Financial Plan

Financial planning is commonly considered a boring strategy used by our parents to manage our money. For a long time, financial planning was considered the way to manage one’s money because it helped people keep track of money coming in and going out. But lots of people are choosing not to do any financial planning because it seems so needlessly complicated with little or not benefit.

But that couldn’t be farther from the truth! There is a benefit to financial planning; the real trick is finding a financial planning method that works for you. Here is an excellent strategy to help you manage the money in your personal portfolio.

The first thing you need to do is create a financial plan. Creating a financial plan does not have to be restrictive, but it should be a guideline to help you manage your income and your expenses each month. The first thing you want to do is list all your expenses on a month-to-month basis. The next thing you want to do it list all of your income on a month-to-month basis. Then compare. Several people who have trouble saving find that their expenses are very close to their income. So what can you do?

One option you have is to reduce your expenses. This might mean going out with friends a little less or giving up on any luxury that you mainly enjoy. Another option you have is to increase your income. Unfortunately, for many people, this is easier said than done.

One way that you can reduce your expenses and increase your income is by using a debt consolidation loan. By consolidating many outstanding debts that are due throughout the mo into a single loan with a single monthly payment you will be accomplishing several things.

First, you will be reducing your monthly payment because you will be securing a larger loan and is spread out over a longer period of time. Second, you’ll be reducing the amount of interest you pay because you will be consolidating your many debts into one debt from one provider. Reducing your interest not only helps to reduce your expenses but also increases your income!

And if you are able to find any assets that can help you get a UK Secured Loan, you’ll be able to spread out your payment over a longer period of time and you will likely qualify for a lower interest rate because you have any security to offer the lending institution to back up the loan.

Now that you are actively pursuing a financial plan, you will need to find a way to continue to reduce your expenses over time. A UK Secured Loan will help you do that. But don’t forget that there are many ways you can also increase your income.

Congratulations! You are assembling a financial plan and getting control of your finances and at the same time you are reducing your expenses and increasing your income.

How do you make your life better? Get more control? Protect your family? Create a personal financial plan. Start here. We all want to know how we are going, . . .

Financial Consultant

How Much Time Does A Big Time Investment Firm’s Financial Consultant Devote to Your Account?

Most financial consultants that work for a large global investment firm need about U. S. $50 million of assets under management to make a decent living in a metropolitan region.

Using this as a benchmark, let’s break down what this figure means to you as a client. It’s highly unlikely that a financial consultant has clients that all have accounts of $1 million or more, so let’s assume that he or she does not accept clients with

less than U. S. $250,000. This could create a hypothetical tier of clients as follows.

20 clients with accounts between U. S. $250,000- $500,000 for a cumulative asset size of $ 7,000,000;

50 clients with accounts between U. S. $500,000- $1,000,000 for a cumulative asset size of $32,000,000; and

7 clients with accounts of U. S. $1,000,000 + for a cumulative asset size of $11,000,000

77 total accounts worth $50,000,000

So it is fairly reasonable to think that a successful financial consultant has 77 clients with U. S. $50,000,000 of assets under management.

Now let’s calculate how many hours a yr this financial consultant will devote to your accounts. There are 52 weeks a yr * 5 days/week * 8 hours a day= 2,080 hours a yr that he or she will devote to his/her accounts, assuming that he/she takes no vacation or holiday days. Most firms will tell their consultants to spend about 75% of all of their time all day engaged in sales activities. So that leaves 25% of the time for your financial consultant to dedicate to the management of accounts, or 520 hours (2,080 hours * 25% = 520 hours).

Almost all financial consultants place their clients into different tiers depending on how much money is invested with them. The U. S. $1,000,000 or more clients would be “A” clients, the U. S. $500,000-$1,000,000 clients would be “B” clients, and the less than $500,000 clients would be “C” clients. Financial consultants universally devote the most time to the accounts of A clients, then B clients, then C clients. To simplify this example, let’s say that the financial consultant spends twice as much time with his A clients than he does with his B and C clients.

If 520 hours is divided in this manner, his 7 “A” clients each receive 12. 38 hours of personalized attention a year, and his 70 “B & C” clients each receive 6. 19 hours a year. So on average, as an A client, you would receive an average of 1. 5 days a yr with personalized attention specifically for your account and as a B or C client, less than a full day a year.

For this level of personal attention you receive from your client, your financial consultant may earn $150,000 to $200,000 a yr depending on the payout grid of the firm.

How Much Time Does an Independent Investment Firm’s Financial Consultant Devote to Your Account?

Now let’s consider what an independent financial consultant can do for you. A great independent financial consultant is independent because he or she wants the flexibility to pursue superior returns for you versus being constrained by the payout grids of large investment firms that mainly never reward great performance but rather just asset gathering.

Let’s consider this scenario. Because an independent consultant may be more discerning as to who he/she takes on a client, let’s assume that he only takes on 20 clients each with accounts between $1 million to $5 million, with a mean account size of $2. 5 million, for the same $50 million under management that we considered under our first example.

20 clients with accounts between U. S. $1,000,000 – $5,000,000 for a total account size of 50,000,000

Now let’s calculate how many hours a yr this independent financial consultant will devote to your account, assuming the same conditions as we did under the first scenario. There are 52 weeks a yr * 5 days/week * 8 hours a day= 2,080 hours a yr that he or she will devote to his/her accounts, assuming that he/she takes no vacation or holiday days. Let’s now assume that since the independent consultant’s operations are much more streamlined and his or her objectives are different, that he spends 70% of his or her time focusing on account management, or 1,456 hours (2,080 hours * 70% = 1,456 hours).

Now all of the independent financial consultants’ clients would be “A” clients so he divides the amount of time spent on each one equally, devoting 1,456 hours/ 20 clients, or 72. 8 hours each yr to each account. Instead of receiving 1. 5 days a yr devoted to your account you now receive more than 9 full days a yr devoted to your account.

How Much is Independence in the Financial Industry Worth to You?

So how much is this extra devotion worth? Let’s consider this scenario from a U. S. perspective, and you can certainly stretch this analogy to other global markets plugging in the relevant numbers for your market. Most U. S. investment firms tell you to expect about 6% to 8% a yr because 98% of the money managers they utilize to manage your money peg their portfolios to the major U. S. indexes. However, for the purposes of our illustration, let’s take what the S&P 500 has returned over the past decade, roughly 9% depending on what start and end date you use.

And even though an investment in the S&P 500, even with the 2006 year-end run, on an inflation adjusted basis would barely be above water for the past 7 years, for the purposes of simplification, let’s ignore inflation for the time being. So let’s assume you receive 9% a year, have a $2,000,000 portfolio and pay your financial consultant 1. 80% of assets, or an annual fee of $36,000 to earn $180,000 a year. After five years, net of fees, in a non-taxable account, you would have about $2,826,000 in your account if the fees were deducted at the end of each year.

Now a great independent financial consultant should be able to earn you about twice that 9% rate, an18% annual clip yr after yr because he or she is spending those extra days maximizing performance versus trying to gather more assets. So let’s say he or she charges you the same 1. 80% of fees. After five years, net of fees in a non-taxable account, you would have $4,237,000 or $1,411,000 more than the financial consultant that is the salesman. In fact, even if the independent financial consultant charged you 12. 5% of profits, you would still be left with roughly $4,156,000, or nearly the same amount, after five years.

So there’s your answer. With an account of $2,000,000, in five years, a great independent financial consultant could be worth more than a cool $1,400,000 to you. Of course, there are as many horrible independent financial consultants as there are horrible firm-related consultants. So make sure you perform your due diligence. However, if you find a worthy independent financial consultant, look at these numbers again and be willing to negotiate paying more fees for infinitely better returns and ultimately a much significantly greater bottom line.

Interview questions and answers ebook: Other useful interview materials: – Free eboo. . .

Financial Trading

In the past, trading on the movement and price direction of financial markets was largely the preserve of major banks, high net worth individuals and sophisticated investment houses. However, the advent of online applications like the Internet has now made it possible for retail investors with limited capital to trade worldwide financial markets in exactly the same way these sophisticated investors did in the past. This form of online trading is widely known as Financial Spread Trading/Betting.

What is Financial Spread Trading?

Financial Spread Trading is a highly leveraged form of trading that has become a mainstream investment tool for retail investors around the world. Effectively, it is a mechanism for ordinary individuals with limited capital to gain access to worldwide financial markets. You can actually trade shares, options, indices, currencies, commodities and just about any other financial instrument through an online financial dealer.

Unlike the traditional way of investing the stock market, Financial Spread trading is based on a simple concept. Individuals get the opportunity to back a trading judgment that they may have, that a particular market is going to rise in value or is going to fall in value. For instance, if you believe that the shares of Microsoft are going to rise in value, you would “buy” Microsoft shares. Conversely, if you believe that Microsoft shares are going to fall in value, you would “sell” Microsoft shares. You don’t actually own the underlying asset. You are simply trading on the price direction of the financial instrument. If your prediction is correct, you make a profit. If you are incorrect, you suffer a loss.

There is also provision of posting a “stop loss order” on mostly all trade you initiate. A stop loss order is a way of reducing your risk exposure to the markets, which means that you can effectively limit your loss in the event of the price moving against your perception.

Spread trading is most easily explained through an example – the concept is the same whatever the market. Let’s assume that it’s October, and due to an imminent breakthrough in the cure for bird flu, the shares of XYZ Corp have been rising steadily over the past few weeks. You’ve been following the market closely, and decide you want to get in on the action. The shares of XYZ are currently selling at $42. 14 per share. In order to buy shares in any listed company, you need to buy a minimum of 100 shares. This means that you need a minimum of $4214 just to buy 100 shares. However, you only have $150 risk capital. What can you do?

Well, given your limited capital, you can simply place a spread trade with a financial dealer on XYZ Corp shares to rise. Financial spread trading enables you to be highly leveraged because you actually trade on margin. Leveraged trading, or trading on margin means that you are not required to deposit the full value of your trade in order to open a position, so buying XYZ Corp shares at $1 a point is actually the equivalent of purchasing 100 shares of the same company. Thus if you are looking to buy 1000 shares of XYZ shares, instead of paying $42,140 for the shares, you can place a spread trade on XYZ shares to rise at $10 a point.

Let’s assume that you contact a dealer for a price on December contract futures in XYZ Corp and get a quote of 4214/4219. You always buy at the higher price, so you buy $4 per point at 4219. This means that each penny movement in the price of the shares is worth $4 to you. To limit your risk exposure to the market, you also place a stop loss order of 30 points, which means that should the market go against you, the maximum you could lose is $120. Over the next few weeks, the stock of XYZ Corporation continues to rise. Six weeks later, you contact your dealer, and the quote for December XYZ Corporation is now 4293/4298.

Because you’re trading futures, it means that the contract expires in December. However, this doesn’t mean that you have to wait until December before you close out the trade. You can close out the trade the same day or at any point before the contract expires.

You decide to take your profits and sell to close at 4293. Because the market went in your favor, you get your full deposit of $120 back. In addition, your profit on this trade is calculated as follows:

Closing level 4293

Opening level 4219

Difference 84 points

Your profit: 78 x $4 = $336

Financial Spread Trading is a derivative product. This means that you are trading on a price that is actually derived from the underlying product. Therefore, if you are trading Microsoft shares, a financial dealer would give you a “derived” price of Microsoft shares. As the prices of those shares go up and down, so would the dealer’s derived price of Microsoft shares go up and down.

The impact of emotions on financial trading. With professor Mark Fenton-O’Creevy and David Jones, IG’s chief market strategist. The comments in this video do. . .