Is this your investment plan?
A lot has been written on money saving habits from grocery coupons to minimizing vacation expenses. A clear understanding of gross and net earnings, money utilization and its effects on long term financial success is critical but remains scarcely implemented. This article provides some practical tips of managing your finances with ease.
Most conversations, calculators take into account your gross income while providing projections such as ideal savings rate. In reality, you will save what you will ultimately have in hand, that is your net income. Accounting for your expected tax bracket, expenses and estimated tax payments (or tax refund) is vital in creating long-term investment plan.
This is just like an interview for college admission or a job. The interviewer would like to know why you want to study certain field or trying to accomplish. Your response gives them a glimpse of what you really are, and your potential. The interview along with your Curriculum Vitae serves the basis of being successful at the said endeavor.
This little bundle of Joy can be a great investment!
Another example, when you apply for a loan, home mortgage or business application, the reviewer would like to know your current financial situation, your future earning potential in the case of loan/mortgage and detailed business plan in the case of business application. Such information serves a critical role for loan approval or success of the said business.
What is so common about college interview, job interview, loan/mortgage application or business application? The plan (CV, application, business plan etc.) is written.
You need to write down your investment business plan. Be it on a piece of paper, a word document or a spreadsheet. One simple method is to accumulate your total monthly expense plus quarterly/yearly expenses (tax payment, real estate taxes, insurance payment, car registration fees etc.) and come up with annual “operating expenses”.
Next, write down your annual net income. The difference of your net annual income minus annual operating expenses (hopefully significantly positive) is your actual annual saving amount. Below is a simple table (click on the link to view) to accomplish this task and get started.
Enjoy and stay tuned for more at Jaadki.com!