Category: Personal Finance

How to do Asset Management Yourself

It’s not enough that you work every day. If you want to become rich, you also need to invest your money so that it will earn for itself. This is the same concept of putting your money in the bank but the low interest rate that banks give is not enough to combat the rising inflation rates. In fact, if you really want to double or triple your money, experts suggest that you put up a business. However, this is not an option for most people, especially those that are afraid of taking risks. Thatís when asset management comes in.

Asset management is the professional management of your money and other assets like stocks, bonds and even real estate for better profit. This is often done by financial advisors and portfolio managers for a fee or most often a percentage of the earnings in a period of time. This fee is what makes most people, especially retirees, shy away from hiring asset management people.

If you know the economic environment and understand investment terms, you can actually take care of your own assets. Here are some tips on how to manage your money and properties yourself.

1. Ask people

Do not be ashamed to ask people for advice or recommendations. Start with the people that you know. Ask friends or colleagues. If you know people who are good in business, approach them. They will be wells of information. This is because they are probably doing their investing themselves and will know business investments that are really good. Plus, these people in the industry are the first to know about stock news and gossips; so you will have first knowledge of the goings on.

Ask them whatís the latest stock that they bought or what investment opportunities do they know that can yield a lot of money. Even if they are not doing asset management themselves, they can probably mention a couple of companies or investment funds that their managers recommended. This way, you are benefitting from asset managersí wisdom and expertise without having to pay for the fee.

2. Do your research

One reason why a lot of people hire mangers and not do the investing themselves is the fact that the world is filled with people who want to rob you of your money. There are a lot of con artists with schemes that seem picture perfect at first glance. Earn money in 6 months with minimum investment, everything will seem too good. One advice, check it out. If something seems to good to be true, it probably is.

Before you invest in something, make sure that you have done some background checks on the company running it. Looking at their websites or visiting their offices are not enough. You need to look thoroughly at every aspect of the company. Check the transactions that it has made over the years. The number of years that the company has been operating is a pretty good clue too. Stay away from new companies as much as you can. They may be operated by con artists.

3. Diversify

This is actually what most people in asset management do. Do you know the old saying “Don’t put all your eggs in one basket.” Heed that. Put your money in different business investments. That way, when something happens with one, you still have the other one.

4. Keep track of your assets

In the broad view, computer progams are in 3 main categories: (1) word Processing (2) Database and (3) Spreadsheet. Of these, Database and Spreadsheets work well for asset management. Database to keep track of what you have. Spreadsheet (recommended) to list what you have and be able to recalculate values, costs, etc.

5. World view

As of the late 1970’s or early 1980’s the world started to break down into two classes of people: (1) those who are computer literate and (2) those who are unemployed.

Think about that and where you stand in “The Big Picture.”

6. Avoid buying “on margin” and leveraging:

A big factor in the stock market crash of 1929 was buying “on margin.” This is a term meaning that a stock is bought on credit, where the buyer might put up 10% of the price and was actually taking out a loan for the other 90%. After the crash, the US Government passed new laws to limit this practice but it still happens.

Today there is another term, “Leveraging” which means that people use the equity in stocks they own (but may have bought on margin) as collateral for acquiring more stocks.

This is an extremely dangeous practice, especially for the small investor. If they do this, they are no longer risking “money they don’t need” but everything they have.

A true story: In Florida there was a “small” investor whose portfolio had reached a value of one million dollars. He was an active trader and the brokerage firm he was working through gave him his own office and computer setup. But he was leveraged to the hilt and didn’t really own much of anything. When “Black Monday” hit, the brokerage firm gave him a “margin call” of about $20,000. This meant he had to comeup with $20k to cover the full prices of stocks he had bought on margin. They must have known almost to the dollar how much cash he could get. Once he tapped himself out to pay the margin call, they glommed onto the cash and immediately hit him with another margin call which he couldn’t even begin to pay. So he realized that he was going to lose his entire protfolio and there was nothing he could do about it. He brought a gun into the Brokerage firm’s offices and shot as many of them as he could before he shot and killed himself.

It was discovered later that he had been a criminal and was part of the witness protection program. This illustrates the dangers of buying “on margin” and “leveraging.”

7. A saying:

There is a saying, “You make your money when you buy. Not when you sell.” This means that if you buy something cheap enought, you can’t fail to make money later when it appreciates and you decide to sell it.

Another idea is this: “It’s not money until you sell it. Until then, it is only marks on paper.” This is particularly true of stocks.

8. Stock market, if and when to get out

If the market starts to drop, you have 2 basic choices, get out or ride it out. Remember that if you decide to get out, sell orders are not executed until the end of the trading day. So, say, you see a trend you don’t like at 8:05 AM EST and give the “sell” order. During the day your stocks drop, say, 550 points. You will eat that entire loss because your sell order will be executed at the end of the day at the price of the stock at that time. Not at 8:05 AM EST at the price it was when you first gave the sell order.

A lot depends upon world news and how you think the market will do over a period of weeks or months rather than on a single day’s performance. If you are pretty sure there is going to be a long down trend, it is probably best to get out to stop the bleeding and then get back in when it bottoms out.

9. Watch out for signs of Market Wrecking:

Intentional Market Wrecking is done by rich and super-rich stock owners. It starts with the sale of some huge block of stock or portfolio. Such a sale will automatically start the entire market on a downward spiral. The original seller can stop selling after a 5 or 10 point drop, once momentum has been established. If a long term wrecking is decided upon, as in the 1929 crash, each time the market starts to rally, the rich and super-rich wreckers will sell short on other blocks of stock. Their resources are so great that they can keep doing this for years.

After a while, the frequency of attempted rallies will slow down as the market reaches a point of exhaustion. Margin buyers and those leveraged will be wiped out quite early in this process. Add bank failures, foreclosures on mortgages, massive unemployment and other related financial reverses and you can see how a long term depression can be created.

Why would someone do this? (1) because they can (2) this is a way the rich and super-rich can remind everyone of the power they wield (3) The people who start this will stop selling early and “ride out” the crash they have created. Once the market bottoms out they can start buying assets at bargain basement prices and the big losers in the crash are all the small investors. Think of this as “A harvesting of the turkeys.”

Remember the words of John D. Rockefeller: “There’s no such thing as an accident. If something happens, you can bet that somebody made it happen.”

 

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The Basics Of Asset Management, Part III

 

TYPES OF ACCOUNTING

Cash bases accounting is the management of your current transactions. This way you keep track of any money being taken out of your account or any money that might be deposited, and whether or not it was deposited from you or from someone else.

When any types of transactions take place on your checking account, that is when this type of accounting will come into play. When someone is talking about assets, they are also talking about the cash that you have acquired.

 

WHAT ARE ASSETS?

Of course there are many types of assets but your cash is really the most basic one there is. Any other form of investment that you may have, including, stocks, bonds, Cds, 401ks, 529s and so forth are also a type of asset, and your house and car are as well, but are usually only a real asset if you own them outright. Otherwise your mortgage holder and car finance company own them!

Assets come in all different forms. Start simple, by making sure you keep track of all your transactions, and trying to stick to your budget, so that you gradually pay down any debt you might have. Once you’ve done this, you’ll be in a position to save, and even to invest.

Once you know what all your assets are and what they are worth then you will be able to begin with your asset management methods. Once you have started figuring out a record-keeping system that works for you, and savings and investment strategies that start paying dividends, then you will have the ability to earn more money from multiple streams of revenue, and you will be able to watch that money grow and help you achieve your  financial goals.

 

YOUR FUTURE FINANCIAL GOALS

It’s never too early to start saving for the future. Once you are in a position to start thinking about saving and investing, also consider consulting with a financial planner. Be realistic about your goals, do your research, learn about what things cost. If you want to buy a house worth $500k, what is it REALLY going to cost.

What will the difference be in that financial scenario if you were able to put down $150k of it in cash? And is this a worthwhile investment, if all of your capital and income are ‘feeding the beast’ and leaving you cash poor with no chance to save for retirement?

Unfortunately, in our get credit quick, get the American Dream society, people don’t stop to ask these questions. Owning a home is a noble aspiration, but is it a false security blanket at the end of the day? Looking at the current crisis in the housing market, one could argue yes.

The essential problem goes beyond that though, to being constantly encouraged to impulse spend on everything in sight on the TV. And let’s face it, how much are we ever taught about asset management at school?

But a little knowledge can go a long way. Even if you think things are so bad than nothing can make a difference, you’d be surprised at how $5 saved here and there can add up.

It’s like the humble dime. It’s small, light-weight, but you get 10 of them together and it makes a dollar.

And once you learn more about asset management, you can encourage your partner, if you have one, and even your children too.  That way you can all be actively planning and participating in reaching your financial goals, not being hostages to fortune. Asset management means just that, YOU manage your assets, for a brighter financial future.

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The Basics Of Asset Management Part II

WHY NOT USE SOFTWARE?

I know we have not mentioned all the really handy accounting programs out there that can help you with asset management. This is because you don’t usually carry your computer around with you, while a check book register or a small notebook are portable, so you can note down your expenditures any time, anywhere.

As the old saying goes, the dullest pencil is better than the sharpest memory. We would also advise you to make note of what you do with that cash you take out of the ATM. All too often, it can vanish into thin air without you even noticing. You can write the amount you spend right on the slip of paper, and note down what it was for.

Was it an essential, like milk, or was it a luxury like beer? Again, part of asset management is sticking to your budget and trying to cut down on your impulse spending, so writing these things down will help you spot your areas of impulsiveness.

A notebook for all finances is an even better idea than the checkbook register because you can also note down any items you might be putting on your credit card/s.

 

THE GOALS OF ASSET MANAGEMENT

The whole goal of asset management is to make the most of the money you do have. Credit cards, with their fees and interest and other potential penalties, are not the best way to make the most of your money.

Accounting comes in a couple of different forms, including, accrual accounting and cash bases accounting. Accrual accounting will help you keep track of what you owe if you’ve exceeded your income. This should then let you know that you are spending entirely too much money and that you had better begin cutting back here and there where possible, in order to manage your assets more efficiently.

It is a rare person these days who doesn’t have some form of debt, and a credit card CAN be a good thing if you are making your payments on time and more than the minimum on a regular basis. This is how you can boost your credit score. It is also a way to decrease it though, if you are not careful!

It is not always intentional either,”we are all also very busy. And yes, mistakes do happen. Your checkbook register may have a different amount written in it, compared to the amount of money that you have spent.

That’s why we recommend duplicate checks, and pressing down hard when you fill them out. All too often we write a check and can’t recall who it was to, what for, and what amount.

Keeping these kind of detailed records and making a habit of keeping all your little bank slips and receipts will also be handy at tax time. Especially if you start thinking about running your own small home based business, you will need to keep track of everything you spend, supplies, corporate hospitality (which you can deduct at 50%), and so  on.

In another article we will talk about the risks as well as rewards of tying your personal finances to your own business, but for now, the main thing to remember is that effective asset management is all about keeping track, and staying within budget and on target for your short term and long term financial goals.

 

The Basics Of Asset Management Part III

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The Basics Of Asset Management, Part I

Asset management is all about being more consistent and efficient about managing all of your assets,  and improving all areas of your financial portfolio which need to be improved.

Many people make the mistake of not managing their different types of accounts properly.

The most common mistake being made is in reference to people’s bank accounts.

 

BALANCING THE BOOKS

These types of mistakes could be prevented if people would take a bit more time to regularly record all their financial transactions, every day, or every week, and make sure to balance out their check books.

The whole point of your little check register is to have a little jotter where you can note down everything going in and out of your account quckly and easily, so you can then reconcile it all when your statement comes at the end of each month.

But you can also be more proactive about it. If you think  you might have missed a few items, go into your bank and ask them to give you a print out of the week’s transactions, and see if you’ve made a mistake, or can’t recall the purchase made.

Keeping a record of all transactions being made at all times is an essential part of good asset management.  If you make a cash withdraw, put it in the records.  If you’re busy and can’t do this every day, always request a paper record from the machine and keep the slip with your checkbook register.

Every check being written has to be put into your check book record so that you do not miscalculate, which could lead to being put into the red and being stuck having to pay service charges and other fees that  your bank may apply.

These fees are getting more and more steep depending on the bank, so don’t make a bad situation worse through carelessness. I don’t know about you but I can think of far nicer ways of spending $39 than paying it to my bank for an overdraft fee.

Good asset management will prevent things like this from occurring.

 

Continues in

The Basics Of Asset Management Part II

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Foreclosure Assistance to Help Save Your Home

 

For anyone who is undergoing a great deal of stress thinking that they might possibly lose their home due to falling behind on their mortgage payments, there are many options that could potentially save your home from foreclosure.

It is very important to seek foreclosure assistance available as soon as you think you are going to have a problem meeting a mortgage payment. Leaving it too late will remove many of your options.

One resource that you could utilize would be the many different online resources, where there is 24 hour foreclosure assistance available for people who are in need.

The online resources are government or nonprofit organizations which are available to everyone who is in need of assistance. They might even possibly be able to contact some of your creditors to discuss with them some type of payment plan, which could help you to manage your finances more appropriately.

The internet is truly the greatest place to locate all sorts of information about foreclosure, to educate yourself and know your rights.  Here at this site, we talk about foreclosure, and also the importance of having a budget which can help you formulate a plan for getting out of trouble with the mortgage company or bank.

In addition to looking up foreclosure information on the internet, Try going to the yellow pages on the internet or even in your home telephone book. Throughout the yellow pages you should be able to find more information about finding foreclosure assistance in the area which you reside in.

Another great resource for locating information about getting assistance with your foreclosure is right at your local library. Visiting the library regularly is a really good idea anyway because it is a good way to get access to new reading material, books and information, plus the internet, inexpensively. Let’s face it, everyone has to tighten their belts nowadays.

In the library you will have the opportunity to find many different resources about foreclosure assistance that could be very helpful to you. There will be advice in the self help section on budgeting, better money management, asset management, and even investing, which could be very beneficial for anyone in need of better financial advice.

But your first priority should always be to make sure you don’t end up homeless. No one wants that, certainly not the bank. They want the nice tidy income from the interest you keep paying them every month, which over 25 years adds up to a fair amount of money!

So, if you are in need of foreclosure assistance, put aside your pride and ask for help. Better to do it at the first sign of trouble and be prepared, than to hope things will get better and in the process make your situation worse.

Learning how to manage your money more efficiently will definitely be your first step in order to see how you can avoid foreclosure and make sure that you don’t ever get behind on your important monthly bills.  A good budget can also help you if you want to go to the bank with a plan on how you are going to make up the missed payment/s

It does not matter which resources you choose to gather your information from on foreclosure as long as it is current, reliable and trustworthy. Take the time to do the research you need on foreclosure and how to prevent it.  Take time to write out your budget.

Above all, come up with a realistic financial plan you can live with. You might not have the glamorous lifestyle you once had, but a few sacrifices here and there will be worth it if you get to keep the home you have invested time and money in, and can stop foreclosure before it ever happens.

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Free Asset Management Software

Can you get asset management software for free? The answer is yes but there only a handful of providers around. Whether it is free or not, it is truly something that companies need in order to prevent duplication. While most vendors sell these to companies, those who are unsure whether the system will work for them can avail of free trials which can be used for a short period of time.

If your company has an information technology department, then chances are they can probably make one on their own. However, not everybody can do that so you better read on to know which ones are giving this out for free.

One company that comes to mind which offers free asset management software is SysAid. You can download the freeware from their website and then use it. The only limitation is that their program can only work for organizations that have less than a hundred computers. If you are happy with their system, you can buy the full product by submitting your details. Then a company representative will get in touch with you.

Another company is Footprints. You can download their asset management software program for a 30 day trial period. Afterwards, you have to pay in order to continue using their services.

But asset management software can be used for others things than just monitor the inventory of a company.

It can help guide managementís decision in dealing with non-profitable assets. If there are certain offices that are not making money, it is best to just close it even if it means cutting a few jobs from the workforce. If there is surplus, the company can convert this to cash by selling these off to potential buyers. Also, if the current equipment is already outdated, there is reason to upgrade this to something better.

One other aspect of asset management software is its ability to catalog music, videos and pictures. Technically, such data are assets of the company and these are better known as digital asset management systems because everything is encrypted digitally.

This will enable the user to get this based on the format of their choosing. Some sites that offer this to users are YouTube and Multiply. But this could not be possible without the media, entertainment and advertising agencies that first used this as they needed to archive their vast video library.

It is forecasted that more companies will utilize asset management programs in the future. But those who decide to invest in such a system should remember that it is merely a tool that is to help the company. Somebody has to be trained how to use it so this can be accessed by every department via the intranet.

Are asset management software applications only for large companies? The answer is no because there are versions for personal users. These may be hard to find so it is best to just stick with web based applications.

The chances of getting free asset management software are very slim. But aside from the two mentioned, there are others to choose from so if you are in the market, it is best to look for these online. It is best to read reviews and blogs that are written about them or see it for yourself by trying the free trial version first before buying the program.

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Are You In Constant Fear Of Foreclosure?

Worry over foreclosure creates an enormous amount of fear for so many people, particularly in the present economy.

It is crucial for everyone facing foreclosure to start thinking on a more positive note, by gathering all the information you can about preventing foreclosure.

Living in fear that you could possibly lose your home is a very stressful situation, and it can literally stop you from thinking about anything else or functioning.

Money problems are the number one reason for divorce in the US. So just think how much the strain of facing foreclosure can damage a relationship.

The first step in dealing with foreclosure is that everyone in the family should pull together to learn all that they can about foreclosure, and what steps you can take to avoid it.

First off, do not make the mistake of avoiding important phone calls from your mortgage company or bank. Don’t go a long time without contacting them to make some sort of payment arrangements.

If you try to dodge the situation, you will only make it worse, and could definitely could lose your home if your lender does not think you are a responsible, reasonable person who is willing to do what it takes to keep their home and avoid foreclosure.

Foreclosure does not make you stupid, or a failure. It is just a house at the end of the day; however, everyone does need a place to live. You also want to do what you can to prevent foreclosure because it would mean losing all the money you have already put into the home.

Foreclosure would also mean a black mark on your credit score which can make life a great deal harder in the future. So do whatever you can within your means to avoid foreclosure if at all possible.

People faced with the threat of foreclosure feel as if they are the only person in the world this has ever happened to. One look at the nightly news will tell you this is NOT the case.

There ARE ways of finding out more, and people willing to help you. So put your pride aside, and ask for help. Chances are you were struggling financially long before foreclosure reared its ugly head.

So part of the trouble is that a great number of us are uneducated about foreclosure, while still others of us think we ‘know’ about foreclosure but have actually received wrong information.

For example, unscrupulous companies might tell you that they can make your foreclosure go away, but what you are really doing is signing over the deed to your house and ending up a renter.

It is not the worst thing in the world to happen, since you still have a roof over your head, but it is unfair if you have been tricked into it. And as we said above, you will have lost every bit of equity you might have put into the home, and any chance of using it as a sound investment.

Because of being uneducated about what foreclosure is all about, and the many different things that could be done to avoid foreclosure, too many people really are losing their homes to foreclosure.

There is a lot you can do to avoid foreclosure, and the first thing is to make sure that you really are financially stable enough to afford the home that you have bought. If every penny is going towards keeping it, you have overextended yourself and need to look at either bringing your payments down somehow, or bringing extra income in.

We never know what is coming around the corner in life, so far too many people over-extend themselves on credit cards, car lease agreements and so on. Then they are unemployed, the cost of gas goes through the roof, they become ill and can’t work, and so.

What should you do if any of this happens to you? The first thing you should do is look at your budget. If you have not got one, look in the Money section of this website for lessons on how to make one.

The next thing you should do it tell your bank. It is better to let them know of a potential situation which might arise, and then never happens, than to hope it will go away and not take steps to deal with it.

If anything unfortunate occurs that would cause you to fall behind on your monthly mortgage payments, don’t dodge the bank, phone and ask for an appointment.

Let them know what has happened, when you think you can pay, what steps you are taking to solve the problem. Discussing your financial issues with a professional can put you on the right path, not the path to foreclosure.

Planning for this sort of eventuality is something far too few people do. No one wants to think about foreclosure when they buy a house, but as we are advised by the experts with regard to asset management, know your budget, and have an emergency fund set by for a rainy day which should cover at least 6 months of your day to day expenses,

Knowing what to do in a time of crisis can truly be a lifesaver for many people. Understanding that foreclosure does not mean that you’re a loser can hopefully remove the fear and angst, and help you deal with foreclosure in a much more pro-active way.

With your budget in hand, get your priorities straight: roof over your head, utilities, food. Then try to determine if there are any changes that could be made that will save you some money each month to help you make up for the missed mortgage payment or the emergency situation you are dealing with which has caused you to fall behind.

Having a positive attitude toward your budget and asset management will also help you stay in the black and out of the red and avoid foreclosure.

For more information from the government on the steps you can take to avoid foreclosure, you can visit:

http://www.hud.gov/foreclosure/index.cfm]]>

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