Saving money for your retirement is a very smart investment for your future and the money should be left to compound and grow until you reach retirement age. Sometimes things happen and you may need to tap into your retirement funds earlier than planned. This is not a good option (most of the time), and really should only be done when there are no other options available to you.

Hardship Withdrawals

Due to the current economic conditions, more people are raiding their retirement funds claiming “hardship”, which is only granted for specific reasons, according to the IRS guidelines. Hardship withdrawals of retirement funds may sometimes be taken to prevent foreclosure or for unreimbursed medical expenses. Some companies have tougher limits for these withdrawals than others.

There is also an opportunity cost when you withdraw from your funds for the reason of a hardship. This means that if you withdrew the money in this way, you will be unable to contribute to your 401(k) for six months. Not only can you not contribute to it, but your company won’t be able to either, so that “free” money you may be getting by them matching or giving a percent to you will be gone.

Penalties and Income Tax for Early Withdrawals

You should not use your retirement funds before you reach retirement age, because it can have penalties, you may have to pay taxes on it, can’t contribute to it again for six months, and you’ll lose a big asset for your future.

When you take money out of your retirement funds, depending on the tax bracket you are in, you could have to pay a penalty and income taxes on the whole amount you withdrew. Another major concern is that if you are under 59 and a half years old, you will have to pay a ten percent early withdrawal penalty fee.

Retirement is Protected from Bankruptcy

Another big reason to not withdraw money from your retirement funds is that it is an asset that if you file for bankruptcy, is untouchable by collectors. Federal law is able to protect your 401(k) assets from creditors, so this is one area that you do not want to lose money from, especially if you are possibly thinking about going bankrupt in the future.

With all of the drawbacks and penalties for withdrawing money from your retirement fund, taking money out of this fund is not a good idea, even if you really need it. Before thinking about touching that money, exhaust all other loans and areas of possible help first. Only take money out if you can’t get it anywhere else and see absolutely no other option.

Investing in your future is one of the best financial moves you can make. There is no argument that money well invested will serve you much better over time than the same cash equivalent placed in a traditional savings account or worse yet in a cookie jar. With that in mind, some people make the decision to avoid investing their hard earned cash. This is usually out of fear of the unknown or lack of information. Investments can be a tricky business, however there are some things that can make the process less intimidating. Here we will look at how emotions play a role in your investment strategy and which emotions and behaviors are better checked at the door.

• Greed- Everyone is guilty of this emotion at some point in their life. In the world of investments, greed can be the fastest way to the poor house. When you decide to invest your money, regardless of the type of investments you are considering, it is important to remember that there are no guarantees. For this reason you should weigh all of your options carefully and only invest money that you can afford to live without. Diving into the world of investments with the goal of getting rich quickly rarely works and in most cases results in greater loss than gains.
• Complacency- It happens more often than many investors care to admit. You choose your investment vehicle, set up your portfolio and then put your investments on auto-pilot. Yes, many financial experts recommend hanging in for the long haul, however in the current economy you must remain up-to-date with what is happening in the market. Does this mean you should jump in and out of investments? Not necessarily, for the most part investments are long term strategies that often weather economic cycles. This does not mean that you can turn a blind eye to events that are happening and in some cases make changes necessary to prevent further loss.
• Pride- You have taken all the right precautions and made educated decisions in regards to your investments. Despite all of this there are times when what you believed to be a good move turns out to be a mistake. When this occurs, do not let your pride stand in the way of making sound financial decisions. We all make mistakes, it is best to acknowledge them and move on.
• Fear- One of the more powerful emotions that leads to poor decisions in regards to investments. Fear of the unknown can stand in the way future growth. To overcome fear you must first learn as much as possible about investments. As you learn more (from qualified sources) you will grow more confident in your ability to make informed decisions about investment strategies.

It is natural for emotions to play a huge role in how your manage your money. After all, your financial situation determines your quality of life on so many levels, it is impossible to avoid the strong feelings associated with your financial health. With that in mind, smart investment decisions are most often made as a result of educated and informed choices versus those made in the heat of the moment.

Forex stands for Foreign Exchange. Forex has been such a popular investment market for the past few years and there have been a large number of traders involved in the market. In the market of forex, multiple currencies are traded by the traders. The traders try to gain some profits by paying careful attention to the increased and decreased price of the currencies they trade.

Forex trade is always open for 24 hours every day starting from Sunday until Thursday. Then, on Friday, trade closes at 10:00 pm GMT. This is not similar to the stock exchange markets, such as NYSE where trades are usually centralized at one place. Also, traders with capital achieving $500 are usually able to a get credit line to make it easier for them to speculate. This is also known as marginal trading.

Marginal trading is meant to refer to trading which is carried out with the help of a borrowed capital. This makes it possible for forex to be traded with no real money at all. As a result, there will also be less cost related to money transfers and bigger positions that are open with an even smaller capital amount.

To invest in the forex market, there are usually 2 strategies which are the technical analysis and the fundamental analysis. The first one assumes that it is possible to find information regarding the market and the fluctuations of a certain currency within the price chain. Meanwhile, the second strategy will usually attempt to analyze the effective situation at a particular moment. This will usually include economy analysis, political analysis and also the other rumors on the market.

Forex investment can actually be considered as one of the most promising ways in earning income. This is because every trader is likely to have equal chances of making profits and this is fair enough.

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Teaching teens about personal finances is one of the most important duties parents have.  According to a recent Charles Schwab survey titled Teens and Money only 30% of teens believe their parents/guardians are concerned with making sure they are learning the basics of personal finance.  64% of teens reported they would rather learn about money management through experience rather than in the classroom.  When parents take the time to teach their teens basic money management skills the education can prevent financial hardship down the road.  Side benefit: parents can learn something too!

Teach Value of Money
Weather your teen gets money from a job, or an allowance they should be able to make the connection between work and income.  It’s easy for teens to ask parents for money and then spend it thoughtlessly, but when they have earned the dollars through their own efforts they will have a better appreciation of it.

Teach Savings
One of the most valuable lessons to teach teens is how to save a portion of their income.  Get your teen into the habit of saving for purchases or investing.  This practice will teach discipline and the benefits of delayed gratification.

Teach Budgeting
Helping your teen calculate his expenses now will get him in the habit of tracking his expenses as an adult.  Allow your teen to be financially responsible for certain things in his life.  For example, gas, cell phone bill, entertainment, and clothing.  Only 14% of teens in the survey said they were involved in paying household bills.  Allowing teens to be involved in this area helps them see realistically how far money goes.

Teach about Credit and Debit Cards
Learning about the responsible use of a credit and debit cards can help teens build a strong credit history and learn to pay bills on time.  The ease of using a credit or debit card can be a financial disconnect for teens.  Fees, interest rate hikes, and overdraft charges are traps that teens need to learn how to avoid.  Credit card debt has caused financial ruin for many adults, but it does not have to be that way for your teenager.

Teach Investment Strategies
It does not take much money for teens to start investing.  If you are unfamiliar with investing strategies this is a great opportunity to learn together.  There are many, online and offline resources available to help start your teen with some simple investing that can pay off big later. 

Teach Confidence and Discipline
Teaching your teen about personal finances and money management now will build confidence and disciple.  Knowing the value of money, saving, budgeting, and investing is sure to put your child ahead of the class.

The time to prepare for retirement is not the year before or 5 years before retirement age. The time to plan is now. A 401K plan is designed to help employees save for their retirement. There are two separate types of plans; a traditional 401k and a Roth 401k. Both of these have their advantages. The traditional 401k money isn’t taxed when the money is placed in the account, but when it is removed. The Roth plan is the opposite in that, income is taxed before placing it into the account and is removed tax-free upon retirement age. Whichever plan is chosen may rely completely upon what an employer is offering. In order to maximize the amount of money available upon retirement age there are a few simple steps you can follow.

The first essential step is to start contributing money right away. Don’t wait for the ‘right time’. That time never really comes. Start by contributing just 1% of your income to your 401K. This is the first step in creating financial security in your future. Make it a goal to increase that amount on an annual basis. This year 1%, next year 2% and so on and so forth. Contributing now is especially important if your employer matches your contribution. If at all possible, put in the amount that your employer will match. This can be anywhere from 3-8% depending upon the company. Imagine contributing just 1% of $30,000. This is matched by your employer so that by the end of the year you have $600 plus the interest on your investment. Now that you’re in the habit, soon you’re contributing 10% of your income and your employer matches up to 5%. Now you’re at $4500 plus interest. This snowballs into $20,000 then $30,000 and beyond. It takes the first small step to get there.

Determine what you need from your 401K money. This greatly depends upon what stage of your life you’re in. Are you five years from retirement or 15 years from retirement? Do you plan on working after retirement or does this money need to pay for all of your living expenses from the age of 60 to the years beyond? If you have five years or less until retirement then you may want to invest in more stable items such as bonds. For those with 15 years or more until retirement, consider it safe to play with stocks. Yes, the stock market has it’s ups and downs but you have plenty of time to sort that all out. The stock market is a long-term investment. Don’t panic if everything takes a dive, stay the course and keep investing. If you continue to buy stocks in the “bad times” then you are actually getting it much cheaper than before and will double or triple your money when the stock market recovers. History has proven that the stock market always recovers.

Retirement should be a time to sit back, relax and enjoy life without having to worry about making ends meet. You are the only one responsible for your retirement. Don’t rely on others to take care of you. Take the steps needed to secure your financial future today. If you already contribute to your 401K then take a look at your portfolio and find out if you’re making the best investments for your age. If you don’t contribute then start now.

We have all seen the advertisements talking about gold, either the buying or selling of this precious metal. For many consumers looking to make quick cash or invest in something tangible, the rising price of gold makes this option attractive in a recovering economy.

There following are some factors you should consider prior to buying gold.

• Do you have a safe place to store it?

• Do you want to take possession of it in the first place?

• Do you want to go into the commodities end of trading?

• Can you afford the risk of a sudden drop over an extended time frame?

• Where do you purchase gold?

• Where do you sell it?

For most consumers; beyond a safe deposit box at our bank, there isn’t anywhere that we can reliably store something as valuable as gold. Is that going to be adequate if for some reason you would need the gold during non-banking hours?

Provided you opt to go to one of the myriad commodities or foreign exchange outfits and physically purchase and take physical possession of gold, do you have a way of transporting it?

Generally, the mindset of the novice investor in platinum, gold or silver is one of dire emergency and expectancy of terrible events in the future. This opens the door to further imaginings and scenarios of exactly how you will end up profiting or bartering for things you need. Incremental values of exchange have to be set up to accommodate the fact that one full ounce of gold is probably too valuable for anything you would want to barter for in the event of an emergency.

Thus, you find yourself in a situation of attempting to buy ½ ounce, ¼ ounce or even 1/10 ounce gold pieces – followed immediately by a realization that you probably should have some silver as well.  With each increment of precious metals comes a fee to purchase and a fee to sell, which can prove detrimental to your intended savings or profit building.

If you would happen to go into the commodities end and purchase quantity through leverage and possibly even consider risking margin investment as well, you will find yourself in a further quandary. A precipitous drop in market value overnight, since it is a 24/7 bid and ask process, could leave you devastated financially.

The final question you need to consider; what if things do in fact go “south”? What do I do with my precious metal investments? Where do I find someone that agrees with the value?

There is that impression of security, often a false impression which can evaporate in an instant. So, consider this avenue very carefully; before you react foolishly. Evaluate the true history of gold performance, adjusted for inflation, over the past 40 years. Consider the risks before investing your hard earned money.

It is a common misconception that you have to be wealthy to benefit from a financial advisor. People who have more money certainly have a greater need for professional advice, yet everyone at some point in their life can benefit from a good financial advisor. Events such as the death of a loved one, marriage, divorce, estate planning, saving for college and of course investments have the potential to become complex money events in life. Before you enlist the help of a professional financial advisor you should first consider the following tips to avoid regretting your decision in the future.

• Do your own research- The most common reason people regret working with a financial advisor is due to a bad experience. No one likes to lose money and if you have had a negative experience you more than likely want someone to blame. Unfortunately in some cases (not all) the negative experience could be avoided with some research before you work with a financial advisor. Talk to your employer, co-workers, friends and family for references. Once you have a list of possible candidates, research their work history and experience. Know what is is you need from an advisor to find the right match for your needs.

• Know your rights- When you hire a financial advisor to handle investments you as the investor have certain rights. By becoming familiar with your rights (Investor Bill of Rights) you can recognize when these rights have been violated. If you find your financial advisor has not worked within the scope of your rights, then you may have a case against your financial advisor.

• Understand the fee structure- To avoid confusion or conflict in regards to how much your advisor gets paid, make sure you understand the fee structure before doing business together. Financial advisors are generally paid in one of the following three ways: commission, fee based on assets or flat fees.

• When in doubt follow your instincts- Like other things in life, there are times we all get a certain “feeling” or gut instinct about a person or company. If you have doubts and are not 100% comfortable with the information you have learned about your financial advisor, you would be better off taking the time to find an advisor that you feel comfortable handling your financial affairs. Perhaps the financial advisor is not on the up-and-up or you might simply have a clash in personalities…in any event you should always feel confident that your advisor is working for your best interest.

Finding the right financial advisor can make the difference between having a trusted professional who will work on your behalf or paying someone who is not interested in anything more than making money (for themselves). Once you have found the right advisor make sure you keep the lines of communication open. You may be paying them to guide you on the right path, however in the end your affairs are your responsibility.

In the last couple of years, there has been a new wave of financial services companies have been born that allow individuals to borrow money from individual investors without involving a bank. Companies such as Lending Club and Prosper have pioneered this industry. Is it safe to borrow or invest money through these companies, or is it all a lending club scam?

When these companies first went into business, they were operating without oversight from the SEC. In 2008, the SEC stepped in and filed an injunction preventing Prosper.com from doing business because the Securities and Exchange Commission contended that Prosper.com was illegally selling unregulated securities. Eventually, Prosper.com and the SEC settled and came to an arrangement where Prosper would securitize their offerings with the SEC and become legitimate. Lending Club has always operated within the realm of SEC oversight.

There are a lot of companies online which purport that they have the next big money making secret offering unreal rates of return, but prosper and lending club scam operations? They definitely are not. Both companies are registered corporations that work within the bounds of the United States investing regulatory environment. Many individuals have borrowed money through these companies (at great interest rates) without issue and lenders that have made smart loans have made very good rates of return.

From a borrowing perspective, it’s just like you are borrowing from a bank. You pay the payments to Lending Club and they take that money and distribute it to the lenders that fund your loan. If you don’t pay your loan back, Lending Club will try to collect the debt from you, but the individual investors have waived their right to try to collect the debt, so it won’t be like a loan shark is out to get you.

If you’re an investor, there is money to be made in making loans on Prosper and Lending Club. Some have said that prosper and lending club scams their investors because the default rates have been relatively high, but in the last several months, Lending Club and Prosper.com have taken steps to make sure that they only loan to individuals who are likely to repay their loan.

Many investors have made between 9.00% and 14.00% APR back on their money. Investing through Lending Club or Prosper does take a bit more work than simply investing in a mutual fund, but it does offer some good diversification outside of stocks and bonds.

At the end of the day, Prosper and Lending Club are definitely not a scam. They are both legitimate companies that offer legitimate securities to real investors. There are a few people that have made bad loan decisions that have lost money investing in loans through these companies, but like any investment, there is some risk involved.

You can learn more about investing in Lending Club at LendingClub.com.