The 2014 Guide to “Good” Investments

Any Guide about good investments should consider how the economic scenario is likely to be in the global market and what exogenous events and uncertainties are likely to prevail in the future. Even though these events can only be anticipated they are self-fulfilling. The important factors to look out for are:-Parliamentary elections, U.S FED tampering, interest rate and inflation rate. In short the overall macroeconomic situation has to be analyzed and its effects on growth, employment and other real variables will shape up the decision of choosing a good investment. The guides are as follows:- finance-tips-for-20-somethings

  • RETAIL SECTOR – Retail investors have been facing high inflation and negative real returns from both physical and financial assets.2014 does not seem to guarantee any such improvement specially if FDI(Foreign Direct Investment)is not allowed in developing countries it could prove to hamper growth and thus investments would seem less profitable.
  • EQUITY – The equity market seems positive especially after the exit polls show the government coming to power after elections favoring development. It also shows a positive sign for exporters and thus an improvement in net exports of the country.
  • DEBT - It seems positive if economy revives after the polls but negative if investors pull out. So a clear green signal is not available here rather it has to be closely monitored. But it promises high-yield returns to new investors or new comers, negative to existing investors.
  • GOLD - Seen as the most lucrative investment till date, investment here seems positive if the governments around the world relax import restrictions and moves towards a policy of greater integration facilitating globalization.
  • REAL ESTATE - the most widely fluctuating sector which saw the bubble burst in 2007 but again in 2009 due to recession world over found it difficult to curb negative impacts. It seems positive depending on the type of government which comes to power after elections. Prices are likely to ease as construction cost eases. But it is negative if the home currency weakens that is depreciating and if interest rates are likely to rise which will depend upon the policy mix of the Central Bank of the respective country. A tight monetary policy sees interest rate rising and therefore investment negative.

Suggestions to investors would be to follow a bottoms-up approach and invest in companies only after considering long-term perspectives and not be driven by just big numbers. Stability always wins over Volatility thus choosing a Co. which promises product development, market penetration and diversification is the key to look out for.

7 Money- Saving Tips That Are Easy to Forget

Saving money has become the norm in today’s era with rising prices and low budget. In our tryst to balance we forget the most common methods of saving money. 7 money saving tips that are usually forgotten are as follows:

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  • Consider buying 2nd hand or used items – planning is crucial for proper execution. Looking at the future is the key to perfect planning. One should always keep a close watch on things that one’s family or personal being will require. 2nd hand vehicles are very common. It saves money and when you get quality things then there should not be any judgement. Many electronic appliances- mobile phones, washing machines, refrigerator etc can be reused. Similarly if you are a clotheshorse buying the upcoming seasons clothes in off season is a good way of saving money.
  • Limiting the cost of utilities – switching off the lights and fans when not in use or for that matter television and music set switch is easily forgotten but is one of the prime factors of increased billing of electricity in most of the houses. By limiting the use when not in use also conserving the energy. Keeping a check is important
  • Bulk shopping – usually one feels that one should buy smaller variation of the consumer item every month so that you save up on your monthly expenditure but what is forgotten is that you will save for the entire year if you buy in bulk. Foresight goes missing. For certain consumer items which you are sure about usage can be brought in together and stored. In this way one saves up the extra but for food items that are perishable it is advisable to buy only what one requires for the time being.
  • Save from your added incentives – The perks that people get from time to time should be treated as an asset and if you keep on saving incentive then in times of crisis the savings will help. Huge expenditures such as mortgages, loans from bank and other places can be eased if you save from your income and use it later on.
  • Letting go of indulgences – if you are frugal and end up indulging yourself every week in salons, restaurants, entertaining yourself then no matter how much you save all your savings will be drained out.
  • Cutting down on your expenses – increasing phone bills, internet billing cost a hole in your pocket these days so used a pre planned billing system which will help to keep a tab on the expenditure.
  • Saving skill – repairing the home appliances, growing fruits and vegetables in your garden and putting some money in your piggy bank are usually forgotten that saves money.

5 Ways to Ease Your Money Stress

A recent survey has proved that almost eighty percentage of Americans are going through major stress, courtesy they money crisis in their life, and an odd sixty six percentage has increased since the last three years. These shocking revelations have made it very essential to combat stress and but your life on track. Now, learning to effectively ease your financial stress isn’t at all easy, and gradual development of skill will be required, if you want to uproot it effectively. Once you make your financial life secured, taking decision will become much simpler. Read on for few tips to alleviate your financial woes.

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  • Determine your financials and rectify them accordingly: Now, most of us spend on an emotional basis, which in the long run hikes your anxiety. Especially for emotional shoppers, you spend when you are not in a good mood to hence uplift it. Although retail therapy sure can be a fun way to release stress, nevertheless, your credit card bill will increase your stress further.
  • It is essential to communicate your problem: One problem that we commonly do is not communicating our stressful problems with our loved ones. Stress always reduces when it is shared and communication is the key to sharing any stressful financial issue. There might be issues which can be solved when heads are put together, hence, never refrain from sharing a stress just because you feel ashamed.
  • While budgeting be very strict: Now that you understand what your problem is what the places are where you have gone wrong, this is time you make rectifications, when you ascertain your budget. Initially a more strict budget might get tricky to adjust to, nevertheless with time you will get accustomed to it. And once you see the amount you are actually saving you will be overwhelmed.
  • Last but not the least save: Save as and when you can. Right from you grocery shopping to amount of electricity you burn. Save in every possible way. This will automatically do away with your financial stress.

What’s Safer: Credit cards or Debit Cards?

Risks and benefits are the two criteria’s which enable us to select the better option credit cards vs. debit cards. Both these cards have their pros and cons. It is about choosing the least risk involved one that can be overcome easily. Guidelines as to which card prevails over the other:-

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  • Controlling your total income – if you are a shopaholic and do not have any control on the amount of money that you spend then debit card answers all your queries as you can constantly keep a check on how much you are spending from you current or savings account. But you have to keep a lid on your expenditure.
  • Handy measures – If one has to withdraw huge amounts credit limits are expandable hence there will be no question of tapping or holding against your limit which happens when one uses debit cards. For travel purpose, extravagant shopping, in 5 star hotels and restaurants credit cards come handy. The debit card becomes problematic to swipe and shows error or insufficient funds which can be embarrassing.
  • Fraudulency issues – when it comes to fraudulency credit cards emerge as the greatest winner. Credit card come with an option of safeguarding your account by notifications such as texting and e-mail alerts when a charge incurs on your credit card sans your presence. In this way the charges are put away. They are guided by Fair Credit Billing Act which verifies your amount being transferred from the card. While in debit cards you can be tapped as they are easily linked to personal checking of one’s account the fraudulent charges can dwindle all your balance and all your checks that need to be deposited will begin to bounce. Even if you report the fraudulence the banks will take some time to investigate the charges and you will find it difficult to get a replacement of your cash and the cheques that does not cash out. So if you need to pay your bills you have to wait. The debit cards are guided by an Act called The Electronic Fund Transfer Act which does not give a guarantee of the fraudulent things that you order and they turn out to be incompetent and worse case if they do not arrive! Once the card is swiped the money will be deposited in the company’s or person’s account. Then it is on you to refund the money back.

5 No-Brainer Ways to Keep Your Finances Simple

Big spending with on budget steps is usually undertaken. While budgeting is important but much thought process should not be involved. Optimum time should be taken to decide about keeping your finances simple. Planning for times ahead is a good option. Organize your costs to bare minimum and then start with your prescribed goals. Though saving ensures minimum sage of your finance. Steps by which one can keep the finances simple are:-

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  • On time payment of bills – Payment of bills is a time consuming affair. Mostly some bills can be paid within fingertips but not all. Online payments can be made and saves up time and travelling cost. So, automatic payments are easier but most important criteria is to pay on time if you do not pay it on time then it leads to stock piling of payment of bills that causes a mental burden on the mind so the earlier you dispose of the bills the better.
  • Save in an automatic way – Keep some money for future use while requiring most for payment of bills. If you forget easily to pay your bills then make it a point to set aside some in your saving bank account rather than current bank account. In this way you will spend less on the immediate use but you are setting aside during future crisis. If you continue to do this it will become a habit and can be inculcated in your system which will never go out of your system.
  • Propensity to save; try using debit cards – if you do not want to spend much currently then do not carry cash with you instead start using the debit card since in this way you can even keep a check on the amount that you are spending without incurring huge loss from your account. As when you use credit cards or cash you feel as if it has no limit but when you have to pay extra charges and interest then you has no more to spend. Keep all the notifications on so as whenever you need to keep a tap on the money spent you will be aware of it earlier than later.
  • Save up most from the bills – internet billing, phone bills and cable bills can be minimized if you look for better packages and options. In this way call rates and internet charges and television viewing will become cheaper while save most from the additional charges that was going as a waste.
  • Buying and spending on necessities – if you are reaping the benefits from one service for multiple use then spend for that product as it will be an utility rather than just a need. Using subsidized plans for more than one service is a good option. Necessity items are purchased more than luxury and hence one tends to think that necessity items are cheaper than luxurious one but luxurious items are usually bought rarely whereas necessity items almost all the times. So save up on the use of necessities.

 

Tips on How to Start Investing

Investment is important and anyone can start investing with small or large amounts. The retail products are being proliferated. Risk factor should be least for starters. Investment in known sectors is ideal and always it is preferable to have a guideline set for beginners in investment. Stocks that are owned individually come with greater risk than joint one. Some tips that can help in starting an investment are:-

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  • Proper allocation of the funds with a check on your debt – If you owe an interest debt you should clear it off before investing. No investment guarantees large percentage profit for beginners. If one pays the interest by credit card then one is also going to incur charges from the card. Hence it does not make in any sense. For loss or for an immediate relief you should have an emergency fund. At the same time you should not invest in something for which you might require later on.
  • Safe investments – if you have extra money that you need for investment go for it. Investing also depends on your retirement plan. Whether long term investment or short term investment. Usually long term investments are considered safe. If one wants to invest in stocks then long term consideration is advisable.
  • Planning for investment – planning is important and organizing a constructive plan, determining your goals and criteria’s are the benchmark for any investment. Selecting a type of investment that gives the assurance of maximum returns should be the starting point of any investment. Once the plan is ready risk taking initiative will also be settled in your mind. One can invest in stock market or in fixed assets for long term.
  • Detailed study – before jumping onto any conclusion a thorough research should be done on the type of investment one wants to deal in. Investment portfolios and guides are important that help in starting an investment. Basic know- how’s help in understanding the kind of investment.
  • Decide and then chalk out – Portfolio’s containing mixture of bonds, stocks and your finance is the optimum condition for proper diversification. Choosing those stocks that are more volatile and gives an assurance of long term security.

The account in which one wants to invest in, counting your expenses, indulging in buying and selling periodically on a regular basis. Business fixed investment; Residential investment and Inventory Investment are three types of investment spending. But the investments are negatively related to interest rates. Usually the function of investments shifts and so does its principle. The profitability also shifts. Investment tax credit and corporate income tax are two provisions of tax on investment. So look at your real interest rate which is inversely related to investment spending. Economic boom stimulates investment and a recession depresses it so it is advisable to invest when there is an economic boom. People usually invest on those areas where the demand is high and there is more diversification on those sectors in particular.

5 Easy Investment Strategies That Build Wealth

There lies a gap between the return from the market and the money you get in your account. If you want to invest then you should involve fewer risks. A financial guide is important to build your wealth. 5 easy investment strategies are:

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  • Investing in many areas – what is meant by investing in many areas is not typically investing with varied providers. A diversity of assets is to be chosen that will multiply. The benefit of this is that during a rise the assets will prove profitable and during slide down the loss will be nullified by the profits. One is protected from fluctuations that affect any sector. Increasing your portfolio helps in assured wealth from investment.
  • Lowering your investment cost – giving less weight to mutual funds and more weight to index fund which reflects performance of a particular market sector where weights are the share of the respective investments as a proportion of total investment basket. As investments are inversely related to real interest rate, a lower interest rate lowers the cost of capital for firms that invest in plant and equipment, lowers the cost of burrowing for home buyers and lowers the cost of holding inventories.
  • Minimizing cost for profit maximization – as the basic aim of investors who invest is that rate of return should be higher than the cost involved in investment. In short aiming for profit maximization requires cost minimization where certain costs involved in investments that is the investment fees has to be reduced as much as possible. As fixed costs have to be occurred irrespective of the level of output and whether a firm shuts down or not it is the variable costs that can be reduced and thus the target should be to reduce variable cost.
  • Checking the investment details – nitty gritties cannot be avoided in investments. Everything has to be taken note of. Avoiding rigidity and maintaining flexibility is a crucial feature as the economy is not constant and changes everyday even if the change might occur to us a miniscule. In order to ensure long term success profits should be ploughed back or reinvested in profitable investment projects for a sustainable maintenance. If it proves to be a struggling task then hiring an investment manager is an apt option.
  • Avoid overcrowding – the number of investment projects undertaken at a time is also a very important determinant of the profitability from investment. If the number of investment project is too large it will lead to overcrowding and it might hamper the management. As a result diseconomies of scale might set in where average cost rises as the level of output increases.

 

Investing in a Gold Backed IRA

Investors are scrambling trying to find the best way to diversify their investments in today’s crazy economical state. No one really knows what’s going to happen but many people predict an economic collapse, worse than what we saw back in 2008. Putting your assets into the right investments can pay off big time for you in the future that is if you make the right choices now.

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Sites like www.timeofgold.com provide lots of useful information, tips and guides on what investors should do if they want a safe way to protect their livelihood. Gold has been and probably will always be one of the top choices, the price of Gold is still holding steady and more and more people are buying up Gold these days, whole countries like China and India are even buying up Gold at enormous amounts. This should mean something to the investors on Wall Street as well as to the millions of people with IRA’s and retirement accounts that are collecting dust.

Gold Backed IRA’s are becoming the investment of choice nowadays and there are many reasons for it. It can protect your investments from inflation or market fluctuation or even that economic collapse people are always mentioning. As long as it is a self-directed IRA, you will get to decide where you want to put your IRA funds, Gold would be the smart decision in my personal opinion. Gold isn’t the only precious metal people are investing in, Silver and Palladium are also some to name a few.

Gold is one of the most durable and stable elements on this earth, over 95% of Gold that has ever been mined is still in existence to this day, can you say that about many other things? Gold is also a physical asset, not a financial asset like paper money, stocks or bonds. So, if you are looking for a smart investment to make that will benefit you greatly in the long run, you really can’t go wrong with Gold.