Monday, September 29, 2008

Living Cheaper - What to Wear

Clothing is one area where money can be saved and put towards your saving account or into your managed fund. Learn how... Mix and match clothing is what saves you heaps when it comes to clothing. If you make sure you buy from just a few colour ranges, then everything you have will go with everything else. Experts advise the black, white, gray and beige range, but it these colours don't suit your skin type coloured tops will go with most black, grey or beige bottoms.

Basic items for the working girl are blazer, coat, dress, trousers and skirt. Shoes and bag will also be needed of course, and buying one good quality bag is better than half a dozen cheap ones. It will always look smart and go with everything if you choose a toning colour. Shoes need not break the bank. But buying reasonable quality will save you in the long run because they will last longer and feel more comfortable.

If you have three pairs of shoes for each season you can wear them turn about and so look smart all the time. You don't need to limit yourself to wearing a suit all the time; separates are more fashionable. And if you air a suit after wearing it for one day, there is no need to have it dry-cleaned quite as often.

Thursday, August 28, 2008

Online Savings Accounts - selecting the best

Online savings accounts often appear to give you a more value - in other words a much higher interest rate, over 6% in some cases. Better still, there are often no fees, or very low fees. You can also access your money whenever you want.

The thing to watch out for is the fine print. You may be fine with placing your savings in an account like this and never - or rarely - withdrawing it. But an emergency could crop up and you need to access some of your savings. Then you find that not only is there a high transaction fee, but you've blown your interest on the balance for the rest of that month.

One month of no interest may not seem like much to worry about. However, it actually puts you further behind than you would be if you had an saving account with slightly lower interest rates and no transaction fees. Another possible problem could be that your single transaction may put your balance below the minimum required to keep your high interest. So not only have you blown your high interest for the month, but your account has reverted to low interest until such times as you can get that balance back up.

How do they work out compound interest?

Compound interest rates can be referred to as an Annual Percentage Rate, Effective Annual Rate or Effective Interest Rate. Of course, our saving account are not the only places we see compound interest at work. It cuts both ways; compound interest is also charged on loans. When you borrow money for a house, car or whatever, you'll notice that the amount of interest you have to pay at first is really high. In fact you pay off more interest than principal.

Gradually that comes down and you begin to see light at the end of the tunnel. You start to pay more off the principal and that brings your total interest down more. Meanwhile the financial institution from whom you borrowed is smiling all the way to their bank.

But to get back to that savings account earning compound interest for you. The longer you hold a savings account, the more interest you will get on it because you keep getting more interest paid on your interest all the time, like a tier effect. So sticking with a savings account is a good and very safe way to invest your money. You could get a higher return on some other types of investments, but there may be more risk attached to them.

What is Compound Interest?

Most of us have heard of interest. That's what you have to pay when you get a loan. That's what makes it so hard to pay back the loan when the interest rates keep on rising! Ah yes, and that's the measly little bit of extra money the bank gives - grudgingly, it appears - when we have a few bucks saved up. But wait! It's not as bad as it seems.

Those two magic words "compound interest" that Einstein referred to as the world's greatest discovery are put to work for us when we have a savings account. But those of us who have just a few hundred dollars don't seem to notice it all that much. That's because it shows up better on larger amounts - and if you don't keep withdrawing. These days most high interest savings accounts work on compound interest.

The interest that you earn on your $100 may not seem much, but it is added to the balance, and then in the second year interest is paid on that total, rather than just on your original $100. So you are basically getting interest paid on your interest or if you have a managed fund then it is the dividend reinvested. When this keeps on every year - as it does, so long as your keep your savings account going, then that total really begins to add up.

All About Managed Investment Schemes

A managed investment scheme is when you pool your money with other investors with the intention of getting back a good return. By using a managed investment scheme, you can access a great many more investment opportunities than if you did it by yourself, but is more complicated than putting your money in a saving accounts. Some investments may require a minimum amount before shares can be purchased. When you pool your resources with others, you can access these types of investments that may otherwise be out of your reach. This means that you can start investing with a smaller amount of money.

You don't need to know a lot about investments when you use a managed investment scheme. Professionals trained in the art of investing do all the hard work. While this means you don't have control of your finances on a day-to-day basis, you can have peace of mind in knowing that they are relatively safe.

Before choosing a managed investment scheme, be sure to check it out on the Australian Securities and Investment website. Each scheme must be registered with the Commission. If it is not, suspect a shady deal and avoid it. You can't afford to risk losing your money in something illegal, there is no harm putting your money in a term deposit while you think it over. Different types of schemes include property or cash management trusts, equity trusts (shares), or agricultural trusts such as horse breeding or aquaculture.

Wednesday, August 27, 2008

Superannuation for the Self-Employed

For self-employed people to enjoy the benefits of superannuation or a self managed superannuation, they must make the payments themselves. Normally, the employer is the one who must make payments and this is compulsory. If you are self-employed, you are your own boss, so you have to make the payments. You may wonder if there is any use bothering, but self-employed contributions do attract significant tax savings. However, you will still need the services of an accountant as percentages and age limits seem to change every year.

There is a wide field of choice when it comes to super funds. When choosing a public fund from a bank or other financial institution or an insurance company, you need to carefully consider what fees they charge and what benefits they give. The reputation of the institution should also be taken into account. Choosing a rock solid reputation will give you peace of mind and ensure the success of your investments, there asset diversification can be similar to those you might see available in managed funds.

Public-offer funds such as those offered by banks give limited participation. You should be able to choose what level of risk you are comfortable with, though. That is, a high return but riskier investment strategy or a lower return but more dependable one. This is about all you can choose, as the trustee is the one who must make all other decisions.

Is Self-Managed Super for You?

If you were thinking of self managed super funds, experts advise to double check certain salient points. For a start, they tell us that you need to have at least $200,000 to make it financially worthwhile. The cost of running your own fund can be around the $1700 per annum mark. This includes the regular audit and reporting that are mandatory.

Time and expertise are other factors. Creating your own super fund is not as simple as opening a saving account. Unless you have plenty of time to spare and know what you are doing, you could find that managing your own super fund is more trouble than it's worth. You have to choose which investments are right for you and know which should be insured. If you change funds you will be changing benefits and fees too. You need to be sure that the fees are kept down while giving you the most benefits possible. You have to be the trustee of your fund and if something goes wrong, then you are legally responsible, even if it was not your fault.

Help is available for those interested in running their own super fund, but be sure you choose the right help. Unless an accountant is licensed they are not allowed to give advice. They can get into a lot of trouble - and so can you - for giving advice they are not qualified to give.