Category Archive 'Personal finance'

Are You Debating Investing in Stocks? What You Need to Know

Personal finance

Trading stocks is a sexy topic. It’s very interesting. We’ve all heard anecdotes of someone that invested $20 and became rich overnight. Everyone hears a story like that. We all want to be that success story. However, we rarely hear about both sides of the coin.

Is it possible to become rich in a matter of days off the stock market? Not really.

Do you need tons of money to make money on the stock market? Nope. You don’t have to be rich. You can get started with a few dollars.

Can anyone trade stocks? Absolutely! You just have to open an account with an online brokerage. This can take only a few minutes and you can be trading stocks in the near future.

For now, let’s look at the idea of investing stocks and what to consider if this if a financial experiment that you’re considering.

“Rule No.1: Never lose money. Rule No.2: Never forget rule No.1.” — Warren Buffett

Are you debating investing in stocks? Let’s look at what you need to know.

Stock prices always change!

The price of the stock will fluctuate all day every single day. Can you handle this? When I first started trading stocks, I couldn’t fathom this thought. I would hit refresh on the page every couple of minutes. I then soon realized that this was no way to live life. You have to be able to come to terms with the fact that the stock price will constantly change. Good and bad. Sometimes it will soar through the roof, tempting you to sell. Other times, it will crash, tempting you to pull out of the stock market forever. Just a warning.

On that note…

You need to be able to handle risk.

How do you deal with risks? What happens to you in an uncertain situation? Some investors are just not meant for the stock market. Others thrive off it! I can’t tell you what to do. All I can suggest is that you understand your own investor profile so that you make moves according to what you can handle.

Most trading accounts will actually help you out with this. They’ll ask you questions to see what you’re all about. They don’t want you to get in over your heard right off the bat. Some rookie investors need to start off with bonds and more conservative investments.

Can you handle risks?

Do you understand the business of the company?

I’ve been a student of Warren Buffett for years now. He preaches the importance of understanding what the company does before you invest your money into it. This was my biggest mistake as a young investor. I would invest my money into companies that I simply did NOT understand.

Why does this matter? Because it’s impossible for you to grasp how things are going if you don’t understand the business. Just because your co-worker or a friend of a friend suggests that you invest in a company, it doesn’t make it the right thing to do. The right companies to invest in are usually the ones that you understand.

You can check out E* trade online trading to get started right now! What will be your first stock purchase?

 “Price is what you pay. Value is what you get.” — Warren Buffett

How Would You Deal With an Unexpected Expense?

Personal finance

We all know that life can throw us a curve ball at times. In mid-2011, due to a freak accident my engine got messed up. Then as soon as I fixed this, someone rear ended me and drove off. So yes, I had a rough month there. I had to fork over tons of money that I wasn’t planning on spending. I had to miss out on a trip and I really had to cut back. Thankfully, I had the money in an savings/emergency account. I definitely wasn’t too pleasant about suddenly blowing all of this money.

We’ve all had to deal with a financial emergency at some point in life. It’s not pleasant, but life doesn’t care about that.

How would you deal with an unexpected expense? This question is always on my mind because you really never know what can happen. You can always at any point in time get hit with a shock expense. If you’re living paycheck to paycheck, this will catch you off guard and ruin things for you.

Let’s look at common options for dealing with sudden, yet unexpected expenses:

Your credit card.

Most of us will usually turn to a credit card to deal with a sudden expense. It’s quick and easy. Best of all, credit cards do NOT ask questions. Everyone else does. With your plastic, you don’t have to worry about approval as long as you’re within your limit.

There’s just one difference here. Some of us have the money in a savings account to pay off this balance. Others have to wait for their next paycheck to handle this. Which side do you fall under?

Your emergency fund.

Do you have money saved away just in case? While some of my friends don’t believe in just leaving money around in savings account, I do. I see the argument for why it makes sense to invest your money. I just don’t believe that you have to invest every single penny. You can keep some money in a savings account just to cover yourself in the event that something should happen.

When dealing with an emergency, you don’t want to stress about liquidation or selling off stocks. You just want instant access to your hard earned money.

Be screwed!

Unfortunately this is an option because we either can’t always be prepared or the expense is too large. In the former situation, the onus is on you to take the time to put some money away. In the event of the latter, there’s nothing that we can do. There’s only so much money that you can save for emergencies. Some emergency situations will simply be too large too handle. Hopefully this doesn’t happen to any of you guys.

What’s your plan? I’m curious to hear about how you guys would handle a surprise expense if something were to happen tomorrow  Do you have a plan? Do you just go with the flow?

Where Are You Keeping Your Money?

Personal finance

Where have you been putting your money? Most of us want to keep our money somewhere interesting. We search the web to see where we can invest and how to invest. I’m here to give you some help by throwing out some of the most common options.

Where can you keep your hard earned savings?

Your checking account.

Some folks keep their money in their checking account or a fairly-liquid account because they refer to this as their “emergency fund.” While it’s easy to scoff at this idea, it makes sense because you always have access to your money. You don’t have to stress about ever going broke or covering for emergencies. You don’t have to use your credit card to pay for it and then worry about insane interest rates.

What if you want to take some risks?

The stock market.

This is of course one of the more riskier options because there are no guarantees. When you invest in a specific stock, you have to worry about every single move that the company makes. If there’s a public blunder, you can almost always guarantee a drop in stock price. You always have to stay on top of the moves that the company is making. This isn’t passive at all.

On the bright side, the returns can be higher. When the returns are high, you’re smiling and proud of your investment. Just please remember that there are risks involved. Don’t get too greedy. I’ve gotten far too greedy in the past. I once could have cashed out and doubled my money. Instead I waited. Why? Because I wanted more money! What happened? I lost money because I waited too long. You live, you learn.

Real estate.

Real estate is where you need to have the most money to get involved. You need dozens of thousands of dollars before you try to apply for a home mortgage. You need to tie up a serious amount of capital into a property because property isn’t cheap these days.

Since I recently invested into real estate, I’ll share my best tips on the topic:

  • Research all properties in advance.
  • Save lots of money.
  • Perform the property management all on your own.
  • Ask for many opinions.
  • Shop around for the best mortgage rate.

Safe investments.

This is where a term deposit comes into play. Term deposits are a stress-free investments with flexible options. These are ideal for those of us that don’t want to stress about our money. We work hard enough. We don’t have to risk the chance that we could lose any of our money. That’s the last thing you need.

Where are you going to keep your money? These are some of the top options, but you don’t have to limit yourself to what I covered on here. There are tons of other options.

How-to Save Money Before Breakfast Tomorrow

Personal finance

Do you finally want to save money? Are you ready to amp up your savings account? I want this to be the year that you start saving more money.

2013 is here and I don’t believe in resolutions. There’s no time for that. I would rather take real action to see real results. I’ve learned over the years that a few small moves today can really benefit you in the future. The beauty is that you don’t have to be super-educated or break your back to see some serious savings.

How can you save money before breakfast tomorrow morning? How can you take a few minutes to amp up your savings?

Create automated savings.

Have you set your savings yet? I don’t like to think about budgeting money and putting my money away. I want to just set it and forget it. I want life to be simplified. I don’t want to think about money non stop. A few years ago, I filled out a form with my employer. It allowed them to take $50 from my paychecks. This was the best idea ever because I’ve managed to passively saving over a thousand dollars every single year. Not bad for no effort.

Cut a subscription.

How many monthly subscriptions do you have? Whenever I want to get serious about my savings, I look over my fixed expenses to see what can be cut. I often find a subscription or something that can be cut out. Then I go after it. This will take you a few minutes maximum. You’ll now be saving more money without much effort at all. Will you get rid of that iTunes account?

Put something up for sell.

Look around your room. Do you see too much crap? Did you know that you can easily sell this stuff for money? You can go on eBay to get rid of some junk and get paid in the process. You’ll have much more space in your home and you’ll have more cash in that good old savings account. A win-win situation if you asked me.

Find a paying gig.

Are you not making enough money? You can put up an ad on Kijiji to see if someone is willing to pay you for your services. What are you good at? What can you teach others? A paying gig will help you make money for the time being. This beats saving money on daily coffees. Once you find your first paying client, you can leverage this to find even more clients and more revenue.

How will you save money before breakfast? As fun as it is to go through Facebook or Twitter to see the newest jokes, you can really benefit from taking a few minutes to do something interesting.

How Much Credit Card Debt Do You Have?

Personal finance

Are you aware of how much credit card debt you really have? Nobody wants to be in credit card debt. We all want to be free of debt. We want to be released from the payments. We want to keep more of our money.

Do you want to crush your debt?

The first step is to determine how much money you owe.

How do you do this?

  • Look at your credit card balances. You need to dig up your balances to see what the totals are like. This might be the toughest part because you have to face your failures.
  • Add up all of the totals. What’s the total amount of money that you owe? Is it more or less what you expected? Are you ready to take on this amount of money?
  • Compare the interest rates. How much money are you spending on interest? You should consider using a credit card calculator to see where your payments are going.

Now it’s time to move on…

What can you do when you figure out how much debt you have?

Decide your next move. Will you focus on earning more money? Will you start saving more on a monthly basis? You next move is critical because it’ll determine how rapidly you become debt free. Earning more money is an excellent strategy for attacking debt. Saving up more money also helps because you don’t have to work any harder. You just have to optimize your spending.

Figure out which debt reduction tool you’ll utilize. What sort of tools will you use to assist your process? There are all sorts of apps and programs available to help you deal with your debt. What you choose to use is ultimately up to you and how serious you want to get about crushing the debt.

Start attacking your debt. Now you have to take action. Since you figured out how much money you owe, the only option is to start paying back this money. This is money that you borrowed to have what you wanted at the moment. You enjoyed the purchases. Now you have to pay this money back. This is where things get serious. This is where you have to sacrifice and get creative because every dollar counts when you’re trying to attack credit card debt.

Keep on going. You just have to remain consistent. This is key. You can’t stop until you’re out of debt. As tempting as it is to start spending money again, you can’t. Your target should be on become debt free. Once you’re debt free, you can live the life that you’ve always wanted. No more feeling strangled by your debt. No more spending your whole paycheck on debt.

How much credit card debt do you have? The second you figure this out, you can start tackling your debt!