Financial Planning

General Retirement Planning

What you are making right now, today may be enough for the present. However, you'll need to plan ahead for a secure retirement and the ability to maintain your lifestyle. First, you need to determine your financial goals -- that is, how much do you need after your retire? Once you've determined that - how should you invest to meet those goals? The possibilities are practically endless so close examination of your options is essential. Here are a few items to consider. Passbook Savings: Most people are familiar with this. They are insured by the federal government, have set interest rates, usually require no minimum deposit and can be added to and withdrawn from whenever you want. Certificates of Deposit or CD's come in various amounts and vary from one week to two years. They usually pay high interest rates however, there is penalty for early withdrawals. Individual Retirement Accounts or IRAs, vary on minimum deposit requirements; have maximum limits and in some cases, you can deduct deposit amounts from taxable income. Mutual Fund accounts allow flexibility but you'll need to determine your income growth needs in order to choose the right type for you. Bond Funds let you buy a diversified portfolio of bonds with varying deposit and maturity requirements. Stock Funds let you diversity your stock holdings, have minimum investment requirements and respond according to the stock market price changes. Treasury Bills are available in $10,000 increments for six month periods and are not subject to state and local income taxes. Take care in choosing your investment avenue. And the best way to begin, is to seek out professional assistance.

Retirement Income Providers

What will be your source of income once you retire? Will it be employer funded retirement plans, social security or individual retirement or IRA plans? In reality, it's best to plan on income from at least two if not all three of these sources to help ensure a secure retirement. Employer funded retirement plans usually consist of pension plans, profit-sharing or a combination of both. Pension plans typically include employee eligibility qualifications and guarantee a certain income upon retirement. Profit-sharing plans are different by the fact that the employer's contribution to this plan is determined upon its profits. Social security the retirement plan provided by the government. Social security provides monthly payments to qualified persons. These funds have been made available through contributions made by both the employee and employer by paying social security taxes. Individual retirement plans or IRAs allow you to make annual contributions to the plan. These funds come from your salary, wages or self-employment income -- alimony can also be used. An IRA shelters your contributions from current income taxes. Contributions need to be made each year by your tax-filling due date and there is substantial penalty for early withdrawal. Take care in choosing your investments and remember that it's best to seek out professional advice when it comes to planning your retirement.

How Much is Enough for Retirement

There is no set amount. Each person needs to decide for themselves how much will be enough. First, decide on how much you'll need to live on. Take into account what current costs are for housing, food, clothing, transportation, travel, entertainment, etc. You'll need to make an "educated" guess on what those costs may be in the future -- when you retire. Your life will not be the same at that time. You'll probably need less. For example: Your mortgage will more than likely be paid off, so your housing expense will be reduced. You may not need two cars anymore; your clothing expenses may go down if you're not having to dress up for work. Do you plan to travel during retirement? If so, your travel expenses may go up. You'll want to project at least a 4% a year increase on cost for these expenses to account for inflation. Once you've figured your expenses, you'll need to project your income during retirement. Use the Rule of 72 to help you determine the growth of your portfolio. Divide whatever a conservative guest of your interest return per year. For example: 10% per year. Then divide 72 by 10. 7.2 is how long it will take to double your money. The only problem is that you don't know how long you'll live. The longer you live, the more money you need to estimate beyond what you expect your lifespan will be. Take care in choosing your investments and remember that it's best to seek out professional advice when it comes to planning your retirement.

Getting Financial Aid From Your College

Assistance programs sponsored and administered by colleges and universities are an important source of financial aid. College-sponsored aid comes from two main sources: tuition revenues and contributions from private donors. Some scholarships and grants are based on demonstrated need. Others are awarded based on various pre-determined criteria other than or included with need, such as academic performance, field of study, special talents or abilities. Many campuses also offer student employment programs to help supplement finances through the Federal Work Study Program. Many times, these employment opportunities are offered based on skills, not necessarily on financial need. For example: Laboratory assistants, business office aide or dorm advisor. Short term and emergency loans are typically available to all students. Repayment however is usually made during the academic year with low interest or no interest. Since qualifications and requirements vary greatly, it's best for your to get information directly from the college being considered.

What is EFC

EFC means "expected family contribution". It's a financial term which describes what students and/or their parents expect to contribute towards college education. Planning in advance is especially important when you already know that affording college may pose a financial burden. When being considered for financial aid, there are formulas that are used to determine your EFC. The reason for the formulas is to estimate what is expected of you based on other families with similar financial circumstances and what the proportions will be from families that have stronger or weaker financial circumstances. EFC also relates to financial aid eligibility. The EFC amount is subtracted from the cost of attendance at a particular college which results in your "demonstrated financial need". Your EFC won't change from college to college, but the determined "need" will vary based on the cost of the chosen college. In other words, your determined financial need may be greater at a higher priced college and lower at a lower priced college. So, what is the best way to meet your EFC? Start saving early, or borrow it all when the time comes. You can even save some and borrow some. But the key is to have a plan on how you want to handle it.

What Types and Sources of Financial Aid is Available

Many types of financial aid programs available. Here are some of the most common: Grant or scholarships are aid that does not have to be repaid. Loans must be repaid but typically carry low interest rates. Repayment usually begins after you graduate or leave college. Student employment is a program where the college finds you work or you find it yourself and is funded through a financial aid program. Sources of financial aid include but are not limited to the following: Institutional Funding is usually available directly from the college. Many have their own scholarships and grants plus loan and work programs. These are usually funded through endowments and planned budgets. Federal financial programs may include campus based aid, federal pell grants, federal stafford loans, and federal parent loans for undergraduate students. Most states also have programs that offer scholarships and grants. Ask your guidance counselor for assistance. You may also find funding available through your local community and community groups such as community agencies, foundations, corporations, unions, religious organizations, clubs, civic, cultural and fraternal groups. Again, your guidance counselor can assist you. You may end up with one or a wide combination of these financial aid programs so don't let the cost of a particular college deter you. You can probably afford to go where you want if you fully explore your financial aid options.

Bankruptcy

What is Chapter 7

Chapter 7 bankruptcy, also known as liquidation bankruptcy, allows the debtor to free himself of all of his debts except certain types of debts, which are non-dischargeable. Examples of non-dischargeable debts are certain student loans and certain taxes. The Chapter 7 alternative is often used when the debtor does not have a regular source of income, is unemployed, or is otherwise unable to make even a partial payment of his debts. In filing a Chapter 7 proceeding, some of your assets, known as exempt assets will be protected. However, not all assets are protected as they are under a Chapter 13 plan. Chapter 7 proceedings also stop repossessions, garnishments, and foreclosures as do Chapter 13 proceedings. However, Chapter 7 does not offer extended time to repay these debts as does Chapter 13. If the creditor does wish to pursue a foreclosure or repossession after a Chapter 7 is filed, they will have to get permission from the court to do so.

What is Chapter 13

Simply put, Chapter 13 is a method by which you pay your creditors in a one monthly payment that you can afford. The key element in Chapter 13 plans, is that the Chapter 13 payment is determined by what you can afford to pay, not by what your creditors want you to pay. Your payment is based on your income, your expenses, and other factors relevant to the plan. One of the most beneficial aspects of Chapter 13 is that it can stop foreclosures and garnishments. It will also stop repossessions if you are behind in your car or furniture payments. It gives you an opportunity to pay your mortgage delinquencies and car delinquencies over time, rather than having to pay a large lump sum to bring these payments current. In most cases, a Chapter 13 will stop interest on your credit cards and may allow you to pay only a portion of your credit card debt. Also, creditors are forbidden to contact you once they receive notice of your filing. Your particular plan will be unique to your circumstances. It is important to seek the help of an experienced Chapter 13 attorney to assist you in filing a plan which is most beneficial and appropriate to your needs.

Protecting Your Assets and Creditor Harassment

In filing a chapter seven proceeding, some of your assets such as homes, cars, furnishings, and bank accounts will be protected, but some of your assets may not be protected. In a Chapter 13 proceeding, all of your assets are absolutely protected. Your car and home cannot be taken from you; your savings account cannot be taken; and if you have paid up insurance policies they cannot be taken. All of your assets are fully protected under a Chapter 13 proceeding. Once you have filed your Chapter 7 or Chapter 13 proceeding, creditors are not allowed to contact you. If they wish to communicate with you, they must do so through your attorney or through the court. Harassment by creditors may cease once your case has been filed.

Paying Taxes, Student Loans, Home and Vehicle Arrearage

Through Chapter 13 Taxes, student loans, home delinquencies, and vehicle delinquencies will be paid through your Chapter 13 plan. Actually, virtually all of your debts will be paid through your Chapter 13 plan except future home payments which are due after you file the plan. Remember, delinquencies, or prior home payments including all those due before filing the plan will be included in your normal monthly plan payment. Handling your taxes, student loans, home arrearage, and vehicle arrearage, along with all of your debts through a Chapter 13 plan, will allow you to pay these debts over time at payment based on your ability to pay without the threat of garnishments, repossessions, or foreclosures, or creditor harassment.

Future Credit

A common concern of persons considering bankruptcy is the effect a bankruptcy will have on their credit. Often, that is not an important factor, because the unpaid debts and collection proceedings have already marked you as a bad credit risk. Surprisingly, sometimes a bankruptcy actually improves the person's credit because bankruptcy will remove most lawsuits, most collection agencies, most past due unsecured debts, and it can allow restructuring of secured debts, and non-dischargeable debts such as past due child support and taxes. Future creditors are most concerned about a person's capability to repay any future debt. By eliminating lawsuits, collections, and unsecured debts though bankruptcy, and using bankruptcy to restructure and stretch out to the extent possible, secured or non-dischargeable debts - the future credit of a bankrupt person can actually improve. In short, bankruptcy may not ruin your opportunity to obtain future credit. Bankruptcy is not a matter that should be taken lightly, and should not necessarily be used if other and better alternatives are available. A bankruptcy professional can help you determine what options may be available to you, and how best to protect and enhance you future credit, should you choose to file bankruptcy.

Banking Services

Totally Free Checking

Are you tired of paying fees each month for your checking account? Is it a burden for you to keep a high minimum balance in your checking account just to avoid paying those monthly fees? Do you just want a basic, hassle-free checking account that doesn't cost you money each month? If the answer to these questions is "yes", then a totally free checking account may be just what you're looking for. A totally free checking account is one in which there are no maintenance or activity fees associated with the account. There is no minimum balance requirement, no monthly fees, and no per check charges. A totally free checking account usually does not pay interest. People who do not plan to keep high balances in their checking accounts find that the minimal amount of interest they would earn in an interest bearing account usually does not offset the service charges they would incur. A totally free checking account is perfect for college students and young adults with basic checking needs. Totally free checking can be just right for anyone who wants a hassle-free, no-fee checking account.

Supermarket Banking

Sure, you can find an ATM machine at almost any supermarket. But, if you do business with a bank that knows how to keep up with the pace in our fast-changing world, they can handle all of your banking needs at one of their many convenient, full-service, Supermarket branches. Most of us have to make one or more trips to the supermarket during the week anyway, so why not save yourself time and fuel, and do your banking at the same time. And those old complaints about "Banker's Hours" don't really hold water any more. That's because supermarket banking offices are open on weekdays, Saturdays. and even on Sundays, so you can perform any of the banking operations that you would normally take care of at the local branch, right there at a local supermarket! Of course, if you do your shopping and banking on Saturday or Sunday, any transaction that you make will be posted the next regular business day. So stop going out of your way to take care of your banking business, and choose a bank that makes it their business to care about you!

ATM Banking

The world is a very different place now than it was when the first bank opened its doors to the public. Often, with the hectic schedules people keep today, they are just too busy to stop what they are doing and go stand in line at the bank to withdraw money. Merchants are becoming more and more reluctant to accept checks for the purchase of merchandise, let alone cash a check so you can have pocket money. So what are you to do? Join the countless others who take advantage of the technical advances at our disposal today and use ATM banking. An ATM, or Automated Teller Machine, is a convenient, quick, and easy way to do your business transactions at any time of the day or night. You can make deposits, withdrawals, transfer funds, make loan payments, any time you like, anywhere you like. Some ATM's even print up a statement for your records. With over 6,500 ATM sites around the world, convenience is just a few steps away.

Direct Deposit - Convenience and Security

When most individuals hear the words direct deposit, they immediately think of social security payments. But there is an ever increasing number of people who have a multitude of other payments made directly to their bank. If you're a busy working mother who has no time to go to the bank, payroll deposit may be the answer to give you more free time. If you're a retiree with no demands on your time, direct deposit may still make sense because you don't have to worry about your retirement check being misplaced or stolen. Before you enter any direct deposit program, check with your bank. They can make sure your account is set up correctly from the start and your checks will be there when you need them.

Bank-By-Phone

Most of us don't relish the idea of fighting the traffic to get to the bank. Sometimes, technology can be a wonderful thing. If you have a touch tone phone in your home and an ATM card, you may never need to go to the bank again. With the bank-by-phone service offered by many banks today, you've already got everything you need to check your bank balance or account activity right there, from the comfort of your home. You can transfer funds between different accounts or possibly set up an automatic payment plan to handle your monthly mortgage or car loan payments. All of this - seven days a week, 24 hours a day. For those of you who enjoy using a personal computer, some banks even have systems that allow for banking via modem. So take advantage of the state of art in banking today.

Checking Accounts

If you're in the market for a checking account, there are several factors that you should consider, such as minimum balance requirements and transaction limitations. There are three types of minimum balance requirements associated with a checking account. First, a minimum balance will be required to open a checking account. At most banks, a checking account can be opened for as little as $25. Second, there will be a minimum balance required to be on deposit in order to avoid a monthly service fee. Third, there will be a minimum balance required to be on deposit in order to earn interest. Some institutions limit the number of checks that may be written per month without a fee, and begin to charge a fee for each check thereafter.

Money Market Accounts

Money Market Accounts are savings accounts that have features similar to checking accounts. The interest rate can increase depending on the balance kept in the account. For customers who do not write more than three checks per month, and want the best return for their money, a Money Market Account may be the way to go.

Savings Accounts

If you are in the market for a savings account, there are several factors that you should consider, such as minimum balance requirements and transaction limitations. There are three types of minimum balance requirements associated with a savings account. First, a minimum balance will be required to open a savings account. At most banks, a savings account can be opened for as little as $25. Second, there will be a minimum balance required to be on deposit in order to avoid a monthly service fee. Third, there will be a minimum balance required to be on deposit in order to earn interest. Savings Accounts are subject to certain transaction limitations depending on the type of transaction.

Passbook Savings Accounts

For years, banks and savings institutions offered the passbook savings account. Many generations grew up with using the passbook as their only savings vehicle. The introduction of new technology to the banking industry offered other ways to set up savings accounts and slowly but surely, many institutions abandoned the passbook. Today, there are still many people who prefer having their deposits and withdrawals recorded in a passbook. It's a great way to teach a child to save since they can see their balance increase each time they make a deposit. Those institutions that have kept passbooks have used the advances in technology to make the account more convenient. Simpler interest postings and "no book" transactions are now possible.

CPA (Certified Public Accountant)

What is a CPA

A CPA, or Certified Public Accountant is licensed by the state to provide various financial and business advisory services. It means the individual has passed a rigorous twenty hour examination on accounting theory, accounting practice, taxation, auditing and business law. In most states, the CPA is also required to an examination on accounting and business ethics. But what does that mean to you - the business owner or manager? It means your CPA is uniquely qualified to assist you, as your business partner, with the diverse and complex issues you face today and will face tomorrow. These issues can range from typical financial statement and tax return preparation, to cash flow management and analysis, internal control systems development and analysis, business planning, "turn-around" program development, budgeting systems development and implementation, and accounts receivable and credit management. These are but a few of the services an experienced and qualified CPA can provide you and your company. In today's complex business environment, business owners and managers must wear many hats to deal with the diverse issues facing them. They must weave their way through a maze of questions and problems using whatever expertise is available to them. Because of limited resources, you are unable to employ those individuals possessing the required expertise and for these reasons, need to seek out those in the business community uniquely qualified to provide the required expertise.

Tips for Having Your Bookkeeping Done by Professionals

Many small businesses started doing their own bookkeeping when micro computers became economical and accounting software became inexpensive and effective. For some, this has been a worthwhile experience. They have reduced costs and improved their understanding of the business; they are more aware of the impact that a transaction will have on net income. For others, the experience has been a nightmare of having to learn how to do bookkeeping, how to reconcile a bank, having to upgrade computers that are not used except periodically, having to buy and install software upgrades, etc. Generally, the time involved with bookkeeping has been costly and frustrating, particularly because of the time it took the business person away from performing those tasks that they were good at and enjoyed, and which were the reasons for going into business. These are the tasks that make the business profitable.

Become More Effective and Profitable

Do a cost benefit analysis. How much time does it take you to do your books? How much does this save you in monthly bookkeeping fees? If you used the same time doing what you are good at, and what you enjoy, how much revenue and gross profit could you earn? If you are saving $500 a month doing your own books, something you don't enjoy, but are giving up $1000 a month of gross profit, get effective and have your books done by a professional. If you don't have time to do your books, or doing your books frustrates you, have your books done by a professional. Providing your books to your accountant each month gives you an opportunity to discuss your business with someone. Sometimes all that is required is to talk about a problem and you come up with the solution.

Tips for New Small Businesses

Design an extensive chart of accounts that is responsive to the business you are in. Make sure you have an account for each type of expense; don't combine one class of expense with another, or you won't know what you have spend on each. If you can't do your own books properly, or you can use your time more effectively generating revenue, let someone else do your bookkeeping. Review your financial statements each month to make sure you are making money or use the information in the statements to make changes so that you can be profitable. Prepare a forecast before you start business. You can revise it at any time; you don't have to wait until your first year end. We suggest that you regularly forecast the results for the next 12 months. Reconcile you bank balance as soon as you receive the bank statement. Keep a running bank balance. You don't do this because the bank might make a mistake, but to force yourself to know what is going on in your own business. Considering the power of computers and the excellent bookkeeping software available at low prices, it is probably a mistake to do your bookkeeping manually. If you are concerned about using a computer, consider having someone else do your bookkeeping. Cash: Don't mix cash receipts with cash expenses. Deposit cash receipts intact each day. Learn to use an imprest petty cash fund. It will save you a lot of problems. Follow up on past due accounts promptly. It's your money. Suppliers: Don't buy merchandise or have work done for cash deals at substantial discounts. You have no recourse to the supplier. Also, it would be too expensive if you can't deduct the expense for tax purposes. File unpaid bills alphabetically in an accordion binder (until you get too big for this system). Pay your bills twice a month and only pay based on an invoice. Paying bills promptly avoids receiving a statement from your supplier with the risk that the statement will be paid too. Stamp and initial your bills after you pay them so that if you are looking at them again, you will know they have been paid. If you have cash available, pay promptly to earn cash discounts. Scan suppliers invoices for reasonableness. There could be mistakes but our experience is that suppliers seldom make mistakes; any mistakes made are obvious. But there could be industries where you have to audit most invoices. Payroll: Make sure you understand payroll preparation and reporting of benefits. If you don't report and deduct properly, you may get stuck with paying deductions that should have been paid by the employees. Filing: This is one area that you can waste a lot of time on if you don't set up a filing system as soon as, or before you start. The wasted time comes later when you try to find something. Write down where documents are to be filed, how long they are to be kept, and what determines current, old and dead.

Investments

Money Market

Today's money market works much like a store in that it offers many different types of money instead of durable goods. The products offered in the money market trade quickly, change daily, and work to meet the demands of the specialized consumer concerns. The primary types of money offered on the market are CD's - certificates of deposit, commercial paper, or short-term unsecured debt, municipal securities, or securities issued by local government, and finally, your treasury securities, or Federal T-bills, notes and bonds. Financial brokers and dealers search high and low to meet the needs of consumers and lenders. Money lent on the market is from many different sources and gets repositioned to a broad spectrum of users. However, most transactions don't even involve cash. Instead, the financial wizards make paper deals. Funds are transferred on the books, not in actuality. Please check with your local bank or personal financial advisor for specifics regarding banking matters.

Mutual Funds

Mutual funds work on the premise that you can get a better return on an investment if you pool small deposits together, thereby creating a large fund to invest in bigger markets. This allows smaller investors to compete with the big boys. Most mutual funds that the smaller investor deals in are actually part of a larger organization that owns and manages a variety of mutual fund offerings. Each fund usually invests in specific and limited market activity. You should exercise caution when dabbling in mutual funds. Place your money only where you feel comfortable with the degree of risk. Make extensive inquiries before you invest. When determining the amount of risk involved, keep in mind this simple rule of thumb: The higher the interest, the higher the risk. Please check with your local bank or personal financial advisor for specifics regarding banking matters.

IRA

On of the great strengths of an IRA is that it can fit the needs of people with different investment priorities. The IRA is just an account. It can hod any type of investment. Your choices include CD's, savings accounts, treasury issues, bonds, different types of mutual bonds, annuities and individual stocks. If you are in your early to mid working years, you can probably afford a greater degree of risk than an older worker. For example: you might consider a well-regarded growth mutual stock fund, but if you are close to retirement, safety takes on more importance because you won't have time to recover from losses before you start making withdrawals. You should probably be considering government backed securities or mutual funds that purchase them. And, you may wish to have some of your funds in CD's. Another flexible feature about IRAs is that you can change the investment mix as you draw nearer to retirement.

Growing Your IRA

Whatever your age or income, to make the most of your IRAs, start now and keep at it. Investing now gets your investment working for your right away. Investing regularly contributes to regular growth. Another tip on making the most of your IRA is to make your investment close to the start of each year rather than waiting until later in the year, or until just before the tax return deadline in April. That way, your tax deferred contribution will be increasing in value for as much as an extra 15 and ½ months. As time goes on, keep an eye on alternative IRA investments. It's wise to monitor your IRAs constantly instead of just putting away money and forgetting about it. Keep abreast of the changes occurring in financial markets and adjust your IRA investments accordingly.

IRAs - Men vs Women

Women and men are treated the same when it comes to IRAs. You can contribute earned income up to $2000 per year to your IRA and obtain tax and assessment benefits. If you happen to be receiving alimony, it's considered earned income for IRA purposes. An IRA program is especially appropriate for many single women. If you stay single, an IRA gives you the same opportunity all other workers have of sheltering some income from taxation each year, and give you the money to build your own source of retirement income. If you marry and quit your job, you'll have at least one source of retirement income of your own rather than having to depend on decisions your husband might make, or on other forces beyond your control. When there's a non-working spouse, the couple can set up two IRAs. The total annual contribution is $2250, which can be divided among the accounts in any ratio desired.

Mutual Funds

When it comes to investing, mutual funds can simplify your life. What you get from a mutual fund at a relatively low cost is professional management of your money by people who devote their full time attention to investment decisions. The mechanics of mutual funds make them easy to use. With small investments, they relieve you of the exacting, time-consuming chore of researching and assessing the outlook for companies whose securities you might buy. And, you get a portfolio that usually consists of 50 or 60 securities. This diversification offers some protection against risk. Once your money is invested, you receive dividends quarterly and capital gains annually, if the funds has earned either. Almost all funds offer to reinvest your earnings automatically purchasing additional shares, and all funds sends a periodic statement of holdings. You can also use mutual funds for individual retirement accounts and KEOUGH plans.

Mutual Funds - Mix and Match

You can buy mutual funds made up of stocks, bonds, government securities and many other investments. You can buy mutual funds to suit your investing style whether or not you are willing to take a lot of risk, very little or something in between. There are many types, and you should examine the part of the prospectus devoted to "objective of the fund" to learn more about any fund you are considering. Growth funds buy and sell stocks to increase the value of the fund's portfolio. Long-term growth funds aim for steady increases in share values. Aggressive growth funds strive for maximum profits and take higher risks. Income funds primarily invest in bonds, although they sometimes own stocks as well. They're primarily seeking good dividends. Income and growth funds combine the two objectives. International funds invest in foreign securities, and global combine foreign and domestic investments. There are sector funds which specialize in stocks of one industrial sector, precious metal funds, and index funds which mirror the market as a whole.

Choosing Specific Funds

Once you've decided on the categories of funds you want in your portfolio, it's time to choose specific funds. Always consider fees and charges. If you buy through a broker, you pay a load. That means a sales commission, usually up front but sometimes at the time of sale. Although investment experts often recommend no-load funds, buying load funds can make sense if you prefer to have a broker making investment recommendations. Some funds sold through brokers don't have a load fee, but have what's called a 12B1(twelve B one) fee. It's an annual marketing fee so if you hold the fund long enough, it can actually cost more than a one-time load. All funds have management and expense fees. Up to a percent and a half per year is customary. Sometimes there are exit fees that decrease over time. Next, you should look at performance. Not just from the recent past but look at five and ten year performance. The best funds hold their own against the competition, even when there's a setback in the market. That's when good professional management really counts. There are magazines that publish these performance ratings.

Financial Planners

Financial planners are a new type of financial institution that's emerged in recent years, and with their swift rise in the profession, have come an equally swift rise in abuse. Laws governing financial planners vary from state to state. Virtually anyone can call himself a financial planner with our without credentials, education or scruples. Luckily, more and more universities are offering programs in financial planning. The Institute of Certified Financial Planners based in Denver offers a course leading to a certified financial planner designation. Still, it's up to you, the consumer, to research the education and licensure of any financial planner you may choose. Look at education, licensure, and ask to speak to other clients. A good financial planner will welcome you to look at his or her background. A bad one may not. Choose a financial planner with care.

Treasury Bills

The treasury bills is one of the most popular forms of government investments. They can be effective tools for the larger investor who wants a short term opportunity. T-bills are usually issued in multiples of $5000 with a minimum of $10,000. They are short-term investment issues in terms of three months, six months and a year. T-bills are sold in a weekly auction by the federal government and then can be sold on a secondary market. Here's an example of a T-bill transaction: An investor buys a year-long T-bill for $10,000 at a five percent discount. The purchase price would be $9,500. The value at maturity will be $10,000. Many investors, however, turn to the secondary market to get a better price prior to maturity. If you're willing to outlay a large amount at purchase time, T-bills provide excellent liquidity. Talk to an expert to see if T-bills are a wise investment for you.

Bond Ratings

Turn to the financial pages of any newspaper and you will probably notice the listings of various bonds. They can, at times seem like hieroglyphics to the beginning investor. Yet they are actually simple and easy to use rating services which help you find out a bond's reliability. Two of the most commonly used are Moody's, and Standard and Poors. These services will examine the bond's past financial performance, financial condition, nature of the issuer's business and backing for the issue, among other considerations. Their service will then issue a rateing. Triple A is the best. In fact, any issue that is rated Triple A, Double A or Single A, is considered of high grade. A series of B ratings single an issue of average quality, while C series is used to rate bonds of poor quality. Other services follow along the same lines. Be sure to check with your financial advisor to an issue's rating before making any bond purchase. Securities are not FDIC insured, have no financial institution guarantee and may loose value.

Bonds

Bonds are issued by corporations, municipalities, agencies and the U.S. government to raise money. When you purchase a bond, you are actually making a loan to the issuer. That issuer then promises to pay you a specified interest rate and to return the face value of the bond at maturity. Usually, the more risk associated with the issuer, the higher the interest rate it must pay on its bonds to sell them. In addition, the longer the maturity of a bond, generally the higher the interest rate it will pay. U.S. Treasury and other government obligations are considered to be the safest investment available. Treasury bills mature in one year or less. Treasury notes mature in two to ten years and Treasury bonds mature in ten years or longer. Treasury zero coupon bonds mature in one to thirty years. Treasury issues represent excellent values in today's fixed-income market. All are liquid investments, meaning they can be sold before maturity. Federal agency notes and bonds are issued for various periods of time and are somewhat less liquid than U.S. Treasury obligations. They yield is usually slightly higher than U.S. Treasury issues. Corporate bonds are issued by corporations to raise capital. They generally pay the highest rates available on fixed-income securities. Of course, you bond is only as secure as the company that issues it. The lower the credit rating of the corporation, the higher the interest the corporation will have to pay its bondholders. If you sell any bond prior to maturity, it could be worth more or less than you paid for it.