Financial Planning

Car is one of the luxurious materials. Well, not all of the people can buy the car. Many people want to buy it. But, they do not have enough money to buy it. They should save their salary for several years so that they can buy their dream car.
Well, if you had enough saving money to buy a new car, what you will do? You do not have even understood about car and you do not understand about car insurance. You do not understand all. One web site that will guide and explain you about car is carinsurancerates. Well, what is car insurance rate? It is the web site that will inform you about car insurance. You will be explained about what is car insurance until the deepest theory about car insurance. You will be understood about car insurance after read it.
Car insurance rate is the detail car insurance web site. Car insurance rates are also explained here. Beside, you will be guide how to choose the best car insurance broker. All of the service of the brokers should be understood. You will also understand how to insure your car in the car insurance broker. So, there is no problem for you to insure your car to the car insurance broker as soon as possible.

As we plan our retirement finances, we have all run into the widely accepted “rule of thumb” that we will need 70 – 85% of our pre-retirement income as our income after we retire.

It seems strange that this percentage can be applied across all retirees since there are so many variables that can affect each individual situation.

While reading SPEND til THE END by Dr. Laurence Kotlikoff, Professor of Economics at Boston University and Scott Burns, nationally syndicated financial columnist, I found the source of the 70 – 85% rule — and was I surprise what I found out about it.

According to the book, the replacement rate is calculated every three years by the Center of Risk Management and Insurance Research at Georgia State University. The calculation began in 1969. It is based on the Department of Labor’s Consumer Expenditures Survey. The research project is funded by AON Corporation, an insurance brokerage, consulting, and underwriting firm based in Chicago.

SPEND til THE END takes you through how the number is derived. Take a couple just preparing to retire who are making a combined salary of $70,000 and subtract the various current expenses that will not apply after retirement as follows:

Combined Pre-retirement Salary $70,000

Less Pre-retirement

FICA 5,355

Federal Income Tax 7,040

State Income Tax 1,678

Retirement Savings 2,421

Related work expenses 1,975

Plus Retirement

Federal Income Tax 1,264

State Income Tax 278

Total Retirement Income $53,073

Replacement Rate 76%

That is the replacement income percent as shown by the authors in SPEND til THE END. It seems so logical and straight forward, but it will probably be wrong for most people. One size does not fit all in this calculation.

Take your individual case. If you are paying your mortgage into your retirement, will it be paid off a few years after your retirement? If this is the case, your required retirement income will be substantially less than the standard 76% will indicate.

Is your spouse considerably younger or older than you? If one spouse passes away long before the other, there will be a long time when your retirement savings have to support only one person. This is not factored into the 76%.

Will you still be supporting children or parents at retirement? This support will not go on all during your retirement (you hope!). When the support stops, your spendable income will rise considerably. This is not considered in the rule of thumb 76%.

As you can see from the above examples, the 76% might significantly overstate the amount of income you will actually need for your retirement.

Before you believe the 70 – 85% rule, calculate your actual current expenses. Then consider each one to determine what your true retirement living expenses will be. You might have expenses which will rise during retirement such as travel or medical care. You will find guidance on calculating retirement expenses on the Best Retirement Calculators website.

Visit SPEND til THE END.com for more information about this revolutionary and interesting book.

Business expenses are a fact of life. Before you start your business you need to take some time and create a budget that lists your main business expenses and what you estimate each will cost per year.

The best way to do this is to use a cash flow planner. It will take you through planning for your business expenses and the cash that will be leaving your business 13 weeks at a time, or one quarter at a time. Let’s look at some of the common business expenses in detail:

Salary – by six to nine months down the road, you should be pulling in enough income to take a draw. This is a significant business expense at the start, even if you’re only taking out $400-$500 a week.

Employee benefits – another huge area of business expense. Search around to find out what people are paying right now. If you are still employed, try to find out what the total monthly premiums are. Remember to account for the fact that you might not get a group discount rate.

IRA – this is a business expense that many people forget about. You will want to retire, so make this or some other retirement vehicle a priority now.

Payroll taxes – this is a business expense that you should talk to your accountant about. He or she will be able to assist you better than any general guidelines.

Training and certification – typically you should factor in about $1,000 a year for this.

Dues and subscriptions – expect this business expense to come in at a little over $300 a quarter or $1200 a year.

Products purchased for internal use – here we’re talking about spare PC systems and parts. You are wise to budget this business expense at between $3,000 and $4,000 per year. The key here is to only purchase items that will bring you immediate ROI. If it doesn’t tie directly to billable hours, then it is a business expense you can’t afford right now.

Telephone and ISP expenses – budget for about $110 a month for a business phone plus an inexpensive DSL account.

Marketing and promotion – this will be a large business expense. Plan for $5,000 to $6,000 a year.

Commercial insurance – budget for $2,200 per year.

Transportation – a fair estimate is $30 per week.

Professional services – typical yearly totals are around $2000.

Corporate income taxes – this is another business expense that you need to discuss with your accountant.

Loan payments – these will be specific to your situation but need to be included in the budget.

The Bottom Line on Business Expenses

Business expenses will happen on a daily basis. To plan effectively you should use a cash flow planner or spreadsheet to keep track of your budgeted business expenses on a regular basis. Some expenses can be budgeted for based on common experience. The others will need to be discussed with your accountant or banker. There are a lot of variables, but the common factor is the need to budget carefully for your business expenses.

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Making a budget is not complicated. You can either do it the easy way or the slightly more tedious way. The slightly more tedious way is to do it with a pen and paper or notebook. You have to write everything out by hand and use a calculator. A bad thing about this besides getting a cramped hand is the increased possibility for errors.

The easy way to keep your budget is to use the computer. I like to use an Excel spreadsheet, but you can use any spreadsheet program. You have a few options for creating your spreadsheet budget. You can search the web for a premade template or you can make your own. I prefer to make my own because I can make it exactly to my specifications. Usually the free templates include things I don’t need and exclude things I do need.

You can use a premade template to get some initial ideas. Some are very complicated and some are simpler. By looking at a few, you can tailor them for what you need. For example, if you have a family that you support and have several sources of income and several different expenses, you will probably need to devise a slightly more complicated plan. If you are single, live by yourself, and have one source of income, you probably don’t need as complicated of a plan.

When you create your spreadsheet, you need to have two basic columns, your cash inflows and your cash outflows. Cash inflows include every source of income and for how much. You will list your salary, interest income, dividend income, part time jobs, tips, royalties, and any other revenue you take in every month. Your cash outflows are all your expenses. Include your mortgage or rent, utilities, phone, internet, cable, food, clothes, etc. You can be broad, but I prefer to be as specific as possible. You could put a certain amount for ‘extras’, but I prefer to state a specific amount for books, a specific amount for clothes, music, eating out, etc. Be as specific as you feel you need to be to help you save money.

Finally, have each column add up and subtract your cash outflows from your cash inflows to get your net cash flows. This is what you have extra for saving. You may be wondering where to include investments. If you contribute to a 401k or IRA that is directly withdrawn from your account, this should be included in your inflows anyway. Just include your take-home pay in your income. Keep in mind that you have this money set aside for retirement, but don’t assume this is all you need to be saving. Also save money for emergencies, college, vacation, and you can also invest other money to build your wealth. I would suggest not including this in your cash outflows.

If you’re good with money and know how to save effectively, you can start your free online work at home job as a financial planner tomorrow. All it takes is a little know how and organization.

Your first step will be to market your skills. There are many sites where you can post information about the services you offer. You can also put an ad out in the local paper or simply network within a group of people you know. Be sure to specify exactly what you can offer and be very clear about your prices. This will give the impression of professionalism and straight-forwardness.

Once you have a client, you’ll sit down and analyze their financial situation. You’ll want to find out what both their long term and short term goals are. They will need to provide you information about their current salary, current savings plans and any retirement accounts they have. You can then sit down and break their income in several parts. You’ll let the know how much they should be spending on things like rent, utilities and groceries. You’ll also add a certain amount that needs to go towards savings.

A huge part of your job is not just the initial planning but the follow up. Many people might be able to figure out how to budget, but have trouble sticking to it and staying motivated. When they know that they will have to answer to you, their financial planner, they’ll be much more likely to stay on track. Becoming a financial planner is a great way to start a free online work at home job.