Stock Preacher

The last step is creating cash flow statement so that you can see how your money moves and how much comes in and how much goes out and where it goes.

Plus the amount of your total income (Listing your Income), Total Expense (Your outgo) into the table show below to see your cash flow. Do you have positive cash flow – more coming in than going out – so that you can start investing in stock or are expense overpowering your income? Doing a cash flow statement isn’t just about finding money in your financial situation to fund your stock program. First and foremost, it’s about your financial well-being. Are you managing your finances well or not?

Looking at Your CashFlow

Personal debt in expenses far exceeded whatever income they generated. That announcement is another reminder to watch your cash flow; keep your income growing and your expense and debt as low as possible.

Analyzing your Cash Flow

Use your cash flow statement to identify sources of funds for you investment program. The more you can increase your income and the more you can decrease your outgo, the better. Scrutinize your data. Where can you improve the result? Here are some question to ask yourself:

How can you increase your income? Do you have hobbies, interests, or skills that can generate extra cash for you?

Can you get more paid overtime at work? How about a promotion or a job change?

Where cna you cut expense?

Have you categorized your expense as either “necessary ” or “nonessential”?

Can you lower your debt payments by refinancing or consolidating loans and credit card balances?

Have you shopped around for lower insurance or telephone rates?

Have you analyzed your tax withholdings in your paycheck to make sure that you are not overpaying your taxes

Finding investment money in tax savings

According to the Tax Foundation, the average U.S. citizen pays more in taxes that in food, clothing and shelter combined. Sit down with your tax advisor and try to find ways to reduce your taxes. A home-base business for example is a great way to gain new income and increase your tax deductions, resulting in a lower tax burden. Your tax advisor can make recommendations that work for you.

One tax strategy to consider is doing your stock investing in a tax-sheltered account such as a traditional Individual Retirement Account (IRA) or a Roth Individual Retirement Account. Again check with your tax advisor for deductions and strategies available to you. For more on the tax implications of stockinvesting keep reading our article at http://www.stockpreacher.com

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Adding up your outgo

Using table below as a worksheet, list and calculate the money that’s going out. What are you spending and on what? The first column describes the source of the expense, the second column indicates the monthly amount, and the third column shows the amount projected for a full year. Include all the money you spend, including credit card an other debt payments; household expense such as food, utility bills, and medical expense; and money spend for nonessential expense such as video games and wii fit.

Payroll taxes is just a category in which to lump all various taxes that the government takes out of your paycheck. Feel free to put each individual tax on its own line if you prefer. The important thing is creating a comprehensive list that is meaningful to you. You may notice that the outgo doesn’t include items such as payment to a 401(k) plan and other saving vehicles. Yes, these items do impact your cash flow, but they are not expenses; the amounts that you invest are essentially assets that benefit our financial situation versus an expense that doesn’t help you build wealth. To account for the 401(k), simply deduct if from the gross pay is $2000 and your 401(k) contribution is $300, then use $1700 as your income figure.

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Your Financial Net Worth Statement

Your net worth is an indication of your total wealth. You can calculate your net worth with this basic equation: total assets less total liabilities equal net worth. The table will shows this equation in action with a net worth of $169090 a very respectable number. For many investors just being in a position where assets exceed liabilities is a great news Use the table below as a model to analyze your own financial situation. Your mission is to ensure that your net worth increase from year to year as you progress toward your financial goal.

Your Personal Net Worth

One reason you continue to work is probably so that you can pay off your bills. But many people today are losing their jobs because their company owes, too!

Debt is one of the biggest financial problem in America today. Companies and individual holding excessive debt contributed to the stock market’s massive decline in 2000 and the U.S. Recession in 2002. If individuals managed their personal liabilities more responsibly, the general economy would be much better off.

One reason of the United Stated appeared to be doing so well during the late 1990s was the fact that individuals and organizations went on an unprecedented spending binge, financial mostly by excessive debt. The economy looked unstoppable. However, sooner or later you have to pay the piper. Stock prices may go up and down, but debt stays up until it is either paid down or the debtor files of bankruptcy. As of the 4^th quarter of 2004. U.S debt has surpassed a mind-boggling $37 trillion, which means that consumers, businesses, and government will continue dealing with challenging time through this decade.

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Make sure you have an Emergency Fund!

This week is undoubtedly one of the most important articles in this blog. At first, you may think this article is more suitable for some sort of general blog on personal finance…

Wrong!

Unsucessful investors’ greatest weakness is not understanding their financial situation and how stocks fit in. Often, I counsel people to stay out of the stock market because they aren’t prepared for the responsibilities of stock investing.

This is why so many people sign up the StockPreacher Newsletter on the top of this page, so they can keep up with the ever changing Stock Market in the StockPreacher Newsletter on top of the information you receive from your registered investment advisor, the StockPreacher Newsletter also touchs on certain elements that can aid you with your stock education, for FREE!

Investing in stock requires balance. Investors sometimes tie up too much money in stocks, putting themselves at risk of losing a significant portion of their wealth if the market plunges. Then again, other investors place little or no money in stocks, and therefore miss out on excellent opportunities to grow their wealth. Investors should make a stocks a part of their portfolios, but the operative word is part. You should only let stocks take up a portion of your money. A disciplined investors also has money in bank accounts, bonds, and other assets that offer growth or income opportunities. Diversification is key to minimizing risk.

Your Emergency Fund

Before you invest in Penny Stocks one of the things you need to have is an “Emergency Fund”

First, list all of your cash on your balance sheet. You goal is to have in reserve, at least three to six months‘ worth of your gross living expense in cash. The cash is important because it gives you a cushion. Three to six months is usually enough to get you through the most common forms of financial disruption, such as losing your job. Finding a new job can take anywhere from three to six months.

If your monthly expense are $2000, you should have at least $6000, and probably closer to $12000 in a secure, FDIC-insured, interest bearing bank account. Consider this account an emergency fund and not an investment. Don’t use this money to buy stocks.

Too many Americans don’t have an emergency fund, meaning that they put themselves at risk. Walking across a busy street while wearing a blindfold is a great example of putting yourself at risk, and in recent years, investors have much into investments (such as stocks) that they didn’t understand, and had little or no savings. One of the biggest problems during 2000-2003 was that savings were sinking to record lows while debt levels were reaching new heights. People then sold many stocks because they needed funds for paying bills and debt.

Resist the urge to start thinking of your investment in stocks as a savings account generating over 20 percent per year. This is dangerous thinking! If your investments tank, or if you lose your job, you will have financial difficulty and that will affect your stock portfolio. An emergency fund helps you through a temporary cash crunch.

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Do you want to make money? Many people want to become rich from the Penny Stock Market. You want your money to grow so that you can have a better life. But before you make reservations for that Las Vegas vacation you are dreaming about, you have to plan out your action plan for getting there. Stocks can be a great component of most wealth building programs, but you must first do some homework on a topic that you should be very familiar with yourself. Understanding your current financial situation and clearly defining your financial goals are the first step in successful investing.

Stock market financial goal

Do you know that unsuccessful investors’ greatest weakness is not understanding their financial situation and how stocks fit in. People have to stay out of the penny stock market because they are not prepared fo the responsibilities of stock investing which they have not been regularly reviewing the company profiles.

Investing in Penny Stocks requires balance. Investors sometimes tie up too much money in stock, putting themselves at risk of losing a significant portion of their wealth if the market plunges. Then again, other investors place little or no money in stocks, and therefore miss out on excellent opportunities to grow their wealth. Investors should make stocks a part of their portfolios, but the operative word is part. You should only let stocks take up a portion of your money. A disciplined investor also has money in bank accounts, bonds, and other assets that offer growth or income opportunities. Diversification is key to minimizing risk.

Understand you Financial Goal before you start Investing in our free penny stock picks!

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