Don’t go broke before payday

Don’t go broke before payday

Giddy with excitement, Jane made her way into Surulere Mall. Hardly glancing around, she found her way into Pretty toes, a massive suite on the left side of the mall. Three weeks ago, on an outing with her friends, she had discovered the shoe of her dreams. A classy, chic, and unusual Jimmy Choo, nothing could stop her from getting it for herself ahead of Valentine’s Day, not even the fact that she had no money. Instantly, she gave the sales lady 20% of the price to tie down the shoe, promising to return as soon as salary was paid. She got her January salary alert and went to the mall to fulfil her promise.

 

Two weeks after, Jane dragged herself into the house, hissing as she realised there was no power. She called the generator guy again, and again he insisted she needed seven thousand Naira to fix it. Just seven thousand Naira, and she couldn’t afford it; except she wanted to walk to work the rest of the month. Who could have guessed the generator would pack up? It’s not that her job pays too little; she could just never spread it through the month. This month for instance, if only she had not bought those shoes or the human hair from Bimbola’s stylist. Now she barely had enough for essentials like car maintenance and the month was merely on its 17th day.

 

Many people can relate to Jane’s dilemma. You welcome salary with excitement, settling bills and buying at will for the first few days until your dwindling account gives you a red sign, forcing you to stop. You are already broke even though it’s still a long time to the next pay.

 

However, this situation is easily avoidable by simply drawing up a personal budget. A few days to your salary, write out the amount you are expecting and a plan as to how it will be spent. Start with your savings, then the ‘must haves’; items that are essential to your well being like house maintenance, food, transport, electricity. Etc. Proceed to the ‘would like to haves’ like aso ebi for your cousin’s wedding and the food processor your wife won’t stop talking about. Up next is the ‘Can do withouts’ like the belt you want just because it is fine or a new toy set for your baby who already has a lot of toys.

 

Often, as you write the list and input the corresponding cost, you discover the ones you will have to postpone or completely delete. You can use the percentage system to divide your income or actual values of items on the list. Remember to leave something for entertainment, emergencies and your faith (if applicable).

 

It is important to put the budget in a place where you can easily see it as the month progresses; by your bedside or on your phone. Your success rate depends on your compliance rate. The more you stick to your budget, the more money you have for the things that matter.  You will also be able to save consistently. You can set up a direct debit order to your Mutual Fund Investment to ensure nothing gets in the way of your savings or financial goals.

The post Don’t go broke before payday appeared first on Realising Ambitions.

Most of your wealth may not make it to the next generation- Henry Hollingdrake.

At a round table discussion with our team, Henry Hollingdrake: representing; ARM Trustees Limited, stated that the chances of wealth being efficiently transferred successfully to the next generation without incurring liabilities and unnecessary risk combined with the ability to further invest free from any restraints and excessive taxation are more complicated now than ever before.

He buttressed that this is ironic given today’s world offers a lot more accessible tools for transfer and preservation of wealth. Tools like estate planning, wills and relevant estate planning vehicles such as Trusts and Foundations for example.

In breaking down this claim, he further explained that in today’s world, owning valuable assets does not always guarantee the value of the assets will be preserved when transferred to the next generation. In worse cases where there is intestate succession, i.e. no Will or mechanism in place to pass on wealth, this function is left to the state to decide.

Even if there is an estate plan in place, it would at least need to provide for adequate asset protection and future growth. One also needs guard against excessive professional fees charged against an Estate that is fraught with complications on death.

Engaging him further, we asked, if your claims are indeedvalid, how does one ensure that wealth is transferred and enjoyed by one’s next generation?

In his response, he stated that first, we must be willing to leverage estate planning tools like Wills, Guardianship documentation, Trusts and Foundations as well as the utilisation of relevant co-ordinated structure for larger and more complex estates. He explained that an Estate Plan be it local or international includes having strategies in place to manage: the effect of inheritance tax, ease of wealth transfer and business succession relating to investments, real-estate, your pension fund, and other assets, which could form a significant portion of your wealth.

An estate plan will help individuals and families with both local and international assets, investments and business operations give careful consideration and properly document their holdings to ensure the assets are protected and passed on to future generations. This is effective, legally robust, practical and efficient. Estate planning offers you protection without borders, especially considering potential shifts in Residency and Citizenship, which may impact one’s wealth. The protection of effective management and ownership of a business operation can also be safeguarded by setting up a Succession plan.

Mr. Hollingdrake concluded the round table discussion by stating that familieswho seek to get started on understanding what is required for an estate plan or indeed would like to set one up,  can reach out to ARM Trustees Limited, an independent award-winning firm with over 20 years’ experience in this field and now also offering international solutions.’

4 ways you could lose money this February

Get free professional advice from an experts

5 Benefits of Having An Education Trust Fund for Your Children

5 Benefits of Having An Education Trust Fund for Your Children

A trust fund is a legal entity established for the purpose of holding assets for the benefit of specific people, or even for an organization. Children are frequent beneficiaries of trust funds because trust funds can safeguard your assets and make sure they are used for your children’s stewardship. How can a trust fund accomplish this?

KEY TAKEAWAYS

  • Setting up a trust fund for your children is not necessarily just for wealthy families.
  • Children are often beneficiaries of trust funds by parents or grandparents who want to pass along their assets.
  • A will can be challenged by third-parties making it a risker option for dispensing your assets. A trust will ensure your money reaches the intended recipient.
  • You can set the trust up to be dispersed when the child reaches a certain age, and you can set up a payment schedule or disperse it in one lump sum.

Guaranteeing Funds Are Available for Your Children

One of the primary benefits of having a trust is that the assets held within it are protected from legal claims. With the possible exception of retirement savings, any assets that you have are subject to seizure by courts and creditors. However, assets held in trust are legally protected.

This will be important if, after setting up targeted savings or investment accounts for your children, you are forced to file bankruptcy, or you experience business failure. Still another possibility is facing a lawsuit as a result of civil liability.

Irrevocable Trust vs. Revocable Trust

There is an important distinction in regard to trusts, however. In order for assets to be protected, they have to be held in an irrevocable trust. This is a type of trust in which the terms of the trust are created at the outset, and then become permanent. You cannot change them, even if you are funding the trust. This means that you will give up a certain amount of control over the trust. But if you want the assets completely protected, that will be absolutely necessary.

The other type of trust is referred to as a revocable trust or living trust. You can retain control over the trust, but for that reason, it will remain subject to seizure by creditors and other parties.

Safeguarding the Money

A trust gives you the ability to name specific beneficiaries, and once you do, your intentions cannot be changed after the fact. This means that you will be able to specifically name your children as beneficiaries of the trust–and even exclude certain children if that is your choice–and your wishes will be carried out.

This is not true with regular investment accounts, and not necessarily true in the case of a will. Since a will disperses your general assets, any part of it can be challenged by unintended third parties. A trust will ensure that the money goes to the people listed in the trust, and no one else.

Ensuring Funds Are Available for the Long-Term

One of the biggest advantages of a trust is that you have control over how the money in the trust is dispersed to the beneficiaries. You can have it done in a lump sum, or you can have it parceled out over a period of several years. You can even set it up as an annuity to make payments to the beneficiary on any basis that you choose–monthly, quarterly, semiannually, or annually.

You can think of this as a kind of “spendthrift provision.” It will make sure that the money isn’t dispersed from the trust and then blown quickly by the beneficiary. This can be especially important with young children, when there may have to be a guardian appointed, or even for young adult children, whom you may not entirely trust in handling the money early in life.

You can set the trust up to be dispersed when the child reaches a certain age, say 25, 30, or even 50 years old. That will allow you to delay turning the assets of the trust over to your child until they reach an age at which you believe they will be financially responsible. You can even choose to make monthly or annual payments up to a certain age, upon which the remaining balance of the trust will be issued to the individual in a lump sum.

Ensuring the Money Is Used for Intended Purpose

A trust can be set up in such a way that you can even determine what the specific purposes of the distributions will be for. For example, you can include wording in the trust that requires that the money is disbursed only for major expenses, such as a college education, buying a home, starting a business, or even caring for a child or grandchild with a disability.

Though we may not like to think about it this way, if you have a child who has a substance abuse problem, a gambling disorder, or whose spending habits you do not condone, putting restrictions on the reasons for which it will be dispersed can be the perfect way to guarantee that the money will be available only for expenditures that will help to improve your child’s life.

Making Sure Money Is There After You’re Gone

While it’s true that you can use a will to bequeath your estate to your children, a trust will accomplish that goal much more efficiently and completely.

This will be especially important in the event that you die before your children reach adulthood. A trust will guarantee that funds will be available during your children’s time of dependency, as well as when they are adults. In this way, you can create a method by which money will be available for their care, for their college educations, and to help them enter the adult world when they’re older.

You may not be there to provide the funds for all of those essential needs, but the trust fund will help take care of them in your absence. An independent trustee can be appointed who will handle the disbursement of assets upon your death based on the terms you spelled out in the trust. This will guarantee that those disbursements will happen in an orderly fashion, and at the intervals that you consider to be appropriate.

The Bottom Line
You can use conventional investment accounts, or even a will, to distribute assets to your children. But a trust fund will do it safely, and in exactly the way you want it to occur.

You can take that bold step to ensure your children or wards have a future you desire for them now. Open an ARM Education Trust Account Here

The post 5 Benefits of Having An Education Trust Fund for Your Children appeared first on Realising Ambitions.

Common money mistakes Nigerians make

Get free professional advice from an experts

LABS by ARM Wins Midcap Startup Stars Award

Asset & Resource Management Holding Company (ARMHoldco) has won the Corporate Startup Stars Awards 2020 in the midcap startup stars category for its work with Labs By ARM – an initiative designed to assist post-MVP FinTech startups in advancing the growth of their companies and ensuring their investment-readiness.

Corporate Startup Stars Awards, now in its fifth year, aims at recognizing the world’s most active corporates in working with startups and identifying worldwide best practices in corporate-startup collaboration.

For the 2020 edition of the award, Mind the Bridge – a global organization with headquarters in San Francisco which provides innovation advisory services for corporates and government organizations in partnership with the International Chamber of Commerce (ICC) worked with active corporates in open Innovation nominated by startups at a global level to handpick 50 companies worldwide in various nominated categories of the award. ARM was one of the 50 companies nominated.

Speaking about the award, John W.H. Denton AO, Secretary-General of the International Chamber of Commerce, said, “Innovation in challenging times is more vital than ever. While these pioneering companies play a leading role in their respective ecosystem, they are also having an impact internationally. Showcasing success stories and recognizing the best-in-class efforts through these awards contributes to a virtuous cycle of the positive influence that helps stimulate corporate-startup growth and collaboration globally.”

Labs by ARM was launched in 2019 to discover companies that are post-MVP and operating in the FinTech space in Nigeria. To qualify to partake in the Labs by ARM accelerator program, startups must be well-rounded with a complementary team for product vision, technology, and a solidified view of how to generate income to solve an important problem for a highly-engaged set of customers.

Selected startups are provided with financial investment, distribution, access to investors and mentors, amongst others, to kickstart the growth of their enterprises.

Recognizing ARM’s nomination in this category, Sadiq Mohamed said, “ We are committed through Labs by ARM to helping startups in the Nigerian FinTech space who are hungry to provide laudable service to the general public through their innovative products. To be recognized on a global level for this initiative is humbling and encouraging. A lot of startups have benefitted from the Labs by ARM program, and we look forward to helping more FinTech startups.”

About ARM

Established in 1994, Asset & Resource Management Holding Company (ARMHoldco) is an asset management firm that offers wealth creation opportunities through a unique blend of traditional asset management and alternative investment services.

 

Christmas: Gifts, colors and carols

Get free professional advice from an experts

ARM Mutual Funds now on Cowrywise

We are pleased to announce our partnership with Cowrywise – our Mutual Funds can now be accessed on the Cowrywise platform.

This partnership gives us access to empower more individuals to fulfil their dreams and encourage them to imbibe a healthy investment habit.

Speaking on the collaboration, Henrietta Bankole-Olusina; Managing Director, ARM Financial Advisers, stated; “Our goal is to empower individuals to fulfil their dreams and encourage them to imbibe a healthy investment habit. Our range of mutual funds cater to different needs depending on their investment goal and risk profile.

The ARM suite of mutual funds is a diverse one. Its offerings fit the desires of various types of investors. Below are our current offerings.

  • ARM Money Market Fund: this is a low-risk fund that invests in instruments like treasury bills. A good fit for short term investors.
  • ARM Fixed Income Fund: like other fixed-income funds, this is a medium-risk fund. It’s a great option for medium to long term goals, as it can serve as a source of steady income.
  • ARM Ethical Fund: helps investors put their money in firms that align with a strict ethical selection.
  • ARM Discovery Balanced Fund: designed for a balance between equities and fixed income. It’s a medium-risk fund.
  • ARM Aggressive Fund: got a long-term view? This is your fund. Though high-risk, it helps your investments grow over the long term.
  • ARM Eurobond Fund: this fund gives you access to investment instruments denominated in United States’ Dollars. Also, it is excellent for protecting your investments from currency depreciation.

Today, all above-listed funds are accessible on Cowrywise with any amount and in few clicks.

Yarmirama Ashama, Product Manager at Cowrywise, described the recent partnership as an expansion of the opportunities that come with investing with mutual funds. In her words, “We cannot raise a new generation of investors alone. This is why partnerships with fund managers like ARM are important. Having them onboard feeds this vision, and we are excited about the results that will follow.”

5 smart things to do with your year-end bonus

If you’ve received your year-end bonus for the year or you’re expecting it, it can be tempting to consider having a splurge in the name of Detty December or convince yourself you deserve an extravagant treat.

But before you throw caution to the wind and deplete that windmill, take some time to consider how you truly want to use it. No matter the size of your hard-earned bonus, you should think about how it can best serve you and your goals in the short and long term.

Here are 5 ways to use your year-end bonus to expand its benefits into the new year and beyond.

1. Pay off debt

If you have a high-interest debt running, a part of your bonus can help shave a part, if not all of it off. You’ll breathe easy knowing you owe no financial debts to anyone.

2. Grow your emergency fund

2020 has taught us one big lesson- always be prepared for emergencies. Throw some part of your bonus into your emergency fund or use it to create one if you don’t already have it. You want to have a financial cushion in case of life’s unexpected moments.

3. Invest in your goals

Whether those goals include putting aside money for your children’s university education, financing your business, renting a bigger apartment, buying a portion of land, getting an MBA abroad, and more; your bonus will help you get closer to achieving it.

4. Invest in yourself

Perhaps there’s a skill you’ve always wanted to learn – one that could help improve your earning power or land you an entirely more lucrative job? Use your bonus to develop that skill and that’s you investing in your future.

5. Diversify your portfolio

Been thinking of spreading out your investment? Now may be the time to go for it with this bonus. When you diversify your investment portfolio, you minimize the risk of loss such that if one investment performs poorly over a certain period, other investments may perform better thereby reducing the potential losses. You also open different sources for returns while in some cases protecting your capital.

Now, let’s say you’ve got the above-mentioned covered and still have some impressive change to spare from your year-end/13th-month bonus – you can go ahead and give yourself the much-deserved treat and roll into the new year motivated to make a greater impact.

Click here to diversify your portfolio today or reach us via [email protected] for financial advice.

Transfer Window: What to look for in a PFA

Get free professional advice from an experts