10 Steps To Retire A Millionaire

Source:http://www.investopedia.com/articles/retirement/08/retire-millionaire-million-dollars.asp
Having a million-dollar portfolio is a retirement dream for many people. Making that dream come true requires some serious effort. While success is never a sure thing, the 10 steps outlined below will go a long way toward helping you achieve your objective.

In Pictures: 10 Retirement-Wrecking Moves

1. Set the Goal
Nobody plans to fail, but plenty of people fail to plan. It’s a cliché, but it’s true. “Plan” is the leading self-help advice from athletes, business moguls and everyday people who have achieved extraordinary goals. (Read Plan To Retire Rich for additional insight into how to develop a course of action to achieve your goals.)

2. Start Saving
If you don’t save, you’ll never reach your goal. As obvious as this might seems, far too many people never even start to save. If your employer offers a 401(k) plan, enrolling in the plan is a great way to put your savings on autopilot. Simply sign up for the plan and contributions will be automatically taken out of your paycheck, increasing your savings and decreasing your immediate tax liability.

If your employer offers to match your contributions up to a certain percentage, be sure to contribute enough to get the full match. It’s like getting a guaranteed return on your investment. Finding the cash to stash may be a challenge, particularly when you’re young, but don’t let that stop you from pursuing future riches. (Read Invest On A Shoestring Budget for some additional tips on how to get started.)

3. Get Aggressive
Studies have shown that the majority of the returns generated by an investment are dictated by the asset-allocation decision. If you are looking to grow your wealth over time, fixed-income investments aren’t likely to get the job done, and inflation can take a big chunk out of your savings.

Investing in equities entails more risk, but is also statistically likely to lead to greater returns. For many of us, it’s a risk we have to take if want to see our wealth grow. Asset-allocation strategies can help you learn how to make picking the right mix of securities the core of your investing strategy. (Achieving Optimal Asset Allocation can help you minimize risk while maximizing return. Asset Allocation: One Decision To Rule Them All explains how to treat all your investments as a single portfolio to maximize returns.)

4. Prepare for Rainy Days
Part of long-term planning involves accepting the idea that setbacks will occur. If you are not prepared, these setbacks can put a stop to your savings efforts. While you can’t avoid all of the bumps in the road, you can prepare in advance to mitigate the damage they can do. (Read Build Yourself An Emergency Fund to help structure your finances to avoid financial disaster.)

5. Save More
Your income should rise as time passes. You’ll get raises, you’ll change jobs, and maybe you’ll get married and become a two-income family. Every time more cash comes in to your pocket, you should increase the amount that you save. The key to reaching your goal as quickly as possible is to save as much as you can. (Read why it might not be better for one spouse in a two-income family to leave work in Consider The Outcomes When Cutting An Income.)

6.Watch Your Spending
Vacations, car, kids and all of life’s other expenses take a big chunk out of your paycheck. To maximize your savings, you need to minimize your spending. Buying a home you can afford and living a lifestyle that is below your means and not funded by credit cards are all necessities if you want to boost your savings. (The Beauty Of Budgeting can help you figure out how to make it to the end of the month before you run out of money.)

7. Monitor Your Portfolio
There’s no need to obsess over every movement of the Dow. Instead, check your portfolio once a year. Rebalance your asset allocation to keep on track with your plan. (Read Rebalance Your Portfolio To Stay On Track to learn more.)

In Pictures: How To Make Your First $1 Million

8. Max Out Your Options
Take advantage of every savings opportunity that comes your way. Make the maximum contribution to tax-deferred savings plans and then open up a taxable account too. Don’t let any chance to save get away. (Read Not All Retirement Accounts Should Be Tax-Deferred to learn the advantages of a taxable account.)

9. Catch-Up Contributions
When you reach age50, you are eligible to increase contributions to tax-deferred savings plans. Take advantage of this opportunity! (For more ways to save money and increase your nest egg for the fast-approaching golden years, read Retirement Savings Tips For 55- To 64-Year-Olds.)

10. Have Patience
“Get-rich-quick” schemes are usually just that – schemes. The power of compounding takes time, so invest early, invest often and accept that the road to riches is often long and slow. With that in mind, the sooner you get started, the better your odds of achieving your goals. (Read For IRAs, Time Is Money for a discussion of the value of compounding.)

The Reality Of Retirement
Retirement might seem far away, but it when it arrives nobody ever complains about having too much money. Some people even question whether a million dollars is enough. (To find out why this magic number has lost some of its luster as a retirement savings target and to temper your expectations regarding the lifestyle you will be able to afford during retirement, read Can You Retire On $1 Million?)

That said, with lots of planning and discipline, you can reach your retirement goals and live a comfortable life after work.

Read Managing Your Income During Retirement to find out how to make your hard-earned savings last as long as you need them to.

How Much To Save To Become A Millionaire

Source:http://www.investopedia.com/articles/05/032105.asp
“You have to buy real estate!” Now how many times do you hear that during a real-estate bubble? If you take this advice, it may be wise to ask yourself if you have too much money tied up in your home and not enough in savings. With all the talk of a diminishing social security system, the need to save more for retirement seems inevitable. So, let’s look at some of the options for building that million you need to retire in style.

Where Are Our Savings?
If you have a great deal invested in your house, remember, listed homes and other property can take anywhere from two weeks to more than a year to sell. Ask any agent who sold homes back in the 1980s, when prime interest rates were averaging over 11%! Still, property seems to be priority. In 2004, the household savings rate averaged a meager 0.8% of disposable income (the rate was 7% over the three previous decades). This 0.8% is the lowest level since the Great Depression (Business Week Online, “Our Hidden Savings”, January 2005). Is this because Americans are putting too much of their savings into their homes or are we just bad at saving money?

So exactly how much should you save annually for your retirement? Although there is no correct answer here, most financial planners will tell you that you should be saving around 15-20% of your annual gross income. This figure may sound unattainable for many, but suppose your employer matches contributions of up to 6% of your salary – now you need to save only 9%!

Sizing up the Options
Let’s look at how some retirement savings vehicles can help you reach your goals:

401(k), 403(b) and Other Employer-Sponsored Retirement Plans
These are perhaps the best savings vehicle for most of the working population. You need to take advantage of your company plan if one is available. Not only do the earnings in the account grow tax-deferred, but a simple contribution of 6% can help reduce your tax bill if hte contributions are made on a pre-tax basis, as pre-tax contributions are excluded from your gross income for income tax purposes.

Traditional and Roth IRAs
Individual retirement accounts are available to those individuals with qualified compensation. Traditional and Roth IRAs are funded with after-tax dollars. However, if your income level qualifies, you can receive a tax deduction for contributions to your traditional IRA. The major difference between the two IRAs is that earnings in the Traditional IRA grow tax-deferred, while those in the Roth IRA grow tax-free. (For a more detailed comparison, see Roth Or Traditional IRA…Which Is The Better Choice?)

Simplified Employee Pension (SEP)and SIMPLE IRAs
The SIMPLE IRA is a tax-favored retirement plan that certain small employers (including self-employed individuals) can set up for the benefit of themselves and their employees.

SEP IRAs are plans that can be established by the self-employed or those who have a few employees in a small business. The SEP lets you make contributions to an IRA on behalf of yourself and your employees. The SEP and SIMPLE IRAs are popular because they are simple to set up, require little paperwork and allow investment earnings to grow tax-deferred.

Taxable Brokerage Accounts
These allow you to invest additional funds after you have maximized all of your retirement account options. Brokerage (cash) accounts can serve also as good savings vehicles for a particular goal such as a home or yacht. Be aware, you’ll need to pay taxes on the income generated in these accounts in the year that it is paid. (For further reading on how finding a broker, see Brokers and Online Trading.)

Getting Disciplined
So you know about some of the powerful savings tools, but you may be wondering where you get the extra cash to invest. Well, there can be a number of places – it first starts with your budget. Match up your monthly income with your expenses for the month. Can you cut back on your dining out? Do you really need that manicure once a week? Can you save money on your current insurance? Try shopping around for other carriers for better rates. Do you really need permanent life insurance (whole or universal life) when you could be saving hundreds with term insurance? (see Buying Life Insurance: Term versus Permanent)

After you’ve skimmed down the budget, there are three keys to making your million dollars. First, as we already mentioned, you must take advantage of any type of employer match program. If you have a 401(k) plan at work and the employer matches up to 6% of your pay, you should contribute at least 6% of your pretax income to the plan. Second, set your accounts up on automatic investment plan, so each month income goes to forced savings. And lastly, invest in the best savings plans first and weed out the bad.

Reaching $1,000,000 with Ease
To take full advantage of your retirement savings vehicles, try to contribute the maximum limit. In 2009, you can contribute up to $16,500 to a 401(k) plan ($22,000 if you are age 50 or older by the end of the year); you can also contribute $5,000 to a Traditional or Roth IRA of your choice ($6,000 if you are age 50 or older by the end of the year). Keep in mind that the eligibility to contribute to a Roth IRA has some income limitations.

Let’s take a look at how an average person, let’s call him Joe, can reach this million-dollar goal by the time he retires at age 67 (27 years from now). Joe (single, age 40) has an annual gross income of $50,000, and his employer has a 401(k) plan and matches contributions up to 5% of Joe’s salary. Joe is also committed to saving $4,000 a year in a Roth IRA. We’ll assume his investments have a 10% return.

Joe takes full advantage of the employer match and defers 5%, or $2,500, of his salary each year. His employer will then contribute $2,500 each year as per the matching agreement. (Assume Joe’s salary remains the same until retirement) Here’s the breakdown of his savings over the 27 years.

401(k)	Roth IRA
Annual contributions of $5,000	Annual contributions of $4,000
Compounded at 10% for 27 years	Compounded at 10% for 27 years
Equals $605,500	Equals $484,400

Grand Total of $1,089,900. Welcome to the Millionaire Club! If Joe had started his plan at different ages, here’s what his results would look like:

Starting Age	Annual Investment	Annual Return	Value at age 67
25	$9,000	10%	$4,838,732
30	$9,000	10%	$2,970,355
35	$9,000	10%	$1,810,239
40	$9,000	10%	$1,089,900
45	$9,000	10%	$642,624
50	$9,000	10%	$364,902
55	$9,000	10%	$192,458

At younger ages, you still have the time to be a little more risky with your investment selections and seek out investments that have the potential to get you that 10% return or more. If you’re looking at certificates of deposit and money-market investments think again – you need to consider other investments such as equities to achieve returns that can outpace inflation. (see Guide to Stock Picking Strategies.)

The chart above also demonstrates the value of compounding interest, one of the most valuable tools to accumulate significant wealth – the key is to start while you’re young and stay disciplined. (see Delay in Saving Raises Payments Later On.) Stick to your plan! The ride may be slow and boring at times, but you’ll be pleased with the long-term results.

5 Billionaires Who Live Below Their Means

Source:http://financialedge.investopedia.com/financial-edge/0410/5-Billionaires-Who-Live-Below-Their-Means.aspx?partner=yahoofin
At least once in your life – maybe even once a week or once a day for that matter – you have fantasized about coming into a lot of money. What would you do if you were worth millions or even billions? Believe it or not there are millionaires and billionaires among us who masquerade as relatively normal, run-of-the-mill people. Take a peek at some of the most frugal wealthy people in the world.

Warren Buffett
Millions of people read Buffett’s books and follow his firm, Berkshire Hathaway’s, every move. But the real secret to Buffett’s personal fortune may be his penchant for frugality. Buffett, who is worth an estimated $47 billion, eschews opulent homes and luxury items. He still lives in a modest home in Omaha, Nebraska which he purchased for just $31,500 more than 50 years ago. Although he’s dined in the best restaurants around the globe, given the choice he would opt for a good burger and fries accompanied by a cold cherry Coke. When asked why he doesn’t own a yacht he responded “Most toys are just a pain in the neck.” (Find out how he went from selling soft drinks to buying up companies and making billions of dollars. Read Warren Buffett: The Road To Riches.)

Carlos Slim
While most of the world is very familiar with Bill Gates, the name Carlos Slim rarely rings a bell. But it’s a name worth knowing. Slim, who is a native of Mexico, was just named the world’s richest billionaire – that’s right, richer than the uber-famous Microsoft founder. Slim is worth more than $53 billion and while he could afford the world’s most extravagant luxuries he rarely indulges. He, like Buffett, doesn’t own a yacht or plane and he has lived in the same home for over 40 years.

Ingvar Kamprad
The founder of the Swedish furniture phenomenon Ikea struck success with affordable, assemble-it-yourself furniture. For Kamprad, figuring out how to save money isn’t just for his customers, it’s a high personal value. He’s been quoted as saying “Ikea people do not drive flashy cars or stay at luxury hotels.” That goes for the founder as well. He flies coach for business and when he needs to get around town locally he either takes the bus or will head out in his 15-year-old Volvo 240 GL.

Chuck Feeney
Growing up in the wake of The Depression as an Irish-American probably has something to do with Feeney’s frugality. With a personal motto of “I set out to work hard, not get rich,” the co-founder of Duty Free Shoppers has quietly become a billionaire but even more secretively given almost all of it away through his foundation, Atlantic Philanthropies. In addition to giving more than $600 million to his alma mater Cornell University, he has given billions to schools, research departments and hospitals.

Loath to spend if he doesn’t have to, Feeney beats both Buffett and Kamprad in the donation category, giving out less grants than only Ford and the Bill and Melinda Gates Foundations. A frequent user of public transportation, Mr. Feeney flies economy class, buys clothes from retail stores, and does not wast money on an extensive shoes closet, stating “you can only wear one pair of shoes at a time”. He raised his children in the same way; making them work the same normal summer jobs as most teens.

Frederik Meijer
If you live in the Midwest chances are good that you shop at Meijer’s chain of grocery stores. Meijer is worth more than $5 billion and nearly half of that was amassed when everyone else was watching their net worth drop in 2009. Like Buffett he buys reasonably-priced cars and drives them until they die, and like Kamprad he chooses affordable motels when on travel for work. Also, like Chuck Feeney, rather than carelessly spending his wealth Mr. Meijer is focused on the good that it can provide to the community. (For more on the benefits of charity, read It Is Better To Give AND Receive.)

The Bottom Line
The dirty little secret of some of the world’s wealthiest people is that they rarely act like it. Instead of over-the-top spending, they’re busy figuring out how to save and invest to have that much more in the future. It’s a habit you might want to consider in order to build up your own little storehouse of cash

The Millionaire’s Retirement Plan

Source:Yahoo Finance
If you’re just entering the workforce, retirement probably seems like a lifetime away. A million dollars by retirement? That’s someone else’s dream, right? It doesn’t have to be. Here is the millionaire’s retirement plan. For these calculations, assume an average annual return of 8%, adjusted for inflation at 3% – a reasonable estimate of average market returns.

Age 25: A Good Beginning

You’re 25 and landed that first job on your career ladder – congratulations! Before you start living to your new paycheck’s standards, budget your retirement savings. If you have a 401(k) plan that matches your contributions, use it! These matching dollars are like a guaranteed return on investment. If you don’t have a matching 401(k), look for a mutual fund through an investment firm with low fees; many now offer target funds, which allocate your investment risk with your targeted retirement year in mind – great for a beginning investor.

Choose a Roth IRA if you can; you don’t get to deduct your contributions from your taxes, but you’ll enjoy tax-free withdrawals at 65. Plan to start by saving about $200 a month to reach your millionaire goal; increasing this monthly amount by $10 annually as you get a raise or promotion will only speed up your saving.

Age 35: Rolling Along

By now you have saved about $45,000 and you’ve grown in your career with a bigger paycheck, but often, family commitments like children and a mortgage will seem more pressing than saving for your golden years. Don’t make the mistake of slowing down your retirement savings. By now, you should ramp up your contributions to about $400 a month – remember that a matching 401(k) will help you in attaining this amount.

If you have kids and worry about saving for their college, look at it this way: the best way to help them in the future is by ensuring you’re financially sound in retirement. Make saving for retirement a priority.

Age 45: Holding Steady

You’re mid-career, and things are looking good in your retirement portfolio. Your savings have grown to about $160,000 – not bad, but it still isn’t quite time to slow down. Increase your retirement contributions to about $450 a month or more, and you’ll be rolling your way to millionaire status by 65.

Age 55: Close to the Finish Line

By age 55, your retirement portfolio should be at $400,000 or so. You can start to see the finish line, but begin to wonder about risk. If you’ve been investing in a target fund, your portfolio has been adjusting its allocation for you; otherwise, look at adjusting some of your investments to reflect a lower risk tolerance. And remember: your income at, say, age 70 won’t be withdrawn for another 15 years – plenty of time to ride out market fluctuations.

At age 55, expect to really ramp up your retirement contributions, to roughly $600 a month, and more if you can manage it. The more you save, the sooner you can leave the nine-to-five behind.

Age 65: Prudent Asset Management

You’re at the finish line: a millionaire at 65! Since you have no way to add to your savings now that you’re out of the workplace, prudent asset management is vital. Keep a close eye on your portfolio so you can make your nest egg last. Protect yourself against inflation as well as market risk, and you’ll be enjoying your golden years without financial worries.

The Bottom Line

With steady savings and smart financial habits, you can retire a millionaire – maybe even before you’re 65.

10% Dividen Bank Persatuan untuk 2009

Dividen Bank Persatuan untuk 2009-10%

sumber:http://www.bicarajutawan.com/forum/thread674-63.html#post515482

What I Wish I Had Taught My Daughter About Money

Source:http://www.moneycrashers.com
My oldest daughter had many milestones this year. She got her drivers license, got her first car, got her first job and turned 18 just this week. Besides being a festive day full of the usual celebrations, we went to get her first bank account. Out of all the huge life-changing events she went through this year, I think the bank account had to be the one that gave me the most pause. I was tormented by the thought that she may be destined for the same financial crisis I put myself through when starting out. Of course, back then I had no clue about how to handle my money or to be a good steward of it. I was guilty of countless transgressions against my financial health. By the time I was 25, I was a complete financial disaster, with no apparent means by which to dig myself out.

My daughter wouldn’t remember those days as she was very young, but as a single mom of two young children in financial ruin, I know it directly affected the lifestyle in which she was raised. Because of my ineptness and indebtedness, I found everything from feeding them to putting gas in the car a miraculous feat. Eventually things got better and I was able to learn how to put money in its place and do the right thing with it. So I have to feel good that I have set some proper examples of money management skills for my daughter to learn from.

But there are still things I wish I would have shared with her about money before now. Things I know if she takes to heart and starts applying them immediately will set her up for a lifetime of financial wellness. For me, this one falls right in there with emotional and physical wellness as being areas I have always been committed to nurturing in my children. These are the things she may already know, but areas of financial wellness I want to make sure she understands:

* It’s not about whether you have a lot of money or a little, it is about living within your financial means.
* Treat your money as you want it to treat you—be good to it and take care of it and it will reciprocate. Treat it badly and it will do the same.
* Never buy something you don’t have the means of paying for right now. This applies to various areas from lump-sum purchases to purchases for which you need to finance heavily.
* No matter how much you make, put away a percentage of it for an emergency.
* Always be aware of where you money is going.
* Always meet your financial obligations no matter how tough it might be.
* Forget those trendy shoes, put it in savings!
* When you have a spending urge, take a look at your savings account balance instead. That is a huge rush in and of itself.
* Develop a budget and financial plan no matter what your income.
* Treat yourself within reason every once in awhile. Depriving yourself is not healthy.
* Give even when it hurts. It might hurt a little, but it will also feel great. Don’t go beyond your means though.

These are just a few of the areas I have outlined to go over with my daughter this weekend. She is a sweet, open-minded and smart young lady so I am confident she will absorb my advice and be appreciative of this heap of hard-earned advice.

What do you share with your teens about money? What are some areas you are concerned with? I would love to hear from you.

10 Essentials for Successful Retirements

Source:Yahoo Finance
Day after day brings new headlines of problems and pitfalls for retirees. We save too little and can’t afford to stop working. We make poor investment decisions and don’t know how to get the most out of our shrunken nest eggs. Social Security benefits may be cut. Medicare benefits also face trims. The national ship of state is going down the tubes in so many ways, and no one will be handing out life preservers to older citizens as the ship sinks.

Maybe these are all true and worrisome trends. Nonetheless, people will retire, and many of them will enjoy terrific lives in their later years. They will join millions of other Americans who have managed to do the same. What are their secrets? Here, culled from research studies and retirement experts, are 10 essentials for successful retirements.

1) Planning. Successful retirements rarely happen by accident. They require planning, and it should begin well before retirement begins. Younger people do not need to have any detailed plan for their later years. Heck, many probably don’t know what they’ll be doing next year. But they should set up tax-favored retirement investments, contribute enough to trigger the top employer match, and place their money in stable and safe investments. Older people should begin in their 50s to ask questions about the adequacy of their retirement funds. They also should attack some of the big retirement issues — where do they want to live, how do they want to spend their time, and the like. At whatever age retirement becomes financially viable or physically necessary, they should have a more detailed plan and ways to achieve it.

2) Budgeting. Most people overestimate their retirement income and underestimate their retirement expenses. Well before the regular paychecks stop, many successful retirees will have taken a hard-nosed look at their retirement income and expense needs. Expense budgeting is crucial. Once the income and expense sides of your personal ledger have been completed, you can see if there’s a gap that needs to be closed. Most likely, it will be closed by trimming expenses. Many experts say it’s a good idea to look at your locked-in sources of retirement income –Social Security and traditional pensions — and match this amount to your fixed expenses — mortgage, utilities, insurance, fixed debt payments, operating expenses for your car, and basic household costs for food and other necessities. Then, look at the likely income stream from your investments and use those funds for discretionary spending on vacations, restaurants, and the like. This way, if returns on your investments don’t fare as well as you thought, you won’t have to eat into your investment accounts to pay expenses. When markets recover, you can resume your spending.

3) Homework. Retirement is many things but a life of leisure usually must be preceded by a lot of homework. This is particularly true when it comes to healthcare costs. The average 65 year old couple will spend $250,000 on health care during the rest of the their lives — the single largest unknown expense for most people. Medicare was complicated enough before health reform was enacted. Anyone planning to retire in the next several years should spend time understanding how the new law might affect them. Other areas that can benefit from some study: how healthy is the economy of the area you’re thinking of choosing for your retirement home; what are the state and local tax rates in that area; what are state estate taxes like; do you have a good approach to spending down your assets in retirement, and, what is the best strategy for you about when to begin claiming Social Security benefits.

[See 15 Tasks to Become Retirement Ready.]

4) Realism. None of the planning, budgeting, and homework you do will provide the basis for a successful retirement unless you’re realistic in your assessments and assumptions. Most people, for example, actually retire several years before they earlier said they would. Likewise, they say they will continue to work well past their 65th birthday. They don’t. You need to be honest with yourself.

5) Balance. The key to a lot of good things in life is a sense of balance. Successful retirements involve a good balance between expectations and reality. This doesn’t mean sacrificing your dreams. It does mean road-testing your dreams to see what it would take to make them possible.

6) Health. No surprise here. Good health is the “knock on wood” wish of every retiree. What’s different today than a generation ago is the widespread recognition that good health is no accident but the probable result of good diet and exercise habits. These habits need to start now, not when you’re 70 years old, although it’s never too late to begin. It’s been proven that strenuous exercise, with heavy weights and sweat-inducing cardiovascular workouts, can help even people in their 80s and 90s. Investing in good health is as important as socking money away in retirement accounts.

7) Family and Friends. As people look forward to their later years, the priorities that loom largest tend to be people, not possessions or unshared travel experiences. As with your health, good relations with friends and family members need to be developed and nurtured over time. If there are people you know you want to spend time with when you’re retired, figure out what you need to do today to enhance the odds you will have the strong bonds you desire in the future. Having honest conversations with children is crucial, especially when it comes to issues surrounding grandchildren. Maybe you want to live close to grandchildren and see them a lot. Do your kids feel the same way? Do they expect you to be constantly on call to be free babysitters? How would you feel about that? Do you expect your kids to be constantly on call to help you out with household chores and errands? Make sure you’re all on the same page before taking important actions you might later regret.

8) Socialization. Loneliness is a killer for older people. This is especially true for men, who are seen in surveys to have harder times than women making friends, and tend not to ask for help or reach out to loved ones. If you don’t have a rich circle of family and friends, and aren’t likely to build one before retirement, perhaps a senior community makes sense. Even if you don’t need help due to physical ailments, you might need the structured social support services that a retirement community can offer. Don’t be in denial on this one. Looking through scrapbooks of old family pictures gets, well, old after a while.

9) Legacy. People who are happy in retirement frequently have taken care of major life decisions rather than leaving them to some future date. Uncertainty is stressful, and stress should not be a sought-after condition at any stage in life and especially not in retirement. Questions about passing on wealth and possessions should be decided when you’re healthy, and should be discussed with family members and other loved ones. Maybe your daughter doesn’t really want your wedding china. That doesn’t mean she’s a bad person. Maybe you think leaving college money for grandchildren is a great idea. But you should discuss it with your kids. If you trust your children, perhaps they should control these funds. Where do you want to be buried when you die, or do you even want to be buried? If you’re married, do you and your spouse agree on these matters? These are discussions you should have.

10) Acceptance. With due apologies for being presumptuous, let me suggest that we all have made many, many mistakes by the time we retire. Often, the people we’d view as the most successful are the hardest on themselves as they approach and enter retirement. Maybe it’s workplace failures. Or personal relationships. Often, it’s the quality of parenting. Whatever it may be, carrying this baggage around with you during retirement is a heavy, heavy burden. It’s nearly impossible to win the blame game. If you play the comparison game, you can always find someone who did things better than you. You may need professional help with this, but forgiving yourself for being human can be a liberating act as you approach retirement and your later years.

Dividen 13% untuk ahli Koperasi ATM

Source:http://utusan.com.my/utusan/info.asp?y=2010&dt=0628&pub=Utusan_Malaysia&sec=Muka_Hadapan&pg=mh_04.htm

SUNGAI BULOH 27 Jun – Koperasi Angkatan Tentera Malaysia Bhd. (Koperasi Tentera) mengumumkan pembayaran dividen 13 peratus tahun ini kepada lebih 140,000 ahli membabitkan jumlah saham sebanyak RM700 juta.

Panglima Angkatan Tentera, Jeneral Tan Sri Azizan Ariffin berkata, jumlah itu membuktikan koperasi tersebut berjaya mengekalkan prestasi pembayaran dividen melebihi paras 12 peratus sejak 1996.

“Koperasi telah berjaya menghasilkan prestasi kewangan yang sangat baik dan konsisten serta mampu memberi pulangan dividen berterusan sebanyak 12 peratus atau lebih sejak 13 tahun lalu,” katanya.

Beliau berucap merasmikan mesyuarat agung Koperasi Tentera Ke-45 di Perbadanan Hal Ehwal Bekas Angkatan Tentera (Perhebat) di sini hari ini.

Hadir sama Panglima Tentera Darat, Jeneral Datuk Zulkifeli Mohd. Zin; Panglima Tentera Laut, Tan Sri Abdul Aziz Jaafar dan Panglima Tentera Udara, Jeneral Datuk Seri Rodzali Daud.

Turut hadir Pengerusi Eksekutif Suruhanjaya Koperasi Malaysia (SKM), Datuk Mangsor Saad.

Mengulas lanjut, Azizan berkata, pencapaian koperasi itu amat membanggakan walaupun keadaan ekonomi negara tidak menentu sejak kebelakangan ini.

Menurutnya, bagi mengekalkan keutuhan ekonomi sesebuah koperasi, setiap ahlinya perlu bekerjasama dan membuat keputusan bernas untuk memastikan ia terus maju.

Sehubungan itu, beliau menyeru seluruh kepimpinan koperasi itu supaya terus berusaha mengekalkan keupayaan pembayaran dividen kepada ahlinya melebihi 12 peratus.

Beliau percaya sasaran itu dapat dicapai melalui usaha gigih seluruh kepimpinan koperasi itu.

“Penglibatan dan sokongan daripada setiap ahli akan mampu menjamin kejayaan bukan sahaja dalam lingkungan koperasi malah dalam ekonomi global,” katanya.

Paying Down the Mortgage or Investing for the Long Term? What Shall We Do?

Source:http://www.thesimpledollar.com/
As I mentioned a bit last week, we’re currently debt free except for our mortgage and a student loan with such low interest that it would be financially reckless to pay it back early. The CD in which we were keeping the money to pay for our Prius matured (it was earning a higher percentage return in a CD than we could get on a car loan, so cracking the CD early and paying a penalty just to pay cash seemed like a poor move), so we paid off the full balance of that loan and own both of our vehicles now free and clear (we paid cash for our 2004 Pilot a few months ago).

Right now, we’re sitting at a decision point. Should we start prepaying significant amounts on our mortgage or should we invest that money elsewhere? I think we’ve come to a decision, but I also thought walking through our decision-making process.

Our home mortgage sits at about 5.5%. We are looking into refinancing it at 4.75%, but we haven’t yet fully run the numbers to determine if it would actually save us any money or not because of the cost of the refinancing and because of our intent to pay it off quite early. We’re already making payments that amount to about 50% more than what we owe each month.

Our question currently is simple: should we raise those overpayments to 100% or more or should we be investing that extra money into stocks or something else?

If we increased our payments to 100% of what we currently owe each month, we would pay off our mortgage in about seven years. If we exceeded that amount, we would be paying for even fewer years than that.

We view money put into the mortgage as being an investment with a guaranteed return of 5.5%, because that’s the amount of annual interest we’ll save by knocking off some principal. If we pay $1,000 early, it’ll save us $55 in interest this year and about $57 in interest next year and so on.

On the other hand, we could invest that extra mortgage payment each month into something else. We could put it into a savings account that would earn us 1.5% or 2% or so, but it would be very liquid.

We could also invest it in the stock market. It would be very liquid there and it would also have the potential to greatly beat the 5.5% we’re making on our home loan.

Of course, “potential to greatly beat” reveals the hard truth. Stock market investing, particularly in the short term, implies quite a bit of risk. 2008 was incredibly painful, for example, as were 2000 and 2001.

The truth is that stocks only pay off as an investment over a long timeframe unless you’re banking on some luck.

So, what’s our timeframe here? Our plan after our mortgage is paid off is to buy a piece of land in the country and build a house on it (and likely a small barn as well).

If we put the money into our home, we would be completely debt free in five years, buying land a year or two after that, and building a year or two after that. Let’s figure five to ten years is our time frame.

Is that “long term” in terms of the stock market? Sadly, it’s not. As Warren Buffett so eloquently put it, “Only buy something that you’d be perfectly happy to hold if the market shut down for 10 years.” The simple fact is that over a period of time less than ten years, the stock market is notoriously volatile.

This becomes even more true when you consider that we won’t be investing all of it now and just waiting. Instead, we’d be investing small amounts regularly over the next several years. Large chunks of our investment would be in stocks for only a year or two.

That’s not the kind of fragile foundation we want for our next home. We’d far rather own our current house free and clear. It’s in a good location, rurally placed with great access to the Des Moines metro area, and similar houses have held their value or even gone up over the last several years. We feel, based on the evidence, that we’ll get out of it at least as much as we put into it when we sell it.

Thus, our extra money is going into our mortgage for the time being. I altered our automatic monthly mortgage payment to be 125% more than our normal monthly payment and may yet alter it again (I want to watch our monthly cash flow for a while). This leads us to paying off our house in just a few years and pushing us right towards the country home we’ve dreamed of.

The Number One Obstacle to Retirement

Source:Yahoo Finance
At first it would seem that the biggest obstacle to retirement is not having enough money. Most people simply don’t have enough in the bank to retire comfortably. While that is certainly a big part of the equation, it’s just the tip of the iceberg. Why don’t many people have enough money to retire? They didn’t save enough, of course. But why didn’t they save enough? And that brings us to what is, for many, the biggest obstacle to retirement–debt. And the problem isn’t just any debt. The problem is non-mortgage debt.

Non-mortgage debt creates a triple-whammy when it comes to retirement. First, during your working years you have less to save toward retirement because you must make payments on your debt. Second, unlike a mortgage payment that goes toward a home that over the long term goes up in value, consumer debt usually goes to pay for things that have no lasting monetary value. And third, in retirement you need more income because, in addition to your regular monthly expenses, you must keep making payments on the non-mortgage debt you’ve racked up. As a result, many save less during their working years and need more during retirement.

[Click here to check savings products and rates in your area.]

In a recent study commissioned by Scottrade, for 63 percent of Americans, debt was an impediment to retirement savings in 2009. And 61 percent of Americans expect debt to limit retirement savings in 2010. While there are no easy answers to the problem of debt and retirement, here are some basic strategies that may help you save more and climb out of debt as you work toward your golden years.

1. Stop Borrowing. No matter how much consumer debt you have, the absolute most important step is to stop going into more debt. You cannot climb out of the hole until you stop digging.

2. Save First. While some advocate ridding yourself of all non-mortgage debt before saving for retirement, this strategy can backfire. Not unlike dieting, you may find the discipline to stay out of debt elusive. So like eating your vegetables first, make saving for retirement a priority today. Even if you save just a few dollars a month, the money will grow and you’ll begin developing good investing habits. Saving first is particularly important if your employer offers a company match for 401(k) contributions.

3. Scale Down Your Budget. To borrow from dieting again, one of the biggest mistakes we make when trying to lose weight is to go extreme. We count every calorie and significantly restrict the foods we eat. Such extreme strategies rarely work in dieting or money. So rather than counting every penny you spend and denying yourself every indulgence, pick the one or two categories of spending that really cause you to overspend. This may include eating out, buying clothes, or, if you’re like me, spending on gadgets. For just these categories, set a reasonable budget and stick to it. You’ll find the approach much easier to follow than budgeting every dime you spend, and you’ll be more likely to stick with it.

4. Plan for the Unexpected. We often go into debt to handle emergency expenses. While we can’t guarantee we’ll have enough money to handle every situation, saving up an emergency fund in a high interest online savings account reduces the likelihood that an unexpected expense will send us into more debt.

5. Plan for the Expected. As important as planning for an emergency is, we also should be planning for large, anticipated purchases. Whether it’s buying your next car, taking a yearly vacation, or paying for a wedding, these big expenses can sink you deep into debt if you are not careful. So rather than letting these big expenses creep up on you, start saving long before you’ll need the money.

Saving for retirement isn’t easy. If it were, we’d all have enough to retire comfortably. But we can greatly improve our chances of having enough money in retirement if we keep our debt under control.

DR is the founder of the popular personal finance blog, the Dough Roller, and author of 99 Painless Ways to Save Money.
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