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A Guide To Investing

Financial Planning For The Sailors

I have many friends who work as sailor, both cargo ships, tankers, passenger ships, cruise ships, until the fishing vessel. When I met them, they always talk about life on the ship and interaction while on the ground. Their stories are very interesting, and certainly very remarkable because life at sea is different with the people on the ground, as well as on their financial stories.

From the experience of my sailor friends, the salary they receive is high, can reach nearly U.S. $ 2,000 per month, there may even be more for the ship’s officer or ship’s captain. That salary is actually sufficient even more for himself and his family living expenses. But some of them have complained that the salaries they receive is always up when they fell to the ground, and they do not have anything when the work contract is completed. Why is that?

The sailors average to work at least a minimum of one week on board, some are nearly three months at sea. Even possible for fishing vessels could be more than that. As long as they are in the middle of the ocean, they are in a limited environment. Boring food menus, entertainment as it is, until the job requires very high level vigilance and hard work. Therefore, when they went ashore, they will pour the pent-up desire for being at sea. When it comes down to the ground, with a lot of money in their pockets, they used to shop at will, eat whatever they want, to look for entertainment that they do not feel at sea. Until their money runs out unexpectedly without a trace, no savings, and there is no item for the family.

Suppose you are a sailor has a salary of U.S. $ 300 per month. If your sailing time is 4 months, then you’ll take the money of U.S. $ 1.200 when you went ashore four months later. And I believe, the money that much can be directly discharged within a week on land as a result of saturation in the middle of the sea. A very sad end! Work hard but no results.

Therefore, the financial planning of a sailor is very important to do so there are no regrets later on. And this financial planning is very simple but must be consistent in its implementation.

If you are a sailor who has a salary of U.S. $ 300 per month, 1 year labor contract, and 4 months at sea, then the following is a simple way to manage your finances.

1. Set aside U.S. $ 100 per month in the company where you work. Ask the company to automatically save you money of U.S. $ 100 per month.

2. Ask your employer to send U.S. $ 100 from your paycheck to your family at home, whether it be parents, siblings, or your wife.

3. Ask the company to send U.S. $ 100 the rest of your salary into your personal account.

With this arrangement, then when you went ashore four months later, you just pocketed U.S. $ 400 in your pocket. That is the money that you can use to entertain yourself. It’s up to you whether want to spend it all or not, but you certainly will not be regret when your contract runs out. A year later if you are not going to extend the contract, then at least you have your family at home make a living of U.S. $ 1,200 for one year, and you still have savings in your company as much as U.S. $ 1,200.

If you still want to continue working at sea, then these savings can be used for capital investments such as buying a stock, bond, or deposited in the bank. If you do not want to continue working at sea, then the savings can use for initial capital to open a small business, such as opening a modern retail store or internet business. What you have to do next is diligent in its management, while learning the ways of retail stores business through the internet.

Employees Conflict Resolution To Protect Investment

If we try to open a business, for example a retail store, then surely we must make an investment. This investment could be a building, employees, merchandise, and even a brand. As we know that the brand is the most valuable asset investment in the business world. Chaos and conflict that occurs within the internal business / among employees will make the investments that have been implanted being lost. Therefore the handling and the precautions of a conflict is essential to protect assets and investments that have been implanted.

Conflict is a misunderstanding, opposition desires that give rise to tensions, discrepancies, or differences of opinion among employees. Some say that the conflict includes differences between social and personal values, inability to act in accordance with the principles and personal values, lack of communication, problems are exaggerated or behavioral differences due to differences in cultural background, religion, education, and other factors.

The factors that cause conflict are:

a. Organizational Aspects
These aspects include the lack of manpower, organizational changes, feeling less secure in terms of security and safety, lack of employment standards, substandard coaching career, discrimination in employment, the company’s goal is less clear, as well as problems regarding the inter-section of instruments .

b. Managerial Aspects
These aspects include the delegation of authority is not enough, the loyalty that is not intact, the less expert management, and centralization of power continuously.

c. Aspects of Behavior
Behavior usually reflects the two categories above. In particular due to the lack of good communication about how the information delivered, not delivered, or it covered because of a lack of trust in the organization.

d. The other aspect
Conflicts caused by complex organizations, the conflict between the task against the process, and differences in belief and objective value.

Conflict Resolution

There are three methods commonly used in conflict resolution, namely:

1. Dominance and Emphasis

  • These methods include:
  • Violence, which is the emphasis otocrative.
  • Nurture, is way more diplomative.
  • Avoidance, escape to take a firm position.
  • Majority rule, try to resolve conflicts between groups by conducting a fair vote through the procedures.

2. Compromise
The conflict was resolved through a search path that is acceptable to the parties concerned.

3. Integrative problem solving
Conflicts between employees converted into solving problems through consensus situation, confrontation, and an understanding of the goals higher.

Dealing with Health Cost

Health insurance is very essential, especially for inpatient care, because once be admitted to the hospital, the costs could be thousands. Insurance use to transfer the risk of financial loss. Perhaps people do not pay premiums for health insurance because if there is no claim then the money will not refund.

In order for our savings that we’ve earned not be spent on hospital, so every family should have health insurance for family peace and comfort. For those who already have health insurance do not need to add by purchasing another health insurance again. The money is better saved for an emergency fund.
Buying health insurance does not need an expensive class. The important thing is have health insurance.

Some tips on choosing to buy & use of health insurance:

  1. Choose the insurance companies with RBC above 120%
  2. Choose the insurance that is separate from life insurance (pure health insurance) with full benefits in case of hospitalization.
  3. Health insurance which is not separate with life insurance or unitlink, usually act as benefit, not a full replacement of the appropriate limit.
  4. Ask if there is minimal hospitalization (there are others which should be treated just 2 days that can claim)

If you already have health insurance and had to be hospitalized, no need to change the class. For example, you have first class coverage wants to move to VIP class. As a result, the increase in the class rooms are not only adds room, but wholly rises, the cost of doctors, medicines, although used exactly the same. Especially when there is an action (operation), then costs are more expensive.

Understanding Of Web Hosting

If we want to make a web, and can be viewed by the public, then we should store all data in the form of a file or database on a server connected to the internet and have a public ip address or known by the name host server.

Looking at this reality, then there are some people or companies who see these as a business opportunities. They has a server connected to the internet, and then some of their server resources are leased to others. This business is called web hosting services.

Web hosting service providers, like a landlord for many residents of boarding houses (website manager), who rent space on servers that they rent out. So this means, if someone is renting some resources from a server connected to the internet that is used for the website accessible to the public, then that what is called website hosting or shared web hosting or virtual hosting.

Many companies whose business is web hosting services, but not many as a best web hosting. Best web hosting is a web hosting company that can accommodate all your website needs.

Before you decide to hire a web host, check the hosting details offered by such companies. This information allows you to find the features which is provide by the company.

Definition of Money

Beginning of money is known as a result of difficulties in the exchange needs. In the past, needs to obtain the desired goods or services used the barter system. This barter system is a system of exchange between goods with goods or goods with services. This system is a first known in the trade world, but was abandoned because of the many obstacles in every exchange.

Some of the constraints in the barter system, among others:
1. It’s hard to find people who want to exchange goods in accordance with the requirements.
2. It is difficult to determine the value of goods to be exchanged to items needed.
3. It’s hard to find people who want to exchange goods with services they have.
4. Difficult to obtain the desired goods in quick time.

To overcome these obstacles, then the experts think about a tool of exchange that is more effective and efficient. And the medium of exchange is called money. Money is a tool that is used to exchange goods and services and generally recognized in some particular region. Money not only as a medium of exchange, but also has other functions as a unit of account, hoarders of wealth, and as a debt standard.

In modern economy, money plays a very important for all social activities in the community. Money has become a necessity, even becoming one of the determinants of stability and economic progress of a country. To meet the need of money, the government of a country through the Central Bank create money, and keep the money supply remained stable. Distribution of money to the community is through commercial banks.

The benefits of money are:

1. Simplify and accelerate the acquisition of goods and services desired.
2. Facilitate in determining the value of a good or service.
3. Streamlining the process of trade widely.
4. Used as a place of amassing wealth.

Simple Ways in Managing Family Financial

Financial problems are common in young families, especially in the first years of family life. Not to mention the little one soon comes in the middle of you and your partner. Is it true that the problem lies with the large-small family income?

Often the problem is not lack of income, but the wrong habit in managing money. Apparently, in fact, a father who earn thousands of dollars could be in shock when he found the money to live is $500,00 before the end of the month.

This is some simple keys to managing family financial:

1. Understand your family’s financial portfolio. Do not be blind about the saving amount, the electricity bills, telephone, car service, shopping, doctor’s and other expenses. You have to know how much credit card debt, bank loan or mortgage and car.

2. Develop a financial plan or budget. Realistic financial plan helps you be objective about excessive spending. No need too ideal, so forget your own needs. No harm in entering need to go to a salon, spa or clubbing. Importantly, the budget should be realistic and you also must comply with the budget.

3. Think more thorough understanding between the “need” and “want”. Quite often we spend money for something that is not too important, or just driven by desire, not necessity. Make a list of tables consisting of columns for shopping items, needs and desires. After filling the column shopping item, fill the “needs” and “wants” with a check mark (V). From here consider a more mature, things you need to buy / fill or not.

4. Avoid debt. The temptation to consumptive live is greater. But that does not mean you easily purchase various items on credit. Grow a healthy financial habits starting from simple, as no consumer debt.

5. Minimizing consumer spending. Meet old friends to exchange ideas in a cafe sometimes necessary, but it does not mean you have to do it on every Friday afternoon. You can use these expenses for saving or meet other needs.

6. Set financial goals. Arrange the financial targets you want to achieve on a regular basis, with your partner. Set specific, realistic, measurable and within a certain time. This goal helps you focus more on designing your financial. For example, aspires to have the funds preschool education of international standard and so on.

7. Savings first. Change habits and thought patterns. Immediately after receiving a salary, set aside for savings in the amount you had planned on purpose or goal of your family financial. Instead, you have a separate account for savings and daily necessities.

8. Invest! Sure you will not be satisfied with just waiting for the savings soar. And your goals for the family is high. This is the time to also think about investing. Now, there are many investment form. Fear of risk investment?! No need to worry, you just need to learn to the experts. Consult your investment plan with the financial expert.

Knowing the Appropriate Method of Investment

Your investment will get maximum results if you can pick the best time to buy and sell your investment assets. However, the method known as market timing, is not an easy thing, because surely you will have difficulty in determining the right time to invest. For example, you feel that the stock price X yesterday was very cheap, because it fell 5%, so you buy it. However, today’s stock price X fell further to 10%, so you regret why you did not buy today, because you had invested the money entirely.

To overcome this problem, you should use cost averaging method of investing. Cost averaging is an investing technique routinely and periodically regardless of economic and market conditions. Thus, you would not panic if the prices of domestic goods rise or stock prices sag. By using cost averaging method, you simply invest with a fixed value on a regular basis each month within a certain period so you will earn a lower average of the principal amount of investment.

Why did it happen? because when prices are rising, the amount of your holdings in an investment would be less, while at low prices, then the amount of your holdings will be more so if it is averaged, the purchase price you get will be lower. With the trend of an increased investment in the long run, of course you will be benefited by this method. To better understand this method, please see the illustration below.

For example, you invest with the cost averaging method on X stock for $. 500 on the 3rd of each month for 5 consecutive months. With the prices change every day, it gets the illustration below investment like this (assuming you could buy stock X in units):

From the results of investments you do for 5 months, found an average purchase price of $2.42((2 +2.1 +1.7 +1.8 +2.2 +2.3) / 5) with X amount of share ownership as much as in 1287, so if you sold all your shares in July, you will get the benefit of ($2.3 x 1287 ) – $2500 = $460.1, -.

Compare if you invest your $ 2500 entirely in February, you will get the purchase price of $2 with amount of shareholdings in 1250 only, so if you sold all your shares in July, you’ll just get a gain of ($2.3 x 1250) – $2500 = $375.

One thing to remember, cost averaging method does not guarantee the benefits you get will be higher than using other methods. By doing market timing, let’s say you invested all your $2500 money in April. You will get the purchase price of $1.7 with number of shares as much as 1470. If you sold all your shares in July, you will get a greater profit, amounting to ($2.3 x 1470) – $. 2500 = $881. However, as previously described, do market timing is not easy, because you may feel that the market timing for entry is February, not April.

Therefore, for long term investment, cost averaging method is highly recommended, especially on markets that fluctuate like the stock market, because it can reduce your investment risk.

Financial Institutions

The business world is the world’s most exciting discussed in various forums, both national and international. It is because the world of business is the backbone of a country’s economic progress. The business world has various fields, trading, industry, agriculture, manufacturing, etc. And they all have different characteristics. But the main problem most frequently faced by each company is about the business capital. Capital is needed for company recently founded or which has been running for years.

An institution engaged in the financial sector plays an important role in meeting the funding requirements for the company. This financial institution provides financing facilities for companies that need funds for working capital and capital investment. The definition of financial institution is “any company engaged in the financial sector, raise funds, distribute funds, or both”.

In practice, financial institutions are classified into two major categories, namely bank financial institutions, and non-bank financial institutions.

Bank financial institutions, or the next we call with banks, is the financial institutions that raise funds, distribute, or both. Bank financial institutions consist of:

Central Bank
Is the bank with the main objective to achieve and maintain the stability of currency. To achieve these objectives, the central bank has the duty and authority in setting monetary policy, regulate and maintain the smooth foreign exchange system, and regulate and supervise banks.

Commercial Banks
Commercial banks are banks that are on duty to serve all banking services to the community.

Non-banks financial institutions include:
Capital markets
This is a market that is a meeting place for seekers of funds (the issuer) and the investors (investors). In the capital market is traded securities in the form of stocks and bonds, which are a long-term capital.

Money market
Similarly with capital markets, but the capital is for short-term capital.

Savings and loan institutions
Is an institution that collects funds from people who are members of the institution, then channeled back to the community and its members.

Pawnshop
Pawnshops are financial institutions that provide credit facilities with certain guarantees.

Insurance
This institution is a financial enterprises engaged in insurance business. Every customer subject to the insurance policy must be paid in accordance with the agreement, and the insurance company will bear the loss if the customer affected by the disaster / risk as it has been agreed.

Leasing companies
Is an institution that provides financing venture capital goods for its customers. For example, if a customer wants to buy goods but do not have enough funds, these companies will pay for the goods. Customer repaid to this company circuitry in accordance with the agreed contract.

The Types of Investments

Before knowing the types of investments, you should first know the difference between saving and investing.

Saving means setting aside your money without expecting an increase of the value of the money you save. By saving money in the bank, at least you know that your money would be safer than if you put it under the pillow. Indeed, if we see at a glance, the various savings banks offer interest savings of 1-3% annually. However, if you notice, every year the prices of goods are always up to the percentage that far exceeds the interest savings. If you are aware, actually the money you have decreased in value.

Meanwhile, investing means expect an increase of the value of your money over time, so it will benefit you. The money which expected to increase in value is stored in a form called assets.

Types of Assets

In investing, there are two kinds of assets, namely real assets and financial assets, which can both be considered as an investment vehicle in order to achieve your financial goals. In investing, you should remember that there are always a risk by losing your capital. Therefore, you must know assets you choose to invest.

Real Assets
Real assets are formed assets such as land, houses, gold and other precious metals. Investing in real assets is a common thing to do. For example, you buy a house, and then rent it to get a monthly income. Not to mention when the rented houses have been completed , you can sell and earn profits. You will get many advantages of investing in real assets, because even if the price can go up and down, but in the long term the value tends to increase.

Financial Assets
Financial asset is an asset that its form is not visible, but still has a high value. Generally, financial assets are located in the banking sector and also in the capital market. Some examples of financial assets are money market instruments, bonds, shares, and mutual funds.

Money market instruments are short-term debt securities that are less than one year issued by governments or companies. In return, you as a creditor will get some interest from the initial value of your investment. Generally, interest will be paid at the end of investment period.

Examples of money market instruments are time deposits, bank certificates and promissory notes. In general, money market instruments have a level of investment risk of failing to pay the value of investments and the interest is very low.

Bonds are debt securities issued by governments or companies. Duration of debt on the bonds is more than one year. Bonds traded in capital markets. You are buying bonds will get rewarded with some interest from the initial value of your investment, which is called the coupon. This coupon is usually paid every 3 or 6 months in a year,

Bonds are a low level of investment risk, but the risk is slightly above the money market instruments. The biggest risk faced by you as a holder of bonds is the possibility that the issuer can not repay its debts. Therefore, there are agencies that provide ratings on bonds issued to find out how big the risk of default on the bonds.

Shares is proof of ownership of a company. People who own shares are entitled to the distribution of the the company’s profit, which is called the dividend, in accordance with the percentage of ownership in the company.

In addition, a company’s share price will move following the company’s performance. If the company has a good performance, then the share price will go up so that shareholders will have benefit if you sell shares. Shares are also traded in capital markets and has a high level of investment risk, because there is a risk of bankruptcy of the company so that you can lose money.
In investing in shares, you should find out if the company really has a good performance. You must do the analysis based on financial statements issued by the company, state economic conditions, and other things that simply take up your time. But of course this is comparable to the potential gains.

Mutual fund is a container to collect public funds that is managed by a legal entity called the Investment Manager to then be invested into other financial assets. The funds are deposited in a bank deposit called the custodian bank.

Mutual funds are the solution for people who want to invest in many assets, but have limited funds. This is possible because of funds raised from many party is large enough to then be invested in shares, bonds and money market instruments in accordance with the policies of the Investment Manager.

In addition, the mutual fund is also a solution for you who has limitations in knowledge and information in conducting investment analysis, and for those who do not have enough time to oversee the daily movement of shares and bonds .

Investing In Mutual Funds As One Of Investment Solution

Perhaps you already know what it is mutual funds, but no harm in refreshing you back on terms of mutual funds. Mutual Fund act as a container used to collect funds from public investors to be invested in portfolio securities by Investment Manager. The securities portfolio can include stocks, bonds, money market instruments, or a combination of some of them.

Investing in mutual funds, like people who like to run faster then that person will be faster to the goal, but by knowing that the risk is fall, then that person would run more vigilant with caution.

Why mutual funds as one investment solution?
In mid 2007, we have learned with the crisis or breakdown of the subprime mortgage housing loans in the United States that triggered collapse of stock markets around the world, but in the midst of the panic of some market participants and large-scale withdrawal, instead of mutual fund investors
exploit the situation to increase its investment or new purchases. That means investing in mutual funds could be one solution investment and mutual fund investors now have more long-term oriented
and better understand the risks so it is not easy to panic and more rational in making decision.

The advantage to invest in Mutual Funds:

  • Investments are managed by the professionals Investment Manager to the administration by custodian and closely monitored.
  • The mutual fund investment is not (yet) become the object of taxation.
  • Not require substantial funds, so affordable by all people.
  • High liquidity. Unit stocks can be bought or sold back every day through investment manager.
  • Diversification of investments referred to loss on an asset, can still covered by other assets to avoid the maximum loss.
  • Transparent in providing information to investors.

In the investment world, many types or forms of investment, if you choose investing in shares, you need rethinking the level of risk contained according to the level of risk you can bear, do not invest in shares that resulted in giving a sense of worry, insomnia and stress. In addition, one thing to the risks that must be faced, namely: the risk if a shares suspended or dismissed by the authority of the stock exchange, thus investors can not sell their shares. Meanwhile, if you choose investing directly in money market instruments, usually require large funds, can not be liquidated at any time, there is a deposition of funds during the period certain time, and become the object of tax investment returns.

In conclusion, the best way to invest in mutual funds are making long-term plans, disciplined, clear mind when it is appropriate or inappropriate for go, and do not panic and fall with the market euphoria.