Invest To Financial Freedom - Ways To Invest when you have $100,000? Conservative Way Part 2
This is the chapter 1 for my series Ways to Invest when you have $100,000 In chapter 1, I will share with you the conservative ways to invest your $100,000. This is the part 2 for this Chapter. Check my part 1 here.
Suggestion 1: cash Bonus life insurance + Money Market Fund
Before we start, why don’t we have a closer look and understand what cash bonus life insurance and money market fund is.
In part 1, I already explained what bonus based life insurance is. So this part 2 will talk about money market fund.
In general, money market fund is a fund that invests in short term investment. The main investment for this fund is treasury, commercial papers, Banker’’s acceptances, Commercial papers, Futures contracts, Futures options, Short-term investment pools (STIPs), Short-term municipal securities and other short term investment.
Basically Money market fund is having the following benefits compare to other funds.
-
1. The value of money market fund unit is always same and set at the value of $1 per share. For example, if you invest $100, you will have 100 shares of money market fund. After 1 year, the fund has 8% of returns then your shares will be 108 and worth $108.
-
2. High liquidity because you can buy and sell your fund shares at any time according to the current share price ( The price is revised daily)
-
3. Money market fund is a low risk investment because Money market funds invest exclusively in dollar denominated high-quality, short-term instruments issued by the federal government, corporations, municipalities, and banks.
-
4. Money market fund can give you tax benefits because municipal money market funds can provide state and federal tax-free income, which can be beneficial for those in higher tax brackets.
Money market fund is a good investment that suitable to most of the family budgets. Sometimes it can bring you a higher interest rate and high liquidity that those Bank saving account don’t have. But one thing you should remember. Money market fund still has its own risk and not 100% can guaranteed you can receive any interest. Sometimes its liquidity also limited. Therefore, please do some researches before you invest in money market fund. Good Luck!
Personal Finance - Planning Tips before Traveling
More and more people like to travel. Since we will spend thousands over dollar to travel, why don’t we sit down and spend some time to do some planning. By planning, we will know how much we will spend and how to save some money while traveling.
Below are some of the simple tips that I recommend to you:
1. Plan for the journey
Before we go on a journey, we should make a plan. In this plan, we must know the main places that we will go and start including those alternative places that we might go. After this, we must include a budget plan. We have a budget on our journey. The main expenses are transport, entrance tickets, foods, hotels, shopping and others small expenses. PS : Don’t take easy with this, because we will easily spend more money if we don’t have a plan on this. You also must reserve some money for emergency usage.
2. Transport
Different transports have different pros and cons. The airplane is fast, you can save a lot of time by taking an airplane. However the cost of airplane is expensive and it is cannot be chosen as your main transport. Train and cruise is another kind of economical transport. However it is slow. You can easily get tired and drop down your mood of travel. If you can afford, you may choose airplane as your main transport. However it is also a good experience if you choose train and cruise as your transport. Anyway, since it involves your money, you must plan and budget it so you can control your expenses.
3. Credit cards
If you go on journey with your family member, expenses can easily go up to thousands dollar. It is troublesome if you bring cash along with you, but it will be more convenience if you bring along you credit card. You may use your credit cards to pay for hotel, foods, shopping and others. If anything happen, you can use it to withdraw some cash from local bank for emergency usage. But, please remember, you still need to budget your expenses. If not, once you over the limit, nightmare will come after you happy time of journey. From my experience, you can treat credit cards as a debit card. You set a limit of $1000, and then you cannot spend over the limit. PS: here you must control your emotion, don’t let your happiness of journey burst your pockets.
4. Walking VS Transport
Just now we mentioned about the transport. However you have to pay for most of the transport. But thanks god, we have a transport that is free - our legs. The main point of travel is - be personally on the scene and feel the natural world around us. Along with the fast development of the world, there are a lot of facilities available in hot travel spot. We go around with car, mountaineering with cable car. We not only spend a lot of money here, but we also by pass a lot of beautiful scenes. If you choose walking, this not only saves some transport expenses, but you also can feel the real purpose of travel.
5. Choose the right place to stay and eat.
Normally, you will spend more money in travel spot. Therefore, it is recommended to choose your hotel and restaurant that outside the travel spot. For example, before you arrive the travel spot, you may choose some hotel in the small town around it. After having your meal, you can visit those places that you want to. If you can, you can eat more in your breakfast and bring some food, such as bread, ham and water for lunch. This just a saving idea in travel. You still need to figure out a complete plan to budget everything you spend in travel.
Financial Planning - 4 MUST To Plan For your Financial Freedom, Part 3 : Replacement of your income
This is the part 3 of the series 4 MUST to plan for your financial freedom, this series is written base on Liz Pulliam Weston - 4 ways to protect your financial freedom. You may read my Part 1 and Part 2.
Disability insurance: Replace your income
You may think your biggest asset is your house or your 401(k), but actually it’s your ability to earn money. And chances are you don’t have enough protection should you be hurt or become sick and be unable to work for more than a few weeks.
Your state’s workers compensation fund, for example, usually provides benefits only if you get hurt on the job. Your employer probably provides some kind of short-term disability coverage, but the checks will end after three months to a year. If you can’t work for longer than that, Social Security may provide some benefits — but only if you’re so disabled that you can’t hold any job. So unless you don’t mind switching from your current career to one flipping burgers or telemarketing, you probably want to have a long-term disability policy.
Unfortunately, you may find long-term disability policies are expensive and tough to get if your employer doesn’t offer this coverage, said Raymond Parry, an account executive with James P. Bennett & Co. in Santa Monica, Calif. A 35-year-old white-collar worker looking for a $5,000 monthly benefit would pay $2,500 a year or more for an individual policy, assuming she was in perfect health, Parry said. Some people who try to get policies on their own, Parry said, find they don’t meet the disability companies strict underwriting criteria.
It’s much easier to get a policy through your employer, if that’s an option. About 25% of the nation’s workers have long-term disability coverage through their jobs, U.S. Department of Labor statistics show. Either their company pays for the insurance, or the worker can buy it at reasonable group rates. The larger the company, the more likely it is to provide this coverage, said Joseph Luchok, spokesman for the Health Insurance Association of America in Washington, D.C.
If your employer doesn’t offer the coverage or you’re self-employed, your next best bet is to see if you can buy a policy through one of the professional or trade organizations to which you belong. If not, you can try to form your own group of at least 10 people to qualify for a discounted rate, Parry said. The insurance agent said he has formed such groups for small business owners who didn’t have enough employees to qualify for group rates on their own.
If your only option is buying a policy on your own, make sure to get enough coverage. Most insurers won’t provide benefits that replace more than 60% to 70% of your income, but opt for the highest percentage you can get. You can buy policies that cover you for the rest of your life, but they’re often prohibitively expensive; look for one that pays benefits until age 65.
Everyday we need money to survive! Yes this is the truth and the fact that all of us know. Even a 5 years old child also know this fact. Everyday we wake up and we must think how to earn some income for us or our family. But what if, I said what if, you lost the ability to make the same income for your family? Case will be worst if you are the main income source and all your family depend on you. That’s why most of the time, when people consult my mentor about the financial planning for future; my mentor will highly recommend them to invest some money into their insurance to protect themselves and their money. My mentor also does the same thing, even though he is financial free. According to him, this will be a protection to you and your love one when anything happens on you. We can’t predict the future but we can prepare for it!
