Be The Master Of Your Financial Fate

"Time is our greatest ally in investing", that has always been the advice that we always get from finance professionals and experts. Though there is some significant truth in it, time alone is not efficient enough for us to get the most out from our investments. Market timing is important as time itself. Both time and right timing, if done and made right, can give us maximum results from our investments. 

But why do we often hear about "time" and rarely hear about "market timing" from these professionals and experts?

The answer is relatively simple. These professionals and experts know how to time the market and they are using our money to earn profit as well. Here are the reasons why these people give "time" as an advice for investments.

1.) These professionals and experts handle our money differently. While we let it "sleep and grow", these people are actively trading, buying low and selling high, and earning profit on a consistent basis. The end result? They earn more than us and even without letting any penny out of their pockets. Thus, it makes sense why some financial institutions have this so called "lock in" period because it can give them an ample amount of time to earn significantly and at the same time minimizing their risk because of the longer duration of having our money on their hands.

2.) Because of the market volatility and unpredictability, we may hand your money over to them when the market is not doing good. By heeding to the advice that "time" is our greatest ally in investment, such professionals and experts get more room to patiently wait for the right entry in the market to buy low. Buying low means more upside or growth potential.

3.) Time has not just been associated but has been exclusively linked to investments. Let's take a look at how an investor and how a trader is defined. An investor is defined as somebody who looks long term while a trader is somebody who buys and sells in a short period of time. Worse, traders are often associated as gamblers because of the unpredictability of the market. Investors are traders. Anybody who buys and/or sells trades irregardless of time. This erroneous definition of an investor and a trader gives the negative notion to our minds that an investor is way better and less risky than a trader.

This is not to put down the reputation of finance professionals and experts and even agents and brokers but the point of this one is just for us to further enhance our financial IQ and correct our distorted mindset about being a trader and an investor. These people know how to handle money in a much more effective way than we do. If we want to be more efficient with our money, it makes some real sense for us to learn the things that they do.

Its quite ironic that most of us went to school, have a career, and earn money yet we weren't taught of how to handle and value money. We may never know everything that these people do (its their profession and career in the first place) but at least improving our financial knowledge will make us more efficient in handling our finances. The worst thing that we can do with our money is to hand it over to other people without even knowing how they are handling it.

Mathematically, individual traders outdo mutual fund firms (individual traders handle mutual funds in the first place). An average good and logical trader could earn a conservative 20% in a month to as high as 50% or even more. Some stocks even go more than 100% in just a matter of days or weeks so we see the potential that these people have. Mutual funds conservatively grow by 12% in a year or as high as 40%-50% in a year. What individual traders earn in months is earned by mutual fund firms in a year. See the difference if we handle our investments correctly or at least know where to put our money and how they are managed?

Invest in knowledge before putting money on the table. Knowledge reduces risk significantly and increases the potential of growth. Its just like earning a degree. If you do well in school, you will acquire the necessary knowledge and skills which will give you a good pay later on. Increasing your financial knowledge will make money work for you.

The Biggest Money Mistakes Couples Make

Managing your own money is hard enough; add another person to the equation and it becomes an obstacle course: Does it make sense to combine bank accounts after moving in together? Should you pay off your credit card debt before getting married? Does the higher earner need to cover more of the bills?

Here are six common mistakes that couples make with their money--and how to avoid them, adapted from the new book Generation Earn: The Young Professional's Guide to Spending, Investing, and Giving Back.

Not talking about finances.

Sure, discussing who pays for what and how much debt each person brings into the relationship is awkward--but also necessary. Before moving in together, talk about how you plan to share household expenses, whether the person with the higher salary will contribute more, how much credit card debt you have, and how you plan to share big-ticket items like cars. Also, take time to map out the logistics: Will you pay bills out of one shared bank account? Or keep all your money separate?

Don't forget to bring up your long-term goals, too, which can make the discussion a little more romantic. Do you want to swim with dolphins in the Bahamas? Or backpack around Europe together? Agreeing on common goals makes it easier to save.

Combining accounts too early.

Putting all your money into one account might be the more romantic option (and prevent any debate over who picks up the tab at dinner), but it can also cause major problems in the event of a breakup. Couples who live together without first walking down the aisle face financial vulnerabilities with joint accounts that married couples don't.

Investments in shared assets, such as a home or car, can be lost during a messy breakup if only one person's name is on the title. Money or labor that went into redoing a former partner's kitchen may never be recouped. And while details vary by state, even assets such as joint savings accounts can go to the person who is first to make the withdrawal. Legalities aside, a lot of couples say they like the independence of having two accounts anyway, at least before they decide they've found their permanent soul mate.

Sharing credit cards, real estate, and other types of debt.

If you add your partner's name to the title of your home, then they own it, too--even if you paid for the down payment and mortgage. "I see it happening too often--a couple gets together, says 'I love you, let's set up house and make this official'. . . and then [one person] signs away half of their equity," says Sheryl Garrett, a certified financial planner based in Shawnee Mission, Kansas, and author of Money Without Matrimony. Couples also need to talk about who would get the first opportunity to purchase the house if they were to break up, at what price would they sell it, and how many days they would have to refinance the mortgage in their own name.

Signing on to someone's car loan or credit card can create similar problems. If you break-up and the other person fails to make their payments, then you're on the hook, too. Even if you've long gotten over the relationship, your credit might feel the after-effects for years.

Getting surprised by the marriage penalty.

Newlyweds who earn similar, high salaries often get an unwelcome surprise the year after they get married: They find themselves stuck with a mega-tax bill. That's because the so-called marriage penalty still exists in the upper tax brackets. In 2010, for example, husbands and wives who each earn $68,650 and up in taxable income are at risk for paying more married than they did as singletons.

Earnings above that amount face a 28 percent tax, compared to 25 percent pre-marriage. Couples are most at risk when they bring home similar incomes. (The reverse is also true. When one person in the marriage brings home all or most of the money in a marriage, that couple usually gets a tax break.) The best way to prepare for this unwelcome wedding "gift" is to know it's coming and to deduct more from your salary throughout the year to avoid a large bill on April 15.

Ignoring the risk of a break-up.

Talking about how you would split things up if you decided to go your separate ways can prevent bad surprises later. Unless children or major assets are involved, there's usually no need to hire a lawyer. In fact, you can just write down the answers to these questions along with any others that apply: Who would stay in the apartment? Who would get the cats? The car? If you want to formalize the process, you can pay a nominal fee to download forms, such as a living-together guide and contract, at nolo.com.

Since unmarried couples don't get to argue their case in divorce court, it could be your only protection in place if things go south. (The legal ramifications of common-law marriages, civil unions, and domestic partnerships vary by state.) Couples might also want to consider talking about any debts, past bankruptcy filings, and credit report problems, because even if you're not legally liable for your girlfriend's $50,000 student loan, it could end up affecting your quality of life if 10 percent of the household income goes toward paying it off each month.

Putting one person in charge of money.

It's normal to specialize in relationships--to delegate dinner planning to the best cook, and gardening to the one with a green thumb. But giving one person all of the money management responsibility can lead to an unbalanced relationship.

New York-based relationship therapist Bonnie Eaker Weil explains that no one should ever feel like he or she has to ask permission before buying something. "I call it 'Mother, may I?' You don't want to get into that position where you're the little girl, or you're the little boy, and the other person is your parents. You want to have your own money, and certain things are guilt-free, and you just do what you want with it. If you want to buy a latte, or lipstick, or a facial, you do not have to ask permission, because it's your own money," says Weil. Plus, in the event of a break-up, you want to make sure you know where all your money is and how to manage it.

Source: Yahoo! Finance

10 Reasons to save for retirement while still young

For almost all young adults who have just started their first job, or who are just getting ready to settle down and marry, planning for their retirement is not at all in their minds. For those who have just gotten their first job, the experience of receiving your paycheck is a thrilling and empowering feeling. Now you have money to spend for the things you’ve always wanted to get. Billboards and glitzy print ads beckon you to accumulate all sorts of products and services that make you enjoy the life that you feel entitled to. At last!

But, listen, time waits for no one. Sooner or later, you will find yourself with a closet full of out of fashion clothes, outdated gadgets, and toys that you have outgrown. Worse still, you may still have credit card bills to pay for these things, and zero cash saved up for even your next vacation to Boracay. This time will come, if you’re not careful. And believe me, that time could just be around the corner.

If you’re smart, you should begin to plan for your retirement as soon as you receive your first pay check! Here are ten reasons why you should prepare now:

1. If you are employed, and your company is setting aside money for your SSS or GSIS or company retirement, guess what? What your company is setting aside is not going to be enough.

2. Time is in your favor. Who has more time to save for retirement at age 60? You, or your uncle who is 30 years older than you?

3. Because of # 1, you don’t have to sacrifice a lot in order to save a lot. If you and your uncle wanted to accumulate P1 Million by the time you’re both 60, you would have to save a smaller amount regularly, because you have more time to save. Right?

4. You can make more aggressive investments now but get rewarded with higher returns. Usually, these higher risk investments have a way of recovering very well over a longer period of time.

5. Inflation is not in your favor. You know it. Don’t be in denial. It will cost you more to retire than earlier generations ahead of you. So, don’t think that it will be affordable enough for you by that time.

6. You can start small and grow. Even setting aside a small portion of your paycheck each month will pay off in big pesos later.

7. It’s easier to develop the habit of saving while you are young and you have no major obligations.

8. As you accumulate savings over time, your money will starting working for you, rather than you working for money.

9. No matter how much you love your parents, do you like the idea of supporting your parents because they failed to save for their retirement? Well, don’t impose your failure to save on your children. They deserve a life of their own.

10. It’s great to enjoy your savings! Imagine the nice and easy life you can enjoy when you have saved enough. If you want to keep working even when you’re old, you will go to work because you like to, not because you have to. And – when you have saved enough to take care of a comfortable lifestyle – you can occupy yourself with work which probably won’t pay much, but which will be fun and self-fulfilling.

Source: Save and Learn