3 Smart Money Moves You Won’t Regret

If you’re aiming to be smart with your money there are many ways you can approach it. Here are three smart money moves you definitely won’t regret in the long run.

Smart Money Moves #1: Pay down high interest debt

The most important (in our opinion) of smart money moves is paying off high-interest debt. High-interest debt is easily one of the first forms of debt you should work to pay off quickly. Loans with lower interest rates like mortgages, student and auto loans are generally manageable with their month-to-month payments. Carrying around high-interest debt is difficult for many reasons, and it often feels like you’re not making any progress with the principal when you’re making the minimum monthly payments. It can feel like you’re only pay toward the interest and in many cases you’re paying very little to the principal on a high-interest loan and paying more toward interest.

Work to pay off high-interest debt quickly, so you can work toward our next step. Creating an emergency fund.

Smart Money Moves #2: Create an emergency fund

Once you’re out of debt, it’s important to create an emergency fund to avoid getting back into debt if an emergency transpires. Medical emergencies, a job loss, your car breaks down, your roof leaks, emergencies come in all shapes and sizes. You want to be prepared.

There is a lot of chatter about how much you should have in an emergency fund. The average is anywhere from $1,000 as a small goal to six months of living expenses in the event of a job loss. You have to figure out where you land in terms of the amount you aim to save for your emergency fund.

Smart Money Moves #2: Check your credit report

A staggering amount of people have material errors on their credit reports. According to the Federal Trade Commission 21% of people in the US have errors on their credit reports. By checking your credit often, (monthly or bi-monthly) you can gain valuable insight into not only the health of your credit, but any misleading, incorrect or inaccurate information on your credit report.

If you see any errors, work with a reputable credit repair company. Credit repair is still a young industry and there are skeptics, but the investment pays for itself if you work with the right company. Having good credit can prove invaluable when you’re applying for new credit saving you money in the long run.

The smartest thing you can do is work with a credit repair company to check your credit, understand your credit history and work to build good credit.

How To Manage Your Financial Problems After Buying A New Home

Changing your living status can drastically change your lifestyle and your financial problems. But you don’t worry, because you will get the solution if you are cautious about how you spend your money.

If you are young and buying your first home, it can be a critical time in your life. Nonetheless, it’s also extremely exciting to imagine that you are setting off to own your property interestingly. This is really the American Dream at work! Chances are, your mortgage payment will be more expensive than whatever rent you were paying before you were a homeowner. You might be stressed over how to budget after you close on the house, yet you will catch on speedier than you might suspect. If you couldn’t manage the cost of the house, the bank wouldn’t have given you the loan, so motivate prepared to crunch some numbers and appreciate the first year living in your new abode.

Pay Attention to Your Lending Officer

Prior to your loan is even endorsed, you’re lending officer should sit down with you at the bank and give you a snappy once-over of the numbers. If they don’t, you should ask them to do as such, or discover a lending officer that will; it’s absolutely OK to shop around for lenders, especially in this economy. When you meet with your lending officer, don’t be reluctant to ask questions and/or take notes. When you lock to your interest rate, they will let you know precisely what your mortgage payment will be, and if you choose to keep your taxes and homeowner’s insurance in escrow, they will calculate that in, as well. Pay attention to that month to month number, and use that to set your new budget.

Set a New Budget

Ideally, if you’ve purchased a house, you have officially set some sort of budget for your living expenses pre-homeownership. If you have, it should be generally easy to set a new budget that accounts for your increased living expenses. Just module the number from the bank for your regularly scheduled payments and make adjustments as necessary. You will need to remove some things; that is almost inevitable. In any case, ensure it is something you can live with.

Communicate with Your Partner or Roommate

If you are buying this house with your spouse or partner, or if you are having someone move in and pay rent, make sure to communicate expectations and concerns transparently. This can represent the deciding moment a partnership when it comes time to pay all that money at closing. When you figure out what everybody owes, ensure you tell everybody upfront. If you are having a renter live with you, it’s not a bad idea to draw up a lease arrangement and have a lawyer look at it. That can save you a great deal of inconvenience down the road.

Learn to Cook

Cooking your own foods can be significantly inexpensive than eating out each night. When you cook, you often have lots of leftovers which you can eat the following night or for lunch the following day. It would be such a shame to waste your new, awesome kitchen in your new house, so if you don’t definitely know how to cook some simple meals, now is a great time to learn how.

8 Tips to Improve Your Financial Communication

What makes a couple successful in their financial relationship? Ameriprise Financial surveyed over 1,500 couples (those married or living together for at least six months) to learn about their money conversations and how they make decisions. The results revealed eight ways you can improve the financial health of your relationship:

1. Understand your partner’s money mindset. It’s normal to have differing views and habits about money, but that doesn’t mean you can’t agree on your financial goals. Couples who report being on the same page financially work to understand their partner’s approach to money and keep the lines of communication open.

2. Make finances a priority and don’t give up. Couples who are willing to have the hard conversations and who work together to find financial harmony will reap the benefits over time. As you might expect, the study found that couples who had been together longer tend to have better communication and are on the same page when it comes to financial matters.

3. Agree on financial goals. It’s tough to pool your money with someone who overspends or who isn’t willing to save for the vacation you’ve always dreamed about. Sharing financial goals does bring you closer together-or at least it’s one less thing to argue about. To make it easier to save, challenge yourselves to add a timeframe to each goal so you know what you’re working toward first.

4. Assign and accept financial roles and responsibilities. Most couples split up tasks such as paying bills or monitoring investments. Clear responsibilities allow you to hold one another accountable without worrying if the cable bill was paid. However, be sure to work together on tasks such as retirement planning that requires close collaboration.

5. Invest in your future together. Make it a priority to set aside a portion of your earnings for short- and long-term goals, including retirement. Know how much you collectively have in retirement savings-a surprising 23 percent of couples are unsure of this number. If you have kids, talk about how much you’d like to contribute to their college expenses so you can save accordingly.

6. Set a spending limit. Spending habits were the leading cause of contention for couples. Consider setting a spending limit to ensure you’re on the same page as your partner regarding large expenditures. On average, couples said a purchase over $400 should trigger a discussion.

7. Understand that disagreeing is okay. According to the Ameriprise study, even couples who say they’re in financial harmony disagree on financial matters. What’s important isn’t that the partners don’t always agree, but that 82 percent resolve their issues and move on.

8. Enlist a professional to solidify your financial plan. When you need an objective opinion – or a deciding vote – meet with a financial advisor. Together the three of you can create a financial plan that meets your specific needs as a couple.

Ultimately, it feels good when you are in sync with your partner regarding financial decisions and can work together toward managing your finances. Couples who actively work on improving their financial relationship will likely be less frustrated over money matters and may even feel better about their relationship overall.

Federal Employees, Are You Financially Ready to Retire?

I meet regularly with Federal employees about their retirement benefits and their current payroll deductions. Most are not aware of what their Paystub reflects but more importantly do not know that a few tweaks to what they are currently doing can make a huge difference in their retirement.

Some key questions you need to ask yourself is:

1) Do I know what I am getting from CSRS/ FERS retirement? This is a simple calculation that is provided in your Summary of Benefits Workbook. Knowing this number is key to setting up the rest of your retirement plan.

2) Do you know what your TSP contributions translate to a lifetime Annuity? Most people contribute to their TSP as a main source of retirement funding. It is important to know what the TSP will translate to in an Annuitized retirement vehicle.

3) Do you know when you can start taking Social Security? Do you know how much your projected monthly Social Security Payments are? If you have not received a statement from Social Security about your benefits, you should call the Social Security office and have one sent to you. As a Federal Employee you can start receiving Social Security income at age 56 through a Special Retirement Supplement. A Special Retirement Supplement is a plan put in place to help Federal employees pad their monthly income until they are eligible for Social Security Benefits. This is available in your Summary of Benefits Workbook.

4) Do you know what your FEGLI Benefits are and do you know how to interpret your FEGLI code on your paystub? Your summary of Benefits workbook, goes into detail about the FEGLI code and how to interpret it. The Workbook also shows some areas of concern that you need to be aware of when approaching retirement.

5) Are you contributing enough or too much to your TSP? Do you know about the 1% FERS contribution? Most people do not know that as a FERS employee the Government matches another 1% if you contribute all 5% to TSP. Thus you are getting a true 100% match.

What is the perfect contribution level? If you are not contributing 5% to your TSP, you are making the biggest error in your retirement investing. The Government matches the first 5% with a 100% match. So for every $1 dollar you invest you are getting $1 dollar plus the additional return of the fund you invest in.

On the other side of the coin I have seen many people invest 10% or more into their TSP and this is also a mistake. The funds within the TSP are very conservative by nature and provide a low rate of return. The maximum you should invest in a TSP is 5% of your income.

6) Do you know the minimum age you can retire with “FULL” Benefits?

Ages are 56-30, 60-20 and 62-5.

7) Do you know how to accurately determine what you are making now compared to what you will be making during your retirement? Do you know what items you will no longer need to pay at retirement? One of the key things that may bring Federal Employees comfort is the knowledge that there are several deductions that they will no longer need to pay at time of Retirement.

For Instance, you no longer need to contribute to TSP or FEGLI.

8) Is your W4 deduction status set to the proper level? Are you giving the government a tax free loan by mistake when you could be earning tax free interest? If you are getting money back each year, it may seem like a bonus but you have missed out getting interest on that income all year.

These are all key questions that will make a HUGE difference to your retirement. Take time to review your Summary of Benefits workbook.

7 Essential Ingredients for Your Best Financial Recipe

When my mother was forty-three, she was divorced after twenty-two years, and five boys – and I’m number two.

In the settlement, she received a lump sum of money. She lamented, “What am I going to do now? I have never had to make financial decisions on my own, and now I have this money and I have to make it last a lifetime!”

I asked her, “Well, what are you going to do now with your half of the settlement?”

“I am not going to make any financial decisions right now,” she answered. “I’m just going to put all my money in the savings account at the bank until I figure out what to do.”

Years later, I realized that not making a decision was a decision. And it was not a good one.

Whether you believe the challenge of financial planning necessary, interesting or overwhelming, not creating a plan, is indeed creating a plan.

What are the essential elements of financial planning? What are the ingredients that you will need for your financial plan? There is more to financial planning than just how much money you have. The best plan for you contains so much more.

In order to create your financial recipe, you also have to look at these seven essential ingredients to create the best plan. To help all better remember them, here is a fun acronym. You have to start with A RECIPE.

A Desire to Leave a Legacy
Recognizing the Need for a Plan
Evaluating your Wants, Needs, Goals, and Desires
Courage For The Journey
Investments
Professional Management Team
Estate Documents Needed

A Desire to Leave a Legacy

When your assets transition to loved ones, this will be your last statement to them. They will remember if you transitioned love, knowledge and understanding, or if you transitioned angst, frustration and confusion.

Recognizing the Need for a Plan

How do I create my legacy? With a plan! We have all heard this before, if you fail to plan, then you plan to fail. The same is true with your financial planning. You must plan to succeed!

Evaluating your Wants, Needs, Goals, and Desires

Where do I start with my plan? Write down your goals and your dreams. Compare this with your wants and desires. Prioritize your bucket-list and you have just begun your
plan!

Courage For The Journey

Even the best plans falter. We all know the world and the economy are unpredictable. But if the economy as we know it continues, then downturns really present strong opportunity. You have to have courage to capture that opportunity.

Investments

The best way to outpace inflation and increase purchasing power is with diversified investments. They are needed in your recipe and need to be understood.

Professional Management Team

Once you have your plan in place and have identified your goals and dreams, then you need to assemble your professional management team. Like sport teams need a coach to bring together all the strengths of the players, your team will bring together your unique bucket-list and coordinate a path to success.

Estate Documents Needed

The federal government allows us to make financial mistakes, which are in the favor of the federal government. Our legacy needs to be safeguarded, beneficiaries need to be named, trustees and various people need to be appointed to ensure that in life, as well as death, your desires are carried out. Without estate documents in place, this is unlikely to occur as you desire.

Now you have the essential ingredients for a well thought out financial plan. My goal for you, while alive you live. Creating A RECIPE will help you live, well!

The 6 Habits of Financial Health

“Never spend your money before you have it” Thomas Jefferson

From the moment you wake up to when you go to sleep, you make constant choices. Should I eat the salad instead of the burger? Should I go jogging after work? And much much more. Over time we form habits, good and bad ones. Every day, we constantly try to implement more good habits in our daily routine. “Running on Tuesday, Friday, and Sunday; High-Intensity Interval Training (HIIT) on Monday and Thursday”, those are mine with few “Should I go and grab a coffee with a friend and skip the HIIT for today?”. Of course, the better your lifestyle is the better your physical fitness will be.
Financial fitness, like physical fitness, is mostly about good habits. Here are the 6 habits to adopt for better financial health.

Know how much you make and how much you spend
Knowing how much you make every month is where you should start. If you have a fixed salary, it is easy. More difficult if your salary depends on commission. Even harder if it is purely based on them. If you work in a cyclical business, then you will probably have highs and lows throughout the year. You should average your last two to three years income, excluding special bonuses.

“A penny saved is a penny earned” Benjamin Franklin

Spend less than you earn
This habit is at the core of all good financial management. It is how rich people get rich. When you spend less than you earn, you save. And what you save becomes wealth. First, you need to know how much you spend. You need to start to register all your expenses. Starbucks, Movie ticket, Milk,… , everything goes into it. The first three months should be taken as “survey months”, I am sure you will be surprised on how much you actually spend on certain things. If you carefully register each of your expenditure without intervention, it will be easier for you to take actions.

“Gold cometh gladly and in increasing quantity to any man who will put by not less than one-tenth of his earngs to create an estate for his future and that of his family” The Richest Man In Babylon

The first law of gold in the amazing book “The Richest Man in Babylon” Says to save 10% of your income. The 50/20/30 rule for minimalistic budgeting is a proportional guideline that can help you keep your spending in alignment with your saving goals. This rule allocates 50% to your essential spending, 30% to your personal spending. The remaining 20% is for saving. More “extreme” and frugal people will save up to 80% of their income. Your personal situation and commitment play a role in your saving percentage, however, do not go below 20%. To achieve it, follow this simple rule: “Play Yourself First”. As you receive your salary set aside 20% and do not use it.

Stay Insured
A study done at Harvard University indicates that Medical Expenses are the biggest cause of bankruptcy, representing 62% of all personal bankruptcies in the States. A good health insurance can protect you. However, one of the interesting caveats of the study I just mentioned, shows that 78% of filers had some form of health insurance. My own take is that you need to select an insurance that is personalized to your needs. If you have dependents you would need a different insurance compared to your single friend.

Be prepared for the unexpected
One year ago I lost my job, my monthly salary went from five figures to zero within two weeks. With today’s mind, I can say that being laid off was probably one of the best events for my career. When that happened I was emotionally devastated. Before I started a new adventure in the special place I am right now, I spent few months without any income. I was able to sustain my previous lifestyle with few adjustments, thanks to the money I had saved. Most will call this “rainy fund”. I much rather call it “Opportunity fund”. Rainy fund brings the memory of scarcity, whether opportunity fund is something full of optimism. I had to use some of my funds during my unemployed days, and having a positive mindset helped me go through that difficult time.

“Make all you can, Save all you can, Give all you can” John Wesley

Develop a long-term financial plan
If you do not know where you are going, you will probably end up somewhere else. Your financial future is much more important than your next holiday. My work colleagues are always busy planning their holidays, if you do the same, channel some of that energy and focus on what your long term plans are. Write them down.

Earn more
Your income matters. Saving 20% of 1,000 is different than saving 20% of 10,000. Everyone has the opportunity to tap into their free time and find something that could produce extra income. Baby-sitting, tuition, music lessons,… The only limit is your imagination. It may be awkward and difficult at first, but with time and persistence you can succeed in developing one or more sources of extra income

Four Simple Tips to Save and Manage Your Money

One of the most important steps you can take right now is to put your budget in other. Setting a budget can help you to live within your means and keep you away from impulsive spending.

Here is what a good budgeting can do for you:

• It gives you control over your spending
• It helps to you to organize your savings and spending
• It keeps you focus
• It makes you aware where your money is going
• It enables you to save for raining days and to avoid unexpected costs

How you spend and manage your money can have a profound impact on your life. Learning how to save and manage your money should be an integral part of your life. You don’t have to be an accounting guru to start nor does it require a lot of paperwork.

Here are 4 steps you can take right now to start saving and managing your money:

Do not spend more than you earn

This sounds like a simple concept but in reality, it is hard to implement. But the good news is that with a few change to your lifestyle you can easily put it into practice. So the first thing you need to do is to analyze your spending habit. You need to track how you spend money. With the help of a simple financial tool like Quicken, you can track all your spending and manage your money more effectively. You can search online for more money management tools that can help you to track and plan your spending. The more you do this the easier it becomes.

Cut back on some of your expenses

You should look for ways to cut your expenses so that you can have more money to save. There are lots of ways to chop down on your spending without much hassle. You can cut on energy and car gas by just being more energy efficient or adopting a good driving habit. There are tons of things you can do to save more on energy, so look for an easy-to-implement system that works for you.

Build an emergency fund

You need an emergency fund to help you prepare for unexpected expenses. If you don’t have an emergency fund and you are hit by unseen events such as job loss, major illness, dental expenses, car repair and home repair etc. you’ll be forced to rely on a credit card, take out a loan or even worse tap into your retirement account. This could leave you in debt and less money for your retirement. The true importance of emergency fund is that it can save you when disaster struck.

Make your money work for you

Finally, make your money earn more money. While there are no simple ways to do this, there are many ways to put your money to work. Here is what you can do to make your money earn more: open a high-yield savings account, invest your money in the stock market, create a passive income, store your money in a retirement account, become a partner in a new business.
These are simple ways to start saving and managing your money. When you form a saving habit, you’ll be inspired to save more and hit your financial goal faster.

5 Harmful Credit Report Myths

As the world rockets toward an all-digital economy, maintaining good credit is more important than ever. With that said, the use of credit cards has increased for everyday purchases, making them a key to participate in online shopping.

A 2015 study by the Federal Reserve Bank of San Francisco found that the share of American retail purchases made with cash dropped from 40 percent to 32 percent between 2012 and 2015. That’s an astonishing eight percent change in just three years!

Given the importance of credit, it is no wonder that consumers are increasingly worried about their credit scores. Requests for credit reports from American credit reporting agencies have skyrocketed in recent years.

Here are five of the most pernicious myths, along with the facts about maintaining your good credit.

MYTH #1: YOUR CREDIT SCORE IS A SINGLE NUMBER
A credit report does provide a single number to potential lenders, but it contains a great deal of additional information as well. Your credit report includes details about the loans you have taken out and the credit cards you have been issued. Details about your payment history are included. The report contains a wealth of information for the lender. Lenders count on all of that information when making a determination about whether to extend credit, what your credit limit will be, as well as the types of credit you might be eligible for.

America’s three credit reporting agencies almost never report the same score when asked to analyze the same person’s account. There are several reasons for this. Second, different lenders report credit information to different credit reporting agencies. Most lenders report to all three, but many do not. Finally, different lenders may calculate credit scores slightly differently.

That’s just for generic scores. You’re also likely to have a different score calculated according to the specific criteria of lenders in real estate, for instance, and/or auto loans, and department store credit cards. the following

· Current accounts. Note that credit cards and mortgages are analyzed according to different criteria.

· Payment history. Lenders want to know whether you pay your bills on time.

· Outstanding credit. Reporting agencies calculate your outstanding balance compared to your total amount of available credit.

· New credit. If you have recently opened a bunch of new accounts, that could be a red flag.

· Credit history. Lenders want to know how long you have been borrowing.

Thus, lenders take much more into account than a single number.

MYTH #2: CHECKING YOUR CREDIT REPORT WILL HURT YOUR SCORE
This pestilent myth has a basis in fact. If your credit report shows a great many inquiries from potential lenders, that may indicate you are in financial trouble and shopping around for loans. A flurry of requests for credit reports can be a red flag.

The credit reports you request don’t show up as negatives on your history. In fact, many lenders believe it is a positive sign that consumers stay on top of their indebtedness by checking their credit histories at least once a year. It’s part of good credit management. Requesting a credit report is more likely to increase than diminish your chances of getting new credit approved.

MYTH #3: THE BEST WAY TO IMPROVE YOUR CREDIT SCORE IS TO PAY OFF ALL YOUR ACCOUNTS AND CLOSE THEM
This myth is partially correct.

Conversely, closing your accounts can have the opposite effect. Lenders and reporting agencies care about how much of your current credit limit you are currently using. That is, they are less interested in how much you owe than in how much you owe compared to how much you are approved to borrow. Sounds complicated, right? Think of it as a ratio. The following example will help shed more light.

If you owe $5,000 in credit card debt, that may not be significant if your credit limit across several cards is $30,000. On the other hand, if you have just one card with a limit of $5,000, then the $5,000 in current debt is quite significant and may disqualify you from opening an account with a second lender.

When you pay off your credit cards, you are decreasing the ratio of credit used to approved credit. That’s great. When you close the accounts, your approved credit is reduced, and that means future credit purchases will represent a higher utilization of your total approved credit. In other words, closing the accounts actually hurts your credit score.

MYTH #4: A BAD PAYMENT HISTORY DOESN’T AFFECT CREDIT SCORES ONCE ACCOUNTS ARE UP TO DATE
Unfortunately, getting caught up on payments doesn’t erase your history of late payments, accounts referred to collections, and bankruptcies. All of that information stays on your report for up to seven years – or longer, depending on the type of bankruptcy.

Getting current is still important. It’s a great sign and it reassures lenders that you are serious about paying your debts. Lenders understand that sometimes circumstances cause us to fall behind on payments. What they need to see is that you are committed to repaying what you borrow and that you don’t walk away from debt.

Missed payments stay on your credit report for three years. If you are a good customer but you are temporarily having trouble paying your bills, it’s worth calling the lender to see if you can reschedule payments. Many lenders are willing to work with customers to allow a few months without payments as long as they are arranged in advance. These arrangements are not reported to credit agencies and do not harm your credit score.

That said, it is still true that a bad payment history continues to affect your credit score for years, even after you have brought the accounts current.

MYTH #5: ALL CREDIT REPAIR SERVICES ARE SCAMS
Corrupt companies have given the credit repair industry a bad name. A simple Google search will reveal many companies that promise to erase derogatory information in your credit report for a fee.

Reputable credit repair companies do exist, doing a lot of good for a lot of people. They understand the rules about credit reporting and how to use those rules to improve your score.

Credit repair services can have incorrect and harmful information removed from your report.

Repair services might advise you to petition creditors for goodwill corrections, in which they remove information about a few late payments from an otherwise unblemished account history. effective A reputable agency can also provide reliable advice on prioritizing payments to existing accounts, applying for new credit, paying down your old debt, and much more.

Many lenders give extra weight to recent credit activity. Showing a trend toward responsible debt repayment can persuade them to be more forthcoming when extending new credit and favorable terms. Follow your credit repair agency’s advice and you could well find yourself with a higher score and more access to home loans, auto loans, and credit cards than you dreamed possible.

The 10 Most Common Sales Tricks

If you’re ever with someone who is trying to sell you something – a home, car, insurance, clothes, new phone or whatever – here are 10 common tricks and traps you should look out for.

1. The Probe
On your first contact with any salesperson, they’ll usually ask you a few questions. These have two main goals. Most obviously, they’re trying find out what you’re looking for. But they’re also aimed at finding out how serious you are about buying. For example, a car dealer would want to work out if you’re a tyre-kicker (someone who is just looking around but not intending to buy) or a fish (someone who can be caught and reeled in).

2. The Psychology Test
To be successful in selling to you, a seller must quickly work out what kind of a person you are so they can adjust their sales pitch to appeal to someone like you. If you’re a positive, extrovert, glass-half-full person, then they’ll probably try to sell the dream – stress how what they’re selling will improve your life. But if you’re more of a glass-half-empty worrier, then the seller will sell security – focus more on the features and performance of what’s being sold.

3. The Make-a-Friend
Sellers will have many tricks to make us like them as the more we like someone, the more likely we are to buy from them. One of the most frequently used techniques is called active listening. With active listening the seller will use all kinds of non-verbal gestures such as leaning forward, inclining their head slightly to one side, widening their eyes, pursing their lips thoughtfully and stroking their chin to show their interest in us. Some sellers even sit in front of the mirror at home practising their active listening skills.

4. The Trust Me
Many salespeople are trained to portray themselves as trusted advisers helping us make the right buying decision rather than being seen as commission-hungry vultures slavering to get hold of our money. One of many ways of achieving this is the same side of the table. Rather than standing or sitting opposite the customer creating a situation where the seller and buyer are like adversaries facing each other, the seller changes their position so they’re standing or sitting almost beside the customer as if they’re working together with the customer to solve the customer’s problem – which house, car, TV, phone or insurance to buy.

5. The Persuaders
Having managed to get us interested in buying something, the seller then needs to get us to make the decision to move ahead. To put pressure on us, they might try the closing door – suggest there’s only a limited time to get the deal they’re offering; or the phantom buyer – tell us there are other people interested in buying what we want even if this isn’t true; auction fever – use other real or phantom buyers to make us feel we have to offer a higher price if we’re to get what we want; or even the deliberate mistake – when adding up the price of something, they deliberately ‘forget’ some small part so that the buyer, thinking they’re smarter than the seller, rushes to complete the deal.

6. The One-Step Negotiation
In the West, we’re used to most things we buy having fixed prices and so often feel uncomfortable haggling over price. Sellers understand this and will often quote an inflated price then allow us to negotiate a small reduction. Relieved at having supposedly achieved a price cut, most of us will then buy. Very few buyers will do two- three- and even four-step negotiations.

7. The Absent Authority
If we do try to do more than a one-step negotiation, then a seller might use the absent authority trick. They could say something like, ‘I’d love to offer this at the price you want, but I’m not allowed to. If you want, I can ask my manager to see what they say’. Then off they’ll go to apparently fight for you against their tough sales manager. After a few minutes, they’ll come back with a small concession claiming this is the best they can do. But as the manager is an absent authority, you can’t negotiate any further.

8. Feel-Felt-Found
If a buyer is worrying about the price or features or reliability of what’s being sold, the seller might try the feel-felt-found. They may say, ‘I know how you feel. Many of our best customers felt like that, but when they bought this they found they were delighted at having gone ahead’.

9. The Close
Most sellers will have the ABC (Always Be Closing) drummed into them by sales trainers and their sales managers. This means that at all stages of the sales process, sellers must be absolutely focused on the end result – closing the sale and getting their commission. Any seller who can charm customers, get them interested but doesn’t get the close will either have extremely skinny children or else no job at all.

10. SSI
Once a seller has closed the sale, then it’s time for SSI (Sell Second Item). If we’re taking a car, SSI might be all kinds of extras, additional warranties and GAP and payment protection insurances. If we’re buying a suit, SSI might include a couple of shirts, ties and a belt. With TVs or phones, SSI would be a care plan – paying a lot of money for an extended guarantee. And with a home, an estate agent might pressure us to take out a mortgage with the mortgage broker used by their agency.

3 Mistakes Most Investors Make

Gather, don’t scatter.

Over the years investors have been convinced that proper investing meant taking their money and spreading it out amongst several investment professionals. Over time, many investors accumulate, on average, four advisors and several accounts. From his 401(k), Roth IRA, Traditional IRA, brokerage and mutual fund accounts, to her 401(k), Traditional IRA, trust and saving accounts, a family can accumulate several accounts with several financial institutions.

This scattering of assets leads to a false sense of “diversification” by “not putting all of your eggs in one basket.” Trouble is, this strategy really hurts most investors.

Many investors have unknowingly scattered their assets, resulting in no one person managing or fully understanding their entire situation, goals or dreams. Without comprehensive planning, there actually is no plan at all.

1. Improper Asset Allocation

Most investors have their assets dispersed with several advisors and several financial firms. No single advisor knows what the other is doing resulting in an uncoordinated portfolio. One advisor in firm A might be selling the very asset that an advisor in firm B is buying. Unless there is one coach reviewing the entire portfolio, then your money is not coordinated.

Your asset allocation should always reflect your current position in life, your current goals, future, feelings and family characteristics. When your hard earned money is scattered to other advisors and institutions, you alone are left to properly manage your portfolio. Many individuals are not trained to monitor this correctly and consistently. Unfortunately, the overall plan suffers.

2. Improper Correlation Within Investments, Managers and Funds

Without saying, each investment needs to be excellent on its own. The investment, manager, or mutual fund needs to have a strong track record (I like a ten-year record). You might be able to select quality investments. That’s not the problem. Where the breakdown occurs is knowing how these investments interrelate. This is nearly impossible to track when one advisor is doing one thing, and a different advisor is doing just the opposite.

Let’s think about a recipe analogy. You might have the best ingredients to make your favorite dish. You might even have quality chefs at your beck and call, ready to make this dish for you. If you put all of these chefs in the same kitchen, but don’t let them know what the other is doing, a culinary disaster awaits. You can see that the likelihood of your dish coming out correctly is very low, no matter how good the ingredients were. Same is true with your investment portfolio.

3. Failure to Monitor the Consolidated Portfolio

You know life is not static. Life is constantly changing. Whether it’s your job, children, the economy, world events, new laws, unplanned expenses (and the list goes on and on), your world constantly moves. Your entire portfolio needs to be dynamic as well. When market forces move, the properly managed portfolio needs to move with it. I am not talking about day-trading, but rebalancing when and where appropriate. Additionally, your goals, future, feelings and family characteristics are changing as well. Every day is either a day closer to your goals, or not.

Having your assets scattered makes it nearly impossible to properly monitor your portfolio based on your changing life. With the technology and tools available, along with the new “open architecture” available at full service financial institutions, you are better off hiring one advisor to help you monitor your portfolio. This trusted advisor will coordinate all of your “eggs” and not put them in the same “basket.” He/she can manage your diversified portfolio to meet your goals, future, feelings and family characteristics and make sure your entire portfolio works in unison to make your dreams come true.

In conclusion, years ago, many firms were limited to the solutions they could individually bring to the client. Many had their own proprietary funds or investments, which may or may not have been in your best interest. Today, full service firms have an “open architecture” and are able to go out into the market place and bring any solution to you that is appropriate. For your strong consideration, only hire an advisor who can go anywhere in the marketplace without limitation!