Risk management in financial planning is the systematic approach to the discovery and treatment of risk. The objective is to minimize worry by dealing with the possible losses before they happen.
The process involves:
Step 1: Identification
Step 2: Measurement
Step 3: Method
Step 4: Administration
The process begins by identifying all potential losses that can cause serious financial problems.
(1) Property Losses – The direct loss that requires replacement or repair and indirect loss that requires additional expenses as a result of the loss.
(For example, the damage of the car incurs repair cost and additional expenses to rent another car while the car is being repaired.)
(2) Liability Losses – It arises from the damage of other’ property or personal injury to others.
(For example, the damage to public property as a result of a car accident.)
(3) Personal Losses – The loss of earning power due to death, disability, sickness or unemployment and the extra expenses incurred as a result of injury or illness.
(For example, the loss of employment due to cancer and the required treatment cost in addition to normal living expenses.)
Subsequently, the maximum possible loss (i.e. the severity) associated with the event as well as the probability of occurrence (i.e. the frequency) is quantified.
(1) Property Risk – The replacement cost necessary to replace or repair the damaged asset is estimated by a comparable asset at the current price. Indirect expenses for alternative arrangements like accommodation, food, transport, etc, needs to be taken into account.
(2) Liability Risk – This is considered to be unlimited as it will depend upon the severity of the event and the amount the court awards to the aggrieved party.
(3) Personal Risk – Estimate the present value of the required living expenses and additional expenses per year and computing it over a predetermined number of years at some assumed interest rate and inflation.
Methods Of Treating Risk
A combination of all or several techniques are used together to treat the risk.
(1) Avoidance – The complete elimination of the activity.
This is the most powerful technique, but also the most difficult and may sometimes be impractical. In addition, care must be taken that avoidance of one risk does not create another.
(For example, to avoid the risk associated with flying, never take a flight on the plane.)
(2) Segregation – Separating the risk.
This is a simple technique that involves not putting all your eggs in one basket.
(For example, to avoid both parents dying in a car crash together, travel in separate vehicles.)
(3) Duplication – Have more than one.
This technique requires preparation of additional back up(s).
(For example, to avoid the loss of use of a car, have 2 or more cars.)
(4) Prevention – Forestall the risk from happening.
This technique aims to reduce the frequency of the loss occurring.
(For example, to prevent fires, keep matches away from children.)
(5) Reduction – Minimize the magnitude of loss.
This technique aims to reduce loss severity and can be used before, during or after the loss has occurred.
(For example, to reduce losses as a result of a fire, install smoke detectors, sprinklers and fire extinguishers.)
(6) Retention – Self assumption of risk.
This technique involves retaining the risk consciously or more dangerous as unconsciously to finance one’s own loss.
(For example, having 6 months of income in savings to protect against the risk of unemployment.)
(7) Transfer – Insurance.
This technique transfers the financial consequences to another party.
(This will be covered in more detail as a topic.)
Administration Of Method
The selected methods must be implemented.
And finally to close the loop for the process, new risks must be continually identified and all risks needs to be re-measured when required. Treatment alternatives should also be reviewed.
Are you in need of money? Perhaps you just want more money. Either way, you might be considering asking a lottery winner for money. If so, you would probably go about asking in different ways, depending on whether or not you actually know the person.
If You Know The Lottery Winner
Let me tell you a true story about two women. These two women were best friends for many years. For one reason or another, they drifted apart and didn’t see each other for a few years. Then one of the women won the lottery. It was a massive jackpot worth hundreds of millions of dollars. A few years after she won the lottery, she re-connected with her old friend. Within days of re-connecting, the one woman told the jackpot winner that she had $50,000 worth of medical bills that she just couldn’t pay. Read between the lines – She was indirectly asking for money.
The jackpot winner was more than happy to pay the medical bills for her friend. She told her to just give her the bills and she would take care of it. That would have been great, except that there actually were no medical bills. It was just an excuse for a reason to ask for money. The lottery winner didn’t like that. If the friend just straight out asked for the money, she probably would have given it to her. But her friend lied and insulted her intelligence.
What’s the moral of this story? If you have a friend that won the lottery, don’t come up with a false story to try to get some money. Rather, just ask you friend straight out to give you some. They just might do it.
If You Don’t Know The Lottery Winner
If you’re planning to ask a lottery winner that you’ve never met for money, you should know up front that the odds are against you. A lot of lottery winners, especially new ones that win massive jackpots get inundated with requests for money. Often, those requests come via sob stories that tug on the person’s emotions. You should know that these new lottery winners quickly become immune to these requests and tune them out.
So if you’re planning to ask a stranger for money, don’t come up with sad stories. Just like in the previous example, tell the truth and just say that you’d appreciate it if they could spare some money. They’ll more than likely decline your request, but don’t take it the wrong way – Jackpot winners can’t give money to everybody that asks them for it. Just make sure that you don’t harass anybody while asking them for money – That’s illegal.
For a long time, little was known about online Forex trading. Mostly wealthier individuals and companies were the only ones investing because large amounts of money are needed to invest in order to actually make a profit. Now, however, many individuals are becoming interested in the online Forex trading market because it is an easy way to make money.
A person can invest a smaller amount of money than larger companies and still make a small profit. They then choose to invest the same amount of money in addition to the profit they just made, and slowly work on building up their money so that they can invest larger sums of money.
In order to trade in the Forex market, one must open up an account for the market, and having a broker is a necessity. There are several articles available online that can help individuals figure out all of the details about how to choose a broker and what they need to consider when opening up an account.
For example, many brokers charge fees. For most, there is a fee for every single trade. This is relatively insignificant when a person is only interested in investing a small sum of money, and then letting it sit for a while. If a person only plans on making a few trades, this probably does not seem important.
On the other hand, many investors like to jump right in, or they wind up making more trades over time, they will need to take this into consideration to make sure that they do not wind up losing money.
The online Forex market is a great way to make money, but it can also be a quick way to lose money as well. If a person makes the wrong trade or does not understand how the market works, they can quickly wind up with almost no money.
This is one of the most important reasons that individuals are encouraged to read as much as they can about this form of investing before taking the steps to open an account. There are several software programs available that are becoming increasingly popular as more individuals are choosing to jump into the market.
These programs help keep an eye on the market, and can then let individuals know when is the best time to make a trade. Most of them include data tools that are used to formulate reports about the market and can help identify market trends. Some even take things a step further by having the option to make a trade for users.
With these programs, the users have to do almost nothing. They simply install the program, set the settings, and then decide whether they are comfortable with the robot making the trades for them. It can really be that simple.
Online Forex trading continues to increase in popularity among the average joe now that the internet allows any person to trade one currency for another. The invention of the internet has opened up this opportunity to allow every individual to enjoy making money through this market, and software programs continue to make it easier than ever before.
Lots of people turn to cars under $1000 bucks looking save a buck or two. Here is a quick guide on how to make some cash (that you can use to buy more rusty boxes on wheels of course)
Plain and simple part cars out.
Step 1. Buy a car. This is pretty much the most crucial step. If you are actually doing this to make money and not just salvaging that blown up buick sitting in your driveway than you need to find a car that people want to buy parts for. eBay is pretty much your friend here and my suggested avenue for selling most parts. In the past I have watched people make money from a variety of cars (my roommate used to finance his workshop with parted out cars) One in particular was a 1994 Honda Accord. Thats right you don’t need to buy a 1939 Alfa Romeo (although that would be sweet) or anything super rare to get good money for parts.
Often times finding a car that is pretty common can be a good thing but be sure to check eBay for the prices certain parts are going for before hand and let that be your guide in making your purchase. Now when it comes to buying the car usually the ones that don’t run will be your best deals and you may even get a freebie if your lucky. (few people want dead cars in their driveway) Obviously the less you pay the more you profit.
Step 2. Tear it apart. The key here is research and time management. Everybody wants to pull the engine and trans etc., but often times it may not even be worth it. Check out eBay or where ever you plan on selling and ask yourself is what these parts are selling for worth my time? Would I actually want to crate and ship this? Is anybody actually bidding on this crap? All good questions that need answers. Honestly it tends to be the nickel and dime parts that can really make you some money. Shifters, speedometers, sensors, mirrors, sun-visors, etc. these parts take seconds to remove and if they are in good shape people are often willing to pay a pretty penny for them, because the only other option for parts like these tends to be the dealers who charge an arm and a leg.
Step 3. Sell The Parts. Once you have determined what you want to sell and pulled the stuff off its time to start selling. I like eBay but swap meets, forums, and other sources may work better for you. If you have done your research you know where to find the people who see value in the parts you have pulled.
Step 4. Scrap the rest. Always factor in that you can prolly get $100-$300 bucks for the rest of the pile at the scrap yard. Usually you will want to haul it there yourself and will probably need to pull the tires and gas tank. I would even consider it a good rule of thumb to try and not pay more for the car than you can scrap it for. This helps you avoid any kind of loss.
And there you have it. Four easy steps to make some quick money and make your neighbors hate you.
Jesus came to give us an abundant life as spoken in John 10:10. This abundant life includes peace, joy, love, wisdom, success, health, weight loss, confidence, having children, spouse, money making ideas, inventions, freedom from sin, freedom from fear, holiness, super intelligence, financial abundance and anything else that would be a blessing. This article focuses on just one of those blessings, financial abundance and how to obtain it for a purpose.
Compared to the rich in the world, most of the Church has been broke for hundreds of years because of a failure to name their financial offerings. The offering is above the tithe. The tithe is one tenth of your income. Without a proper understanding of sowing and reaping, the finances of even the best money manager come far short of the financial abundance of an anointed and instructed sower. You see, although Christians named their tithes which took care of the operating expenses of their local church and subsequently took care of their own house expenses, they failed to name their financial offerings. Result, Satan stole the harvests they would have received from their offerings and left the Church with a paycheck to paycheck broke existence. But that is all changing. God is restoring to the Church an understanding of how to properly sow and reap abundant harvests. He is fulfilling Proverbs 13:22b in these last days:
“The wealth of the sinner is laid up for the just.”
So let me show you how to experience financial abundance through the biblical principle of sowing and reaping.
Jesus taught sowing and reaping. Remember the crowd on the Galilean shore in Luke 5:3 where Jesus preached to them from Peter’s boat. By loaning his boat to Jesus, Peter had activated the sowing and reaping principle. As a result of sowing his seed (boat loan) into Jesus’ ministry, Peter got a harvest. A miracle boatload of fish. Look at Luke 5:4-6:
“Now when he had left speaking, he said unto Simon (Peter), Launch out into the deep, and let down your nets for a draught. And Simon answering said unto him, Master, we have toiled all the night, and have taken nothing: nevertheless at thy word I will let down the net. And when they had this done, they inclosed a great multitude of fishes: and their net brake.”
Just as a farmer expects a harvest when he sows his seed into the soil, you are to expect (have faith for) a harvest when you sow your finances into a ministry the Holy Spirit has prompted you to support. It could be your local church or some other ministry that is advancing the kingdom of God, reaching souls for Jesus. And make sure you give your seed an assignment by naming your seed when you sow it. You could name it “financial breakthrough,” or “financial abundance.” If you are a writing a check, write the name of your seed, “financial breakthrough,” somewhere on your check.
Important – Sowing is to be a lifestyle, not a one shot thing. You don’t name your financial seed, plant it and never sow again. No, continue to sow consistently, naming your seed until your harvest comes in. After your first financial harvest comes in, keep sowing for another financial harvest. The bigger the financial seed you sow, the bigger the harvest. And the bigger the harvest, the bigger the seed you can sow, producing bigger and bigger harvests ushering you into your wealthy place.
It may be a day, a week, a month or a year before your first harvest comes in, but your harvests should manifest in due season. Once they start coming in, you’re on your way to living the abundant lifestyle promised you by Jesus Himself.
“Be not deceived; God is not mocked: for whatsoever a man soweth, that shall he also reap” For he that soweth to his flesh shall of the flesh reap corruption; but he that soweth to the Spirit shall of the Spirit reap life everlasting. And let us not be weary in well doing: for in due season we shall reap, if we faint not”(Galatians 6:7-9).
Listed below are the sowing and reaping steps you take to release your faith for your miracle abundant financial harvests:
Step 1. Know God Is Your Source of Supply – Don’t try to figure out how He is going to do it. That is His job. Your job is to sow and expect a harvest.
Step 2. Pray for What You Desire – What do you desire? Let’s say you would like a financial breakthrough. Okay. You need a scripture to base your faith on. John 16:23 will work. “And in that day ye ask me nothing. Verily, verily, I say unto you, Whatsoever ye shall ask the Father in my name, he will give it you.” So, ask your Heavenly Father in Jesus’ name according John 16:23 to give you an abundant financial breakthrough harvest on your financial seed sown. When do you believe you have your harvest? The moment you pray. You must believe God heard your prayer and granted your petition the instant you prayed. If you believe you have received your financial harvest the moment you prayed then you must act like you have it. Your actions are called works. You release your faith by your works.
The Bible says in James 2:17 that faith without works is dead. What are works? Let me illustrate to you what works are. Let’s say a very rich person you know and trust hands you a check for thirty million dollars. What would you do? Jump, shout and celebrate. Right? Those actions (works) show that you believe you have the thirty million dollars. When your bank sends your bank statement saying you have thirty million dollars in your account would you start jumping, shouting and celebrating again. No. You did your celebrating the moment your rich friend handed you the check. Same way when you pray and ask God for something. You celebrate the moment you finish asking God for what you desire. Your words, celebration, joy and your financial seed sown are your works that show you believe you have received your harvest the moment you prayed. So you release your faith by your actions (works showing you believe you’ve got your harvest now). Your works give life to your faith. Your works release your faith. Your works complete your faith.
“Therefore I say unto you, What things soever you desire, when you pray, BELIEVE THAT YE RECEIVE THEM (the instant you pray), and ye shall have them” (Mark 11:24).
Step 3. Name Your Seed – Naming your seed gives it an assignment. What do you want from your harvest? Healing, finances, peace, a spouse? Whatever it is you want, name your seed. And make sure the name of your seed corresponds to your prayer. If you prayed for a financial breakthrough, then name your seed “financial breakthrough.”
Step 4. Sow Your Seed – Ask God the Father in Jesus’ name where to sow your money seed. The Holy Spirit will direct you to sow your seed in good soil (a church or ministry doing the will of God – winning souls, teaching healing, sowing and reaping etc.). Bad soil is where God’s will is not being obeyed. Your seed (works) is the evidence that you have faith in God’s promise (John 16:23) to grant your prayer request for an abundant financial harvest.
Step 5. Sow as an Act of Love, Worship and Obedience – Sow your seed as an act of love, worship and obedience to God. You are obeying God’s command to give when you sow and out of your abundance you can bless others as the Holy Spirit directs.
“Give, and it shall be given unto you; good measure, pressed down, and shaken together, and running over, shall men give into your bosom. For with the same measure that ye mete withal it shall be measured to you again” ( Luke 6:38).
Step 6. Believe You Have Your Harvest Now – Release your faith by daily thanking, praising and worshipping the Lord Jesus Christ because God has seen your seed planted and has granted your harvest. That’s faith when you act like you have your harvest even before you actually see it with your physical eyes. Visualize your harvest. Use your God-given imagination and see yourself with your harvest. See yourself dressing the best, driving the best, flying the best and always having abundance of finances. See yourself as a blessing and money magnet.
Why is it vitally important to believe you have it (your harvest) before you can see it? Because if you do not believe you have your harvest the moment you pray and plant your seed, you are not in faith. Faith says, “I have it now.” Doubt says, “I will not believe I have my harvest until I see it.” Secret: A key to accelerate (speed up) the manifestation of your harvest is to daily rejoice that you’ve got it (harvest) now before you see it with your physical eyes.
Step 7. Speak God’s Promises over Your Seed – As you daily release your faith through thanksgiving, praise and worship for your harvest to manifest, speak God’s promises over your seed sown. For instance, if you named your seed “financial breakthrough,” speak financial prosperity scriptures over your seed like Psalm 1:1-3, Psalm 35:27, Luke 6:38 and Philippians 4:19.
Step 8. Keep a Record of Your Seed Planted – This way you can focus on your seed planted as you release your faith for your harvests through thanking, praising and worshipping Jesus Christ and declaring God’s promises over your seed sown.
Step 9. Be a Conduit for God’s Finances – You are blessed to be a blessing. Yes, because you are to be God’s representative, an ambassador for Christ, you are to dress the best, drive the best, fly the best, live the best, but always on call to sow your financial seed wherever God directs. His agenda is to become our agenda. His agenda is for souls to be saved, delivered, discipled, serving in a local church, bearing fruit and walking in His glory, virtue and perfect will.
Very, Very, Very Important! There are two things that will hinder you from receiving your harvest. Disobedience and lack of faith. I will explain. Disobedience: If you fail to ask God how much you should give and you give an amount He is not pleased with, then you are being disobedient. If you fail to ask God where to sow (plant) your seed and you sow your seed in the wrong soil (ministry), then you are being disobedient. Don’t expect God to give you the harvest you desire if you have been disobedient. What does this mean? To avoid being disobedient, you will have to spend time listening to the voice of the Holy Spirit who will guide you into all truth, helping you make wise sowing decisions.
I know I mentioned faith in step six, but I want to drive this faith principle home. Lack of faith is a big no no. When you sow your financial seed, you must believe (expect) your harvest to manifest, to come in. Don’t just drop your money in the bucket and not expect God to multiply your giving and bless you with a bountiful harvest. If you don’t expect a harvest, you’re not going to get a harvest. Faith is what moves the hand of God to multiply your seed sown.
This sowing and reaping principle I have shared with you will work in every area of your life, not just for finances. As listed at the beginning, you can sow for a miracle harvest of peace, joy, love, wisdom, success, health, weight loss, confidence, having children, spouse, money making ideas, inventions, freedom from sin, holiness, freedom from fear, super intelligence, financial abundance and anything else that would be a blessing to your life. There is miracle power in the seed. Release your faith for the abundant life through sowing and reaping.
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Jesus said, “If ye love me, keep my commandments.” We are commanded in Matthew 28:19-20 to witness to the lost. Do you love Jesus? Please don’t disobey Him by not witnessing to the lost. Don’t forfeit your soul winner’s crown awaiting you in heaven. Click “Soul Winner’s Crown” below to receive free online teaching on how to be a successful soul winner for God.