Financial literacy simply refers to the ability to comprehend and use different financial skills effectively, such as investing, budgeting, saving, and personal financial management. On the other hand, the inability to understand financial concepts is called financial illiteracy.

Key Points

• Financial literacy is generally the financial concepts and skills we and must learn.
• Financially literate individuals have greater chances to be financially independent as young as they can.
• When we have a strong foundation on our financial literacy, we can effectively work for our life goals, education, savings, early retirement, responsible credit and debit, and so much more.

Financial Literacy Explained

During previous years, services and products generated by finances have been impacting the world and different societies. During the early American ages, people are more on cash as the primary tool to exchange goods and services. However, as of now, we have credit cards, mortgages, student loans, health insurance, self-directed investment accounts, and so many more that were brought about by our technological advancements. These then gave us more ways to live comfortably and rationally, depending on our strategies in managing our finances and life.

Now, although a lot of us have been engaged in financial literacy, there are still some skills that mostly fell on the umbrella branches of financial literacy. These branches are the sub of what financial literacy teaches us, such as household budgeting, managing pay-off debts, evaluating investment products and credit, and more. . For instance, retirement planning can be essential for you and your family in the future when you retire. This can be effective if done during the early age of your employment. A healthy financial status can be necessary during your old age. Maybe you would need someone to take care of you during that period of time. In such cases, you may prefer to transfer to a senior living facility like Chelsea Senior Living (https://www.chelseaseniorliving.com/) or the ones like them that can take proper care of elderly people. Getting to live in a senior living facility might require a sum of money. Therefore, it is advisable to start saving for such purposes during your early years. Similarly, if you are aware of the different government programs for low-income families, you could save a lot concerning household budgeting. Say, if you qualify for free cell phone service from the likes of enTouch Wireless, you are saving hundreds of dollars every year. Similarly, if you are aware of the other such programs, be it for home loans or healthcare, you get to enjoy the micro-branches of financial literacy. Also, there are times wherein even these kinds of skills still require enough working knowledge to bring out the best results every time we use them. Here included are the time value of money and compound interest.

Moreover, given that financial literacy brings different impactful things to the world and its societies, being illiterate about it must be ended. Unfortunately, there is a total of 66% of people among the Americans who are unaware of this field. This then appears to be dismay as it is regarded as one of the root causes why a lot of Americans are usually ending up having too many debts to pay, as well as live a poor and miserable life. Another thing, too much lacking financial literacy leads to different downfalls. The most common here is having too many debts brought about by poor financial decisions.

Example of Financial Literacy

Claire is a secondary school teacher wherein she is in charge of teaching her students about financial literacy. In her curriculum, Claire is eager to teach her students basic financial topics such as debt management, retirement saving, insurance, tax planning, investing, personal budgeting, and general financial education. Claire’s reason she does this kind of lesson is that not all schools and educators teach their students financial literacy, which she believed an essential thing that must be taught to students as early as possible. In this way, there will be more financially literate and rational individuals being produced by schools. Another thing, financial literacy, after all, is an essential topic that anyone needs to know. Here, we are taught how to manage and use our funds properly. In this way, we can always make rational financial decisions that will bring us lifetime-worth benefits.

Frequently Asked Questions:

1. What are the steps to be financially literate?

Well, it’s simple. To be financially literate only needs two things: a proper financial plan and determination. First, we need to have a proper and profound financial plan that will serve as our guide throughout our journey. This will be our backbone to produce only financially rational decisions to avoid regrets in the end. Next is determination, which we’ll need to continue pursuing our dream of financial freedom. Once we have both of these, then we can start our journey to financial independence and literacy.

2. What are the most used Personal Budget Rules?

When we say personal budget rules, it simply refers to our ways of managing our money. As it said that it is personal, then it depends on us. However, the most popular and used personal budget rule is to stay disciplined. If we have the discipline when we spend our money, then we can realize the better way to spend it and not just on nonsense materials.

So, if you are not already, become financially literate to manage your finances better in the future.

You’ve decided you’re ready to begin investing in the stock market. The next step is to open an online brokerage account, but first, you want to check out some of the suggested brokerages. As you do your research, you will need to consider several things. Does the brokerage offer low-cost or free trades? Does it provide access to a wide variety of investment products? Could I get a good deal with a Discount Broker? What about customer service and tech support? Here are some things you should consider before choosing a brokerage.

• What do you need?

Choosing the best brokerage for you can be tricky. Do you need a discount broker or a full-service broker? What services do you need, and what do you not need? The answer depends on your financial needs and goals.

Here are two scenarios that seem very similar. Joe and Jane both need a broker to help them invest their money. Both of them are in their twenties, single, have a steady income, and have no dependents. On the surface, they seem the same, but in reality, they have very different financial needs and goals.

• Narrow the field

Choosing the best brokerage can be difficult. So, narrow down the field by focusing on the features that are most important to your investing strategy. Picking a new brokerage is a personal decision and one that you should take your time making. But if you’re trying to cut down the list of potential brokers, consider the following. First, once you’ve decided on a type of brokerage (discount, full-service, online, etc.), do some research on the specific companies. Most brokerages offer financial advice, but some deal with specific types of investments, like stocks or bonds. The more you know about your ideal brokerage’s offerings, the easier it will be to narrow down your choices.

• Identify or know the fees

When it comes to choosing a brokerage, you should start by deciding what type of investor you are. If you are a stock trader, you will need to pay attention to things like commission costs, minimum balance requirements, and trade minimums. If you are a passive investor who has a long-term strategy, you will want to research the service fees and the number of free trades you can receive. Also, there are some things to look out for if you are investing in mutual funds, like asset allocation and front-load fees.

• Test the platform

When you are looking for the best broker, there are so many different factors you can use to decide on the best broker for your needs. You could go to brokerage review sites, ask financial advisors, check out forums, and even ask friends and family if they use a good broker. Of course, all of these will give you recommendations, but your decision should be based on more than just one person’s opinion.

The best way to determine what brokerage is best for you is to try a few out and see how you like them. You can start by signing up for an account at any online brokerage, which will give you a general feel for how these types of companies operate. Next, try out a few of the services that only a select few brokers offer, like a retirement account or mobile app.

• Are they good at educating their clients?

The internet makes researching every aspect of banking easy, which means that you can learn about the best brokerage through the comfort of your own home. This is not just an option for the wealthy, either. If you are a student or someone who just doesn’t have the time to engage with a broker, you can research and choose a broker online. Once you have a broker, you’ll be able to open an account, which is the first step in the process.

Many people assume that, since they know how to invest in stocks and manage their portfolio, they can manage their brokerage accounts as well. While that can be true for some, for others, it is a recipe for disaster. Figuring out the best brokerage is a similar process to finding the right stockbroker. You want someone who is going to understand your financial situation and goals and will work hard to meet them, as well as being easy to contact when you have questions.

Starting up a business or moving your business from one stage to the next can be difficult. There are so many factors to consider which can cause you a huge headache. One of the biggest hurdles that lots of businesses face is finance. For your business to grow, it might need bigger office space, more office furniture (check this website here for reference), more employees, better equipment, faster and stronger computers, or a location that is more accessible to customers.

Similarly, in the case of a physical store, to expand it into a showroom, you may need to invest in certain retail store fixtures like glass shelving and racks as well as in other areas such as signage, payment processing technology, and a number of personnel to properly manage the showroom. You may also need to invest in marketing and advertising campaigns to draw in customers, and in an additional inventory or warehouse to store the extra stocks of the items you sell.

All of these changes certainly require lots of money which might not be available at hand. In some cases, the money might be there, but using it may not be wise since these funds could be a part of the emergency reserve. In situations like these, I believe getting a business loan is the best thing for your business as well as your peace of mind. That being said, securing a business loan might not be a cakewalk. There might be a lot of requirements that you must fulfill so that the lenders can approve the loan. Many people tend to lack knowledge on how to get a business loan. This can lower their chances of getting the required funds for their company.

You may need to collect documents like business bank statements, financial and management accounts, VAT returns, details of company directors, financers, etc. Along with these, you can also create a business expansion model to exhibit the possibility of increased future profits and returns. You can look into websites such as https://www.printivity.com/books/perfect-bound-books to get all these documents bound into a wire-o book or stitched to provide your business plan a presentable look.

Change is very vital and it should be done at the right moment. So many big companies over the years ignored the need for change because they thought that their foothold in the market was strong enough to last a lifetime. Other hungry and ambitious companies emerged and implemented the necessary changes thereby leaving the fossils in the dust. One lesson I learned from this is that you should never stop being innovative and thinking of new ways of doing business even though you are at the top of the mountain.

What To Look For When Getting A Business Loan

Not every financing house is the right fit for you and similarly, not every big bank out there is also good for your business. Before I open an account with a bank or take out a loan I always do my due diligence. I make it a point to find out about their interest rates, benefits they offer as well as any other pertinent information that is worth noting. Having information from one bank and then signing up with them is similar to a person shopping for a car or house then getting the first one they get. I find it useful to look around, compare then make an informed decision after considering all the facts.

Similarly, when you are looking for a loan for your startup or your growing business it is important to compare banks and other finance houses to see which ones suit your business. Some banks are well suited for small to medium companies and they offer smaller loans with relatively low-interest rates. In my opinion, these firms that partner a lot with smaller companies will be better for a small business as they give the right support. Going to a big bank might not be the best as they might only deal with large sums of money which are not necessary for your business.

Bigger businesses looking to expand into new territory will most likely get the required funds from bigger banks that give out bigger loans. These banks often have enough money to fund your expansion, provided the new venture is guaranteed to bring them back their money plus interest. They can also offer long-term loans which might allow you to not be under pressure when it comes to repayment. Another added advantage of getting a long period to pay back a loan is that a new business or a new dimension of the business might take time to be popular and bring in the required money.

An important thing to note is to only get a loan that covers your expenses. Getting a loan that covers more with some change to spare will often lead to spending the money in the wrong places and making it difficult to repay the money.

Reading reviews here and there, I have discarded the notion that my desire to venture into art investment thrives on the common aim as other businessmen that I just turn up to a gallery, buy the artwork and wait for its value to soar. Unfortunately, that isn’t the case. There are numerous factors that I must consider before taking up art as an investment. They include but are not limited to the following.

Monetary barriers

There’s a limitation to the amount of money that I can access to diversify my investment into art. Credit to the tune of hundreds of millions is certainly out of the equation. Capital is one of the major constraints to my entry into investing in art. Of course if I was to believe that some large profit could come from a particular investment and the buying price is a little too steep, there is a potential to finance the purchase in other ways, such as finding secured loans that could be suitable. Quite a few people I know have taken out loans to purchase art, so this is certainly a viable financial option for investing. However, this is not the only cost as auction houses can claim commissions as high as 25% when buying and selling. Still, I have to be very careful lest I invest into a white elephant.

Liquidity risks

From a simplistic viewpoint, investing in art entails buying a piece of art, waiting for its value to appreciate, and then cashing out. Unfortunately, it’s not as easy as it sounds. I will venture into this diversified art business knowing that it’s highly liquid, and can be dictated by other external factors that can bar me from cashing in on my assets. Factors that can make it difficult for me to sell my piece of art or access my money include the genre of the piece of art, the country that I’m trading in, and the wider economic climate.

Provenance risks

Differentiating genuine and fake artworks is difficult and requires expertise. Although the gallery that I buy from ought to be well-placed to tell which one is legit or fake, they cannot always be 100% certain. For instance, in 2016, Alain Dreyfus was alerted that Alfred Sisley’s painting bought at Christie’s in 2088 was looted by Nazis in 1940 from another family. The failure in provenance documentation led to a suit to return the money.

Extra costs

Besides the existing high commissions demanded by auction houses when buying and selling a piece of art, I’m likely to deep further into my pockets when choosing art as an alternative investment. This is partly because about 80% of secondary market volume belongs to Christie’s and Sotheby’s auction houses. In addition to these scary fees, there are many other costs such as transport, insurance, and storage that I must consider for every piece of art that I purchase.

Ownership models

Although this is not a major factor that I should dwell on, it’s worth considering it. Ideally, venturing into art can provide an excellent opportunity if I have money to participate in auctions, and I can identify high-performing pieces of art. But if I have limited capital, then I may consider being more judicious to use a shared ownership model as an alternative entry point to this investment.

Frankly, while conceptualizing ideas around investment in art, shared ownership didn’t cross my mind. But through blockchain technology, I can now get all the vital information through the mainstream outlets. However, there are fears that this infiltration could be the source of major discontent in market dynamics.

For instance, if I decide to invest in digital shares in a painting instead of an entire piece of artwork, it might substantially lower my cost of entry into art investment. It can also be the perfect avenue for me to bypass the liquidity risk (trading artworks in small fractions is easier than selling the artwork itself) as well as avoiding auction houses.

Since blockchain underpins the above principle, I will invest in the paintings knowing that I have a better long-term assurance of provenance than previous or current investors have had in their engagements. This is because the centralized ledger is secure.

Working with an investment firm

Another consideration is to purchase and sell artworks through a credible investment firm. Most of them thrive on the ideology of shared ownership in a democratized environment. Still, they can connect me to other lovers of art from different backgrounds who also want to trade in the artwork. There are many platforms that can aid in the buying and selling regarding investments into art pieces, and as stated before, some look to trade in art shares instead of whole pieces of art. Depending on your financial standings, either option could be worth looking at.

Another advantage of investment firms is that they can spread their investment capital with ease because purchasing numerous works helps them to diversify their portfolios.

Being financially stable is not only about earning 4, 5 or 6 digits per month, it also means having enough savings and insurance that can be used in times of emergencies. Should we have an accident, need emergency payments, and so forth, these savings and insurances can help us out financially. Also, it will prevent us from spending our cash frivolously and to save it for more valuable purposes. Given that, here are the details about insurance and its importance. Knowing these will help us realize that life is easier with insurance.

Defining Insurance

Insurance simply refers to the contract that is represented by a policy and is owned either by an entity or an individual. There are many types of insurance. Health insurance, home insurance, disability insurance (find out about breeze, a disability insurance company, here)… the list goes on. People take out insurance to protect themselves, items, housing and even investments. Having insurance allows us to receive a reimbursement and financial protection against losses from any insurance company. Also, companies pool the risks of clients to make more affordable payments for those insured.

Moving on, let’s proceed to the importance of having insurance.

Ensures Business and Family Financial Stability

The importance of having insurance is that it promotes the financial stability of businesses and families. Whenever things decide to go the wrong way, insurances enter the scene as safety nets. Having a life insurance policy from somewhere like myTribe Insurance can effectively support the whole family with their life should a family member be lost.

This has a lot in common with businesses. Here, once a key member is out of commission, insurance can help the business to go on. To be prepared in such cases, organizations often obtain key man life insurance for businesses. One such policy tends to pay out a lump sum to the firm in the event of the death or diagnosis of a terminal illness of a key person like the CEO or director. This means that the business can continue without significant disruption to operations.

Lenders Ask for Insurance

Most mortgage lenders will insist on insurance as a security in case we should temporarily hit hard times and not be able to afford to continue buying or building a property. In short, we can enjoy the money needed by our business to keep it going. Besides, having no insurance can be a huge hindrance to taking the kinds of risks that will see a business ultimately succeed.

Minimizing the Loss

By having insurance, we are allowing for an eventuality that we could not afford should it happen. For a small premium, large losses can be covered. Insurance also promises to put us back in the same position that we were in before the loss. This is why most business owners tend to seek business insurance Red Deer (or elsewhere), in order to protect their assets and mitigate financial risks. Whether it’s property damage, liability claims, or unforeseen disruptions to operations, having the right business insurance ensures that the impact on the bottom line is minimized. Similarly, most individuals tend to have home insurance for comparable reasons. It acts as a safeguard against the unexpected-be it natural disasters, theft, or accidents-that could otherwise result in significant financial strain.

It is Compulsory in Some States

Insurance is required in some states and is also part of the state laws. One example of it is auto insurance, which is compulsory in the state of Wisconsin. This kind of insurance helps people to mitigate the risks on the road. Having this can also save lives, as well as the financial situation of those who are insured. Whilst having this type of insurance is a necessity if you want to adhere to the laws in your area, it doesn’t have to be expensive. For example, if you look for car insurance without deposit quotes online, you can see how spreading the cost of your plan over monthly installments could be better than paying in one go. With that being said, having insurance is something that you need to have in order to protect yourself and others, so when it comes to paying for it, be sure to find one that best fits your situation.

Peace of Mind

Insurance provides peace of mind. Since getting a job is already a hard task, especially if we aren’t that competitive, getting even a little insurance is beneficial. Once we are hired, we must think of having insurance first before anything else. That is because it can help us become financially stable and ready. When there are emergencies in our life in terms of finance, our insurance can help us get through. Also, if we got into an accident, insurances can help us cover the expenses of our damages and that of others. Above all, it is considered as an opportunity, so we shouldn’t waste any of it.

Insurance is indeed a must-have, especially for today’s generation. Also, if we have a good flow of monthly income, getting not only one but multiple insurances can help us prepare for old age. Remember to be wise and prepared at all times since life presents itself in unpredictable ways.

Most often, those who want to build their financial security will consider investments. At the same time, many people like myself may be nervous about getting involved in investment because they are worried about the risks. Some consider themselves to be risk-takers and are far more open to a variety of different types of investments. I am not so daring but I wanted to consider property investments. These can be a little more secure, but they still do come with some risks. This type of investment goes beyond investing a few hundred dollars, which is a possibility when investing in stocks.

Types of Property Investments

When I was thinking about a property to invest in, I found there are two major considerations. Is the investment for short term gain, or is it for the long term? Or, in most cases, it can be both.

Short Term Gain

I did realize that when purchasing my first home, that this was my first investment experience. However, I was not going to realize the financial benefits from this in the short term.

Those who buy a house that they are not going to live in often do rent it. This is where short term profit can be realized. There are pros and cons to this type of investment.

Passive income: Renting a house like this is considered to generate passive income. The rent proceeds can be used to pay the mortgage and any other expenses that come with the house. Ideally, enough rent should be charged to glean an immediate profit from this property. But even if it doesn’t, then the investment is still a good one but has a long-term effect. There are a few other ways that you can generate passive income. For example, you could invest in stocks, or start a blog or video channel. For more information on how to start your passive income, you could check out this article: Passive income for beginners, or similar ones on the web. It may help you through this endeavor of yours.

Long Term Gain

As a rule, property increases in value as time passes. This can be a slow process in many cases but still a lucrative adventure, particularly if there are no immediate needs for the property to return an immediate profit.

Some people will buy a primary residence and then live in it for several years. When the time is right, they will sell it at a profit, allowing them to upgrade to a newer or bigger home. Some may invest in a second property, such as a vacation home, with two intentions. One is to use it for their immediate pleasure. Then secondly sell it when the property value has become substantial. This is what I felt was the best investment approach for me.

For the Retirement Years

One great way to save for the retirement years is to buy a home in the younger years and then hold onto this for several years, not selling it until it’s close to retirement time. A substantial profit can be realized from the increase in appreciation of the home. By this time in life, many couples are now on their own and are ready to downsize anyway.

Commercial Property

Another option is to invest in commercial property, and the same basic concepts can apply. Immediate gains can be realized from the rent then a profit when the asset is sold. Although you do need to be thinking about the other expenses that come with buying a commercial property, for example, you may want to update to commercial metal roofing because this is less likely to be damaged, even from storms. Therefore, it will cut down expenses further down the line and make it more attractive to future buyers. So, you need to be thinking about your improvement budget so that you can sell the property for much more.

Making Careful Choices

Those who are seriously looking at property as an investment really want to do their homework. If they invest in the rental property, they want to be sure that they are buying rentable property. You’ve to make sure that the property you’re investing in doesn’t come under the expired real estate listings. If at all it comes under the said listing, do quick research as to why the property got expired. You may be able to get the place you wanted in a much affordable rate if you know the downfall of the property you’re investing in. It’s okay to buy a home that may need some work before renting, but the costs have to be weighed against the potential profits. If fixing it up will bring higher rent and make it easier to rent, incurring these initial costs may be worth it. It means paying attention to what is going on in the rest of the neighborhood. For example, it would not be practical to turn a home into a luxury home in a low-income residential area.

I learned that when investing in property, decisions should not be made in haste. There is always the thought that a delay may create the loss of a good deal. But, moving too quickly without doing proper research can create a financial disaster. A brainstorming session with a property consultant could be a wise decision to make in this regard. If you are looking for properties consultants London, you could contact firms like Address Property Consultants, who could help you find a suitable and efficient solution for your property investment queries.

Be Prepared

Keep in mind that there are a lot of responsibilities that come with being a landlord. This is not the type of investment that one makes then forgets about it. There are lots of things that must be considered before actually purchasing a piece of property.

Making concrete decisions that will shape up a new venture into a thriving enterprise without the support of an experienced financial advisor is challenging. You need to have someone to tell you where when and how to spend your money and help you on budgeting. They should help you to grow your business in the right ways and tell you where to invest. Sometimes you can get buildout costs, such as these tenant build out costs in jacksonville for an example, and you wouldn’t know about this without a financial advisor. You need someone who understands what it is like to build a company and how to use those finances correctly, which people can get assistance with and see more about by going onto helpful financial websites such as earlygrowthfinancialservices.com. Setting up both long and short-term goals that are attainable demands input from experts who have gone through similar challenges in the past and have solutions to pressing challenges in the industry. With the right decisions, we’ll realize business financial growth and stability. These experts are so because of what they have built up over time and how they have been able to assist with important and necessary financial situations. Using resources that can be found at https://www.leadjig.com/financial-advisor-marketing/, they are able to appeal and become beneficial to businesses who require the support needed for their operations.

In this article, I’ll discuss different reasons why small businesses should seek the services of financial advisors.

Financial Advisors Make Work Easier

Running a newly built enterprise involves handling different roles that might make us confused. We cannot be the head of each department and expect everything to work as planned without a few hitches. We don’t have to take up the entire load while financial experts can handle important parts of running the business at a small fee. The experts look into the budget, give financial insights, and counsel, ensuring that all financial situations run smoothly.

Financial Experts bring Experience

Although we don’t need to go to school to learn how to run our businesses, working with individuals who understand the market is critical. Financial consultants are trained extensively and are rich in experience gained from handling various clients in different industries.

The financial experts conduct the business assessment, check on its practices, and recommend improvements depending on the business niche. While doing this, proper management of available resources is done in ensuring that maximum returns are generated.

Consultants Identify Complex Challenges Within the Venture

Both employees and the management may not identify problems within the business. Third-party participation in business management ensures that trivial issues that might arise complex challenges at later stages get mitigated early. Financial consultants identify loopholes that could bring losses and recommend changes that will have the problem covered.

Shape-up the Future Plans for the Business

Business goals and objectives shift over time due to market or production change. As such, we forget to change our objectives with time and get caught up unaware. Financial advisors are the first to realize growing markets, new production strategies, and what consumers want. These important details are useful in planning the future of the company and expanding its growth.

Financial consultants are trained to forecast business performance by looking into financial indicators such as technological development, market conditions, and changing competition. This knowledge is vital in strategizing the business future and curbing potential challenges that could alter business growth.

Financial Experts Cut Costs

The primary focus of financial advisors is to use available resources and reduce wastage. The experts create an accounting system that monitors costs and ensures everything is aligned with the set budgets. The system helps in identifying cost variances from time to time and allows individuals to act quickly. This ensures that the costs remain within the provided budgets. Whilst this is obviously beneficial for the business, some might prefer to use some software for this. Businesses can benefit from ProSymmetry software to help them manage their projects and their finances. This might be more beneficial for some businesses.

Conduct Research

New business owners face different challenges every day and this might hinder us from doing various researches that are vital for the venture. Considering that periodic market and product research is key in rapid business development, working with an experienced financial consultant is a must. The professionals meticulously approach taxation and legal matters through research.

The consultants study our financial reports, check on the business market trends, and look into different financing options that can help the business grow. If we need some refinancing, the experts make recommendations on whether we should go for equity or debt-based financing. This is done regarding the business needs and a decision is arrived at after comparison of all options is done.

Help Balance Business and Personal Finances

A business establishment is aimed at improving our financial positions but this becomes cumbersome immediately when the business starts running. We all become too focused on business development and forget to analyze our gains from what is generated in the venture.

Both the owners and the venture should benefit financially in a similar way. Instead of buying more shares into the company, a financial advisor helps us plan for our retirement. We get to save more ensuring that all our eggs are not placed in one basket.

Wrapping Up

Business financial management is not easy regardless of our goals. We need someone to help us manage our cash flow, long-term financial objectives, loans, and identify potential markets. Financial advisors have for long proved useful in managing the financial aspect of a business. Get an affordable expert and salvage the business from its downfall.