Investing is a risky activity. There is so much one needs to learn, and stay on top of, that it can drive one crazy. Many a time someone has started an investment strategy, only to lose it all because of their inability to stay on top of things.
Of course there are many ways to avoid risking your money, and a good financial planner always helps. Also the types of investments one deals in should be tailored to how much they can safely invest, and meet their financial goals, without the worry of losing everything they have.
Everybody has a risk tolerance that should not be ignored. Some individuals can stand the risk, others stress over every decision they make.
Any good stock broker or financial planner knows this, and they should make the effort to help you determine what your risk tolerance is. Then, they should work with you to find investments that do not exceed your risk tolerance.
Determining one’s risk tolerance involves several different things. First, you need to know how much money you have to invest, and what your investment and financial goals are.
For instance, if you plan to retire in ten years, and you’ve not saved a single penny towards that end, you need to have a high risk tolerance, because you will need to do some aggressive, risky, investing in order to reach your financial goal.
On the other side of the coin, if you are in your early twenties and you want to start investing for your retirement, your risk tolerance will be low. You can afford to watch your money grow slowly over time.
Realize of course, that your need for a high risk tolerance or your need for a low risk tolerance really has no bearing on how you feel about risk. Again, there is a lot in determining your tolerance.
For instance, if you invested in the stock market and you watched the movement of that stock daily and saw that it was dropping slightly, what would you do?
Would you sell out or would you let your money ride? If you have a low tolerance for risk, you would want to sell out… if you have a high tolerance, you would let your money ride and see what happens. This is not based on what your financial goals are. This tolerance is based on how you feel about your money!
Again, a good financial planner or stock broker should help you determine the level of risk that you are comfortable with, and help you choose your investments accordingly.
Your risk tolerance should be based on what your financial goals are and how you feel about the possibility of losing your money. It’s all tied in together.
Mahalo.
******************************************************************
Need to learn how to get and stay out of debt and live debt free?
Tips and techniques outlined in our ebook “Debt Free Living”.
For more information:
http://www.renspubhouse.com/debtfree/debtfree.html
******************************************************************
Thursday, February 28, 2008
Wednesday, February 13, 2008
One Must Start Somewhere - How To Begin Investing and Getting To The Top of The Heap.
Donald Trump and Warren Buffet didn't start out rich, they started building their empires somewhere and you can join them with patience and persistance.
If you are anxious to get your investments started, you can get started right away without having a lot of knowledge about the stock market. Sure it helps, but while you are studying and learning, you can still invest your money in an intelligent manner. Start by being a conservative investor with a low risk tolerance. This will give you a way to making your money grow while you learn more about investing.
Start with an interest bearing savings account. Sure this is not exciting, but every little bit helps. Something is better than nothing. Besides, you can always move the money latter after you are more knowledgeable and confidant with your investment knowledge. You may already have one. If you don’t, you should. A savings account can be opened at the same bank that you do your checking at , or at any other bank. A savings account should pay 2 – 4% on the money that you have in the account. Again not exciting, it’s not a lot of money, unless you have a million dollars in that account, but it is a start, and it is money making money.
Next, invest in money market funds. This can often be done through your bank. These funds have higher interest payouts than typical savings accounts, but they work much the same way, some even let you write a limited number of checks against the account (generally two to three a month). These are short term investments, so your money won’t be tied up for a long period of time, but again, it is money making money, and that is the general idea isn't it?
Certificates of Deposit are also sound investments with no risk. The interest rates on CD’s are typically higher than those of savings accounts or Money Market Funds.
You can select the duration of your investment, and interest is paid regularly until the CD reaches maturity. CD’s can be purchased at your bank, and your bank will insure them against loss. When the CD reaches maturity, you receive your original investment, plus the interest that the CD has earned. Again f you are not ready for the big time when they do mature, have th interest moved to your money market fund, and "roll-over" the CD's (reinvest the principle in another CD of the same approximate length).
If you are just starting out, one or all of these three types of investments is the best starting point. Again, this will allow your money to start making money for you while you learn more about investing in other places. This way you will build up capital for when you are ready for the next step.
Mahalo.
******************************************************************
Need to learn how to get and stay out of debt and live debt free?
Tips and techniques outlined in our ebook “Debt Free Living”.
For more information:
http://www.renspubhouse.com/debtfree/debtfree.html
******************************************************************
If you are anxious to get your investments started, you can get started right away without having a lot of knowledge about the stock market. Sure it helps, but while you are studying and learning, you can still invest your money in an intelligent manner. Start by being a conservative investor with a low risk tolerance. This will give you a way to making your money grow while you learn more about investing.
Start with an interest bearing savings account. Sure this is not exciting, but every little bit helps. Something is better than nothing. Besides, you can always move the money latter after you are more knowledgeable and confidant with your investment knowledge. You may already have one. If you don’t, you should. A savings account can be opened at the same bank that you do your checking at , or at any other bank. A savings account should pay 2 – 4% on the money that you have in the account. Again not exciting, it’s not a lot of money, unless you have a million dollars in that account, but it is a start, and it is money making money.
Next, invest in money market funds. This can often be done through your bank. These funds have higher interest payouts than typical savings accounts, but they work much the same way, some even let you write a limited number of checks against the account (generally two to three a month). These are short term investments, so your money won’t be tied up for a long period of time, but again, it is money making money, and that is the general idea isn't it?
Certificates of Deposit are also sound investments with no risk. The interest rates on CD’s are typically higher than those of savings accounts or Money Market Funds.
You can select the duration of your investment, and interest is paid regularly until the CD reaches maturity. CD’s can be purchased at your bank, and your bank will insure them against loss. When the CD reaches maturity, you receive your original investment, plus the interest that the CD has earned. Again f you are not ready for the big time when they do mature, have th interest moved to your money market fund, and "roll-over" the CD's (reinvest the principle in another CD of the same approximate length).
If you are just starting out, one or all of these three types of investments is the best starting point. Again, this will allow your money to start making money for you while you learn more about investing in other places. This way you will build up capital for when you are ready for the next step.
Mahalo.
******************************************************************
Need to learn how to get and stay out of debt and live debt free?
Tips and techniques outlined in our ebook “Debt Free Living”.
For more information:
http://www.renspubhouse.com/debtfree/debtfree.html
******************************************************************
Sunday, February 3, 2008
The Problem of Our Age Has a Name and it is Called ‘Credit Card Debt ‘
Once upon a time, not so long ago the adage “Cash is King” was the mantra of business. Credit Cards were virtually unheard of and most credit was done by “Letters of Credit”, or “Revolving Credit”. Of course in the 1960's and 1970's Credit Cards started to take off and were at first a sort of a luxury for the rich and upper crust.
Credit cards are no more a luxury, they are a necessity. Let's face it, the whole “New Economy” depends upon them. So, you would imagine that people are going for credit cards without abandon.. In fact, a lot of people possess more than one credit card. So, the credit card industry keeps growing by leaps and bounds. In fact I am sure most of you receive at least 3 solicitations a week from different banks (let alone the idiotic commercials on TV, radio and in magazines).
Credit Cards a great tool if one knows how to use them properly and is careful in their use. However, too many people do not take care, as they don't really pay attention to what they are doing (usually because Mommy and Daddy took care of the bill when they were younger), so the credit card industry and credit card holders are posed with a big problem called ‘Credit Card Debt’. In order to understand ‘credit card debt’, we need to understand the work flow associated with the use of credit cards as such.
Credit cards, as the name suggests, are cards on which you can get credit i.e. make borrowings (your credit card debt). Your credit card is a representative of the credit account that you hold with the credit card supplier. Whatever payments you make using your credit card are actually your borrowings that contribute towards your credit card debt. Your total credit card debt is the total amount you owe credit card supplier. Normally, if one uses them properly, one settles their credit card debt on a monthly basis. Of course sometimes emergencies arise and one has to go further into debt than planned. This is fine as long as you budget and don't overdue it.
So, you receive a monthly statement or your credit card bill which shows your total credit card debt. Ideally you should pay off your credit card debt by the payment due date, failing which you will incur late fees and interest charges. However, you have the option of making a partial (minimum) payment too, in which case you don’t incur late fee but just the interest charges on your credit card debt. If you don’t pay off your credit card debt in full, the interest charges then get added to the debt. Of course this is how Credit Card Companies and Banks make money off Credit Cards (and why they advertise their use so you would have to pay them interest).
If you don't pay off the balance every month, your credit card debt keeps on increasing, more so because the interest rates on credit card debt are generally higher than the interest rates on other kind of loans/borrowings. Further, the interest charges add on to your credit card debt each month to form the new balance or the new credit card debt amount. If you continue making partial payments (or no payments) the interest charges are calculated afresh on the new credit card debt. So you end up paying interest on the last month’s interest too and so on and so forth until one finds themselves in the deep spiral of endless debt.
Thus your credit card debt accumulates rapidly and soon you find that what was once a relatively small credit card debt has ballooned into a big amount which you find almost impossible to pay. Moreover, if you don’t still control your spending habits, your credit card debt rises even faster. This is how the vicious circle of credit card debt works.
So remember to keep a budget and track your purchases so you don't overspend and everything will be fine and you can keep yourself out of debt and enjoy your life.
Mahalo.
******************************************************************
Need to learn how to get and stay out of debt and live debt free?
Tips and techniques outlined in our ebook “Debt Free Living”.
For more information:
http://www.renspubhouse.com/debtfree/debtfree.html
******************************************************************
Credit cards are no more a luxury, they are a necessity. Let's face it, the whole “New Economy” depends upon them. So, you would imagine that people are going for credit cards without abandon.. In fact, a lot of people possess more than one credit card. So, the credit card industry keeps growing by leaps and bounds. In fact I am sure most of you receive at least 3 solicitations a week from different banks (let alone the idiotic commercials on TV, radio and in magazines).
Credit Cards a great tool if one knows how to use them properly and is careful in their use. However, too many people do not take care, as they don't really pay attention to what they are doing (usually because Mommy and Daddy took care of the bill when they were younger), so the credit card industry and credit card holders are posed with a big problem called ‘Credit Card Debt’. In order to understand ‘credit card debt’, we need to understand the work flow associated with the use of credit cards as such.
Credit cards, as the name suggests, are cards on which you can get credit i.e. make borrowings (your credit card debt). Your credit card is a representative of the credit account that you hold with the credit card supplier. Whatever payments you make using your credit card are actually your borrowings that contribute towards your credit card debt. Your total credit card debt is the total amount you owe credit card supplier. Normally, if one uses them properly, one settles their credit card debt on a monthly basis. Of course sometimes emergencies arise and one has to go further into debt than planned. This is fine as long as you budget and don't overdue it.
So, you receive a monthly statement or your credit card bill which shows your total credit card debt. Ideally you should pay off your credit card debt by the payment due date, failing which you will incur late fees and interest charges. However, you have the option of making a partial (minimum) payment too, in which case you don’t incur late fee but just the interest charges on your credit card debt. If you don’t pay off your credit card debt in full, the interest charges then get added to the debt. Of course this is how Credit Card Companies and Banks make money off Credit Cards (and why they advertise their use so you would have to pay them interest).
If you don't pay off the balance every month, your credit card debt keeps on increasing, more so because the interest rates on credit card debt are generally higher than the interest rates on other kind of loans/borrowings. Further, the interest charges add on to your credit card debt each month to form the new balance or the new credit card debt amount. If you continue making partial payments (or no payments) the interest charges are calculated afresh on the new credit card debt. So you end up paying interest on the last month’s interest too and so on and so forth until one finds themselves in the deep spiral of endless debt.
Thus your credit card debt accumulates rapidly and soon you find that what was once a relatively small credit card debt has ballooned into a big amount which you find almost impossible to pay. Moreover, if you don’t still control your spending habits, your credit card debt rises even faster. This is how the vicious circle of credit card debt works.
So remember to keep a budget and track your purchases so you don't overspend and everything will be fine and you can keep yourself out of debt and enjoy your life.
Mahalo.
******************************************************************
Need to learn how to get and stay out of debt and live debt free?
Tips and techniques outlined in our ebook “Debt Free Living”.
For more information:
http://www.renspubhouse.com/debtfree/debtfree.html
******************************************************************
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