Pension and Retirement Plans


Retirement is when a person stops working and retires from his/her regular job. Typically there is a pre-defined retirement age for employees, after reaching that age employees have to retire from the job. Also, the employees may opt for voluntary retirement, before the pre-defined retirement age.

Pension is a regular amount that a person usually receives from his/her employer post retirement. The pension funds might be set up by the employers, government or other institutions such as trade unions etc. The pension plans are typically taken care of by the employer, wherein the employer contributes a certain amount and certain amount is deducted from your salary. This amount is invested by the employer in long term financial instruments to generate returns that will support the post retirement pension of the employee. The employee starts receiving the benefits of pension post retirement, wherein he/she receives monthly payout of pension, which helps the individual in sustaining maintenance expenses.

Only 20% or so employees receive pension, and most private companies don’t offer pension. Such employees, who do not have benefit of pension, can secure their future by investing into retirement plans. Retirement plans, such as 401k, allows individuals to put aside a regular amount from their pre-tax income into the retirement funds. The funds are managed by financial institutions that specialize in fund management. They invest these funds across various asset classes and markets in largely long term instruments to generate return on the capital, to ensure that returns beat inflation and generate some return over and above inflation. These funds help an individual save money for the post retirement needs, even if his/her employer doesn’t offer pension. Some employers though do not offer pension, but they contribute to your retirement fund as well. The primary difference between pension and retirement plans is that the funds for pension plans are primarily contributed by the employer, whereas the funds for retirement plans are largely contributed by an individual.


Wealth Management: A Comprehensive Analysis


– Wealth Management: An Introduction

Handling numerous estates and stock portfolios can be  challenging and this is why people enlist the help of wealth managers to help  them manage their wealth. Wealth management is an advisory service catering to
the financial needs of individuals. This advice touches on  many areas that affect a person’s wealth such as estate planning, retail  banking, taxation and legal resources. There are two key objectives when it
comes to this type of management i.e. stabilizing wealth and making sure it grows  after stabilization.

– Misconceptions about Wealth  Management

People have many misconceptions about this kind of  management. For example, people believe that wealth management is reserved for  the wealthiest people in society but this is not so. Wealth management is an
integrated system of sound investment portfolios, meticulous financial planning  and aggregated financial services. It just so happens that a bit of money is  necessary for someone to take advantage of it.

– The People behind  Wealth Management

It is difficult to understand this form of management without  understanding what it takes to be a wealth manager. For instance, a competent  wealth manager should have a reputable certificate in accounting or
finance such as a Certified Financial Planner or a Chartered Financial Analyst.  Wealth managers can also hold a postgraduate degree in business such as an MBA.  The manager should be honest, transparent and accountable in all his dealings  with his clients. A growing client base is also a good sign of a competent  wealth manager with numerous years of experience in this business.

What Is Real Estate Investing?


Real estate investing involves the expenditure of capital in order to purchase or manage a property. The expectation is that the property will increase in value over time, thus generating a profit for the investor. In the case of real estate investing, property is generally defined as a piece of land and/or the buildings and structures that are built on the piece of land in question.

Investments in real estate can take many forms. For example, an investor may purchase an empty plot of land with the expectation that the land will increase in value over time due to nearby commercial and residential developments. The investor can then sell the plot of land to a business or individual who wishes to place a commercial or residential
building on the land. As the local economy surrounding the plot of land improves, the land will have more value to potential buyers. The investor will therefore be able to sell the land for a substantial profit compared to the initial cost of investment.

Investments in commercial and residential buildings work in a similar way. For example, real estate investors often purchase houses or apartment complexes in developing neighborhoods. As the neighborhood economy becomes more robust, the houses or apartments will increase in value to potential homeowners. The investor can then sell or rent the homes to local residents, thus generating a profit over the initial cost of buying the homes.

Often, successful real estate investment involves a number of expenditures in addition to the initial purchase of property. For example, successfully increasing the value of a house or apartment complex generally requires expensive renovations. If the cost of purchasing and renovating the property is greater than the final value of the property, the investor will lose money. Therefore, real estate investors have to perform cost-benefit analyses in order to carefully allocate money towards property improvements.

The same is true for commercial real estate investment, in which funds are allocated for improving a business and the property on which it is based. The goal is to then sell the business to another owner for more than the cost of investment. In other cases, investors may maintain ownership of a business with the expectation that the business will generate an ongoing profit that eventually outweighs the cost of their investment.

Emulate the Success of Investment God Warren Buffett with His 5 Tips


If you plan to become a stock market investor and you have still no idea about who Warren Buffett is, then you should STOP. That’s because he is not only the richest investor in the world but also because his investment policies enlighten the investors in a very powerful manner. Warren Buffett and his financial associate Charlie are reigning over the investment market due to their distinct investment policies and deep knowledge of the stock market. There is so much that you can learn from his words before formulating your own investment strategies. If you really want to emulate his success then you must understand and follow the best five tips that he has given for the betterment of the aspiring investors.

Don’t base your stock buying decisions upon company’s management

Warren Buffet strongly puts forth his theory, “I try to buy stock in businesses that are so wonderful that an idiot can run them. Sooner or later, one will.”

This statement can be understood by considering a simple example. Suppose you plan to buy the shares or stocks of Apple Company. Then, you have to think about the risk involved if the company’s managerial head plans to leave the corporation. What would happen then? Will the value of company’s shares start to deteriorate substantially? You have to ask these questions to yourself when you plan to buy stocks. You should prefer to purchase the share of those companies whose biggest assets are its services rather than the management head so that the shares’ value doesn’t crumble down easily.

Being optimistic about returns from sale of assets is foolishness

In the very own words of Warren Buffett, “Never count on making a good sale. Have the purchase price be so attractive that even a mediocre sale gives good results.”

While purchasing assets an investor’s focus should be on buying that asset which will get him the best value for his money. You should always try to `earn’ profits while purchasing assets. The optimistic thinking that `I will cover up the purchasing expenses by selling this asset at a higher price later on’ is nothing but foolishness. What if you could never get an overtly profitable asset selling opportunity? That’s why the investment tycoon Warren Buffett says that the purchasing of asset should always be done at a profitable price. If that’s not possible, then WAIT for the opportunity.

Understand the degree of responsibility needed to buy assets

If you dream of earning in gold then mark down the words of the investment king Warren Buffett, “An investor needs to buy stock as if he is buying the whole company down the road.”

An investor is solely responsible for the fate of his money. The investor should feel so involved and responsible while purchasing the asset that he should feel like he owns a part of the company. That’s when he will be inclined to do complete research analysis for that company’s past, present and future. The fate of the company will directly be associated with the fate of your assets. When the company suffers a loss then your dividend payment suffers a loss. That’s why you should think responsibly while purchasing assets.

Strike the stock market at the right time to balance out profit and loss

Do you want to know how Warren Buffett and his associate Mr. Munger became rich? Here is their secret in the words of Warren Buffet,” The beauty of stocks is they do sell at silly prices sometimes. That’s how Charlie [Munger] and I got rich.”

The patience is the virtue of the investor. That’s why you should wait for the right opportunity while purchasing or selling an asset. If you dream of owning shares of an extremely successful company, then you should keep an eye on the stock market to see when the prices of the company’ stocks have decreased. Buying successful companies’ stocks when they are cheap is the right strategy instead of paying huge sums of money to buy some stock when it is at its peak value.

Don’t jump into investing as soon as you see the first favorable information

“The worst mistake you can make in stocks is to buy or sell based on current headlines.” This saying from Warren Buffett has ruled most of his stock purchases.

You should plan a long term research analysis for the stock before planning to buy it. Spontaneous ups and downs are commonly associated with the stocks. Therefore, there is no point is springing to action as soon as you see some second hand information that the stock prices are going to fall. The investors who act quickly even on the emergence of rumors never succeed in the stock market.

Mental tricks that will help you invest wisely!


Most, if not all investors, usually have two major fundamental struggles when they think about investing. These struggles include; how to invest well, and how to save enough money to either start investing or keep on with the good habit of investing.

For the un-initiated, deciding on how to invest your money may look like an easy thing to do; but as many investors will confess, this is usually not the case. A whole lot of investors are normally aware of what they want to invest in, but are usually quite wary about the timing. It always feels like the wrong time! If the markets are rising, it feels foolish to invest then as everyone believes that all instruments are overpriced and it is thus better to wait until the prices fall.

If the markets are falling, the same feeling persists, you don’t want to be the person taking the infamous ride down; it sounds better to wait till the market hits rock bottom. When markets are volatile on the other hand, as they always tend to be; many investors feel helpless and instinctively stay away from investing. In market reality though, anytime is investing time; the key is to know what to buy or what to sell and most critically, know when to embark on either buying or selling.

There are tried and tested mental tricks that can help you get through the market during such trying times. They include the following;

Ignore the Never Ending News

Unless you work on Wall Street or you are involved in active day to day investing, you should avoid sitting down for hours on end watching TV cable channels that are dedicated to the stock market. TV is the biggest known driver of investor nervousness; many times the reports emanating from analysts and other commentators are biased or temporary in nature. The fluidity of the market makes it virtually impossible to fully capture the true state of the market in a single sitting; it is thus quite difficult to make a judgment based on such market reports unless you incorporate other tools; such tools may not be available to you.

Seek advice from professionals before investing

Everyone’s friend or relative, be it an uncle, aunt or cousin is always ready to dole out advice on the best stock or instrument to buy. Steer clear from such advice, if you need advice on the kind of stock or product to invest in, seek such advice from a professional. If you are getting tips from friends about a lightly traded stock; chances are that the information you are getting is stale. If on the other hand the tips you are getting concern a heavily traded stock, your source most likely doesn’t know that much about the stock. If you find picking stocks difficult, you can choose other products like index funds and unit trusts.

Build a well balanced portfolio

Building a portfolio allows you to set an acceptable level of risk and return. If your portfolio is stock heavy, it is bound to be more volatile but it is bound to have higher returns on the long term. If you are keen on reducing the volatility of your portfolio then the best course of action would be to reduce the stocks. Avoid piling your portfolio with stocks from a certain category or class alone.  Even though such an approach can generate high returns, experience has shown that it is quite risky and is not for the faint hearted.

Learn the art of portfolio rebalancing

Rebalancing refers to the process bringing back the different categories or asset classes back into a proper relationship following some significant change in one or more classes. This ensures that you return your portfolio to the proper mix of cash, bonds and stocks etc. so as to conform to your original plan. This reduces the risk profile of your portfolios, enhances its performance and offers higher returns in the long run. It does involve selling those classes that are doing well and reinvesting the money in either new classes or lagging classes in the portfolio. As a rule of thumb, unless the money raised by selling a class item can be reinvested in the portfolio, it should not be sold.

Avoid frequent buying and selling

Unless you are a speculator, you should ensure that your holdings are measured in years and months and not days and weeks. Studies have shown that most investors are generally too active on the market and always tend to lose out on gains. If you have a portfolio as earlier suggested, use it wisely to help you take note when one class is doing better than the other. This will help you make a more informed decision on when and why to sell.

Tips for Becoming as Wealthy as Bill Gates


There are only four ways to get rich: You can inherit money; you can steal money; you can marry into money; or you can make a lot of money through investments. Inheriting money is only an option if you are born into a wealthy family and if you are lucky to be included in the will. Marrying into money is not a solid option since chances of being divorced and left penniless are extremely high due to prenuptial agreements.  Stealing may sound like a thrilling option but the long hand of the law will eventually catch up with you leaving you impoverished and in jail. Investing is therefore the only viable and reliable way of making money.

If there is one person in the universe who has mastered the art of making money through investments it’s Bill Gates. He has been consistently ranked as the wealthiest man in the world. The only way to become the best is by learning from the best. If you want to become as wealthy as Bill Gates, here is what you should do:

Hire Wisely: 

Entrepreneurs who play by the book believe that to build a successful legacy you have to hire workers fresh from college and then train them to deliver results that reflect the company’s ideology.  The super rich discovered long ago that to get to the top you have to play the game differently. Bill Gates made his wealth at Microsoft by hiring the right people. The people who developed Microsoft Windows had previously worked on versions of windows at other companies such as Xerox. Xerox spent a lot of money on research and training while Bill Gates simply capitalized on their capabilities. Hiring skilled workers is the most effective way of landing the best talent in the market. The best talent always delivers the best results.

Spot small investments and buy them off: 

Building an enterprise from scratch and watching it grow from strength to strength is the dream of every investor. However, we live in a highly innovative and competitive world and every day new ideas are transformed into new products.  It is easier and cheaper to spot a small company with good products and buy it off than to wait until your company comes up with a revolutionary product. When Hotmail and WebTV developed quality applications, Bill Gates bought the companies. He saved Microsoft from being overshadowed by competitors and made a lot of money while at it. Buying start-ups reduces future competition and increases profitability.

Let other people do the important jobs: 

Bill Gates is a very proficient programmer but he didn’t do the coding at Microsoft. He let other people do the coding while he concentrated on building his empire. If you are great at doing something, it is frustrating to entrust other people with the task of translating your ideas into reality. However investing is about making money and the faster you can make it the better.  All Bill Gates did was to review the codes created by his employees to ensure that they were up to his standards. Delegating is very important as it leaves you with room to concentrate on the core issues.

Diversify your investments: 

The English proverb that warns us against putting all our eggs in one basket is correct. Never ever concentrate your investments in one area. Bill Gates does not rely on his company’s stock only; he has spread his investments across bonds, private equity, and several stocks. He has also invested in various other ventures such as the biggest beverage company in Southern America. The more you diverse your investments, the lower the risks and the higher the returns.

Give to charity: 

To most investors charity sounds like a dumb idea. They find it impossible to imagine how a person can make money by giving money. The world’s billionaires know that giving is profitable. Running a charity is fiscally beneficial because charities are exempted from taxes. It’s also socially beneficial because you get to support crucial causes in society and gain public support for your generosity.


If you want to become wealthy, there is no short cut. You have to work harder, work smarter, and work differently from other people. Bill Gates was a bit lucky because he was born to wealthy parents but rather than wait to inherit their empire he chose to build his own. Learning from his investment tips will help you invest wisely. Nobody knows what the future holds. If you make smart investments, one day you might displace him from the top of the Forbes list.

They said study hard and become rich – then they told me get a job


When you were in school, what did your teacher tell you? Study hard, get good grades, find the calling of your life, build a huge business empire and become incredibly rich. Unfortunately this is not what the teachers, and for that matter most of the parents tell you when you are a kid. They say, study hard, grow up a bit, study harder, grow up more, study more and find a good job. When they say ‘good job’, they mean find a job that pays well. For you to be paid well, you must find someone who pays well. Have you ever thought who pays you, if at all you are paid well for your employment? No matter how hard you study, no matter which university you graduate from, no matter how skilled you are, you end up being an employee. If it is any better, at the most, you are a better paid employee. But when we talk about real money, not the salary, the one who employs you – the owner – is the one enjoying the real wealth in the truest of the meanings.

The question many ask is – how to become rich? There are several ways to become rich. Let’s have a look at them.

Be born rich

By now you must have already realized if you stand any chance of becoming rich in this manner. This could be one of the simplest ways of being rich, but unfortunately not everyone is born with a silver spoon in their mouth. If your parents are not rich, you are not born rich either. It doesn’t take a degree from Harvard for you to know that you are not inheriting anything enough from your parents that will make you wealthy. You will have to look for other ways.

Marry someone rich

This may sound like a good proposition, easy too, and quite unlikely at the same time. People do get rich this way but it is rather quite a farfetched scheme. This is just a possibility which people may wish to explore but not really a reliable way of getting rich.


Win a jackpot

This is another possibility you could be thinking about. But just look around and see how many people have become wealthy by winning lotteries? Lotteries and jackpots make people rich in the rarest of the rare cases. There are people who have spent their lives waiting to get lucky some day, dreaming about the easy money flowing into their bank accounts every day. This is definitely not a proven method of getting rich. When you rest it all on luck, you lose control on your life.

Do what you love doing

If you are looking for easy money, there is nothing easier than getting paid for what you love doing. When your love becomes your profession it no longer remains a job. When you love doing something, no matter how much you do it, it never is hard work for you. You may love writing and you could spend endless number of hours with pen and paper not feeling weary even once. You may be in love with graphics and animation and you could keep doing it for countless number of days and months without complaining.

This is the reason why it is said that if you do what you love you will never need to work. It may be easier said than done though. If it was this easy, everyone would have become rich. Unfortunately, we only program our kids to make them suitable for a ��good job’. Only if we could teach them how to find their true calling, the love of their life, how much simpler their life will be.

Money is easy

Erase the notion ingrained deep in you somewhere that money is difficult to come by. Get yourself programmed with the new mantra that money is easy to come by, and you don’t necessarily have to work hard to earn it. Some may baulk at this very thought that you don’t need to work hard for money. But the fact is, the people who find the true calling of their life and become immensely rich doing what they love are devoted to it so passionately that to the rest of the world they seem to be working hard, but for them they are not working at all, they are only enjoying it.