Cleaning Out Your Documents: What to Keep and What to Discard

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Are you doing a financial spring-cleaning this year? Scan your papers to keep an electronic bank of valuable documents. There are certain steps to observe according to the kind of expense, asset or transaction; but, in general, make sure that your digital files of your records are as legible and accurate as your hard copies and also as easily accessible when you need them.

So, what documents do you need to save or discard? Here is a rundown:

Taxes – You may need to keep your tax documents while the statute of limitations applies. These will include the following: W-2 and 1099 forms, invoices, receipts, cancelled checks, mileage logs, proofs of payment and other records pertaining to deductions, income or credits claimed on your return.

Student loans – Never ever discard your student-loan master promissory note because it the legal support for your loans. Keep it until the time you have repaid the debt.

Credit cards – It is wise to keep credit card statements for as long as 7 years.

In case you are already paperless, determine how long to obtain your statements online. This is easier than eventually having to request them via snail mail in the future.

Real estate - Your FICO score measures your qualification for a mortgage and the interest rate you need to pay. You have to reach a score of about 620 to be considered by any lender in order to qualify. If you are not qualified for an affordable rate, you may have to wait before buying a home for the time when your credit improves – it will take more than 7 years to have negative activity on your report.

Insurance – Many do not easily warm up to the need for life insurance for obvious reasons, one of which is the uncomfortable feeling of knowing how temporary life really is. However, accepting the inevitability of our own mortality should convince us of the importance of keeping our original documents, such as assignment of beneficiaries, always available on hand.

Banks/brokers – Regarding documents for brokerage accounts and banks, you probably already hold an edge: majority of financial institutions provide a completely digital alternative, facilitating ease of storage.

Bitcoin – If you have bitcoin or some kind of cryptocurrency, download the most recent records without discarding any. Incidentally, IRS has started cracking down on cryptocurrency holders; and there is still no specific rule or stand regarding how to treat these tokens. Moreover, cryptocurrency transaction logs are most probably likely electronic-based. Knowing the uncertainty, there is no sense in discarding any record of such transactions?

Employee benefits – Employees accumulate so much paperwork from company-sponsored benefits, such as a 401(k), HSK and medical insurance policies. Keep these papers for a minimum of 3 years. As for EoB junk, you can discard them; but papers with tax or legal implications should be safely stored.

Retirement –The most important document is the beneficiary form, which is what you fill out when opening a retirement account and assigns your account to a beneficiary upon your death. It is not your will or living trust. Keep your forms are updated and inform your executor and beneficiaries where you store your papers.

tag : Devin Consultants Financial Management in Singapore and Tokyo

Determining What Kind of Investor You Are (Part 2)

Determining What Kind of Investor You Are (Part 2)


A Professional’s suggestions on How to invest for your character

How does an investor balance his or her portfolio with the risks?

Richard Flax, chief investment officer at Moneyfarm, suggests: ‘We will adjust the contents of the portfolio according to the investor profile. That essentially requires adjusting the values of higher risk assets (such as, equities and commodities) and lower risk assets (including, government bonds and cash).

The risk exposure in an asset changes according to how a client responds to risk, allowing a target level suitable for every profile.

Any investment approach must look forward and backward, considering various risk metrics, such as volatility and drawdown, and creating portfolios founded on projected gains and past risk parameters.

Why diversification and time are important

Investors need to diversify but must avoid being overly diversified. Many people in the UK invest in a single stock or just a few stocks, depending only on a few firms and experiencing great volatility.

On the other hand, one can shift to the other extreme and have plenty of funds that provide the same objective, adding complexity, increasing costs and, in the end, not giving the desired gains.

You have no other choice than to take greater risks. No free rides in the process. Your money can rise or fall; determine where you are in the picture where you are comfortable. Go for the long-term duration.

Which type of investor are you really?

Consider these professional suggestions:

First, the right time frame -- with more time you have the potential to build more wealth through compounding and the lower the risk of short-term loss.

Determine also how you respond to loss, or volatility. Although volatility means nothing to an ordinary client – since performance is the main concern – how do you respond when the portfolio value drops?

Also, find out whether you are a nervous investor by asking yourself how often you check your portfolio.

A very important task is to educate yourself about the financial markets, as this determines how much you comprehend investing.

Lastly, how much do you possess? If you own several properties and have no mortgages, your capacity for risk is much greater as your will only lose a small amount in comparison to your wealth.

Looking forward and backward at the same time provides an advantage to the investor. As professionals, we aim for various degrees of risk based on what a client reveals to us and in what category of investor they fall into.

Determining What Kind of Investor You Are (Part 1)

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Many investors have no idea of what kind of investor they are. Instead of dealing with the question early on, they plod along with no idea what they are and what they are doing wrong.

This question is vital in finding out what your goals are, how you handle risk and how you respond to gaining or losing money – factors that greatly impact your investments.

Understanding these factors will help you avoid errors in choosing your investments. This will not only spare you from going through restless nights due to taking so much risk but also from losing bright opportunities to gain significant wealth.

Let us look at five various kinds of investor to help you appreciate the importance of this matter.

The conservative investor

The conservative investor is one who takes great effort in charting his or her course and safeguarding his money. Such type is a safe player, always concerned about gaining a better gain compared to merely holding on to cash; although this individual is content with being able to sleep soundly instead of tossing and turning at night in the hopes of achieving the biggest possible gains possible.

For various reasons these individuals could include senior investors nurturing their pension plans while making use of them, as well as younger investors who play it safe within shallow waters with their meager and hard-earned savings.

The focused investor

This type of investor is open to greater risk compared to the conservative version; although safeguarding their wealth is a primary consideration as well. And while they may be open to fresh ideas for investments, they tread cautiously and remain alert against anything that may endanger their investments.

The focused investors are always mindful of everything they do and remain steady on course with their investing strategy without being diverted or distracted by any mishaps. The have the tenacity to build their wealth through meticulous and prudent moves.

The driven investor

This type is the no-nonsense, business-only investor. They stay fixed on their goals and chart out a clear road map for those goals. He or she knows exactly the purpose for investing and what benefits to aim for. The next move is to choose the best investments to keep in a portfolio in order to attain the set goals.

The driven investor is open to taking on higher risk for greater gains, although this kind will make sure the rationale for doing something and what it will entail.

The exploring investor

This type of investor is obviously looking for a challenging discovery along the path of long-term investing. This individual has a deeply inquisitive mind. Investing has become a challenge for this investor and provides opportunities to test new ways of building wealth. Nevertheless, the exploring investor is not reckless but is open to experimenting to discover the most advantageous approach.

The exploring investor realizes that investing provides great wealth on the long-term basis and the chance to choose many directions goes well with this type. As a competent explorer, he or she keeps an emergency plan along with a broad mind for assessing the risks along the way.

The adventurous investor

The adventurous type of investor is one most open to taking steps that demand taking a leap of faith. This investor optimistically sees the glass as half-full, allowing for great possibilities in what others would see as dismal or risky.

This investor type has set up a contingency cash fund somewhere secure which allows him or her to handle investment risks.

As such, this individual goes for the unappreciated asset type or sector that is low-priced while others stay away from it, or could be picking more on the low market times – hoping that the long-term view favors such a strategy.

Nevertheless, the adventurous investor does not gamble; on the contrary, each move is strictly weighed for its consequences.

tag : Devin Consultants Financial Management in Singapore and Tokyo

Six Tips on Effective Long-term Investment



Keeping your money in bank savings accounts at present will produce negligible interest rates. Hence, leaving all your money in banks may give you considerable safety but not much growth. On the other hand, investing your money in stocks may bring higher returns; but the risks are much higher. And you could actually lose part or all your money at times.

Try these few easy rules to help you remain strong in the market and gain big returns through a large long-term stock portfolio:

1. Spread your investment. Diversification distributes your risks through a number of stocks in various markets as well as in bonds, mutual funds and other instruments. Follow a rule of thumb such that each instrument or stock should not be more than 10% of your entire portfolio. Likewise, try to invest in diverse national regions, Asia, Europe, US and rising new markets areas. Also invest into hedge funds, commodity funds and property funds. This strategy provides a safeguard against any failure in any specific sector.

2. Investigate. Do your research in various industries and from diverse sources. Opt for firms with products and strategies you are familiar with. Browse or visit as many online resources that provide tips on evaluating and comparing investments. Although historical performance does not assure future performance -- in general, choosing a mutual fund or unit trust that showed a strong record in the last couple of years and which requires low management fees is a good move.

3. Invest back dividend payouts. A significantly big percentage of the entire gains in majority of portfolios is a result of reinvesting dividends and not from stock price increase. For instance, a 3% yield may seem paltry; however, in the long run, it will produce a huge profit. Opt for investments that have a sound record of dividend payouts and retain them as your long-term leverage.

4. Keep the performers and sell the nonperformers. Constantly check how your investments perform in relation to the market index. You will be tempted to sell when some of your holdings are doing well for a quick profit; however, hold on to them on a long-term basis to maximize gains. As for market nonperformers, get rid of them even if you have the urge to keep them for a possible upsurge or an increase of your holding at basement prices. That is not the best investment approach, as suffering a low setback early in the process is better than a big loss in the future. Never allow you emotions to convince you to hold on to your stocks.

5. Avoid mob rule. Although difficult to pull since most people rush headlong, buy whenever the stock market is down, sell when the stock market up your least performing stocks and invest into other instruments, such as bonds and property.

6. Look far into the future. Avoid making trades so often, as agents’ fees will diminish your gains. Remember, be patient and aim for the long-term results. Trends and fashions do not last long. Be prudent in diversifying your portfolio. Never lose your equanimity at times when markets collapse – take them as open seasons for buying courageously.

Lastly, when you do need money, be ready to sell. Your investment is meant to support your personal and family financial needs; hence, make use of it instead of belt-tightening or living like Spartans in order to accumulate wealth until that time when you are too old to enjoy it – or worse, too dead.

tag : Devin Consultants Financial Management in Singapore and Tokyo

Three Investment Tips from Warren Buffett

We all know who Warren Buffett is and what he has achieved as a phenomenal investor. More than that, however, he is also a good story-teller and an effective teacher. For fifty years, he has essentially painted his company, Berkshire Hathaway, to become a gigantic mural showcasing the numerous investment styles and management strategies he has implemented.

Every year, Buffett writes to Berkshire Hathaway shareholders in his capacity as chairman and chief executive, continually strengthening his reputation as a leading investor. Let us consider three valuable tips contained in his latest letter:

1. Fees can do you in

Less than a decade ago, Buffett wagered that passive index fund would surpass several hedge funds. He is way ahead by a wide margin on that bet, even as early as a couple of years ago, that the bet was effectively settled before the ten-year deadline. Buffett explains it this way in his letter:

"Although most managers at both levels were honest and smart people, the results for their investors were quite dismal. Unfortunately, the large fixed fees paid to the concerned funds and funds-of-funds, which were absolutely unjustified by performance, meant that their managers received huge compensations for the past nine years. Gordon Gekko would have said: 'Fees never sleep'."

2. Use their fear as your weapon

Mr. Buffett retells the parable of Mr. Market this way:

"When times are troubled, you have two choices: First, as an investor, use people’s fear as an opportunity to buy at low prices. Second, your own fear will work against you, as it is also needless. Investors who wait patiently on the long-term and avoid huge fees and unwanted expenses will surely do well in the end."

The better choice is to let others panic and stay calm; likewise, remain on course for the long haul.

3. At times, share buybacks is the way to go

They have various titles: repurchases, buybacks or capital returns; and companies love offering them. If you have surplus cash hidden and you wish to enhance your return on equity and to improve per-share earnings, as well as to satisfy investors without being tied yearly, go for the Share Buyback.

Buffett put it so plainly; every investor will not need an interpreter or mentor to get it.

"Here is a simple analogy: With three equal partners in a business valued at $3000 and one is bought out by the other two for $900, each one makes $50 out of the deal. However, if the two paid $1100 in the buy-out, the remaining partners lose $50 each. This holds true for corporations and their shareholders.”

Buffett, therefore, suggests: "Before considering any repurchases, a CEO and the board should unite and say, 'What is good at a certain price is bad at another'."

If you are the kind of shareholder who delights in a company repurchasing shares, let this be a lesson to cure that impulse. Just make certain the decision is good.

A lot of investors stayed away from Berkshire Hathaway shares, thinking the firm was big, its shares pricey and its chairman old. But within the past year, those shares went up 29%.

Trump’s entry and other factors helped raise the share price. But as Buffett keeps telling people, short-term predictions are unreliable and they need to buy quality shares on long-term investments.
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Pearlene L. Carey

Author:Pearlene L. Carey
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