Finance Investment

Personal finance and investment

Faustina Bermejo
Personal Finance and Investment

Personal finance and investment

As the recessionary clouds are fading away from the international markets, investments and personal finance concerns are also picking up. Sadly most personal finance managers guide people on ways to increase liquidity by purchasing their company’s credit instruments primarily, credit cards and personal loans. The credit situation may get out of hands and debt refinancing or consolidation is the only options left with. And mind it! These are the high risk options which might lead cause an individual very dearly. For instance, a mortgage against home loan for sealing up the credit may lead to home foreclosure in case of payment defaults.

Personal Finance and Investment
Personal Finance and Investment

In order to stay afloat and maximise liquidity some of the best in class personal finance & investment tips are as follows:

Individuals should understand their risk capacity. Young guns can manage a 60%-70% debt and remaining portion with equity. As one grows older, the debt portion has to significantly come down. An ideal Debt portion should be 20%-30% for individuals aged 60+.

Investing in secured government bonds is good finance

Investing in Secured Government Bonds is Good Finance
Investing in Secured Government Bonds is Good Finance

Investing in secured government bonds, fixed deposit schemes, pension schemes, insurance products and equity linked saving schemes is beneficial in the long run. Individuals can realise higher dividends and few are even tax free!
For children and spouses dedicated financial instruments should be purchased to look out for their education and health respectively. Friendlier payment terms can be negotiated with the bankers and other reliable financial institutions.
High risk instruments such as Mortgage loan against home or a mortgage loan against a vehicle might provide short term liquidity but can rip off in long term. These are smart instruments for service providers. The lesser rate of interest associated with them draw more people towards such instruments. However, what is missed out on is the longer payment durations and interest component.

Individuals should assess out their credit

Individuals Should Assess Out Their Credit
Individuals Should Assess Out Their Credit

At the start of each financial year, individuals should assess out their credit, equity and investment plans. Investment should be managed smartly in debt instruments. As far as possible secured investment instruments must be preferred.
At the time of financial year closure most individuals sort out tax benefits. Individuals should rather target the off season months or recessionary periods in economy. Bankers and other financial institutions generally offer discounts and healthier deposit rates than peak periods.

Only reliable bankers or financial institutions should be sorted out for managing your financial needs. Cheats and newer companies should be completely ignored. After all, it’s your hard earned money and it needs to be parked in safer hands.
Nobody can eliminate financial risks completely. The idea is to mitigate risks. If you have $1,000 available for investment it should be invested across various investment products and not one in order to maximise your profit at maturity.

DEbt Finance

Improve finance with Debt Consolidation

Faustina Bermejo
Improve Finance With Debt Consolidation

How does Debt Consolidation Work

For borrowers with good credit, credit cards may provide a cost-effective method of debt consolidation for debts they intend to repay in 12 months or less. It may be possible to transfer balances from other credit cards to a 0% balance-transfer credit card and repay the total balance without incurring interest. Of course, 0% balance-transfer deals don’t last forever, so the best way to take advantage of them is to pay off the total balance before the interest-free period expires.

Bad Credit

Bad Credit
Bad Credit

Unfortunately, borrowers with bad credit won’t qualify for any 0% balance-transfer deal. Indeed, depending on just how bad their credit is they may not qualify for any standard credit card and may need to rely on credit cards for bad credit. Providers of these types of credit card typically charge relatively high interest rates – 30% and more – but if you pay off your balance in full at the end of each month you don’t pay any interest at all.

Debt-Consolidation Loan

Debt-Consolidation Loan
Debt-Consolidation Loan

Another method of debt consolidation involves taking out a loan to pay off existing debts. In doing so, borrowers consolidate all of their debts into a single debt with a single monthly repayment. The main advantage of a debt-consolidation loan is convenience. Instead of repaying numerous creditors at various interest rates at different times of the month, borrowers take out a loan large enough to repay all their existing creditors and make a single repayment on the new loan once a month.

Repayment Period

Repayment Period
Repayment Period

Borrowers often choose to repay a debt-consolidation loan over a longer period to make their monthly repayments smaller and take the pressure off their finances in the short term. Of course, extending the repayment term may mean that they actually pay more interest on the loan, making it a more expensive option overall. Anyone thinking about taking out such as loan should carefully work out the full cost.

Borrowers with bad credit may find that they are not approved for a debt-consolidation loan or may only qualify for one with a higher interest rate. They may also have to pay an arrangement fee for this type of loan.