Warren Buffett once wrote, “To invest successfully over a lifetime does not require a stratospheric IQ, unusual business insights, or inside information. What is needed is a sound intellectual framework for making decisions and the ability to keep emotions from corroding that framework.” Wise advice from one of the world’s richest men, but even Mr. Buffett was a novice at one point in his career. Somewhere along the line he learned that knowledge, experience and control of one’s emotions are key traits that every successful investor must have.
Awareness through education of proper money management is a good first step in your preparation process. As an introduction, here is a “”Top Ten” list of investor mistakes and how to avoid them:
1.No Education: Believe it or not, a high percentage of beginning investors are so eager to play the market that they forgo any organized investment training or education exercise. Even gamblers know they need an edge to beat the “House”. The market can be very unkind in dealing with the ignorant. Invest the time to learn about investing long before you invest one dollar;
2.No Plan: Any training course would require you to write down your goals and objectives on Day One. What is your risk tolerance? Are you a long-term investor or a trader? How do you plan to allocate your investment funds? Are you prepared for an emergency? All valid questions that need answers to form your personal plan. As Coach John Wooden said, “A failure to plan is a plan for failure”;
3.No Experience: You must approach any market with a disciplined approach, one free of emotion that sets targets for both gains and losses, and then acts upon that “sound intellectual framework”. You must practice your craft to develop your approach and confidence. Practice with “virtual” accounts and keep accurate records. Analyze your errors in judgment and learn from them;
4.No Broker Review: Your broker is your business partner. In today’s Internet world, we too easily choose partners without ever seeing them or checking them out. Unscrupulous forex brokers have disappeared with enormous sums of money in that profession. As a result, there are numerous sites that actively review brokers. Do your due diligence before choosing your broker;
5.No Appreciation for Fraud: The criminal element in our society is very well organized and naturally gravitates to any activity involving money. Beware of unsolicited offers that promise unrealistic profit opportunities. Be skeptical of investment proposals that are not in writing or involve very complex securities, regardless of how professional they appear. If an offer sounds too good to be true, it usually is. If pressured to invest, walk the other way;
6.No Appreciation for Risk: Investing involves risk. Penny stocks are not bargains. They are some of the riskiest investments in your universe of choices. If you decide to invest in companies, read their annual reports. See if their price chart history resembles the charts for other successful companies. Know how much risk you are considering before you even buy the stock;
7.Insufficient Diversification: Mutual funds have rules that limit investment in any one company to 5% of the entire portfolio. The reason for such a rule is obvious. The negative results for one holding will not adversely impact the fund in a material way. If investing in 20 companies is too much of a burden, then consider the benefits of Exchange Traded Funds (ETF’s) or no-load mutual funds.
8.No Appreciation for Fees: Brokers are in business to make money. Be sure you understand their fee schedules. Mutual funds and insurance companies hide many of their fees in the small print. Be sure to read your contracts. There is no reason to pay exorbitant fees. If you are, then you have less to invest;
9.Influenced by Tips: Never react to tips from friends, the media or unsolicited salesmen. If you heard a great idea from a talking head on a financial channel, you can be sure that everyone else has already acted and driven the price up where no one should buy. It may even be a “pump-and-dump” scheme designed to fleece the unsuspecting, so beware. There is no shortcut to doing your own homework. Study before you buy;
10.Too Much Emotional Involvement: We end with Mr. Buffett’s advice. You cannot be married emotionally to a stock, especially a loser. Cut your losses early, and let your winners run! Always make decisions according to your disciplined approach honed during your early practice sessions. Remove emotion from the process.
It is now time to continue with your preparation work. If you end up losing sleep over your investments, then it may be a sign that you have bitten off too much risk. Be flexible, and adjust accordingly. Remember that all investment plans begin with budget planning first, then finding the best place to invest your money. Although your goal is to make money, you should also expect to sleep well and have fun, too!
Bi line: Tom Cleveland is a market analyst for Forex Traders, an online resource for the foreign exchange market and forex news.
We live in a material world where everything has a cost, such as walking down the street. We pay our taxes just paving, food and clothing costs, we can not live without food or clothes. The balance about which we speak is about living in this material world with a love of money as it is what we are going to make life more pleasant, healthier and calm, clear as everything has its downside, can also be our worst torment causes of stress and problems in the couple, this one from the mishandling of it.
The result would be more or less: Get up Sunday morning with your kids healthy and happy as it was time that you spend the whole day with them, and knowing that you paid all your expenses, your refrigerator is full and still you have left money in the pocket to buy some candy for your kids. With the assurance that if you pass an accident or problem you have a cushion on the bench available for any time or that your insurance is current in payment for anything. Your money for retirement continues to grow and nothing can take away the smile of the morning. That is the way to your financial health affects your happiness.
Now we see the opposite: You did not sleep on Saturday night due to fear that anytime you’re going to cut the power or gas, your wife is concerned that there is not much to eat in the fridge and there is still much for the day pay, your children need good food to maybe have some disease by low and your defenses without money for the rest of the week, looking for someone in your family that you can lend money only to get more in debt and without paying mind someday. This does not mean you do not want your children or your family does not love you, simply neglect to managing your money can take you all that. So our theory says you should always keep a balance between material and spiritual.
The only solution to this is: do not lose the child within you, look after your health, your money, your loved ones and enjoy doing what you love.]]>
To Start with creating a budget, start by making a list of all the expenses you can recall and the amount that you can spend on them. It would help you to review your history on your checking account and credit cards.
List all your income and expenses accurately. Don’t round the figures up or down. Don’t smudge on how much of your income goes to taxes. Don’t leave things out.
Include enough categories to know where your money is going. However, too many people go to extremes in details. You don’t need to necessarily track every single category, you can lump some together. Review your budget regularly to determine that you have enough categories and are budgeting enough for each category.
Track how much cash you are spending. If you are not good able to track, give yourself an allowance of cash that is all you have to spend. Try not to overspend on your cash limit for the month. We know what can and can’t come out of our checking, so it protects our budget.
Consider your savings as a bill that must be paid. It is recommended to have it automatically withdrawn from your checking each month. That way, there is no way to avoid paying your savings. It is already gone. You won’t spend it thinking you’ll put a little extra in next month. The most important bill you have to pay is your future.
Budgeting isn’t about tracking money, it is about meeting financial goals. It allows you to save for your future, for your kids’ education, for vacations and other things you want to do in your life. Without these goals, there is no reason for a budget and it will fail.
Keep a look at your budget regularly to see how you spend your money. With this you would be able to look at your budget and see exactly what can or needs to be changed. You can always challenge yourself to cut costs and save more.
The only thing is that should be kept in your mind is to keep your eye on the goal and have a positive attitude that will only make your budget work. Always look at your budget as a way to find money for your future.]]>
The three winners of the respective contests are:
Winners of contest on linkbuildingscool:
Camila, RohiniSeth and Stacy Lorsan
Winners of contest on UXBooth:
Tom Walters, Sophia Browne and Vinay Kashyap
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Get in touch with us to know more about our upcoming events, discounts and offers.
Whatever it is meant from being financial independence, the most important thing is how to achieve it. Following tips crave your path towards a financially independent lifestyle:
Figure Out Your Financial Priorities: You may never achieve your financial freedom unless you first define it before trying to pursue it. Defining your financial prioritizes can make it easier to curb spending on those things that are non-essential to your goal. Never eliminate the financial goals you find difficult to carry out, but be honest while committing yourself towards accomplishing your target.
Align Your Expectations With Bottom Line: Another tip to help you achieve your financial freedom is to realize just how much you’ll need to save to achieve it. You may think a million dollars will do the trick. Maybe it will, maybe it won’t. It all depends on your expectations. The person who truly wants to be financially free should always align his or her expectations with the bottom line.
Learn To Be Flexible: To achieve more of your dream try to bend a bit. As you map out your financial dream, consider what you might be willing to do to get what you want. Maybe it means you could choose a less expensive home in a less expensive area or doing a second job for awhile or rent out your house during the summer while you travel to visit friends and family etc.
Living Below Your Means: The time-honored way to accrue financial security is to live below your means. Never spend more than your earnings, even if you could afford to. This would save your from the risk of spending what you could have saved. Remember, the most preferred way to overcome the biggest fear of running out of money, is to play it safe.
Have Control Over Your Time: You would come to know the reality of being wealthy when you have complete control over your time. No matter how much money you make, you aren’t wealthy unless your days are spent doing the things that you enjoy so much that you would pay to do them and have control over your time.
These financial worries can be solved very easily with money management applications. These web based applications help in reducing our financial stress by managing our finances anywhere anytime. When it comes to keep a limit on our finances and budget , we need all the help we can get from money management applications only.
ManageME7 is one of the key players in online money management applications area. This money management tool enables you to manage your finances in an efficient yet easy way. It acts as a lethal weapon in combating your tangled finances with its only mission to help you overcome your financial worries.
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Hurry!!! grab your free license today. You can be the winner of the license from each of the contests also.
Don’t Let This Golden Chance Slip Away From Your Hands.]]>
Well, mistakes are the best teachers, as the lessons learned are ingrained by the outcome of our failures. Finances in the same way let you learn what to do and what not to do. To achieve financial goals even a single financial mistake may be a detrimental one.
This post in intended to highlight some common mistakes that need to be avoided for a better financial planning:
No Proper Financial Plan: Lack of a financial plan, and not setting any financial goals can bring a lot of financial problems. A properly written plan with all short-term and long-term goals surely results into success. Reevaluation of the plan and tracking the progress often are basic ingredients of a proper financial planning.
Improper or No Insurance: A financial plan is incomplete without adequate life insurance plan. One major goal of a financial plan is to maintain the life style of your family whether you are with them or not. A common mistake we make is buying life insurance policies such as endowment plans or money back to save tax, also hoping to reap returns. Returns from such policies are much less compared to traditional investment products such as stocks, mutual funds, gold or real estate.
No Diversification: Do not put all eggs in one basket. This mistake arises when a major part of portfolio is invested in a single or same type of financial instrument which increases risks resulting into high losses/profits. The right portfolio should be built by optimum allocation into different asset classes.
Tax Saving Without Consideration: Many taxpayers try to withheld too much from their paycheck for income taxes. They think of it as a way to save. Investing in different financial products on the consideration of tax saving without evaluating other parameters of financial products is one of the major financial mistakes.
Idle Money: Money lying idle in cash or saving bank accounts generates negative returns. This is one of the biggest financial mistakes which we often make by ignoring the effect of inflation on the money invested. Insufficient funds in the saving bank account for emergency purposes.
No Investment: Spending money blindly and not considering about any investment is another bad money idea. Increase the investment amount as your income increases. Don’t wait for a lump sum amount to be accumulated to invest and don’t try to time the market. Develop a regular and disciplined investment approach.
High Debt: Small amounts of debt, or house mortgages and auto loans may be comfortable but realize that these can be hard to handle if money is tight. If you do acquire new debt, do so cautiously and after researching the best loan options. Always prepare a plan to keep a tight leash on personal loans and credit card debt.]]>
The reason behind moving your money is that the big banks don’t care about people, small businesses, and community. Smaller, community banks are supposed to be more responsible and personal because you know the bankers personally. The organizers believe that a mass movement to smaller banks will force the big banks to be more responsible.
If you are also thinking about moving your money to a nearby small bank, then it is advised do some research before stepping further as there are some factors in favor and not in favor of this.
Control: The biggest advantage of moving your money is the feeling of control over the situation that you’ll receive from sticking to a small bank.
Support to Small Business: A small bank nearby, supports local organizations and lends to small businesses. Being in a small community, they become a part of the community.
Personalized Services: A bank with just a few branches and clients provide better personalized service when you have some problem related to your accounts. Moreover they charge less fees for their services.
Inconvenience: Local banks have a limited number of ATMs that may also be far from the place where you work or live.
Over-leveraging: Big banks are bailed out for excessive leverage but smaller banks fail in much higher numbers because they over-leverage and make risky loans.
Higher Risk: Most of the community banks are failure prone. Before placing your money in a small bank, you should verify its ratings.
The decision about moving your money depends totally on you. You have to decide whether switching to a smaller bank is right for you and your financial habits.]]>
Mobile financial services are very likely to become the next big thing that will attract millions of consumers all over the world. There are three kinds of mobile financial services:
Mobile Banking: It enables customers with existing bank accounts to get connected to their bank or financial institution over the mobile network. They can use standard banking services such as bank account management (check balance, view transactions, etc.), credit / debit card management with it.
Mobile Payment: Enables customers to make credit card payments and bill payments any time anywhere, from either a bank account or a mobile wallet.
Mobile Money Transfer: Transferring Money via international or national remittance hubs from and/or to a real bank account or a mobile wallet. It is is a peer to peer form of mobile payment mechanism which is most successful among other kinds of mobile transactions.
As the use of Internet is expanding day by day, consumers are becoming more comfortable with using their handsets for increasingly sophisticated purposes, which also leads towards adoption of electronic channels for financial services. Today’s successful payment services have been built using certain mobile-specific channels that even basic handsets could support. Moreover access to the Internet will enable providers to offer solutions that do not depend on the security solutions offered using the SIM card in the phone. The growth of the mobile Internet may cause a boom in a new generation of branch less banking providers, raising substantial questions about risks to consumers, as well as the future shape of the competitive landscape.
It is estimated that there will be more and more people within the reach of wireless communications in next few years. Devices like mobile phones, which require less energy than PCs and ATMs and which can be recharged by windup or solar power, would play an increasingly important part in mobile finance.]]>
Financial planning Stage1: This stage is about tracking where you are now. What is your income, your assets, debts and expenditure? How stable is your income? Does it remain constant, or is it dependent on factors beyond your control? And what about prospects, are you in an occupation where you can reasonably expect your income to increase year on year?
Financial Planning Stage 2: The next stage is about identifying your goals which depend upon your age, circumstances and individual tastes. For example, the young will probably be concerned with purchasing their first home, the early middle-aged with paying their kids college fees, and the late middle-aged with providing sufficient retirement income.
Goals: Goals exist within different time frames. These can be short term that might be to save enough for next year’s vacation, a medium term which may be to pay off your mortgage and the longest term one may be building a decent pension fund.
Step1) Identify and write down your financial goals.
Step 2): Break each financial goal down into several short-term (less than 1 year), medium-term (1 to 3 years) and long-term (5 years or more) goals.
Step 3): Learn through a money magazine, or a book, or surf the Internet, for how to take wise decisions that will increase your net worth many times over. Then identify small, measurable steps you can take to achieve these goals, and put this action plan to work.
Step 4): Evaluate your progress by reviewing your monthly, quarterly, or at any other interval progress to determine if your program is working. If you’re not making satisfactory progress on a particular goal, re-evaluate your approach and make changes as necessary.
Finances can be improved by by saving money and investing carefully without any specific targets but it is a good idea to have some general goals.]]>