Buying a Car? Sound's good

How to Buy a Car With Bad Credit



Buying a car is a big deal for most people. Cars are pretty expensive and most people can't pay cash for them. Most of the times, people take out loans to pay for their cars the same way they take out loans for their homes. Most cars are paid of in the period of a few years. The longer you take to pay off a car, the more interest you will pay. It's in your own interest to find a car loan that has low interest rates and a not so long payoff period.

But with the economic crisis still going strong, a lot of people now have bad credit scores. A lot of people are worried they cannot be approved for a used car loan because of their bruised credit. It is very ironic that people with bad credit have bigger problems being approved for loans with lower interest. After all, if you're on bad credit, you're already having troubles making your payments to begin with.

How To Buy A Car With Bad Credit

You can still buy a car even if you're on bad credit. But I'm going to be perfectly honest with you. It will take a lot more effort than if you would have had good credit.

Before you are going to be shopping around for a used car loan, make sure that you have checked your own credit first. There are websites on the Internet that will get you your credit report for free. But they only do this once per year. You'll want to know where you stand before you go talk to a lender. The lender will also run a credit report and it would be unpleasant if you were to be confronted with any surprises you didn't know about.

If your credit is really bad, you might have to repair it before you can be approved for a loan. If your credit is not the worst out there, then you can usually get approved for a used car loan if you provide proof of income and employment. Knowing you'll be able to pay off your monthly bills on the car loan will make clear to your lender that you are a low risk investment for him.

SHOPPING!

"To go or not ... ... That is the question!"

How many times this question has crossed our minds? Almost every time we spend money, is not it? Have a nice day passed without us spending a single penny? Unlikely! The question is not whether I go or not, but as the content, we accept our spending habits. Here are some smart spending habits to adopt in order to financially sound.

Spend to budget

There is a proverb that says, Malay, Ukuri baju sendiri di Badan we measure "our clothes on our shoulders. That's like saying, we ought to spend our budget. We have already reported on the issue of tax administration in the previous article, and repeating: Budgeting is really a plan for us without spending later, a guilty conscience. What is important here is that we have a plan "expenditure" in the first place. Without them, we will very likely be spending on impulse or what is commonly referred to as the impulse. We can not entirely avoid impulse buying and it is not wrong. There were times when we can not resist the aroma from the cup of cappuccino or a pair of shoes or handbag is for sale! And even if it is more the rule than the exception, we have our spending habits on their guard.

When preparing your spending plan, you must also learn to anticipate your needs. For example, if we make progress on new clothes for the holiday season, get it earlier in the Mega Sale or whenever a bargain comes our way (for example) at a sale of the closure of storage or sale. If we want a roof every time it starts to buy rain, we have not only end up with too many umbrellas May, but have to pay a premium for it. It is also advisable to budget for unexpected expenses such as angpows wedding, car repair, home repair, etc. These elements, if not set, can throw us off-budget!

Compare prices

Should we get used to buy for the comparison of prices before you buy something or just us? Some of us can say that the time and cost of shopping before you buy a bottle of oil or not a tube of toothpaste May is worth it. True and that is why we have to be a smart consumer - we must plan our purchases and a copy of the prices of the products. Here we could do our own "price book" to a decline in the prices of the items we regularly buy and exactly where and when we get the best deal ever!

For example, if store A has the lowest prices for most items in our shopping list during the week, then we should plan our food shopping during the week there. However, if Store B has the best deal at the weekend and we are free weekend, we should be there instead. The fact is - a shopping list, book a price and stick to it. In fact, we can continue this process a fun family activity to help our children get to hold a poll on "price" every time they go shopping. Each family member can see each other then who will find the best deal in town! This would not only help us to compare prices, but also teach our children the value of money.

Branded Stuff

What's in a Name? Each year in May, and it will be worth more than the product itself and as consumers, we tend to brands that we trust the most to buy. What is all well and good, but if you end up buying things we can not afford it or not, it becomes a problem. Some of us buy things brand, because we discussed the ideas and emotional appeal through advertising created themselves, and not affected, because we need it. As intelligent consumers, we sometimes have to look and ask about the brand: "Do I really need?", "It is really worth so much?" And "Can I really afford?" Do not make purchases on the pictures or all at once, what your friends, but to your needs and benefits of the product.

Buy Used Items

The thought of buying used items can save some people, but this is a great way to stretch your ringgit. The biggest advantage here is to take the first buyer to the initial impairment of the product which is usually the largest. Take for example the purchase of a new car. Do not suffer in most cases, the owner of the new car 10-20% depreciation in the value of his new car when he drove him out of the showroom! If he sells after 3 years, it can be used for two thirds of the original purchase price to sell if he is lucky! Imagine if you had bought it ... It's like a rebate. Yes, you may not get that "new smell" of a car, but it's really important? It may be worthwhile to be a victim as long as the car well maintained, not robust and strong non-reduced, right?

To buy another good example of products that we do not want new products for babies, including clothing and toys. Some of us may recoil at the idea, but it is not unusual. Baby clothes are not cheap, and carry your baby gets, the more likely very quickly for some time that the baby goes through the clothing. Ideally, we could get the hand-me-downs for free by dropping a hint here and there. Otherwise, you can either borrow or buy second-hand from parents that they no longer need the most.

Purchase of used items can also add new products are sold at a fraction of their original price because of defects in products, factory overruns and disposal of old stocks. If you are a celebrity or public figure is is very important, you need not identified in the latest fashions or new model cell phones, watches, etc. If that does not bother us or slight imperfections, it is an older model, there are limits take opportunities to make a good deal. There are many places to purchase these products, including stock sales, factory, flea markets, junk shops and flea markets. The negotiation process can be very funny and you will surely sharpen your negotiating skills at the time!

The sleep test

Shopping can be addictive and is never easy to resist. We all know the symptoms of insect bites when buying ... We feel the adrenalin rush that makes our heart's desire after, then it goes to our head and we begin to rationalize about them. We say that because we worked so hard to earn, we really are, and want us to reward this one time! He finally solves the hands reach into our pockets and let the "Plastic Card -" Charge It!

Our will can be strong, but our flesh is weak! Finally, we are only human, right? However, it is an effective way of contrast, by "they sleep." This is especially useful for expensive items, like buying a new car, change the old furniture, renovation of our house, buy that plasma / LCD TV or home theater system or any other thing we check. Before we participate in these articles, sleep and see it closer to our budget to see if the purchase fits into your current plan. Discuss with your partner or your family, and what time you need to carefully consider both, because the money is gone, is gone!

Remember: If your next purchase, ask yourself the following questions: "Do I really need?", "It's in my budget?" "Is this the best deal?" "Can I find a brand, cheaper with the same value?" "Can I place a second hand thing?"

A wise consumer and prudent financial management "Let's Make A Way of Life" today!

"To spend or not ... ... That is the question!"

How many times this question has crossed our minds? Almost every time we spend money, is not it? Have a nice day passed without us spending a single penny? Unlikely! The question is not whether I go or not, but as the content, we accept our spending habits. Here are some smart spending habits to adopt in order to financially sound.

Spend to budget

There is a proverb that says, Malay, Ukuri baju sendiri di Badan we measure "our clothes on our shoulders. That's like saying, we ought to spend our budget. We have already reported on the issue of tax administration in the previous article, and repeating: Budgeting is really a plan for us without spending later, a guilty conscience. What is important here is that we have a plan "expenditure" in the first place. Without them, we will very likely be spending on impulse or what is commonly referred to as the impulse. We can not entirely avoid impulse buying and it is not wrong. There were times when we can not resist the aroma from the cup of cappuccino or a pair of shoes or handbag is for sale! And even if it is more the rule than the exception, we have our spending habits on their guard.

When preparing your spending plan, you must also learn to anticipate your needs. For example, if we make progress on new clothes for the holiday season, get it earlier in the Mega Sale or whenever a bargain comes our way (for example) at a sale of the closure of storage or sale. If we want a roof every time it starts to buy rain, we have not only end up with too many umbrellas May, but have to pay a premium for it. It is also advisable to budget for unexpected expenses such as angpows wedding, car repair, home repair, etc. These elements, if not set, can throw us off-budget!

Compare prices

Should we get used to buy for the comparison of prices before you buy something or just us? Some of us can say that the time and cost of shopping before you buy a bottle of oil or not a tube of toothpaste May is worth it. True and that is why we have to be a smart consumer - we must plan our purchases and a copy of the prices of the products. Here we could do our own "price book" to a decline in the prices of the items we regularly buy and exactly where and when we get the best deal ever!

For example, if store A has the lowest prices for most items in our shopping list during the week, then we should plan our food shopping during the week there. However, if Store B has the best deal at the weekend and we are free weekend, we should be there instead. The fact is - a shopping list, book a price and stick to it. In fact, we can continue this process a fun family activity to help our children get to hold a poll on "price" every time they go shopping. Each family member can see each other then who will find the best deal in town! This would not only help us to compare prices, but also teach our children the value of money.

Branded Stuff

What's in a Name? Each year in May, and it will be worth more than the product itself and as consumers, we tend to brands that we trust the most to buy. What is all well and good, but if you end up buying things we can not afford it or not, it becomes a problem. Some of us buy things brand, because we discussed the ideas and emotional appeal through advertising created themselves, and not affected, because we need it. As intelligent consumers, we sometimes have to look and ask about the brand: "Do I really need?", "It is really worth so much?" And "Can I really afford?" Do not make purchases on the pictures or all at once, what your friends, but to your needs and benefits of the product.

Buy Used Items

The thought of buying used items can save some people, but this is a great way to stretch your ringgit. The biggest advantage here is to take the first buyer to the initial impairment of the product which is usually the largest. Take for example the purchase of a new car. Do not suffer in most cases, the owner of the new car 10-20% depreciation in the value of his new car when he drove him out of the showroom! If he sells after 3 years, it can be used for two thirds of the original purchase price to sell if he is lucky! Imagine if you had bought it ... It's like a rebate. Yes, you may not get that "new smell" of a car, but it's really important? It may be worthwhile to be a victim as long as the car well maintained, not robust and strong non-reduced, right?

To buy another good example of products that we do not want new products for babies, including clothing and toys. Some of us may recoil at the idea, but it is not unusual. Baby clothes are not cheap, and carry your baby gets, the more likely very quickly for some time that the baby goes through the clothing. Ideally, we could get the hand-me-downs for free by dropping a hint here and there. Otherwise, you can either borrow or buy second-hand from parents that they no longer need the most.

Purchase of used items can also add new products are sold at a fraction of their original price because of defects in products, factory overruns and disposal of old stocks. If you are a celebrity or public figure is is very important, you need not identified in the latest fashions or new model cell phones, watches, etc. If that does not bother us or slight imperfections, it is an older model, there are limits take opportunities to make a good deal. There are many places to purchase these products, including stock sales, factory, flea markets, junk shops and flea markets. The negotiation process can be very funny and you will surely sharpen your negotiating skills at the time!

The sleep test

Shopping can be addictive and is never easy to resist. We all know the symptoms of insect bites when buying ... We feel the adrenalin rush that makes our heart's desire after, then it goes to our head and we begin to rationalize about them. We say that because we worked so hard to earn, we really are, and want us to reward this one time! He finally solves the hands reach into our pockets and let the "Plastic Card -" Charge It!

Our will can be strong, but our flesh is weak! Finally, we are only human, right? However, it is an effective way of contrast, by "they sleep." This is especially useful for expensive items, like buying a new car, change the old furniture, renovation of our house, buy that plasma / LCD TV or home theater system or any other thing we check. Before we participate in these articles, sleep and see it closer to our budget to see if the purchase fits into your current plan. Discuss with your partner or your family, and what time you need to carefully consider both, because the money is gone, is gone!

Remember: If your next purchase, ask yourself the following questions: "Do I really need?", "It's in my budget?" "Is this the best deal?" "Can I find a brand, cheaper with the same value?" "Can I place a second hand thing?"

A wise consumer and prudent financial management "Let's Make A Way of Life" today!

Money Matters

My thoughts about Fundamental principles in managing your personal finance

Net Worth - Evaluating Your Current Situation

Knowing where you stand today in terms of your finances is the first step in developing any financial plan. Net Worth (your assets minus your liabilities) is a tool that is able to give you a "snapshot" of your current financial situation. It will help you determine your and what resources you can apply to meeting your goals.
Net worth is the main measurement of wealth. The most straightforward ways to increase your net worth are to increase your assets (by investing current assets and accumulating more) or to reduce your debts. The other number to look at in evaluating your current situation is your net income (your gross income minus your expenses).

Cash Flow Management

Many people find they are spending more than they bring in. It's difficult to increase your net worth (and meet your financial goals) if you are constantly falling behind on the income front. Hence, cash flow management is key to achieving personal financial security. Check and calculate your cash flow using our Cashflow Calculator.

For example, are you spending more on entertainment or other nonessential expenses than your income supports? Or are you spending more than you have to for necessities such as housing, an automobile, clothing, or other similar items? The answers will probably point you to one or more possible solutions, such as cutting back on the non-essentials or finding less expensive alternatives. Then, you can put the money you save to work toward meeting your goals.

Most causes of overspending can be addressed through use of a budget. Simply going through the process of putting together an annual budget can help you prioritize expenses and uncover areas where you may be able to free up more money to use for savings and investments.

Many people find that they can develop the discipline needed to put money aside on a regular basis by budgeting for savings and investments the same way they do for other expenses. A good way to make sure your budgeted amounts actually do go into savings and investments is to set up an automatic saving / investing plan with a bank or a mutual fund company.

Trimming Your Budget

Cutting your expenses will take some effort. You may have to delay some purchases and find ways to spend less on the things that you need to buy. By cutting costs, you should be able to afford to contribute more to your savings and investments. Similarly, if large debt payments are making it difficult to save, you need to look at ways you can reduce this burden so you can move ahead toward your financial goal.

Reduce Housing Costs

One good avenue to explore is the possibility of refinancing your mortgage. The rule of thumb is to consider refinancing your home when mortgage rates drop two percentage points or more below your current rate. But people who plan to remain in their home for a while can come out ahead with a rate reduction of as little as one percentage point.

Buy Smart

How and when you shop can make a discernible difference in your spending. Different items generally go on sale at different times during the year.

Age of the Plastic Culture!

This is the Age of the Credit Cards, an Age of the "Plastic Culture".

Anyhow, the rate of credit card circulation shows that it’s easier than ever to subscribe to the “Plastic Culture” and the figures correspond also to the aggressive promotions and marketing campaigns by these credit card companies for the past few years. These companies will do anything, almost anything to get you to own their cards.

And the best part of the whole section is here - the rate of Bankruptcies caused by the “Plastic Overdose”.

KUALA LUMPUR, Malaysia, May 1--The number of Malaysians declaring personal bankruptcy surged 47 percent between 2001 and 2004 to figures more than double those seen during the Asian financial crisis of 1997, a report said Sunday, AFP reported.

Deputy Finance Minister Ng Yen Yen said bankruptcy cases rose to 16,251 cases in 2004 from 11,065 in 2001.
Even though the debt threshold for bankruptcy was increased from 10,000 ringgit to 30,000 in 2003, the finance ministry data still showed an rise in cases, Ng said.

“We are not even enduring bad times now. This is not good and it (the trend) must be stopped,“ she was quoted as saying by the Sunday Star newspaper.

Ng said even during the Asian financial crisis in 1997, there were only 7,396 bankruptcy cases.
Statistics showed that 11 percent of the people became bankrupt because of non-payment of credit card debt while 8 percent of the bankrupts were between the ages of 20 and 30, she said.

“This is serious because by right, no person under 35-years should be a bankrupt,“ the minister said.
Ng said the government was turning to education and improving awareness on how to contain overspending to prevent a further rise in financial failures.

Research showed a direct link between credit card use and the bankruptcy rate among those aged between 20 and 30, said T. Indrani, deputy secretary general of the Federation of Malaysian Consumers Associations.

Bankruptcy in Malaysia

What do you know about bankruptcy?

Bankcruptcy is a word that immediately brings a negative vision to our minds. It happens everywhere in the world and is not partial to a certain country, race or nationality. In Malaysia, the total number of bankruptcy cases nationwide has risen from 70.009 in 1999 to 106.000 in 2003 and today the figure stands at 160,000.

Bankruptcy law exists to help both the bankrupt and the creditor. It will stop the creditor from harassing the debtor and it safeguards the rights of both parties.
What is Bankruptcy?

Simply said, it is a legal process initiated by an individual or a company due to the inability to settle his debts. Bankruptcy happens when a person is unable to settle his debts (known as a debtor) owed to the people or party who loan him the money. The people or party who gave out the loan is known as the creditor. Creditors can be a banking institution or even a company giving out hire-purchase schemes.

To protect himself against possible harassment or from any other legal actions by the creditors, the debtor may file for personal bankruptcy.

On the other hand, the creditors may take action first against the debtor by serving him a bankruptcy notice to recover the money owed by the debtor.

Before filing a bankruptcy petition either by the debtor or creditor, the following criteria have to be met:

• The sum involved is RM30, 000 or more
• The sum of money must be ascertainable (liquidated sum)
• There is a default period of six months for the act of bankruptcy to have occurred
• Before the petition date, the debtor must have reside in Malaysia for at least one year
How Does a Person Become a Bankrupt?

Generally, if a person into bankruptcy due to several reasons. Those mentioned below are not uncommon in Malaysia.

• Taking up a Loan

There are various loans available to cater for different needs and wants. These loans can be personal loans, study or education loans, housing loans and even buying a car under a hire-purchase scheme.

• Acting As A Guarantor

A guarantor can be a social guarantor or a corporate guarantor. A person who stood as a guarantor for loans like education, house, car hire purchase, scholarship and thus third-party loans is known as a social guarantor.
A corporate is a person who stood guarantor for loans relating to business loans, for example in a business partnership.
A guarantor is also liable to face bankruptcy when summoned by the creditors. The creditors will go after the borrower first and if that fails to recover the amount owed, they will go after the guarantor to settle the debts.

• defaulting On Credit Card Payment

The inability to pay up the amount owed to the credit card account is also one reason to go bankrupt.
In May 2008, it was reported in one of the national newspaper that last year in 2007, there were 1.873 cases bankruptcy due to credit card usage. Although the figure is still low, there is a trend showing the numbers has been rising from 1.397 in 2004, 1.479 in 2005 and 1.656 cases in 2006.
What Does It Mean To Be A Bankrupt?

When a person has declared bankruptcy, the court will appoint the Director General of Insolvency (DGI) to administer over the bankrupt's assets in order to settle the outstanding debts. The DGI intends to initiate investigation to find any assets or properties that belong to the bankrupt and to sell or dispose them to repay the creditors.

For a Malaysian, being a bankrupt is tough for the individual. Among other things, the individual faces the following hurdles or restrictions:

• He has to give up all his belongings and assets.
• He is not allowed to open a bank account without the approval of the DGI.
• He is not allowed to travel from outside the country without first getting approval from the DGI or the court. The DGI wants to hold his passport.
• He is not allowed to do any business nor become a company director nor even be part of the company's management.
• He has to sacrifice a certain percentage of his monthly income to the DGI to repay his debts.
From How To Avoid Becoming A Bankrupt?

A straightforward answer to avoid becoming one of the statistics is simply to take responsibility for one's financial affairs or well-being. It means not to take huge loans to purchase something if you do not have the ability to pay back the monthly installments. It also means not being in-control of one's spending habits and to over-commit on too many loans including hire purchase.

The same goes for the social guarantor who does not have the resources and means to settle the debts on the borrower's behalf. To think rationally (not emotionally), and act carefully before signing on the dotted lines.

For those intending to open a business, do your research work properly and thoroughly. Ensure that you have enough financial resources and stamina for the start-up and for the first few years. Most businesses do not make money initially, and may take a few years to show a profit. Imagine the worst scenario happening and Whether you can survive financially. Having just the start-up capital is not enough, you need to have back-up plans and support available.

There are cases however when ill-fate strikes and a person becomes bankrupt due to unforeseen circumstances such as a serious illness, a debilitating accident or being cheated in a business partnership.

Then there are cases where a person willingly files for bankruptcy for the sole purpose of wiping off all his unsecured debts. These 'non-genuine bankrupts' take advantage of the legal process to 'write off' their bad debts and the amount can run up into the millions but is still living a luxurious lifestyle.
How a person is Discharge From Bankruptcy

A bankrupt will be discharged from bankruptcy when

• He has settled his debts in full to the creditors.

• If the creditors accept the repayment scheme offered by the bankrupt, then the bankrupt can make an application to the court to get an order of discharge.

• Certificate of discharge:
The DGI also can use his discretionary power to discharge the bankrupt by issuing a certificate of discharge. This is possible after a period of five years from the date of bankruptcy even though there still remain unsettled debts. However, the DGI will have certain criteria to evaluate before making his judgment such as the bankrupt's conduct or behavior, the age and the financial status.

• Order of discharge:
The bankrupt can make an application to the court to request for an order of discharge. The court will refer to the DGI's report before any decision is made to grant a discharge or not or to grant a discharge with conditions attached.

When face with debts, a person should seriously consider before choosing to file for bankruptcy. There may be other better options to choose from. Besides the restrictions mentioned above, the bankrupt may face other personal challenges. His future plans and personal development may be negatively affected due to his 'reputation bankrupt'. Society naturally want to see him in a different light and treat him differently. In addition, it may affect his ability or opportunity to apply for future loans in order to advance himself in his career or business.

Therefore, consider yourself to have been forewarned on this subject matter after reading this article.

What is personal finance?

Here's my view about the fundamentals of Personal Finance

Personal finance is the application of the principles of finance to the monetary decisions of an individual or family unit. It addresses the ways in which individuals or families obtain, budget, save, and spend monetary resources over time, taking into account various financial risks and future life events. Components of personal finance might include checking and saving accounts, credit cards and consumer loans, investments in the stock markets, retirements plan, social security benefits, insurance policies, and income tax management.

Personal financial planning

A key component of personal finance is financial planning, a dynamic process that requires regular monitoring and reevaluation. In general, it has five steps:

1. Assessment: One's personal financial situation can be assessed by compiling simplified versions of financial balance sheets and income statements. A personal balance sheet lists the values of personal assets (e.g., car, house, clothes, stocks, bank account), along with personal liabilities (e.g., credit card debt, bank loan, mortgage). A personal income statement lists your personal income and expenses.
2. Setting goals: Two examples are "retire at age 65 with a personal net worth of $1,000,000" and "buy a house in 3 years paying a monthly mortgage servicing cost that is no more than 25% of my gross income". It is not uncommon to have several goals, some short term and some long term. Setting financial goals helps direct financial planning.
3. Creating a plan: The financial plan details how to accomplish your goals. It could include, for example, reducing unnecessary expenses, increasing one's employment income, or investing in the stock market.
4. Execution: Execution of one's personal financial plan often requires discipline and perseverance. Many people obtain assistance from professionals such as accountants, financial planners, investment advisers, and lawyers.
5. Monitoring and reassessment: As time passes, one's personal financial plan must be monitored for possible adjustments or reassessments.

Typical goals most adults have are paying off credit card and or student loan debt, retirement, college costs for children, medical expenses, and estate planning.

The six key areas of personal financial planning, as suggested by the Financial Planning Standards Board, are:

1 - Financial Position: this area is concerned with understanding the personal resources available by examining net worth and household cash flow. Net worth is a person's balance sheet, calculated by adding up all assets under that person's control, minus all liabilities of the household, at one point in time. Household cash flow totals up all the expected sources of income within a year, minus all expected expenses within the same year. From this analysis, the financial planner can determine to what degree and in what time the personal goals can be accomplished.

2 - Adequate Protection: the analysis of how to protect a household from unforeseen risks. These risks can be divided into liability, property, death, disability, health and long term care. Some of these risks may be self-insurable, while most will require the purchase of an insurance contract. Determining how much insurance to get, at the most cost effective terms requires knowledge of the market for personal insurance. Business owners, professionals, athletes and entertainers require specialized insurance professionals to adequately protect themselves. Since insurance also enjoys some tax benefits, utilizing insurance investment products may be a critical piece of the overall investment planning.

3 - Tax Planning: typically the income tax is the single largest expense in a household. Managing taxes is not a question of if you will pay taxes, but when and how much. Government gives many incentives in the form of tax deductions and credits, which can be used to reduce the lifetime tax burden. Most modern governments use a progressive tax. Typically, as your income grows, you pay a higher marginal rate of tax. Understanding how to take advantage of the myriad tax breaks when planning your personal finances can make a significant impact upon your success.

4 - Investment and Accumulation Goals: planning how to accumulate enough money to acquire items with a high price is what most people consider to be financial planning. The major reasons to accumulate assets is for the following: a - purchasing a house b - purchasing a car c - starting a business d - paying for education expenses e - accumulating money for retirement, to generate a stream of income to cover lifestyle expenses.

Achieving these goals requires projecting what they will cost, and when you need to withdraw funds. A major risk to the household in achieving their accumulation goal is the rate of price increases over time, or inflation. Using net present value calculators, the financial planner will suggest a combination of asset earmarking and regular savings to be invested in a variety of investments. In order to overcome the rate of inflation, the investment portfolio has to get a higher rate of return, which typically will subject the portfolio to a number of risks. Managing these portfolio risks is most often accomplished using asset allocation, which seeks to diversify investment risk and opportunity. This asset allocation will prescribe a percentage allocation to be invested in stocks, bonds, cash and alternative investments. The allocation should also take into consideration the personal risk profile of every investor, since risk attitudes vary from person to person.

5 - Retirement Planning: retirement planning is the process of understanding how much it costs to live at retirement, and coming up with a plan to distribute assets to meet any income shortfall.

6 - Estate Planning: involves planning for the disposition of your asset when you die. Typically, there is a tax due to the state or federal government at your death. Avoiding these taxes means that more of your assets will be distributed to your heirs. You can leave your assets to family, friends or charitable groups.