4 Personal Finance Tools and Their Cons and Pros

In the personal finance realm, there are all kinds of tools in which you can invest. You can get some of them through your work, and you can purchase others on your own. They can pay significant dividends, particularly if you diversify your portfolio and make your money work for you.

We’ll go over some different financial tools in this article. We’ll discuss why you may want to invest in each of them, and we’ll talk about any potential drawbacks that each one might present.

Why Invest in Various Finance Tools?

Before we get into the different tools that are out there, we should explain why they’re going to interest you. Your short and long-term financial health is the main reason why you should look into investment tools and strategies.

Some people don’t plan for their financial futures. Instead, they spend their money recklessly and hope they’ll see an unexpected windfall.

The Federal Motor Carrier Safety Administration says that Texas and nine other states represent 51% of truck or bus fatal crashes. A resident of these states might try to pursue a wrongful death lawsuit if a commercial vehicle kills a family member.

However, you can’t count on lawsuits for your financial future any more than you can rely on a rich relative leaving you money or winning a Powerball jackpot. These things happen occasionally, but you’re better off pursuing reality-grounded investment strategies. Now, let’s go over some of the tools at your disposal.

401K Programs

A 401K program is something that your work might offer to its employees. Workers get a chance to save for their futures this way.

A 401K is a retirement account. You put funds into it from your paycheck each week, or possibly every month if you’re on that pay schedule. Some employers will also match your contributions up to a particular percentage, such as 2, 3, or 5%.

401K programs are great because when you put money into them each pay period, you’re saving for your future and your family’s future. You can also get what amounts to free money if your employer generously matches part of your contribution.

You can cash in your 401K once you get to retirement age. You can use that money in retirement, along with your Social Security payouts.

The one drawback is that if you have very little money in the present, you probably need every penny you can get. When you put money in your 401K every pay period, that’s less money you have to spend on rent, food, utilities, and so forth right now.

An IRA

Maybe you’re self-employed, or you have a job that does not offer a 401K program. Some of them don’t, particularly if the job is what some people call “unskilled” labor. Food service industry jobs, for instance, don’t often provide 401K programs.

An IRA is a retirement account you open yourself with a bank. You put money in it when you can afford to do so, and it generates interest. Like a 401K program, you wait until retirement age, and then you collect that money.

The drawback is the same as with a 401K program. You can’t spend in the present what money you’re saving for the future.

Also, if you need that IRA money desperately, and you decide to cash out early, you’ll usually have to pay a penalty on that. If you don’t want to pay that penalty, you’ll have little choice but to wait until you get to retirement age to claim that cash.

A Mutual Fund

Maybe you want to get into investing, but you feel like purchasing individual stocks is too risky. That makes sense since buying individual stocks is a significant gamble due to how much they can fluctuate.

Buying into a mutual fund essentially means that you’re buying up many stocks and other commodities at once. A financial expert controls what commodities make up the mutual fund. The idea is that your investment will grow over time, and you’ll get more money out of it depending on how many shares of the fund you bought.

You can cash out your mutual fund shares at any time without suffering a financial penalty. The only potential drawback is that even though mutual funds are safer than single stocks because they’re more diversified, even a mutual fund can go up and down depending on what the market’s doing.

If you can leave your money in a mutual fund for five or ten years, you’ll probably make money off it since history shows that mutual funds usually go up over longer periods. However, if you buy into a mutual fund and then decide you need that money again just a couple of months later, you might lose money that way if the market’s not doing so well at that time.

CDs

A CD is another financial tool you can consider. You can buy a certificate of deposit for a set amount, usually from a bank, and it will often bring back a higher interest rate than something like a savings account would. You might get a 6-month CD or one that matures in a year, two years, or even five or ten years.

CDs are safe since market volatility cannot touch them. Like IRAs and 401Ks, though, you can’t collect that money until the maturation date. With most CDs, you incur a penalty if you need to withdraw the money early.

Because of this, you need to be as sure as possible that you won’t need that money before the maturation date, or it kind of defeats the purpose of buying one. Also, if the economy isn’t doing so well when you’re CD shopping, the interest rates you can get for them aren’t going to be all that high.

You might decide to purchase several of these tools if you can afford them. Diversifying your financial portfolio is one of the fundamental strategies in which any individual can engage.

The Advantages of Payday Loans

Life is extremely unpredictable. You never know what you might be faced with the next moment. Financial emergencies are one of the problems that most people have to deal with pretty often in their lifetime. Imagine yourself being in a situation where you have to pay an unexpected medical bill or have to make an urgent car repair, but you are out of money. Adding to the problem, if you have a bad credit history, it would be very difficult for you to obtain a loan. What now? The whole scenario might drive you into depression, as you might not see a way out of it, but don’t worry! There is one life savior for you and that is a payday loan! 

In situations where you are crushed under extreme financial pinch, payday loans are there to solve your problems instantly, but temporarily. Below are some advantages of taking these appealing loans which will prove why these loans should be your last resort in an emergency situation. 

Fast Money

The best part about these loans is that you get the money very easily. There is no detailed questioning or form filling. You can even apply for payday loans online simply, submitting very little information that is required and approved within no time. Most of the people who apply for payday loans get the loans on the same date, which is why these loans are most preferred in case of emergencies. 

The Application Process is Convenient

Unlike most loan application processes, you don’t have to schedule a meeting with any loan officer to apply for a payday loan. Most traditional loans often dictate how the money should be spent, but don’t worry, as this isn’t the case with payday loans. You have the freedom to spend the money anywhere you want. 

Bad Credit History

Most people with a bad credit history are denied any loans by the banks. However, you need not worry about that when it comes to payday loans, because even if you do have a bad credit history, you can still get approved for a payday loan. All you need to show is that you can pay back the loan on time. Your current steady income is going to act as proof that you can pay the loan back. If you have found yourself in a difficult situation where you need a payday loan, use a reputable provider like Speedy Cash who can help you ease the burden.

The Requirements

Before you get excited to apply for a payday loan, it is essential that you know the consequences if the loan is not paid back timely. Generally, when you get a payday loan, the lender receives a cheque written by you of the amount you are borrowing, or you grant them permission to withdraw money from your account on the due date of paying back. So when the day arrives, the amount will automatically be deducted from your account. The main problem arises when you don’t have funds in your account and for that, the situation becomes extremely undesirable. 

  • You will get hit by a Non-Sufficient Funds fee charged by your bank
  • The lender may charge you another fee along with the interest. 
  • Every time you make an attempt to write a check from your account, the NSF fees will keep hitting you for every single attempt. 

So before applying for any payday loan, ensure you can pay back the loan otherwise the loan can become costly due to overdue fees and bank fees.

Five Things Every Successful Business Needs

Supposing you are all set to start your own business and ready to experience the freedom it will offer you—the freedom of exploring your passion and setting your working hours while being your boss. Everyone wants to be the CEO of their own company. In case you don’t know, 2016 was when eighty new business ventures were created each hour. Since then, more and more people are striving to start with their small business and moving towards entrepreneurship. If you are one of these, there are five things that every successful business needs, especially when starting on a small scale.

Strong Business Plan

Nothing can go wrong with a strong business plan. It doesn’t matter your business’s nature and what services and products you want to sell and provide to your clientele. You need a strong business plan. If you search the internet, you will find many free business templates to help you set up your business plan. However, if writing isn’t your cup of tea, you have nothing to worry about. You can also seek professional advisors who will help you set up a document that contains your business aims. Remember to jot down all your milestones, goals, and objectives to track your progress effectively.

Good Marketing Strategy

An effective marketing strategy is an essential part of any business. In fact, it wouldn’t be wrong to state that a company’s success and failure depend on the marketing strategy. Different aspects are part of an effective marketing strategy. For instance, you need to consider your competitors’ stance, the marketing forms, and the contemporary marketing methods. You will also need to determine how you will reach your client base. An effective marketing strategy includes an effective marketing strategy.

Customer Engagement

When it comes to setting up a business, the most important components are your customers. Without your clients, your business will cease to exist. Focusing on your clients’ requirements and needs is a crucial step towards a boost in sales revenue. This is specifically true when you launch a new product. Your customers need to be the focal point of every business decision that includes the payment methods and forms of engagement if you genuinely want to be successful.

Effective Management of Finances

One of the primary reasons businesses are forced to close their doors is poor cash management. Without cash, you won’t be able to invest in stocks or put your business plan into practice. You cannot even pay your employees, follow your marketing plan, and invest in any equipment. Irrespective of the nature of the business, you will have to make all financial investments wisely. You might also opt for online loans while keeping a close eye on your income and expenditure. Businesses require funding at different phases. It might be at the start of a new project or while expanding one’s business, investing in equipment, and recovering from losses. Entrepreneurs have to look out for effective ways to make optimal use of their financial resources, and whenever the need arises, they can opt for a business loan.  

Enhanced Technology

In 2021, we cannot deny the importance of technology being the king. With the ongoing pandemic, half of the population is forced to work. Your business needs to be all geared up with the recent technology to stand out from your competitors. This includes making your business websites compatible with different browsers and mobile devices. Upgrading your business website with the latest software can also boost your business efficiency while safeguarding your administrative tasks.

What to Consider Before Applying for Small Business Funding

Whether you have just set up your small business or have been running it for a while, there’s a high chance that you’re going to need some additional funding. Although it’s easier than ever to start a small business online with whatever you have in your bank account, many business owners find that borrowing money helps with improving branding, hiring an employee, outsourcing to freelancers or specialist companies, and reaching out to potential customers. Getting a business loan is difficult for many new, small companies. But the good news is that there are several small business lenders who may be willing to accept your application and provide you with the funds that your business needs to grow.

Reasons to Apply for a Short-Term Loan:

First of all, it’s important to determine the right type of funding for your business. If you need the cash to cover an emergency expense or a sudden loss of cash flow, a short-term business loan might be ideal for you. These loans are designed to be taken out for a short period of time to cover unusually high expenses and keep your cash flow positive. They are often used for purposes such as making emergency repairs, hiring additional temporary staff during busier periods, or when you expect your cash flow to improve soon and need additional funds to keep operations running until then. Find out more about qualifying for a short-term business loan at advancepointcap.com.

Long-Term Financing Options:

On the other hand, you might be looking for funding options that are available to your business over the long-term. A business credit card is often one of the most effective funding options available as it provides you with an ongoing line of credit that you can use whenever is necessary for making purchases, upgrading equipment, investing in services, and more.

Getting Your Business Plan in Order:

Whether your business needs short- or long-term financing, it’s important to make sure that everything is in order before you apply. Any lender will want to see a copy of your business plan before they consider your application, so it’s a good idea to go through this document and make sure that it is up to date. If you are just setting up your business and have not yet written a business plan, there are plenty of online resources that you can use to help you create one.

Your Business Credit Score:

Bear in mind that your business’ credit score will be taken into account when applying for short- or long-term funding. This applies to any lending that you have participated in and how it was managed. If your business is currently in debt, it may be necessary to pay these debts down before you can apply to borrow more. Issues like missed payments and defaults will also be taken into consideration. If your business is brand new, your personal credit score may be examined instead, so it’s worth taking steps to improve it before applying.

If your business needs funding, determining the exact type of funding you need and ensuring that your company is in a good position to borrow is crucial to improving your chance of acceptance.

Applying for a Personal Loan? Follow These Tips

Personal loan is considered as one the most convenient way to meet any immediate financial emergency. Whether you have any medical emergency at your home, need to fund your child’s higher education, or even wish to clear all the outstanding debts, personal loan is the immediate choice to get funds without any hassle. These loans are easy to access as opposed to home loans or car loans because banks do not require any security for personal loans. 

The interest rates applied to personal loans are comparatively higher than any car loans or home loans because banks consider personal loans as unsecured and undertake higher risk in providing personal loans. Before applying for the loan, it is essential to understand your financial needs and terms of the loan. Take some time to calculate the EMI amount that you easily afford during your tenure. 

To help you with this, we are here with some important points to consider before you approach your bank and apply for a personal loan.

1.Check Your Credit Card Score

Whenever you apply for a personal loan, the banker goes through your credit report to see the number of applications you have sent to different banks. If your credit report is full of different applications, your credit score falls. So, to avoid any rejection from the bank, it is advisable to check your credit report before you apply for a personal loan.

2.Compare the Interest Rates 

There are several platforms available to compare interest rates offered by different banks. Comparing the interest rate helps you ensure that you receive the lowest interest rate. Also, enables you to select the best interest type which makes the repayment of EMI easier.

3. Calculate all the Costs

When applying for a loan, there can be numerous loan processing charges like prepayment fee, processing fee, late payment fee etc. Consider all the charges to get a clear estimation of the total expenditure. Calculating these types of charges along with EMI help you decide the most affordable loan for yourself.

4. Consider your financial needs for picking the appropriate loan

List up all the requirements and then prioritize them to finance with a loan. There can be numerous financial needs like wedding, medical emergency, buying a vehicle or to plan a holiday. Decide the loan amount based on the expenses associated with your requirements. Consider flexi personal loans if your monetary needs are unpredictable. 

5. Evaluation of your ability for the repayment of the loan

Before borrowing, one should always be ready with the preparation of  repayment. You should have the ability to pay the EMIs using your income. For this, you can use several calculators to estimate the monthly EMIs in advance to plan your payments accordingly.

6. Consequences in case of failure in repayment of Loan 

There might be some serious implications if you fail to repay the loan amount. Make sure you pay all the EMIs on time as delayed or deferred payments will not just make you an unreliable customer for the lender but you will also face penalties which will automatically increase the loan amount.

7. Avoid gimmicks

You may come across some artificially low interest rates by some lenders. These types of gimmicky schemes often turn out to be more expensive than others. Generally these are based upon floating interest rates which makes the interest rates appear low in the beginning but with time it increases substantially.

8. Read the complete loan agreement

It is essential to read all the details of the loan agreement to avoid any unpleasant surprises later on. Understand all the charges, fees and penalties to get aware of the terms & conditions of your loan.

Personal loan might be the last option to meet your financial needs but they do have some drawbacks. What if you plan your money in advance and be ready with your funds for any type of emergency. There are several options available in the market to save your money to get good returns over a period of time. If savings are not enough, you can go for various investment plans and achieve your financial goals. If you need financial stability in your life, investment is a good option to get you there. There are several benefits of investments which makes you get started with it. 

Benefits of Investments:

Quality investment is one of the best ways to achieve your long term financial goals.

 

1. Helps you build wealth-Channelize a part of your monthly savings into investments based on your financial needs. You should be clear about your financial goal whether you need funds for your trip,buy assets, or to plan for your retirement. To start with this, you simply need to set an objective of investments and then accordingly select the tenure and the perfect investment tool for it. 

 

 

2. Beat the Inflation- The average rate of inflation is around 3% and if you invest money, you will earn a 7% average rate of return. This way you will stay ahead of inflation and can increase the money value.

 

 

3. Retirement Funds- The power of compounding works best if you want enough funds after the retirement period. Compounding is when your interest starts earning interest. This way you can earn a good amount for your retirement.

 

 

4. Save on your Taxes- There are several investment options available in the market that can help you save on your taxes.

 

Taking a personal loan to meet your financial needs has its own advantages and disadvantages. If you are satisfied with the terms & conditions of loan agreement, check all the above mentioned points to consider before applying. And, if you want to grow your funds for a safer future, you can go for an investment option. Whether you have a financial goal of 10 years or more, quality investment helps you reach your goal faster. Go for the best suited investment plan according to your needs.

5 Most Promising Financial Products in 2021

Is it time to give your finances a makeover? Whether you have accumulated a large sum of money or you have recently pulled yourself out of debt and you wish to manage your money better, it might be time to do a little inventory and establish some new goals for your wallet.

When you are trying to figure out the best path to improving your financial health, the world is truly your oyster. The financial industry – from the corporate titans to the small fintech outfits – has come up with a treasure trove of products and services to take care of your money.

To make your journey to financial wellness a little easier, we have compiled a list of the top financial products everyone should look into this year:

1. Wealth Management Apps

Do you have time to sit down with a cup of coffee and comb through your financials for a couple of hours? If not, you can automate this process by utilizing any one of the many wealth management Apps available today.

Online wealth management Apps are great because they monitor your spending, update you on your goals, offer personal finance tips, and even encourage you to better take care of your dollars and cents.

Plus, some Apps can even invest for you, with some even using your spare change!

So, what wealth management apps should you consider? Here are a few of the most popular ones:

  • Acorns: This app takes your virtual change out of your account and invests the money.
  • Mint.com: A budgeting website and app that gives you a detailed presentation of your budget, transactions, and analysis.
  • Finch: This innovative hybrid checking and investing App, lets you instantly access your invested funds.
  • Personal Capital: This app tracks your budget while also giving you insight about your investment accounts.
  • Empower: This service integrates budgeting with accrued saving, setting weekly and monthly spending limits.

The attractive aspect of these Apps is that they are free to use!

2. All-in-One Checking and Investing Account

If you have a lot of funds sitting in your checking account, it is dead money. Many consumers will rely on their checking account as an emergency fund source or as a financial cushion. But aside from covering the necessary day-to-day and month-to-month bills, the money in your checking account serves no other purpose. And, since the dollars in this account are not earning interest, these funds are in fact losing value when you factor inflation. 

So, what is the alternative? Perhaps an all-in-one checking and investing account is something to think about for your finances.

This account essentially blends your banking and investing needs into one convenient account, from buying that daily latte to paying your rent to investing in an index fund. And, perhaps the most appealing benefit of them all, is that it provides daily returns. Instant liquidity and regular growth: a savvy financial product for any beginner investor!

3. Robo-Advisors

Are robo-advisors the go-to tool for investing in the future?

Robo-advisors are digital platforms that give users automated and algorithm-driven financial planning services with little to no human supervision. Everything robo-advisors do is based on the information from clients.

Robust financial planning, enhanced security features, and detailed portfolio management – these are some of the features of robo-advisors.

Could they replace conventional financial advisors? Consider this from Investopedia:

“With more than $250 billion currently under management in the U.S., various industry studies predict that the amount managed by robo-advisors will continue to grow at a torrid pace. At one point, many even predicted that robo services would drastically reduce or eliminate the need for traditional advisors.”

Some financial institutions are choosing to blend the human with the robot, providing the efficiency and convenience of a robo-advisor, with access to personalized service where needed.

4. Value Dividend Stocks

Interest rates are at all-time lows across the globe, encouraging consumers to dip their toes in the financial markets to receive more than a few cents on their savings. But what should investors even buy if they’re looking to reduce risk but maximize returns?

Although everything comes with risk, your best option might be value stocks that pay a dividend.

A dividend is a portion of the company’s profit that is paid to shareholders every month, quarter, or year. This strategy is beneficial for two reasons: you receive a capital gain from a higher share price, and you earn a regular income.

Here are some value dividend stocks that have not missed a dividend payment and have been steady in their yields:

  • International Business Machines (IBM): 5.58% yield
  • World Wrestling Entertainment (WWE): 0.99% yield
  • Exxon Mobil Corporation (XOM): 2.20% yield
  • Brookfield Infrastructure Partners (BIP): 3.81% yield
  • Walmart (WMT): 1.45% yield
  • Suncor Energy (SU): 3.44% yield
  • Nutrien (NTR): 3.16% yield

5. REITs

After watching the multiple real estate shows on television, you have probably gotten the itch to participate in real estate investing, whether it is flipping properties or earning rental income.

While appealing on screen, in reality real estate is a hefty commitment, demanding time, energy, and considerable financial resources. Not to mention stress. If investing in real estate doesn’t fit into your current situation, there is an alternative: REITs.

A real estate investment trust, or REIT, is a company that owns and operates income-producing commercial, industrial, or residential real estate. REIT investors earn a monthly or quarterly dividend, without the headache of owning a physical property!

So, what are some REIT products you should look into in 2021? Here a handful to consider:

  • Prologis (PLD): 2.45% yield
  • Public Storage (PSA): 3.60% yield
  • SBA Communications (SBAC): 0.71% yield
  • Equinix (EQIX): 1.57% yield
  • American Tower (AMT): 2.25% yield

The financial industry is known for its impressive number of financial products. You can find anything and everything for any purpose or goal. But knowing what to research and what to buy in 2021 – and beyond – can be a feat in and of itself. For more information on how to get your money to work harder for you this year, talk to someone you trust who prioritizes savvy financial management, or reach out to a financial expert who has experience in any of the products we’ve listed above.

Registering a WFOE in China as a US Entrepreneur: Why You Should Work with an Agency

For more than two decades, China has surprised everyone because of its meteoritic economic growth. Almost all top companies, from Dell to GM, have some presence in China or plan to go there. If you are a US citizen and want to see your company grow rapidly, the idea is simple, incorporate your business in China. 

The Chinese administration adopted a pro-business approach that targets two things, attracting new businesses and supporting them to grow. In addition, the country has a large market that you can capitalize on to catapult your business to the next level. 

To take advantage of these opportunities, you need to register a company in China, but this can be complicated because it involves dealing with multiple offices and preparing loads of documents. This is one of the reasons why you should consider working with agencies of experts. 

Keep reading to identify more benefits of working with an agency for company incorporation as a US entrepreneur.  

Agencies Work with Experts 

The most challenging process of registering a WFOE in China is probably the large number of documents that need to be prepared. Most of these documents, such as articles of association and the business structure might be too complex, especially to those without legal backgrounds. 

However, agencies are run by experts in company registration. This means that they know how to prepare the documents professionally, raising the chances of your company’s application getting approved. 

Having been in the Chinese market for some time, it will also be easier for the agency to navigate through the different entities. Whether it is getting approval for the business name or application for the business license, the agency will make the process simpler, convenient, and cheaper. 

Agencies can Tell You Strategies that Work and Those that Don’t 

For your business to be successful, you need to use the right strategies. However, a lot of businesses fail within their first year because they adopted the wrong strategies. This brings us to the main question, “How do you identity the right strategy for your company in China?” 

By working with an agency, you have the best opportunity to identify the strategies that work and those that do not. Having worked with other companies, these agencies’ experts will have seen what does not work and caution you in advance. See – why risk using strategies that will yield no fruits? 

A Helping Hand during the Early Phase of Business Establishment 

Company incorporation as a US entrepreneur is only the first step in your effort to make it a multinational.

 The next most important step is getting the enterprise started. The agency you select will be there to hold your hand and ensure your company’s entry is seamless. In addition, the agency can also help you with bookkeeping, filing tax returns, and offer important advice for faster growth.  

If you are a US entrepreneur and plan to invest in China, the best route is working with an agency. These firms not only help to simplify the process of company registration in China, but also come in handy to ensure you become successful. With experts on your side, you cannot go wrong!