has different view about wealth. Some people define wealth with house, car, gadget and other.
Example: A teenage want a car
We do not know what the car because the goals is very vague. Is the boy want a Jaguar? Mercedez? Honda?
There are some question about the goals, such as:
When does he buy the car?
Is it a new car?
Will he buy cash or lease?
The teenage can write the goals is to save $ 5,000 for  buying old Honda car next three years. He does not want a new car that is very expensive.
The teenage know that he must be realistics to create a financial goals. He feels he can save $ 5,000 for three years.
2. Set the short, middle, and long term financial goals
Create the goal for short term or next 1-5 years. The short term may be not bigger as the long term cause the short time.
Example: the short term is to save $ 2,000 to own a good motorcycle.
The middle term financial goal is the anything that you could reach by 5-10 years.
Example: The middle term is to save $ 50,000 for master degree fee.
The long term financial goal is anything that can you reach in ten years more.
Example : The long term is to save $ 100,000 for hose.

3. Review the goal
After a year, you must review the goals? Can you materialize the one year financial goals? If you cannot materialize it, you have to work hard.

4. Determine the plane toward financial goals
Some people do nothing after create a goal. They must be wrong. They have to struggle to materialize their financial planning.

5.Review and modify the goal
What is the progress after one years you have made the financial planning?
Some economic situation may break our financial goals? Do not blame the economic situation because you cannot change it. The step that you can do is to modify the financials goals. Find the ways to reach the goal but do not decrease the financial goals.

How to organizes Finances

Like ride at the deadliest road, organizing the finances is difficult. Some people is not able to manage their money whereas they have so muc money. Here are some steps to organize the finances:
1. Set the finances goal
Write your goals at the book or your dairy.The finances goal is very simple. Every people want to be health, meaning has house, vehicles, saving and investment. Create a specific goal so you know the goal exactly. Example, you want a million dollar when you retire or you want to have a big house. 
The finances goal encourage people to work hard. People often stop to work before they reach the goal. They feel so tired to reach the goal whereas they have not yet hit the goal. Without a goal, they do not what they work for. They have no direct to work. 
2. Track your spending
How much you spend for a month. Compute what you have spend in food, cloth, transportation. You need gasoline to go to office so you must to include the gasoline to your spending list.
The kid spending is also your spending. Compute the food, cloth, and everything of their spending.
3. Create a budget
Having known the financial goals, you can allocate some money for goal. Provide the post at your budget to buy the house as you have write at the financial goals. Set aside paycheck for the house.
The budget can help you to manage your finances. It helps you to compute all income and spending.
4. Compute your net worth
The networth is depict the wealth of someone. The basic formula of net worth is asset minus the liability. The more net worth, the more wealth.
To compute the net worth is not difficult. First, List all asset that you have such as cash, saving, investment, and others. Your house that you buy or car that you have are your assets. Calculate the investment you too. The investment value is the market value now.
Second, list of your liability. Compute the debt you have to some creditor. The car at your garage have been not yet settled from the credit company. You still have the liability to the company. Record the remain of money that you should have as your liability.
Third, Deduct the asset with the liability. If the result is minus, you are in dangerous. You need to reduce the liability and increase the asset.

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How financial goals impact your financial planning

Before creating a financial planning, a financial adviser must ask exactly what is financial goals. With your financial goals the adviser will create your financial planning. Surely the financial goals will affect the financial plannings. Without the goals, you cannot construct the financial planning. Like driving a car, you should know where you are gonna go. A driver must be confused if they should drive without any destination. Having been told the destination, the driver may need the map or a plan to arrive at the destination.

How the goals affect the financial planning:

1. The financial goals will affect the budget that will create. If we want the expensive house but we have little money, we have to make a tight budget. Our priority is to save much money for the expensive house. We may slash some spending for the house or we may find other money for the house. The adviser will suggest us to find more money from other sources.

2. The goals also encorage you to save more money bit by bit. We realize that the our goals is so difficult to reach. The rule of thumb of saving is ten percent of the income. The financial planning may order you to increase the percentage of saving if you have so many financial goals.
The percentage of saving to the income will influence your lifestyle because you should set aside more money to the saving.  The financial adviser may suggest you to tight your spending. Perhaps, you may change your car or resize your house that saves thousand dollars.

3. One element of financial planning is investment. The goals will influence the number of money that you should invest. If the goal is high, they should dare to invest at high risk investment because it could make more money. As consequently, you are dare to take the risk. The possibility of loss is high too.
The portfolio of your investment may contain stock and junk bond. The portion stock could be 90% of the portfolio. Due the economic tight, this portfolio is not profitable too.
4.Retirement fund
The worker whose has financial goal to retire early must save more money. As the life expectacy is greater, they need more money. They will not recieve the paycheck from the boss again.  They can start the business early. The easier business opportunity is the selling. Selling anything that you like and you know.

The effect of the goals is very real. You should be careful to create the financials goals.

How debt influence net worth?

Some people think owe money can increase the net worth. Let Says, Mr Broderick has $ 10,000 in the certified deposit. He wants to increase the asset by owe $ 10,000 from the bank. Mr. Broderick asset look increase. He has $ 10,000 in deposit and he has $ 10,000 in suitcase. Mr. Broderick want to buy the store at the certain city to wide the market.

Mr. Broderick net worth is not increase per se. After get loan from Bank the netw worth is become zero. He has deposit $ 10,000 asset, but he has bank loan $10,000 liability.

The Bank also charge interest rate 5% years so Mr. B will pay $ 10,050 next year. Next ten years Mr. B net worth will be below zero. The liability $10,050 minus $ 10,000 equals $ 50. If Mr. B cannot get the cash from his new store, he must be bankrupt. If, on the other hand, the new store sales so many product, the asset may increase. Let say, Mr. B can make money $ 11,000 from the new stores. His networth wil increase to $ 11,000 assets minus $10,050 loan equals to $ 950.

Not all debt decreases the net worth. For a moment, debt must decrease the net worth. If we can use the debt, the net worth could increase. Before propose the loan, a businessman should make sure that the debt can be useful for business.

Borrowing money for buy a luxorious car must decrease your net worth. You cannot generate financial benefit from luxorious car. The interest rate of lease car is high and the value decreases every year.

In my opinion, the debt is difficult to lift our net worth. The interest of the debt is high so you will difficult to pay it.

Borrowing to userer or mafia is a fast ways to bankrupt. They can provide the cash quickly without guarantee but they will find you wherever you go. They are not shame to charge the high interest to the borrower.
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Five Things About Loan

You should know that loan is dangerous

A loan sometimes helps some people that need something like things, car, computer, book, etc. Some people could not pay cash for expensive things because their salary is low.

I think we should not think about loan today because we are hard to return the loan. The employee cuts so many jobs. Perhaps we suffer firing too. Of course, the unemployment needs to open a business for their live. Unfortunately, some unemployment use loan because they have no fund.

You should know some information before ask a loan to others. The information is useful to avoid you from bankrupt. The information is:

    You should know what is the purpose of loan

You should know why you loan to others. Some people use loan for needs like education, house, car, furniture, etc. People must need house for staying, car for transport, college for future. Unfortunately, most people has limited money.
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Do not use loan for unnecessary thing like buying a Jaguar, buying a bungalow, etc. You should use a loan for productive things like open a business. Make sure the business could give you return so you can pay the loan.

The global crisis make your salary is decreasing. Our ability to buy anything is also decreasing.

    You should know that you can pay the loan

You could measure your ability of paying the loan. If you feel hard to pay the loan, you should not ask the loan.  A bank will help you to determine the ability paying the loan. They will survey your financial health with notifying your salary, assets, family, child, etc.  For example, your asset is only $10,000. The bank will not lend you for $ 20,000.

If you have no ability to pay the loan, the bank will not give you any loan and reversely. A bank is a profitable oriented company so they will not give you charity.

    You should know what (who) is the creditor

Some creditor asks your guarantee like house, car, land, and other fixed assets. They will seize your asset, if you cannot pay the loan. Bank and other financial institution are selective to give the loan.

Besides bank and financial institution, you can ask loan to people. You can ask people around you like parent, family, friend, etc. They may be kind creditors. Most of people will not charge you with interest and other cost.  Some people offer you with soft loan that does not ask you with interest and cost. My Grandpa said that some people give you soft loan without returning obligation. You can return, if you could get the profit.

Borrowing with people is sometimes easy. If you could not pay the loan, you will break the friendship and fellowship.

    What is the loan

Financial institution offers various loans like personal loan, secured loan, unsecured loans, mortgages, auto loan, equity loan, etc. the loans has different characteristics each other. Mortgages is for the borrower who need house, auto loan is for the borrower who need auto, etc. we cannot use auto loan for house financing and reversely.  The types of loan i.e:

Mortgage loans: a loan for buying house or building

Personal loan: a loan for buying something

Auto loan: a loan for buying car

You should check what loan that fits on your needs. You had better ask soft loan to the financial institution. It will light your loan payment.

    The cost of loan

You should consider the cost of loan. Some financial institution set high interest for your loan. The higher loan will make you difficult to pay it. If you postpone the payment, the interest will grow over many times.

Financial institution also provides fixed rates and floating rates. A Fixed rate is the rates that set stable for example 4 % a year. The financial institution usually set higher interest to fixed rate than the floating rates. A common people think that fixed rate is cheap than the floating rate. In reality, fixed rate could be a cheap cost, if the Fed rate is down.

Besides interest, you must pay some fees like origination fee, administration fee, underwriting fee, appraisal fee, credit report fees, and processing fees.

How someone whose has variable income creating budget

Thanks for internet that helps us to work online and make money online. We can make money by making business presentation for other people. If they like, they may pay you dozen or thousand dollar. The company can pay less than hire some employer. For the self employed people, they may receive more or less revenue, depending on their project. When they got abundant project, they may receive more money.
Someday, Company will employ freelancer than employer to cut the company expenses.  In future, the company just pays the salary without pension fund, health insurance, and others.
As a freelancer or self employed, they may receive uncertainty revenue or variable income. Sometimes they receive dozen dollar or sometimes they receive nothing. To create budget for freelancer or self employed, they may calculate yearly income. Find the average of your income by dividing income by twelve.
Though you have no fixed income, you should allocate your some expenses. List also that you expenses monthly that you have expenses. Compute grocery food, water bill, electric bill, and cable bill, and others.  The spending side is relative fixed than the income. You must adjust the average of your income to the spending. Do not spend more than you can earn or you will borrow money to cover your high spending.
As a freelancer, we can estimate when we receive the income base on last year experience. For example, the auditor will receive abundant money in March because the jobs or project is abundant in March. There are so many companies that find audit service. Do not use the money for spending only. Some people may spend the money for useless gadget whereas use it wisely and you can put it at emergency fund that you can withdraw it whenever you need money.
In my opinion, emergency fund is very important for the people who have no fixed income. They can use it whenever they have no jobs or project. I think they are better to provide at least six month of your monthly spending. Increasing it double is also wise decision.

Why you need to increase money when retire

When you retire, it does not mean you can feel free. Perhaps there are some money that may harm you. Here are the cost that may harm you:

1. Maintenance the house
After you stay for twenty or thirty years, your house may damage. Perhaps the rain has damage the roof. Surely, you have to improve it or your house will break. The maintenance is not cheap, you have to pay the roof and the repairman service.
Some house needs improvement in the wall, the window, or others. If the retire want the best material, they should dare to pay more.

2. Kid Education
If you have still young child, you should fund the kid. Your kid college fee may need your money. Surely, you cannot ignore your kid college or you will need money to care them. For example: If they do not pay the college, they will stop to study. If they stop study, they cannot graduate the college. If they cannot graduate the college, they will be difficult to find jobs. If they have no jobs, you must help your kids to fulfill the daily necessity. Surely, you have other option to expel your kid from your house. It is your choice .

3. Health
Some sick retire may spend so much money for medical expenses. The young who do not keep the health will get so many diseases in the old time.

Photo by : Philip Taylor PT


4. Hobby
After retirement, some worker focus on the hobby. They use the severance to buy collectibles such as coin, stamps, painting and statue. A piece collectible is hundred thousand dollars. The crazy collector may spend the money for it whereas the real value of the coin is just dozen thousands dollars. The are tempted to collect the coin that is not important. Perhaps they think that the collectibles will generate money from them.
The maintenance of hobby is usually expensive too. A collectible do not need expensive maintenance but caring pet needs high cost. Example: Cats need the expensive food. My brother has six cats (one mom and five kitten). He needs $200 a month for cat feed, not included cat sand and vitamin. My brother also do not bath the cat to pet salon. He can bath the cats alone. Fortunately, the cat is health. We do not have to ask veterinary to cure the cats. In my country, the veterinary cost is not expensive just $ 10-$20. I believe the cost of veterinary is more than $ 100 in United States.

5. Child trouble
Perhaps your child owe some money to mafia. Surely, you should pay the debt or Mafia will kill your child. As a parent, you will not let any people hurt your child.

Four Financial goal mistakes

Some people cannot reach the financial goal whereas they have written it in the book or computer. The unreachable financial goal could happen because some mistakes in writing the financial goals.

1.The financial goal is vague
The people often write that the financial goals is wealth but the wealth definition is so wide. Each people has different opinion about the wealth. The homeless think that the wealth people is someonew whose has a comfort house. The small house owner think that the wealth people is someone whose has house and condo.


2. The goal is unrealistic
The ordinary clerck set the financial goals is to have an airbus aircraft. This is unrealistic goals, the man must be a dreamer.
The ordinary should think as the common people. Their salary is enough for house, kid education, ordinary car, and others. They also need to consider the medical and the retirement.
They can fits the financial goals with the money they have own or salary they have. How much the amount money that can they save in a month?

3. unmeasurable
The goals is to own the house but the goal does not describe the house. The goal should describe the house well. Example, the house price is in the urban city near the centre of city. The house in city center is more expensive than the suburban house because the land price is very expensive. The unmeasureable goal make you difficult to allocate the money.

4. Decrease the goal
Evaluate the goal is a must but decrease the goal is a mistake. When you have a realistic and reachable goal, you do not have to change the goal.
Example: Last year, you have write the financial goal about saving $ 100,000 for house. Due the downturn economic, you change the goals. you decrease the saving to $ 75,000. The decreased goal make you lazy. You do not find the alternative way to reach the goal.
Be creative to reach the goal. Find other income source to reach the goal and do not depend on paycheck every month. You can buy some asset such as land, property, vehicles, and rent the assets. Alternatively, you can invest to the profitable investment. 
The financial goals is an element of financial planning. Making a msitakes in financial goals will influence the financial planning. Carefully to make the financial goals for your life. You can consultate to the financial expert about your financial goals.

Top Financial Planning tips
Personal budgeting Concept

What is Liquid Net Worth mean?

Liquid net worth is the diferrence of liquid asset to the debt or liabilities. The liquid net worth compute how much cash that we can spend. The liquid asset is very important for our life. We need cash to buy food or beverages. If you go vacation to underdeveloped country, some cafe may not receive your credit card. They just need cash. Therefore, you should change your money to the destination local currency.
Beside paper money and cash, there are some liquid asset that you may have. In your country, the suppermarket still receive your debit card. You can use it to buy meat, vegetable, cereal, milk, for your daily necessity.
When you go to cafe, you can also pay the food and beverages with the debit card. Surely, your asset will decreases if you often eating out.
Even a company need liquid asset for buying inventory, buying raw material, paying the salary, paying tax, and others. The company is impossible to pay the employee with table or car. The employee will not receive the office inventory but they just want cash.
The lack of liquid asset can disturb the company operational so the man does. A health company must have a good liquid net worth. 
The money that you put in investment is also liquid asset too because you can cash the money easily. It needs few hours or second to cash the asset. When you need money, you can ask your broker to sell the stock. Surely, the stock price is same with the market value that day. You can either win or loss in selling stock that day.
Though the investment is a liquid asset but we cannot predict the value of asset like a cash. Today, our stock price is $ 1,000. The next days, the price might increase or decreases. Beside stock or equity, the liquid asset from investment are non-IRA mutual Fund, ETF, and others.
The other liquid assets is precious metal such as, gold, silver, platinum, and paladium. We can sell the metal at jewelry store or online store such as Amazon and eBay. The precious metal price is stable unlike stock or other capital market investment. The best investment metal is precious metal bar.
To calculate the liquid net worth, you add all the liquid asset. Then sub it with your debt. It is good when you have a positive liquid net worth. If, on the other hand, you have negative liquid net worth, you need to add the liquid assets.

Five advices to help you become a millonaire

Every people want to have million dollars but it is not a rocket science and easy. To become a millionaire, you can do these advices below.

1.Stream so much income

Try to find so much money as you can. An employee can get $ 35,000 or $ 65,000 per year, depending on the skill. If your salary is low, you can find side jobs. You can still work while you do some side jobs.

Create the book, software, technology to get royalty. Some famous book author can be a millionaire from the book.

Do not depend to your boss only. Someday the boss will not pay you. You have to create so much income source.

2. Save your money

Saving the money is not just in bank. There are some things you can do to save your money. Buying in a bulk is a way to save your money. Use the coupon in the web or magazine to trim down your spending.

We can save the money by thrift the fuel. Buy the regular gasoline rather than the premium. You can save little dollar from it.

3. Invest wisely

Invest for your future. When you stop working, you will get some money to fulfill your daily needs. Investment can multiply our money in short term or long term.

The capital market is the most famous investment today. Unfortunately, the return of stock is not good recently due the economic tight. The bond market is also not good because some Europe country such as Greek offers high interest bond. we can get high interest from the Greek Bond but we are doubt that Greek will pay back our money at the time.

Alternatively, you can invest at real asset such as land, property, crop land, farm, plantation and other.

4. Live below your mean

For what a luxorious car if the cheap car can pick up you to office? For what a big house if the small house is enough for you? For what a gold watch if the steel watch can show the right time?

A millionaire should live below the mean. They can use the money for investment. Warren Buffet, a millionaire investor, prefers to drive cheap car than luxorius car. 

5. Be consistent

A millionaire should be consistent. They should do what they have planned. When they cannot get jobs, they can open a business. Some lucky business man make money more than the employee can do.
read also 
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Why Financial Planning is necessary 
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How to budget when you marry

When you are single, you must be not difficult to create the budget. The budget just consist your spending only. When you marry a woman, you should think the woman spending. You have to responsible for the spending. When your spouse bear some kid, you have to fulfill what they need.
The family budget must need more money than the single. To create the budget, you can do like this:

1. List all of your incomes. The salary may sit on the first rank of the income. Some mother also work to assist the family finances. You may add the wife salary to the incomes list.
Do not forget to list the other incomes. Perhaps you write some book that generate royalty each month. Perhaps you have a business that  generate profit thousand dollars. List all the incomes and do not miss an entry.
2. List of the spending
The first things that you have to list is monthly living cost. The living cost of family must be higher than the single budget. You have to provide more food as much as the number of family. Perhaps your kids need baby food because they have no teeth.
The family head should consider to buy the house for the family. He can use mortgage or buy the house cash.The house is very important for family where they can live at there. 
3. Find the excess of the income with the spending. If the spending is higher than the income, you are better to reduce the spending. Other ways to balance the income and spending is to raise the the income.

Five Elements Financial Goals

The Financial goals is an essential element in financial planning. The goals should have at least five element or ingredients. Here are the elements:

1. Create wealth
The aim of financial goals is to make the people wealth. They can create wealth with some ways. Most people prefers to work for the boss. They can shows the boss that the company deserve to pay they more. They can choose any company that promise high salary,
Some other prefers to open a business due the business can make more money than working as an employee. Some of them are success in business.
2. Maintenance wealth
If you nave reach the wealth, you have to maintenance it. Manage the money that come from your boss or the business well. The money that come to you or cash inflow should be balance with the cash outflow or spending. List the spending for the next month completely. The spending must be lower than the income so you can invest the money or save the money.  
3. Increase wealth
Our jobs is not finish when we have reach the wealth. You should not satisfy when you just get $ 30,000 a month. You can also increase the money to a hundred of thousands. The employee can ask the boss promotion or the business man can add a new store so they can generate more money. A business man can try other business. Example: They can open a car workshop.
4. Protect wealth
Some people may protect the wealth with insurance. The life insurance can help the family survives. The health insurance can protect from hospital fee that is very big. The sick will not disturb the wealth again.
I prefer asset allocation than the insurance, due it is cheap. In asset allocation, we do not have pay the premium. We alone determine to put the money to various asset. Do not put your money at financial asset only such as stock, bond, mutual fund, derivatives, and other. You can put your money to real asset such as land, property, and else

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How to find Financial Planners

If you have so much money, you may need financial planners who advice you to make you more money. The financial planners helps you to build your financial planning. For the common people who does not know about finance they need the financial planners

There are so much people who offer their service as the financial planners. Do not to be tempted with the persuade from fraud people. There are some tips to choose the financial planners, such as:

Have Certified Financial Planners

Having a CFP certificate does not guarantee, the planners is a good financial planners; however, this is the first screen to select the financial planners. Most people whose hold CFP certified has advance financial knowledge. Not all of the financial degree has the certified financial planners. The people should pass the examination to get the CFP certified. I have ever seen the CFP exam that is very difficult.

The payment structure

Do not use the financial planner who ask the commission. The financial planner tend to suggest some product. the financial planner will get the commission from the company that has the product. The financial planner make unbiassed valuation. They said that the product is the best and can generate much money.

Ask the people near you

Get recommendation from people near you. They may have a good financial planner too. They have experienced to use the financial planner for years.

Go to NAPFA

See the list of financial planners on National Association of Personal Finance Advisers. There are so many names of financial planners.

See the code ethics of Financial planner

Each Financial planner has own ethics code. Be sure to choose the financial planners who has "fiduciary" code ethics.

Selecting a Financial planner is very important because they may help you to grow your finances. The mistakes in selecting financial planner could make you bankrupt.

Read More: 
 How to avoid personal finance crisis
Pros and Cons Buy in Bulky
How to live below your mean

 

Financial Planner for 50’s : Preparation to retirement

When we reach 50, we may need so much money. Our Child may need education or college fund. It is not an easy task. The fifty should provide the education fund for the kid

Adjust the portfolio
The fifty often shift the investment to safe investment. They replace the stock with low risk bond. They do not want to gamble with their money. If they loss in the market, they do not know to change the money. They afraid their house will loss to cover the investment loss.
The blue chip stock or defensive stock may fit with the fifty investment due it generate dividend for the investor. The blue chip company is also stable, facing the tight economic.

Resize the house
When your kid has gone from your house, you may need to resize your house. You do not have to own a big house that may bothered you. You must be tired to sweep and peel the large floor. The cost of small house is also cheaper. You do need to make much maintenance to the house.

Retire
If you have much money, you can decide to retire at the fifty. In my country, the government will fire the public service who has hit fifty five except the teacher, lecture, nurse and doctor. The government does not want to employ the old man that is less productive because it load the government budget.
Some company may fired the worker who has hit fifty five.

Find other jobs
If you work at the office or company that need your power, you need to move to other company. The fifty must decrease the activity to keep the health. The fifty five must not be strong as young man. If they got sick, they must be decrease the activity.
If you have a sign that the company will fire you, you have to prepare yourself. Find another company that want use your service and skill. Alternatively, you can use the severance from the company to start a business. Perhaps, you have some idea about business.
In my country, the government organize workshop to help the retire to get some business knowledge such as farm, small business, and others. Some retiree can build a business after they quit from the jobs. It is better than do nothing. An oldman may still work to make money.

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Important liquid net worth in your portfolio

A traditional man invest the money to crop and land. They do not recognize saving account moreover the stock or mutual fund. When he need to finance the kid, he has no money. He has no choice to sell his farm crop. Unfortunately, there was no one to buy the crop. Finally he borrow the money to the usurer. The amount is below the farm crop. The usurer charge high interest to the farmer. The farmer cannot pay the interest; as consequently, the usurer seize the farm. The farmer asset.
From Illustration above, we can learn that the liquid set is very important. The lack of liquid net worth make the farmer loss his crop farm. He has made mistakes by invest the money at the land only. If he had few gold bar, He would not have to borrow the money from userer. He can sell the gold bar to the jewel shop or pawn shop.
The college will not receive the farmer land as the college fee. They just want cash . 
The liquid net worth is a way to maintenance your emergency fund. The farmer has no emergency fund so he must borrow the money to the usurer. The farmer supposedly earmark the emergency fund before the kid enter the college. I cannot blame the farmer because he do not know about finance.  The emergency fund is contain liquid asset only such as cash, saving account, non IRA mutual fund, marketable securities and precious metal.
The liquid net worth also ensure the balance of portfolio. Our asset must be diversified either liquid or illiquid asset. The lack of liquid asset can influence the illiquid asset. Like the farmer, he must sell the crop whereas the crop is the only asset. On the other hand, having the liquid asset only is not good too. You cannot collect the return from illiquid assets.

The benefit of recession

Over 19% of United States people are rich today. They can generate money while the economic is tight. No matter what the economic condition, some people can generate more money. On the other hand, some unlucky person cannot make money even the economic is good.
We know that recession make us difficult to make money, however, there are some benefits in recession time. You can use it to make you wealth. Here are some benefit in recession:
1. The interest rate decreases
The government want the people to work again.  They do not want people just saves the money and wait for the interest. They decrease the interest rate so the business can borrow the money to widen the market. The company will need some employ to operate the company. Surely, the unemployment rate will decreases after the government decreases the rate. 
2. There is an investment opportunity
Though the stock has hit the bottom, the stock might rise up again. Today, the stock price is very cheap. You can buy the stock for long term. At the end of the recession, the stock price might go to the ceiling.
Do not buy all cheap stock. Carefully analyze the stock that will give you so much money in past. The fundamental of stock sometimes reflects the stock.
3. The low tax
At recession time, the government often cut the tax so the employee can bring more money to home. The government try enlightening the citizen load. The businessman can get more income too.
4. cheaper product
With the low tax and interest, the producer can decrease the price. It is a good idea, remembering the people just have little money.They hope more consumer buy the product so they can generate more money.  For the consumer, they can slash the budget for daily necessity. They can save the excess money for other budget purposes.
5. Cheaper property
Due the mortgage crisis, there are some house are seized by bank. The owner cannot pay the mortgage so the bank sell the house. Unfortunately, the demand of house is low due the downturn economic. The bank should sell the house fast or they loss. That is why the bank offers the house cheaper. If you have so much money, you can buy some property. Someday, the property price will increase.
The land is also good for the investment, due its stable price. Someday, a developer build a condo or mall above the land. Surely, you will get profit over many times.

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The budget for the worker who has no field income

Not all people can receive salary like people who work for the company. Sometimes, they get money each three month. For example : The farmer who plant corn, sorghum, paddy rice can get money after harvesting the cerelia. It need at least three month.
Due advanced technology, some surfer prefers to work as the freelancer. They can get some project on internet. They will be paid after the project has done. Sometimes the employer does not pay them because they do not satisfy with the project or they may fraud you. They said that your work is bad whereas they use your work.
As the freelancer, you have uncertainty cash flow. Therefore, you have to create a budget that is specific for instable income. These are the steps:
1. List all expenses
The freelancer must have expenses too though they cannot make money every month. List the fixed spending such as debt, mortgages or house rent, income tax, insurance, food, and else. Do not forget to list semi fixed spending such as electric bill, heat bill, internet bill, cable tv, cloth, and so on. Sum all of  the month spending.
2. Sum the income that you might receive next month. You may get the benefit from service fee, royalty, consultant fee, and others.
 Alternatively, you count the income that  you receive last year than divided by 12. It can smooth your revenue.
Do not list the income too optimistic. For example, you will receive hundred percent of your project that you have done last month. Some boss may pay you next month but some other may not pay you. Some client want to pay you but they want to pay it next month. You have to compute the income carefully.
3. Compare the income with the spending. If the income is higher than the spending, you can allocate the excess to the saving or investment post. You can also buy something if you need it.
If, on the other hand, your spending is higher than income, you need to reduce the spending. Alternatively, you borrow the money from other. By borrowing money, you can fulfill the daily necessity for temporary. It is not good to add the debt, remembering the high interest that you should pay. The better ways to make your budget balance is reduce the spending. As a freelancer, you need to trim down any spending due you do not have fixed income.
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Financial Planning For 40's : Collecting abundant Money

The forty has reached the top of career. Few forty can get the manager level position while most of forty just ordinary clerk. If they married at twenty, they would have some teenager who need college fee. At the forty, they need more money than the people in thirty.
Here are some financial advices for the forty: 

1. The retirement is still the main of financial planning for forty. The forty can still contribute the money to the their retirement fund. Some people prefer retire early at forty. They must have much cash to finance theirself.
In my country, the company often retire the worker who has reached 45 old years. They do not want to employ the old man that cannot work fast.

2. Portfolio
The forty must need the safer investment. They can decrease the risky investment at their portfolio. Today, the share market is not good due to the economic crisis. Most company try to survive with the economic tight. That is why they do not pay the dividend.
They can save the money to gold, silver or other precious metal in order to keep the value of their money.

3. Education
The forty must need money for kid college or school. They have to spend those money for the kid.Surely, they must save the paycheck for the other child if they have more than one child. Without a good education, your kid could not find a good job.

4. Find other income source
As a experienced worker, you may find other source money. The employee often open a business to increase the cash stream. They can open a consultant firm. Some company may hire you to finish the project.
The easy income source is internet. Some employee create a blog to make hundred or thousand dollar a month. This is not a heavy job. You just need one or two hours a day.

5. The financial planning also emphasize on reduce the spending. By reducing the spending, you can save some dollar a month. Cleverly find some ways to reduce the spending.
You do not have to own the luxurious car though you are able to buy it. There are a lot things that you can do with the money. If you have excess money, why do not invest it. Why do not help other people?

6. Housing
The forty should have to own the house. As become older, you need a permanent shelter. You do not need to move from one apartment to other apartment.

The financial planning is a continuous activities. The financial planning for 40 will determine the next financial planning, while, the financial planning at forty are determined by previous financial planning.

read also:
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Financial Advices near retire

Some employee are worried with retirement. They worried because they will not receive the paycheck from the boss anymore. For employee who use to receive the money from boss, it must be difficult to retire.

1. Calculate the entire of income after the retirement. Surely, you will not receive the paycheck again but you may other source income. You may build a small business that can generate hundred or thosand dollars a month.
Some retirement may decide to work as freelancers. Estimates money that you will receive each month. Do not record the freelancers income to optimistic because the freelancers income is unpredictable.
Having investment can make your life comfort. Also estimates the money from stock, bond, mutual fund and ETF. Consider the recent economic condition recently.
2. Calculate the spending
You can estimate the spending when you retire. It is not difficult to calculate the spending if you used to track your spending. We can just make adjustment for the spending. Sometimes we should delete the spending post or add some new spending.
3. Where place that you will stay
The retiree prefers to stay to suburban where they can breath fresh air and far from noisy. The place where you live can affect your finance too. 
Living in suburban is cheaper than in the city.
4. Payoff the mortgage
It is not good to pay the mortgage after the retirement. It must be difficult to pay the mortgage monthly after retire. You can resize your house to cheaper house so you can pay off the debt.
5. Adjust the portfolio
People who near retire need to adjust the portfolio. You are not young again to cover the high risk. Shift your investment to safer investment such as mutual fund, blue chips stocks, and others. Some experts says that the people near retirement can invest at 30% grow fund.
Invest at bond is not good investment due the low interest rate. The bond has risk too.
6. Open a business
In my country, the government offers the workshop for public service who approach retirement. The government hopes the public service can open a business too.
In my opinion, an employee approach retirement must be difficult to build a business because most employee has no experience in business.
A business is a risky activity, meaning we can either win or loss. Not all people can make money from business. However, the employee may try it to make money.

Financial Planning for 30's

What is financial planning for the thirty? This is almost similar with financial planning for twenty or forty. The Thirty may take high risk reminding they are still young. They have health body. They can works in various places. As a young man I work at least for three office. Surely, I spend most time at an office. I got the paycheck from those office If I work the project.

In thirty most of us can generate more money because we reach the top of the health. You should use it to prepare your future. Here are some financial planning for thirty.

1. Retirement Fund
Yes, you should think about retirement fund though you are still young. The early you save money, the more you will get the money after retirement. The retirement fund can fulfill your daily need after you retire.

2. Housing
A young man need the house too. It is not good to live with parent moreover you have married. If your parent ask you to live with them it is not problem. Perhaps they want to ask help for you. In retiree, they do not like living alone like other people. 
Though, you live with parent, you can buy the house if you have money. You can rent the house to other people.

3. Start a business
In Japan, there are some creative young that found creative business. They create some anime and cartoon film that make money million dollars.
when you still young, you can start a business. You can take care of the business after work.

4. Saving and investment
Save your paychek and then invest at profitable investment. This time might be not good for investment but someday the investmet will rise up again.

5. Living Frugal
Do not think that you can make money forever. Someday the company may fired you and you will be poor. Do not use the brand product while the generic product is not different in quality. Do not follow other people style because they may have high salary.
We can save much through this lifestyle. Dozen, hundreds, or thousand will be useful for us.

6. Emergency fund
Set aside money for emergency fund. The amount is depend on your daily needs. The emergency fund is usually six times 

7. Education
Perhaps you want continue to the master degree or doctoral degree. You can make money after you graduated from higher college or university.

How to increase net worth

People try to increase the net worth that depict the wealth. Net worth is the difference between the assets and the liability. A rich man may not have high net worth if he or she borrow money to buy asset. Off course, the high debt makes the people or unwealth. Example, Mr. Jordy has luxorious car, and big house but he lease the car. Each month, he has to pay two hundreds dollar while his salary is only $ 2,500. Meanwhile, his neighbor Mr Jones has no car. He just got $ 1,000 from the business but he has no debt. He has paid the house previous years. Though Mr Jones salary is lower than Mr Jordy, Mr Jones has higher net worth.
The higher net worth, the more rich people. There are some ways to increase the networth:

1. Increase the asset
This strategy is good for people who cannot reduce the liability side. They should work hard to increase the asset side to balance the liability side on the right.
Increase the cash stream by working for other company, opening a business, selling stuff at internet, selling the stuff at the garage, and so.
You can also increase the house. Buy some house and hire those house to the renter. The renter can pay the rent expenses each month or each year.
Beside buying house, you can also buy other aseet to keep your value of money. Buy some productive asset to increase your networth. Some plantation or livestock can make you money. The plantation can produce fruit and cereal and you can sell it to the market.
2. Decrease the liability
This strategy is fit for someone who cannot increase the asset. They have to decrease or reduce the debt so it can lift the net worth. Try to decrease the useless liability such as plasma tv, luxorious car, and other.
Settle the debt as soon as possible. Use your asset to pay the debt with interest. The high debt decrease your net worth and it may reduce the asset. 
3. Increase the asset and reduce the liability
This strategy can increase your net worth fast. Surely, everybody can do it but the result may vary.  Despite you have much money, you do not spend it for luxorious things. They prefer to save or invest more money to make other money. As consequently, the asset may increase because the asset can generate money.
Our investment such as stock, mutual fund, or ETF price might increase. When we sell the investment, we will get money.

How to become financially stable

Diversify your income
A man should have more than one source income due tight economic. We cannot depend on salary only that your company have not increased it year to year. Some employee save a part of salary to build a business with the friend or colleague. They can work for the business after working from office. It does not disturb their jobs in the office.
If you are busy, you can invest your money to reliable friend. They may share the profit with you. While, you are still working, your friend will send money to you.
Is it enough to generate income from two source? No, you can expand other source. You can buy some asset such land, car, boat, and others.
Get money from various income types.
Most employee get monthly salary that is derived from the boss. The high salary base on our contributor to the company. The manager level employee can get higher salary than the staff. The company also employ the expert with high salary.
Due to economic tight, some company reduce the employee. The employee who depend on salary will got nothing. They just receive pension rate. If the company are kind, they may give severance that can we use to find other jobs.
Speaking about financially stable is not complete without talking about spending. To reach financially stability, the people should manage the spending well.
The debt usually may affect the instability. When the interest rate high, we need more money to pay the debt. Allocate the money to settle the debt soon. If you have excess money you can settle all of debt. Perhaps, you will get penalty but it will enlighten you next day.
The increase of good also may disturb the financially stable. They can make flexible budget to anticipate the increases goods. There tips to reduce the spending such as buying in bulk, using coupon, and others.

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Why Financial Planning is necessary?

Some rich people hire the financial adviser to construct the financial planning for them. They realize that financial planning is necessary for them. They can plan to make the company great or live comfort after retire.

Here is why the financial planning is necessary:

Management
The spending should be less than the income is the main principle of the financial planning. The financial planning can help us to manage our money. It helps us what kind money for spending or saving for any people.

Estimation
The financial planning can estimate your financial needs in future. You may have some plan for future such as buying house, paying kid college, traveling around the world and else.
If you want make your dream come true, you can estimate the money you need in future. If you just an ordinary clerk, you must be difficult to make your dream come true.
Portfolio
In financial planning, we put the money not only in stock only but also other investment such as ETF, mutual fund, precious metal, and else. You are in high risk when you put all money at stock only or bond only.
Some financial plan as to diversify the asset to various financial assets or real asset. When the economic tight, they can buy more real asset such as plantation, cattle, chicken and others.
Retirement
We need to set up the retirement when you have no long work. It can guarantee you to get cash stream when you have no salary. The financial planning suggest as to set apart of our salary for retirement. The amount of money that you save at the retirement fund will increase. It because the investment generate the revenue. If you have no retirement fund, you can invest directly to the some company. In future, they may fulfill your necessity someday. The financial planning explain the steps to go wealth with restricted salary that you have. It suggest you live in frugal though you can generate million dollars.
Big Expenses
What happen to us in future is unpredictable. That is why the financial planning is important to fulfill the big expenses. A employee may got sick after working hard, the child may need dozen thousand dollar for college fee, and so. Without good financial planning, the man could not fulfill the big expenses.
A good financial planning encourage man to prepare money fro big expenses. They should not worry about the big expenses.
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Golden Rule for Financial Prosperity

Every world citizen wants to financial prosperity. They try to work hard to achieve a financial prosperity. Here is the golden rule of financial prosperity:


1. Stream multiple incomes
The Salary or paycheck that you receive from your boss may be not enough for you. You can find other source to support your living cost. Some employee may find side jobs that they can do after arriving home. The blogging may be also a good ways to stream few dollars.
There is trend in my country; the younger employs prefer to stop working as the employer.
2. Shelter
People who are unable to own the house must be uncomfortable. They have to hire the house or apartment to other people. If the owner expels you from house, you can do anything. They have the house.
In my country, some rich man proud for their much house. They buy so many houses at different place. They rent the house to other people.
3. Vehicle
In Java culture, a man should have a ride. That is why the motorcycle is very salable in Indonesia where the most Java lives at there. They often use motorcycle leases. We just need $50 for down payment and we can pay the residual of the credit on three years. Using motorcycle is very economist. You just need a liter of gasoline a day. However, the motorcycle is high risk. Over 60% traffic is caused by motorcycle.
Having a motorcycle may be not enough for you. A good cheap car can bring you to office. You do not have to buy a luxury car though you have million dollars in your pocket.
4. Avoid debt or loan
A man should not ask the loan or borrow money from others especially consumer debt such as vehicle, TV, and others. If you want borrow to growth the business, you can consider it.
My business guru refuses the loan proposal of his student that require loan. He said that the student should sell the asset that the student had. He wanted to borrow the student if the student has no anything.
The student must be disappointed with my guru but he did what the guru said. He sold his asset such as motorcycle, cell phone, and others. After three years, his business has grown. He has a good car.
From this illustrative, my guru want to teach that we should avoid debt.
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Why people fail to reach financial freedom

They have good jobs and they have much saving. They also contribute to retirement fund. They have done what the financial experts suggest. However, the people cannot reach the wealth or financial freedom. How about people who have no jobs? They must be suffered.

Here are some reasons why they fail:

1. Cannot get the right jobs
We live when the high unemployment rate is so high. The opportunity to getting jobs is low. Some people prefer to open a business rather than waiting the office asks them for an interview.
For unemployed people, they are difficult to save or invest because they have nothing. Some of them depend on the parent gives or they become homeless. They hope from people bless in street.
2. Adaptable
I saw so many businesses can adapt no matter the regime who lead the country. They are adaptable to any business condition. Either communist or democracy government, the businessman can earn high profit.
As the individual, we should be adaptable with the economic situation. The high inflation does not affect this kind man. He or she may replace the investment or saving that can earn profit in the inflation. They will change the business core when the inflation is very high.
3. Marketable skill
While some doctor cannot generate money, a teenager can generate thousand dollars in a month. In my country, there are so many young writers who have published dozen books. The young writer usually writes teen fiction.
If we have a marketable skill, we will not starve. Though you have no jobs, you can sell your skill to the company or other people.
Find that skill that only few people masters it. The people will find the people with skill.
4. Has no planning
Most people have no planning where they go. They are difficult to reach financial freedom because they do not know what they should do. They may be a high paying employee.
Set your planning today. Let say, you want a master degree or real estate for next five years. You will be motivated to gain the money. Set some part salary for master degree and real estate. 
5. Destiny
I do not blame the God that has made people poor. The man could not change the destiny no matter how hard they try. However, you should work hard to reach financial freedom. There are so many opportunity in the world. Do not be desperate to work until you get what you want.
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How to avoid personal finance crisis

The uncertainty global economic is increasing. The Greek debt crisis has influenced the world economic. Some Europe country also suffer debt crisis such as Portugal, Italy, and others. The crisis may affect your personal finance especially the investors who invest the outside. They will loss:

1. Pay your debt immediately and do not propose another debt
Set aside your salary to the debt expenses. If you have more money, you should settle the debt immediately. Do not ever let the debt hang your neck.
The mortgage has caused some people poor because they cannot pay it. The credit card can cause the financial crisis. Some Korean people in financial crisis due to credit card. We have to better throw the credit card now.
2. Not dependent on your boss, your parent, you brother and your sister
In economic tight when the company may fire you, you should find other jobs to fulfill your basic need. You must be able to predict whether the company wants to bankrupt. If they late or do not pay your salary for month, you should be ready to find other company or other office.
Some people feel comfort with the parent. They think the rich parent will support him or her forever. That people must be unwise. If the parent needs more money, they should payback the money soon.
3. More save
It is difficult to save more when the good and service price multiply. However, you should save more to anticipate the crisis. Saving money does not mean we save the money at bank or certified deposit. This investment is not profitable today. Saving at bank may guarantee your money but it cannot protect the value of money.
That is why, people save their money at gold or silver. The gold and silver price is skyrocketing at last year. I am also worry that people will hunt the gold so the price will be unreliable.
4. Emergency fund
The emergency fund can help you to finance your living cost in short time or six month. It depends on the amount of emergency fund. This fund helps some unemployment while they cannot generate salary. The unemployment must need transportation cost to apply new jobs. They also need paper and envelope for applying a position in the office. 
5. Find some free
There are some coupons in internet or newspaper. Use the coupon to cut your spending. You may just get a gallon of milk, a slice of pizza, a con of ice cream but it can save few dollars.
6. Change your lifestyle
The economic is tight, you have to change your lifestyle now. The generic product is better than the brand product now for you.
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Financial Advice for teenage

A teen also needs financial advice too even they have not yet generate money. They may not know about finance or money because they have no jobs unless special teen who work as the artist or celebrity, such as Justin Bieber. Though the teen has no paycheck or salary, they should manage their money well. The parent should advice the kids so they can manage money when they grow up. Here is the financial advice for teen:

1. Budget
A teen that have able to calculate the number and graduate from mathematics subject must be able to create a budget. They can use a piece of paper or they can use spreadsheet. I believe the teen spending is not much as the mature spending. Perhaps their spending is just transportation cost, lunch, toys, and others. Most teen spending is paid by their parents. 
Remember what you spend last month and what will you spend next month. This is not difficult for the child to record the spending.
2. Frugal living
Do not ask your mother or father to buy the expensive gadget and toys like your friend? Your friend father may be a success business that has million dollar in stock while your father is just a clerk. You just need a simple phone to connect with your friend or you may need a notebook.
As the teenager, you do not need own car. It needs service and maintenance. You can use bicycle to go to school or the school bus.
3. Saving
Your mother gives $ 100 per month but you do not spend the entire of money. You do not need to back to your mother. Keep the excess cash to your cash box. You may need the money when you grow up or you can collect it buy games, software, baseball card, and other.
It is better to buy the toys with your money than asking to your mother.
4. Try to find little pennies
In my country, a couple kids make English course games. The games can help the foreign English to learn English fun. The kids generate royalty when they young.
Why do not sharp your skill when you are young? You are young and your parents support you with money. They also allow you live inside the house.
Some kids offer the service to the neighbors. Mowing the yard is not a bad idea. The neighbor may like what you do.
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How to generate money when you are between jobs

When the company decides to fire you in order to efficiency, you should make the step to find other jobs. Finding a jobs need time. Sometimes we should wait other jobs for years. Surely, waiting jobs is not a good activity. It makes you sick and wastes your times. Here are some activities that can make money while you are between jobs:

1. Find part jobs
Some people may offer mowing yard to the house that have large year. Perhaps the owner will be kind to you and give little dollar to you.
Visit the veterinaries near your house. He or she may need assistance to hold the cat or dog. The veterinary may need someone who wants to bath, sit, and walk with dogs.
2. Surf the internet
Some people dream get thousand dollar from blog or website. This a internet era where people can sell or buy through online. If you have no much money, you can sell other website stuff such as Amazon, eBay, and else. You can get 4% each you can sell the stuff.
There are some website that offers little dollar. Five dollar that you can get from the internet may be useful for buying some bread, milk, cookie, pampers, and others.
Some survey also pay you little dollar. It is not difficult to do that. You just choose or select the option.
3. Garage Sales
Having some useless items? Why do not you sell the items? It is better than let the items damage at your garage. Perhaps your family saves some antique stuff at the garage. Save the money from garage sales for food or transportation cost to find new jobs.
4. Volunteer
There are some non Government Organization that seeks the volunteer. You may work as volunteer to get paid five dollars a day. It is not much but you can get benefit by working as volunteer. You can add your volunteer work on your curriculum vitae or your portfolio. The company may appreciate the volunteer than unemployment.
5. Open a business
It is not wrong to start the business after the boss fire you. Old age is not a reason for you to stop trying. Why do not you start business from your hobby? Perhaps you have some toys or train.
Use your saving to open a business. Perhaps you will be success with business. Some people can be success after the boss fires them. Now, they have own business and employ some people.

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