How to Create Investment Goals

When it comes to investing, goal-setting is a vital step toward achieving financial success. Achievable goals can help you narrow your focus, stay motivated, and create a plan. In this article, you will learn the importance of goals and the steps to take.

#1: DETERMINE YOUR GOALS

Start by determining exactly what you want to achieve. Common investing goals include saving up for child’s education, retirement, and a house. Good investment goals need to be SMART. SMART stands for the following:

Specific: Setting a specific financial goal requires laying out the purpose for why you want to save.

Measurable: Financial goals need to be easily measured to help you assess your progress.

Achievable: Setting goals that are not achievable can diminish your motivation and steer you away from your path.

Relevant: A good investment goal should align with your values and beliefs.

Time-Bound: Calculate how much you need to save monthly or weekly to achieve your investment goal by providing a sense of urgency.

#2: SELECT YOUR INVESTMENT STRATEGY

According to the Financial Industry Regulatory Authority (FINRA), there are different types of goals such as short-term, mid-term, and long-term. Short-term goals can be achieved in less than three years and may be suited to liquid investments such as cash and money market accounts. Mid-term goals that can take up to ten years can be allocated to balancing your portfolio, fixed-income investments, and stocks.

Lastly, long-term goals that can last more than ten years can take a more aggressive approach such as investing in stocks, mutual funds, and exchange-traded funds.

#3: TAKE SMALL STEPS

New investors and those who are more risk-averse can start small to get a better understanding of the process. Adjustment to the investor’s approach can make goals more realistic and achievable.

#4: SEEK PROFESSIONAL SUPPORT

Countless social media pages and credible blogs provide financial advice about investing and other topics. Many investing platforms have educational resources on their website. It is up to you to do your research and seek professional support when needed.

BOTTOM LINE

Assess your investment goals as early as possible to avoid difficulties and complications. Planning and execution of your investment processes require a level of discipline and commitment. Start small if the process feels overwhelming and watch your nest grow.

Sources: 1 & 2

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Important Things to Consider Before Becoming a Landlord in Singapore

The idea of having a tenant who will cover the costs of the mortgage sounds great on paper. This situation makes owning a property seem like an easy investment. In reality, you must be ready to shoulder several fees and taxes as well as unexpected repairs. Not to mention, you must handle the stress that comes with it.

Renting out your property takes knowledge and experience. After a couple of years, you will know which strategies will work and which will not. In the meantime, consider these things before becoming a landlord in Singapore.

#1: ESTABLISH A SCHEDULE FOR SITE INSPECTIONS

Landlords cannot disturb the tenants’ home with unannounced inspections. Instead, landlords must arrange regular site inspections to ensure that the property is undamaged. You will be able to update your tenants if there are items that need replacement or repair during your visit.

With the tenant’s permission, it is a clever idea to arrange an inspection every six months. Inspecting the site will help you pinpoint or prevent severe damage. For instance, once floorboards start to rot, you will need to quickly fix the issue. Letting the problem brew for half a year may lead to ripping out the entire floor.

#2: BE PREPARED FOR PROPERTY TAXES AND MAINTENANCE COSTS

Additional fees such as property taxes and maintenance costs come with being a landlord. Most private condominiums have a monthly maintenance fee. This fee, charged by the management committee, is determined by your share value.

On the other hand, property taxes are progressive and are based on the Annual Value of your home (AV). The AV is the estimated gross rental income of your property per year. It is determined by a valuation from the Inland Revenue Authority of Singapore (IRAS). Educate yourself about it.

#3: KNOW THE TAX DEDUCTIBLES

In case you are not familiar with the regulations, mortgage interest is tax deductible. The interest rate on the mortgage loan is tax deductible only if the property concerned yields income. Likewise, maintenance costs for the property are tax deductible. This can be more complex because you need to list all the items and costs of replacements.

Image Credits: pixabay.com

To check out the list of deductibles, you may go to the IRAS website. You should have a good understanding of what you can claim as a landlord. If you are uncertain, you can always ask a property agent or a wealth manager for professional help.

#4: BRACE FOR THE IMPACT OF VACANCIES

You cannot expect that there will always be rental income to cover the cost of the mortgage. A period of vacancy can happen for a variety of reasons such as the economic constraints of the pandemic, the tenant’s inability to pay for rent, the tenant will move back to his country, or the tenant’s decision to purchase his own flat. You will need to bear the mortgage without the rental income when vacancy occurs.

Moreover, do you have the capacity to service the loan if your monthly loan repayments are greater than your rental income?

#5: HAVE AN EMERGENCY FUND

The situations stated above highlight the importance of setting up an emergency fund. Keeping six months’ worth of mortgage payments in the emergency fund is recommended. If you do not have it now, you can build your fund over time.

Your fund will give you sufficient time to find solutions in case you are faced with unpleasant scenarios. This will also help you deal with emergency repairs such as broken pipes and non-functional air-conditioner.

Sources: 1 & 2

 

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What Can You Do When Your Parents Have Money Troubles?

Money is a sensitive topic for many families. Discussing the financial troubles of your parents can leave them in a vulnerable and fearful state, understandably so. Additionally, your parents may feel that their spending and saving decisions are theirs alone.

People are less transparent when it comes to their financial problems, and this makes things more complicated. Try to help your parents explore their options while maintaining your financial responsibilities to yourself and your family. Consider these tips.

#1: ASSESS THE SITUATION

Start by evaluating your parents’ current financial situation. Have an honest discussion with them about the issues that they are having or expecting. You can either help your parents in monetary or non-monetary support. The best approach will depend on where your parents are now and where they want to be in the future. Seeking professional help can help with the facilitation of the money conversations.

#2: HELP YOUR PARENTS DOWNSIZE

Whether your parents are living in a place that is no longer affordable or are planning to cut down on certain expenses, help them to downsize. Run the numbers on the possible housing options and determine how much they would save over time. The analysis should include their mortgage, moving costs, and other housing-related fees.

#3: ASK THEM TO MOVE IN

If your parents cannot afford to live independently anymore and you can take them in, you can consider asking them to move in. Assess their health and the other members of your household to determine whether they can live with you. Taking in your parents can have a significant impact on their finances as it will free them from rental payments and housing bills.

#4: CREATE THEIR REALISTIC BUDGET

Are your parents seeking ways to stretch their cash? Sit down together and draft a realistic budget that factors in their income and expenses every month. If their income is less than their expenses or if they are breaking even, look for areas where they can earn more or spend less. The goal is for them to live more comfortably.

#5: HELP WITH MAINTENANCE OR REPAIRS

Some financial needs are short-term. If your parents need help with home or car repairs, you can offer help for them occasionally.

#6: BOOST THEIR INCOME

Is your organization looking for part-timers? You can recommend it to your parents. Taking on a part-time job or working from home can help your parents bring in more money. Help strengthen their social ties and encourage them to try new things to achieve financial growth.

Image Credits: pixabay.com

Sources: 1 & 2

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Here’s how to stop the urge of spending money

shopping bags

Emotions have a big influence on what we buy. As a result, it’s understandable that when anything is going on in our personal lives, it will manifest itself in our financial habits as well.

Does a little online shopping sound like the solution when you’re having a bad day? It may be as simple as picking up a new blouse or the latest pair of shoes. You convince yourself it’s not a huge cause for concern; you simply want to treat yourself to something good. Hold your horses! Making judgments based only on emotions is a proven way to give impulsive buying the upper hand.

Here’s how to stop the urge of spending money.

Have a plan

Having a plan for what you want to purchase and how much you will spend before you begin your shopping spree is a wonderful strategy to avoid impulse purchases. You will be less prone to overspending if you have a shopping list in place. It might include everything from groceries to holiday gifts for your family and friends; just make sure you know what you want to grab before you go.

Solve issues with existing products
DIY drums

Image Credits: sneakernews88.top

Is it really necessary to have a mobile phone holder on your workstation, or can you just rest it against a water bottle to check incoming notifications? Is it wise to purchase your kid a toy drum set when you could DIY your own? Using a little creativity, you might be able to fix problems with products you already own, or at the very least, postpone your next e-commerce transaction.

Track all that you’re spending: big or small

The smallest purchases may quickly mount up, and by the end of every month, we may be faced with buyer’s regret. The secret to effective budgeting is keeping track of your expenditures because it holds you liable for every dollar that leaves your bank account. You will be capable of making better spending decisions once you know where your money goes.

Many people begin by keeping track of their larger spending, but it’s just as vital to keep track of those minor, recurring purchases. A daily cappuccino, weekend meals out, or getting a seemingly harmless monthly magazine may add up to a lot more than you realize, and they can have a significant impact on our finances. You would have saved roughly over $100 per month if you could forego that Starbucks drink before you hit the office.

One of life’s most noteworthy temptations will always be to spend. Knowing how to control your impulses will help you get the optimum financial status possible in the future. While avoiding spending urges may seem tedious or challenging in the short term, the money you save today will provide greater options for enjoyment and financial security in the long run.

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Tips to educate your kids on investing

teaching kids how to invest

Time is your best friend when it comes to investing. The longer time you allow your assets to develop, the bigger your retirement fund will be. The problem is that most individuals aren’t educated about investing until they’re in their adult years. And by that time, most have already squandered over two decades.

Traditional educational systems often do not educate children about investing, such as why they should acquire stocks while they are young and how to build a diversified portfolio that will last them until retirement. As a result, it is incumbent on parents to prepare their kids for financial security. Fortunately, financial literacy can be taught from the comfort of one’s own home.

Here are tips to educate your kids on investing.

Patience is key

Investing, like most pleasures in life, takes patience. Instill in your kids the understanding that investing is not a get-rich-quick gimmick. Rather than anticipating a rapid return, the idea is to put money into the stock market and watch it increase over time. This piece of advice will set more realistic goals for your child when it comes to investing from the get-go.

Gift them investment books
How to Turn $100 into $1,000,000: Earn! Save! Invest!

Image Credits: amazon.com

There are several excellent finance-related books for kids and teenagers that may help your child learn more about investing. For example, How to Turn $100 into $1,000,000: Earn! Save! Invest! is ideal for any parent who wishes to raise a child who is financially savvy and secure. The quest begins with instructions on how to make a first hundred bucks while the rest of the book follows the path to a million dollars. What’s there not to like about it?

Introduce familiar companies

For years, the expression “buy what you know” has been tossed about in investment circles. It’s important to teach kids how to invest by putting their money in firms they recognize. Today’s children are well-versed in product branding and are adept at conducting web searches. Consider inviting your kid to spend time with you investigating the stock price of a firm they are interested in.

Look up the payout history during the search and clarify why they will get the declared dividend amount for each share of stock they hold. You could perhaps suggest reinvesting returns to continue expanding the asset, based on your child’s financial literacy level. Kids may become long-term investors by investing in what they know: if they clearly understand the firm and grasp what drives its operation, they are more inclined to stick it out during moments of instability.

The sooner you start introducing concepts of investments to your children, the more probable they will establish good financial habits and accumulate money over time. You may even be amazed at how much your children can comprehend, notably if you start teaching them diverse tactics at an early age. Don’t put off the thought of helping them start saving for retirement; they will thank you down the road.

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