Early Retirement, The Facts
Submitted by: Janet Schlarbaum
Author: Martin Haworth
Whilst ‘early’ retirement might sound wonderful, many people would not wish to be pensioned off quite that easily.
In fact, worthwhile work in a stretching, yet enjoyable environment is probably much more likely to keep you feeling young, than an enforced early traditional retirement!
And we know that work just is so often not like that - sadly. So, the growing trend for the retirement is based on the fact that people retire early, rather than continue working at something they no longer enjoy at all.
It’s likely that upwards of 60% of the population would wish to retire before they were due to - often because of the hassle and lack of fulfilment in the workplace.
Truth is, that there are many benefits in early retirement, though these have to be balanced with the lack of income which can happen if money is taken from the retirement fund and/or that fund is used to pay out earlier.
In fact, significant reductions in benefits occur just because they are going to be drawn from for longer periods.
That’s why many people are looking to more unique ways to fund their early departure from the workplace - here are a few ideas:-
1. Property - after the boom at the end of the 90’s and early into this decade, property has taken a bit of a slowdown. Yet overall, if you have the vision, the initial funding and are prepared to put your investment on the back burner for a good number of years, most authorities in the subject believe that property will be a good investment.
Bear in mind that you may need to take specialist advice before you buy and that it might be an investment that needs topping up from time to time if you have voids/repairs etc.
2. Stock Market - whilst this is always a difficult one to predict, the value of businesses has, in general, grown to outpace inflation and certainly, over the long-term, to beat simply putting cash into the bank or other forms of cash savings.
It would also be worth investigating other forms of investment in shares, the form of which will vary across countries.
3. In most places in the world there are bonds which are similar to shares yet are spread across a basket, thus reducing the likelihood of disaster (sort of not putting all your eggs in one!).
This also extends to a huge variety of specialisms across all sorts of industries and nations - each with their own special flag-flyer. There is little confidence that these types of investments are any different than sticking a pin in as many have shown poor returns over the years.
4. Online - a growing number of investors are chasing all sorts of opportunities online and it can be a nightmare in finding even a strategy to assess what sort of investment might work best at all. Yet there are reputable business opportunities out there if you look for them, many of which require focus and minimum effort ongoing.
Remember that you can have a lot of fun with online investing e.g. EBay and Google Adwords and you can also lose your shirt. If you can find an investment that involves a one-off payment to get in, rather than one that is the proverbial black hole, you might well be best to give that sort of investment a go - there is no doubt that they can be very lucrative.
Is Your Business Ready To Expand And Raise Capital?
Author: Wade Anderson
Quite a few States have begun using the Small Corporate Offering Registration (”SCOR”) that utilizes Regulation D, a viable source of growth capital, for entrepreneurs and smaller companies through the use of a private placement memorandum.
Keeping in mind this basic outline of the regulatory issue, you can prepare an offer document, called the Private Placement Memorandum (PPM). The aim of a PPM is to divulge to potential investors all relevant information about the company and its area of business, with special emphasis on the risk factors involved when investing with the company.
When selling stock, preparing a Private Placement Memorandum is desirable. It is also a requirement when applying for exemption from the securities laws.
A PPM is very often useful in proving that the company has provided all the material facts relevant to investors, especially in case of failing investments when investors might begin clamoring for refund of their money.
PPM Guidelines
A PPM should comply with certain important rules. The guidelines that should be followed when creating a PPM are:
Do not make any false statements.
There should not be any misinformation in the PPM that will mislead an investor.
All the material facts should be set out completely.
All risk factors should be divulged at the outset.
The PPM should also prove the veracity of the statements it makes.
Facts should be set out plainly and simply without any exaggerations or rosy projections.
A Private Placement Memorandum is a venture capital tool extensively used by companies seeking to raise capital from investors.
How to Create a PPM
There are a number of avenues open for companies to create a private placement memorandum.
First and foremost, is to retain the services of an attorney who will draw up the PPM. Upon completion, the company may, through this document, solicit and go ahead in obtaining investments. Attorney fees for the complete private placement can range from $5000 to $20,000.
Second, some companies may turn to investment banks to raise capital. But with so much of negotiations and wi existence many different investment banks, entrepreneurs may run the risk of losing complete control of the situation - something to be avoided.
Third, is the advent of specialists in the preparation of PPMs. These specialists have streamlined the process for raising capital. Companies on a high growth path can save valuable time by utilizing their services.
Fourth, is the self-preparation of your own Private Placement Memorandum using a template.
A good PPM, during its lifetime, can be instrumental in raising millions from individuals and institutions.
The contents of a Private Placement Memorandum are exhaustive and detailed, so before making a complete Private Placement Memorandum, first try preparing a Pre-Offering Summary that would set out the prime objectives of the company and also help ascertain the market’s potential for the proposed offering.
The PPM should, however, hold information regarding Introductory Materials, Description of the Company, Risk Factors, Capitalization of the Issuer, Management of the Company, Terms of the Offering, Allocation of Proceeds, Dilution, Description of Securities, Financial Statements and a little bit about Exhibits.
Federal Securities Laws Applicable To Private Placements. Generally speaking, the Securities and Exchange Commission needs you to file a registration statement before commencing to sell security in interstate businesses. Exemptions to the Securities Act of 1933 are Rule 504, Rule 505 and Rule 506.
Mutual Fund Investing 101
Author: Amy Goodmann
What is a mutual fund anyways an average person may well ask?
A mutual fund is simply a co-operative means by which means many people can pool their savings together and have it professionally managed and as well take advantage of institutional volume discount pricing of purchase and sales commissions.
The concepts of pooling allow investors with relative small amounts of money to access investments that may require larger sums to achieve affordability.
Government and corporate bonds, for example require minimums much higher than the $ 500 or so that most mutual funds will accept as minimum deposits. Additionally, pooling those many small sums gives the fund manager enough capital to broadly diversify the investments within the fund and provide full administrative and accounting services to unit holders.
Every mutual fund is different, not just in it financial objectives but also in the types of investments it may hold. Whether a fund holds stocks, bonds or a combination of the two, will ultimately define the degree or risk associated with each fund.
The differences in the types of securities a fund will hold are determined by the fund’s objectives. For example, if the objective is to provide unit holders with current income, the fund will hold various types of bonds and incomes financial vehicles. A fund seeking growth may invest in more speculative common stocks. Obviously the latter is much riskier than the former. Generally speaking, the higher the return objective, the higher the risk, and by extension no risk then no reward.
One of the great benefits of mutual funds is that by holding a variety of stocks and bonds, the investor significantly reduces the risk of losing money over a given period of time. An investor who uses all or her or his money to buy a single stock stands a much greater risk of losing money than one who invests in a mutual fund that holds between 20 to 50 different stocks… This is similar to what your grandfather advised you
not to hold all of your eggs in one basket . The chances of the 50 stocks losing all of their value are much less than a single company going out of business.
Furthermore, mutual funds offer the expertise of a highly trained, sophisticated money manager and of team of researchers with much greater access to information than the gingival investor to select, monitor and sell stocks and other investment vehicles at the most profitable time. Virtually all mutual funds have some degree risk, but it should be noted that even cash investments run the risk of being devalued by inflation and foreign currency exchange fluctuations.
Liquidity that is the ability to buy or sell investments and convert your funds to cash is another advantage that mutual funds have over many investments. Most funds have their shares or units valued on a daily basis. This means that investors can have the convenience of buying or selling shares or units in a fund on any business day without having to wait or seek a specific buyer to take the units off their hands. And a decision for the mutual fund unit holder to sell or redeem units, will not affect the unit value either.