Why Financial Planning Is Important

Over the last few years, we often heard terms like financial planning, personal finance, investment management, retirement planning which have emerged as buzzwords of sorts. Newspapers, blogs, magazines, television channels and just about every one under the sun seem to be talking about the importance of financial planning. So what is financial planning; more importantly, why it is so important?

In simple words, Financial Planning (FP) is the process of meeting your life goals through the proper management of your finances. The process of financial planning should help you answer questions such as where you are today, that is, your current personal balance sheet, where do you want to be tomorrow, that is, finances linked to your goals, and what you must do to get there, that is, what you must do to reach your goals.

The process involves gathering relevant financial information, setting life goals (such as children education, buying home, buying car) examining your current financial status and coming up with a strategy or plan for how you can meet your goals given your current situation and future plans .

Developing a financial plan needs a consideration of various factors. This includes client's current financial status, their financial goals, any outstanding loan, investment instruments, insurance requirement, retirement corpus, inflation, risk profile, tax liability etc.

FP provides you with a method for organizing your financial future, so you can plan for the unforeseen. Organizing your finances empowers you to be independent and handle unpredictable events in your life. Successful personal financial planning is crucial for anyone who wishes to manage financial difficulties and accumulate wealth.

Coming to our main topic ie why it is important. Let us understand one by one.

1. It helps in increasing cash flow as well as monitoring the spending pattern. The cash flow is increased by undertaking measures such as tax planning, prudent spending and careful budgeting.

2. A proper financial estimate / plan that considers the income and expenditure of a person, assists in choosing the right investment policy. It enables the person to reach the set goals.

3. It helps gaining an understanding about the current financial position. Adjustments in an investment plan or evaluating a retirement scheme becomes easy for an individual with financial understanding.

4. Providing for your family's financial security is an important part of the FP process. Having the proper insurance coverage and policies in place can provide peace of mind for you and your loved ones.

5. It helps you to achieve financial freedom.

6. To meet financial goals and obligations.

Trading and Profit and Loss Account

Trading Account

As already discussed, first section of trading and profit and loss account is called trading account. The aim of preparing trading account is to find out gross profit or gross loss while that of second section is to find out net profit or net loss.

Preparation of Trading Account

Trading account is prepared mainly to know the profitability of the goods bought (or manufactured) sold by the businessman. The difference between selling price and cost of goods sold is the, 5 earning of the business. Thus in order to calculate the gross e-learning, it is necessary to know:

(a) cost of goods sold.

(b) sales.

Total sales can be ascertained from the sales ledger. The cost of goods sold is, however, calculated. n order to calculate the cost of sales it is necessary to know its meaning. The 'cost of goods' includes the purchase price of the goods plus expenses relating to purchase of goods and brining the goods to the place of business. In order to calculate the cost of goods "we should deduct from the total cost of goods purchased the cost of goods in hand. We can study this phenomenon with the help of following formula:

Opening stock + cost of purchases - closing stock = cost of sales

As already discussed that the purpose of preparing trading account is to calculate the gross profit of the business. It can be described as excess of amount of 'Sales' over 'Cost of Sales'. This definition can be explained in terms of following equation:

Gross Profit = Sales-Cost of goods sold or (Sales + Closing Stock) - (Stock in the beginning + Purchases + Direct Expenses)

The opening stock and purchases along with buying and bringing expenses (direct exp.) Are recorded the debit side whereas sales and closing stock is recorded on the credit side. If credit side is Jeater than the debit side the difference is written on the debit side as gross profit which is extremely recorded on the credit side of profit and loss account. When the debt side exceeds the credit side, the difference is gross loss which is recorded at credit side and extremely shown on the debit side of profit & loss account.

Usual Items in a Trading Account :

A) Debit Side

1. Opening Stock. It is the stock which remained unsold at the end of previous year. It must have been brought into books with the help of opening entry; so it always appears inside the trial balance. Typically, it is shown as first item at the debit side of trading account. Of course, in the first year of a business there will be no opening stock.

2. Purchases. It is normally second item on the debit side of trading account. 'Purchases' mean total purchases ie cash plus credit purchases. Any return outwards (purchases return) should be deducted out of purchases to find out the net purchases. Sometimes goods are received before the relevant invoice from the supplier. In such a situation, on the date of preparing final accounts an entry should be passed to debit the purchases account and to credit the suppliers' account with the cost of goods.

3. Buying Expenses. All expenses relating to purchase of goods are also debited in the trading account. These include -ages, carriage inwards freight, duty, clearing charges, dock charges, excise duty, octroi and import duty etc.

4. Manufacturing Expenses. Such expenses are incurred by businessmen to manufacture or to render the goods in saleable condition viz., Motive power, gas fuel, stores, royalties, factory expenses, foreman and supervisor's salary etc.

Although manufacturing expenses are strictly to be taken in the manufacturing account since we are preparing only trading account, expenses of this type may also be included in the trading account.

(B) Credit Side

1. Sales. Sales mean total sales ie cash plus credit sales. If there are any sales returns, these should be deducted from sales. So net sales are credited to trading account. If an asset of the firm has been sold, it should not have been included in the sales.

2. Closing Stock. It is the value of stock lying unsold in the godown or shop on the last date of accounting period. Normally closing stock is given outside the trial balance in that case it is shown on the credit side of trading account. But if it is given inside the trial balance, it is not to be shown on the credit side of trading account but appears only in the balance sheet as asset. Closing stock should be valued at cost or market price wherever is less.

Valuation of Closing Stock

The ascertain the value of closing stock it is necessary to make a complete inventory or list of all the items in the god own together with quantities. On the basis of physical observation the stock lists are prepared and the value of total stock is calculated on the basis of unit value. Thus, it is clear that stock-taking entails (i) inventorying, (ii) pricing. Each item is priced at cost, except the market price is lower. Pricing an inventory at cost is easy if cost remains fixed. But prices remain fluctuating; so the valuation of stock is done on the basis of one of many valuation methods.

The preparation of trading account helps the trade to know the relationship between the costs be incurred and the revenues earned and the level of efficiency with which operations have been conducted. The ratio of gross profit to sales is very significant: it is arrived at:

Gross Profit X 100 / Sales

With the help of GP ratio he can ascertain as to how efficiently he is running the business higher the ratio, better will be the efficiency.

Closing Entries relating to trading Account

For transferring various accounts relating to goods and buying expenses, following closing entries registered:

(i) For opening Stock: Debit trading account and credit stock account

(ii) For purchases: Debit trading account and credit purchases account, the amount being the and amount after deducting purchases returns.

(iii) For purchases returns: Debit purchases return account and credit purchases account.

(iv) For returns inwards: Debit sales account and credit sales return account

(v) For direct expenses: Debit trading account and credit direct expenses accounts individually.

(vi) For sales: Debit sales account and credit trading account. We will find that all the accounts as stated above will be closed with the exception of trading account

(vii) For closing stock: Debit closing stock account and credit trading account After recording above entries the trading account will be balanced and difference of two sides ascertained. If credit side is more the result is gross profit for which following entry is recorded.

(viii) For gross profit: Debit trading account and credit profit and loss account If the result is gross loss the above entry is reversed.

Profit and Loss Account

The profit and loss account is opened by recording the gross profit (on credit side) or gross loss (debit side).

For approaching net profit a businessman has to incur many more expenses in addition to the direct expenses. Those expenses are deducted from profit (or added to gross loss), the resultant figure will be net profit or net loss.

The expenses which are recorded in profit and loss account are ailed 'indirect expenses'. These be classified as follows:

Selling and distribution expenses .

These composer of following expenses:

(a) Salesmen's salary and commission

(b) Commission to agents

(c) Freight & carriage on sales

(d) Sales tax

(e) Bad debts

(f) Advertising

(g) Packing expenses

(h) Export duty

Administrative Expenses .

These include:

(a) Office salaries & wages

(b) Insurance

(c) Legal expenses

(d) Trade expenses

(e) Rates & taxes

(f) Audit fees

(g) Insurance

(h) Rent

(i) Printing and stationery

(j) Postage and telegrams

(k) Bank charges

Financial Expenses

These composer:

(a) Discount allowed

(b) Interest on Capital

(c) Interest on loan

(d) Discount Charges on bill deducted

Maintenance, depreciations and provisions etc.

These include following expenses

(a) Repairs

(b) Depreciation on assets

(c) Provision or reserve for doubtful debts

(d) Reserve for discount on debtors.

Along with above indirect expenses the debit side of profit and loss account enterprises of various business losses also.

On the credit side of profit and loss account the items recorded are:

(a) Discount received

(b) Commission received

(c) Rent received

(d) Interest received

(e) Income from investments

(f) Profit on sale of assets

(g) Bad debts recovered

(h) Dividend received

(i) Apprenticeship premium etc.

The 7 C's of Business Writing

Having some hard times in business writing? For some reasons, you just do not have to. There is always a solution to every problem and in your part, you can look for simple ways to help you out in your writing tasks.

If you've been looking for simple guidelines you can follow in business writing, you might want to consider the "7 C's." While quick to understand and easy to remember, following them is guaranteed to improve the quality of your business papers.

1. Clarity. Good business writing is clear. It has a definite message, with no confusion about what each sentence is trying to communicate.
2. Correctness. It has both correct grammar (courtesy of a business English software) and accurate facts, successfully communicating your message because all mistakes, whether mechanical or factual, have been adequately addressed.
3. Conciseness. Properly written business papers are concise, expressing ideas in just enough words as is necessary. There's no unnecessary long-windedness and beating around the bush.
4. Conversational. Good business writing sounds like an actual business conversation. There's no difficult language to process and no unnecessary ambiguity.
5. Convincing. It uses a serious tone to paint a believable and convincing picture, regardless of whether you're persuading a prospect or presenting a report.
6. Courteous. Good business writing takes people into account, so it's either callous nor insensitive. There's a promising air of courtesy to everyone addressed, regardless of how high or low their job titles may be.
7. Complete. A good business paper should be complete, containing all the information the recipients will need in order to effectively understand it.

Mobile Manners!

Mankind has found some meaning for itself in this endless universe by acquiring an existentially potent entity called the mobiles or cell phones. The 'mobile' partnership has become so crucial that it's time enough to try defining some 'manners' that should essentially be an integral part.

All of you may of course love your mobiles with varying degrees of emotion leading to the oft observed phenomenon of obsession. So, this partnership is potentially fraught with grave dangers particularly since your mobile cannot reflect its emotions in equal measure. You must measure up its emotions so that you do not land up in situations that embarrass you and harass others. Based on that, mobile manners must be evolved. But, the partnership dangers must be spelled out first.

Shrieking: You are in the midst of an important meeting and suddenly your mobile starts shrieking and screeching. While you are right in calling this noise a ring tone you paid for others are equally right in calling it disturbance. Suddenness of the moment makes you paralyzed and you watch your partner go on full throttle helplessly.

Indiscriminate: You may be attending a classical music concert or even a movie where you did not think it proper to follow the specific instructions of the organizers thanks to the strategic importance of your partnership. Suddenly your partner bursts out and you truly deserve all those angry disconcerted looks you instantly get. Even if you followed the 'silent' instructions you wanted to record some part of the proceedings too and you inadvertently hit upon a sound file that rudely opened up and made you hopelessly unable to do anything about it. You became the cream of attention with even the theater attendants running towards you to help you out.

Intemperate: You are in an august gathering or let us take the example of an elderly lady attending a funeral or discussions about holding a meet in honor of the deceased. A crackle of a baby's laughter breaks out-unimaginable and unstoppable. To her horror the elderly lady discovers that it's her mobile only. The august audience looks aghast. The elderly lady may grin foolishly and put the blame on her grandchildren for tampering with her partner, but the damage is done.

These few illustrative cases are from the point of view of your partner. Good mobile manners here imply your absolute control and supervision on your partner.

Now, let us examine a few cases from your point of view.

Howling: You may be standing or sitting next to any individual or groups in any kind of public place and you suddenly start howling to your partner forgetting that you are not making a long distance call from a dilapidated land line set. You are likely to get instant stares looks and gesticulations.

Lovemaking: If you indulge in caressing fondling and kissing acts with your partner in public domain you instantly offend the other holy partnerships. You become an object of ridicule and anger.

Infidelity: Even after being immensely satisfied with your partnership you may demonstrate suspect attention on other partnerships. Without being solicited you take over someone's partner and start fiddling with it. When someone asks for your expert advice on a complex issue of his/her partnership you may do much more than what is asked for. The obvious result is disgust or your friend turning into an enemy.

In these few cases you are the supreme commander and you can evolve your good mobile manners pretty quickly.

Have a flourishing partnership!

Computer Jargon Untangled

Ah computer lingo. It's sometimes tough to understand and if you're not computer savvy you may be left wondering what on earth they are saying. For instance, what is a walled garden? Is it a literal garden surrounded by a wall like in the olden days? Is it the stuff of Jane Austen? No, a walled garden in computer terms means a group of pages linked to each other but not linked to by other pages. So they're stand alone. This seems a bit weird since the whole point is to link to other pages, these do not. Sadly, this tactic does not fly and they will likely have a lower page rank than regular sites.

Time on page refers to, oddly enough, the time a person spends on a certain webpage. Go figure! The time is calculated from when someone clicks on to when they click off. The longer they spend on a page the better as this usually means that they have found what they are looking for and are reading the information. If they click on and then immediately off you have work to do on your site (or they landed there by accident).

By comparison, the bounce rate is the percentage of users who enter and then leave a site without looking at any of the pages. Were they there by accident or did your site bore them to tears so they took off for the hills?

The site map is something we all love to use on websites, especially those that are built correctly. This simply means that you can easily find what you are looking for by clicking links to other things on the site.Saves us time and if we are redirected quickly we will be far happier than having to wait around for the new page.

An e-commerce site is one that is devoted to retail sales so it will have handy links, a built in shopping basket and hopefully an easy to use check out system so that we can get our stuff and go.

Finally latent systematic indexing. This is when search engines index commonly associated words in a document. These are also called long tail searches and it helps us users find what we are looking for faster and without a lot of unnecessary clicks.

Search engines are there to help us with our searches so keep them happy with your own website and you'll be good to go!

Top 10 Books on Personal Finance

Many people entering the work today are making money, but are struggling to manage it. For many, personal finance is a mystery. They struggle to understand the basic personal finance principals, concepts and ideas.

Are you one of those who are struggling to manage money? Then seek assistance from the experts in the field. Read their books and learn the basics of personal finance. Gain the knowledge of saving and compounding your wealth over a period of time.

Here is a list of top 10 books on 'Personal Finance' which will help you manage your finances in the right way.

• The Total Money Makeover: Dave Ramsey
Dave Ramsey gained popularity as the author of the best-selling book, 'The Total Money Makeover'. In this book, Dave provides simple personal finance advice on how to get out of debt, no matter how poor the situation is, by falsifying popular myths. He explains the concept very clearly using simple techniques, so that even a layman can understand and follow. The strategy involves how to pay-off debts by focusing on on paying-off small debts first, while paying only the minimum for all other debts.

• The Millionaire Next Door: Thomas Stanley
The best-selling book 'The Millionaire Next Door', authored by Thomas Stanley, identifies some common practices of Americans who have accumulated wealth. He says that most wealthy people do not live in Beverly Hills or on Park Avenue - they live next door. The author finds common connections among millionaires after conducting a survey on them in US He discovered that millionsaires 'live below their means' and this is the secret of becoming wealthy. The book "The Millionaire Next Door" examines both sides of wealth equation: saving money and earning money.

• Rich Dad, Poor Dad: Robert Kiyosaki
"Rich Dad, Poor Dad" covers Kiyosaki's philosophy and his relationship with money. The author has achieved his unique economic perspective from two different persons. The story is about two dads - one, the author's father, who was the superintendent of education in Hawaii, ended up dying penniless and the other is his best friend's father, who was a drop-out of school at age 13 and went to become one of the wealthiest men in Hawaii. Kiyosaki uses the story of these two men and their financial strategies which varied a lot. He illustrated the need of a new financial paradigm in order to achieve financial success in the new millennium.

• Your Money or Your Life: Vicki Robin and Joe Dominguez
This is one of the best personal finance books which focuses on how to gain control of your money and begin to make a life, instead of just making a living. The authors explain the concept of "time is money" in a very literal sense and how to transform your relationship with money and finally achieve financial independence. These authors encourage readers to sort out their priorities, cut expenses, and then to seek passive income and retire early in the pursuit of financial independence.

• The 9 Steps to Financial Freedom: Suze Orman
Ms. Orman, a former waitress and stockbroker turned personal-finance advisor, combined practical investment tips with more psychological advice in her first book "Financial freedom". This book teachers us how to approach money from a spiritual and emotional point of view. She advises people to do nine things in nine steps that are needed to attain financial freedom. She says, when we have power over our fears and anxieties, we have attained success to financial freedom.

• How to Get Out of Debt: Jerrold Mundis
"How to Get Out of Debt" provides step-by-step guide to getting out of debt once and for all. It is based on the proven techniques of National Debtor Anonymous Program. Jerrold Mundis was actually a debtor, and the story is based on his own experience. This book contains real tips and is based on real stories of people.

• Clark Howard's Living Large in Lean Times: Clark Howard
"Living Large in Lean Times" is a powerful guide to save money. The book covers everything from cell phones to student loans, coupon websites to mortgages, paying electric bills, and beyond. This book paves way to financial independence and wealth. It offers more than 250 tips on saving money.

• All Your Worth: Elizabeth Warren and Amelia Warren Tyagi
Warren and Tyagi will tell you the truth about money in this book. They show you how to balance your money, how to get out of debt, cover your bills etc. They make people learn how to balance money into three essential parts: 1) the Must-Haves (the bills you have to pay every month), 2) the Wants (some fun money for right now), and 3) your savings (to build a better tomorrow). They help you to get your finances on right track. Warren and Tyagi advice not to keep complicated budgets. In this book, they both simply show a whole new way of looking at money and yourself.

• After Shock: David Wiedemer
An aftershock helps you know how to protect and grow your assets before, during, and after the next global financial / economic crisis. Placing your cash in on the best new investment opportunities will make you know which jobs, careers, and business sectors will gain the most rather than lose when asset bubbles collapse around the world. The author says that for those who act quickly, there is still time to protect yourself, your family, and your business in the coming 'Aftershock'. So, this book shows you what to do right now to protect yourself from aftershock before it's too late.

• The Money Book for Young Fabulous and Broke: Suze Orman
Suze Orman, the world's most trusted expert on money matters advises on how to get out of generation's debt in her book "The Money Book for Young Fabulous and Broke". She depicts the specific financial reality that young people encounter today by credit card debt, student loans, credit scores, buying a first home, lack of insurance (such as auto, home, health) and the financial issues of the self-employed. She says that this generation should be aware of the urgent need to take the matter under their control.

We hope these books help you attain financial freedom.

How to Make Love to a Man in Bed - Sex Tips Every Woman Should Know

Lately, your love life just isn't what you want it to be. You want to have an amazing sex life with your man and you want to make sure that not only are your needs being met in the bedroom, but that his are as well. You want to keep him happy and satisfied. You want to know how to make love to a man in bed to give him some of the greatest pleasure he has ever had.

Instead of wishing for a better sex life and a most exciting time in the bedroom, it is time that you made it happen. Now is the time to take the reigns and to really show your man what you are made of. Now is the time to learn how to make love to a man in bed with the help of these sex tips.

Most of the time, you leave it up to your man to initiate sex. That is something that needs to change now. Your guy wants to feel sexy and to feel desired as well. He wants to feel like you want him and the only way to do that is to show him. He wants you to have your hands on him and to not be able to take him off. By initiating sex, you make him feel special and this is a good first step.

As well, you should make love to him in a different sexual position. The missionary sure gets boring after a while and there is no room for further exploration of your bodies. If you switch up the sex position that you use, you offer him a different form of stimulation. The woman on top is always a very popular position for women who really want to blow their man's minds in the bedroom. Men love this position and if you truly want to make love to him, then you should actually make love to him.

The most important sex tip is to have fun. Your man doesn't want you to take things so seriously and to get upset if things go sour. Sex is fun and it should be fun. It is a time of bonding and creating more intimacy in your relationship. When you keep sex fun, you want to have more of it because you enjoy yourself more. As well, you want to explore more aspects of sex because you feel more comfortable about it. This is how you get in the right frame of mind to set your love life on fire and that is how you really make love to a man.