FYInance

Archive for the ‘Financial Planning’ Category

Sometimes people have gold but don’t know its value. Gold is a great investment and the value of gold keeps going up. That means if you keep your gold now it is like to have higher value later. But, sometimes it is not practical to keep the gold when you need some money now.

A reader shares with us that he does not want a bar of gold no matter how real or no matter how great an investment it can be. All he needs is rent money. When you actually have immediate needs such as need to pay rent now, it is hard to imagine what you can do with an investment. That’s why when people need money or a job, it is not practical or appreciable to try to get them to invest or start their own business. Starting a business is an investment that does not give immediate money.

Below is one of our reader talking about how he prefers rent money than keeping gold as an investment.

“If I had a bar of gold today, I would probably take it to the local gold buyer and see if thy would buy it and for how much. I need the rent money, so every little bit helps and it seems like a bar of gold would just about pay my rent for a few months. That’s pretty much what I would do if I had a bar of gold today.”

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We talked about investing in gold a little before and how valuable gold is so I think it would be fun to ask some of our audience what they would do if they had a gold bar. Of course, not everyone is interested in investing in gold or anything at all so the answers we get are interesting. We share the answers with you below.

If you have a gold bar today (a real gold bar) what would you do?

“If I had a bar of real gold I would first sell it because the price of gold is historically very high. With the money I receive from selling of the gold, I would put it into a savings account with the highest interest rate I can find, and leave it there, adding to the account, until I have enough to buy a nice piece of property.”

Interesting, this reader wants to invest in a property and would prefer to sell the gold. We already touched on the fact that you need to have emergency money before you think about long term investing. Gold is more of a long term investment than a short term so if you need emergency money or need to buy a home, gold investing may not be for you at the moment.

Do you want to share with us what you want to do with a gold bar?

Today we are going to discuss briefly why financial planning is so important. First of all, you can do your own financial planning even though most people seek the help of a good financial planner or financial advisor. A financial planner can examine your financial situation while having your short term and long term goals in mind and help you come up with a plan (a financial plan) that outlines how you can reach your financial goals.

If you go to a financial advisor, he or she might be able to help you but a financial advisor does not usually come up with the financial plan himself/herself. Besides, there might also be a conflict of interest because a financial advisor has investments to sell whereas a financial planner usually do not sell investments or you can choose one that is independent of investment firms.

It is important to differentiate your long term goals and short term goals as well as examine where you current are financially. Without a financial plan, you will be lost and wouldn’t know where to start to achieve your goals and if you did know then it is still hard to keep track of what you are trying to achieve and what you have already achieved. Everything you do financially should be part of a big plan.

Any thoughts?

Too many people live paycheck to paycheck. However, with a little bit of financial planning, you can improve your financial situation in a big way. We learned from Ed, a financial planner who has been in this industry for 11 years, that without proper financial planning, it is hard to work towards a goal and achieve any financial goal. After all, you can say, I want to have $50k by next year but how are you going to achieve that? That’s why financial planning is very important. First you have to know your financial goal, and then you can work with a financial planner to come up with a plan to achieve that financial goal. Financial planning is very important.

The $50K question is back!

We asked our readers again, what would they do if they had $50k today and one of our readers said:

“If I had $50,000 I would pay off my credit card debt of $30,000, pay off the remainder of my husbands student loan of $10,000, and pay off the remainder owed on my car of $10,000. I would pay off the credit cards and school loan to eliminate the monthly interest charges. Since the interest has already been added in to the car loan there would be no savings of interest by paying it off, but I would pay it off because that would free up my income for savings.”

Wow, this reader has definitely been paying attention. She has a specific plan for the $50,000 and she has some financial knowledge. She doesn’t just want to pay off debt, she knows exactly what debts she is going to pay off first.

We also thank Ed today for his wisdom in financial planning and how he drilled into us the importance of financial planning.