Don't Bet The Farm

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The First Steps to Investing Safely

Investing SafelyMany people are thinking of ways to make alternative money and investing can be a first start in the right direction to get involved in the awesome world of investing. You do not have to be a pro to get started and there are many first steps to investing that you can take to break into this world.

Penny stocks have been gaining a lot of attention and penny stocks can be used as the first steps to investing. You can invest very little in penny stocks and this decreases the risks that are normally involved with trading. You can use penny stocks as a platform of learning and then move on to other forms of investing. There are many great resources for penny stocks out there and it is very easy to sign up and get started. Some of the best penny stock trading sites have great resources to help you learn and this is something you may want to take full advantage of.

The 12 Absolute Rules For Investing Safely

Financial independence means having the freedom to do what you want – and not being tied to a job merely because you need the money. Isn’t this an excellent goal worth striving for? Money buys you freedom, the freedom to do what you want to do. Studies have proven that it is impossible to be truly happy without freedom.

qTo acquire wealth, we need assets that produce our income. To do this, we need to accrue investments that are roughly 10 times the annual income we need to support our lifestyle. In this way, the dividends generated by our investments, on average 10%, will create the income we need without eroding our asset base.

Build income-producing assets by following these 12 essential rules:

1. Develop a suitable investment plan to ensure you have the appropriate growth and return from your investments.

2. Always start by identifying your risk profile and the required term of your investments (i.e. short, medium or long-term)

3. Calculate the appropriate investment portfolio mix for your risk and term profile.

4. Build your investments into 3 categories: low, medium and high risk.

5. Divide your investment choices into these 3 ranges, building the safest first.

6. In a very volatile market, steer clear of all high risk investments.

7. Get the best financial planning advice. If your financial planner doesn’t assess your risk profile before advising their recommendation, then move on and find a better one.

8. Stay with your plan. If it is the right plan for you, and you give it sufficient time (all asset types fluctuate over the short term), the plan should succeed.

9. Don’t put all your eggs in the one basket. Many people think that paying off their home mortgage and then buying an investment property is a safe investment. But what happens if the property market collapses?

10. Build in appropriate time frames. If you choose good investments and stay with them for, say, 10 to 15 years, you will ride the waves of the market.

11. Avoid high-risk investments, such as risky business ventures, highly speculative stock, tax avoidance schemes or too-good-to-be-true propositions that promise unusually high returns.

12. Avoid borrowing for your investments. This can be fraught with danger. (The fundamental cause of the 1929 Wall Street crash was too many people bought shares on margin calls – and when the market started falling, they had no money to pay their debts or buy more stocks. Ultimately this caused the severe downward spiraling effect that caused the crash.)

The best way to succeed in investing is to stay with good investments over the long term (say, 10 years or more). Markets will always rise and fall, yet even the best experts have difficulty in picking the highs and lows of the market. Over time the share market will rise, usually at a rate of 15% to 20% over a 15 to 20 year period.

Unless faced with significant changes to your circumstances, stay with your plan. If it is the right plan for you and you give it sufficient time, the plan will succeed.

Basic Tips on Personal Finance

Do you ever wonder where your money goes every month? Does it sometimes seem as though you cannot afford to do things because your financial obligations are holding you back? If you find that you are asking yourself these sorts of questions, perhaps you should take a look at your financial situation and assess whether you are practicing good personal finance management or not. Good personal finance management spends within their income, plan for the future and solve financial problems as they arise. Poor personal finance management pay more, do without and fall behind. If you find yourself in the second category, you can do something about it. You can learn to take charge of your finances by planning your personal finances.Planning your personal finances doesn’t always come naturally, and even if you are just beginning to take your financial matters seriously, then you likely need a few personal finance tips.

wEvaluate your current financial situation. One of the most important goals for most people is financial independence. Collect accurate information about your personal financial situation. Calculate your net worth which includes the real estate, saving and retirement accounts, and all other assets. This will help you decide how much money you can set aside for meeting future needs and goals.

A basic personal finance tip is to make a budget. A personal finance budget is information made up of your income and expenses and the more accurate this information is, the more likely you are be able to meet your goals and realize your dreams. A personal finance budget should be made for at most one year at a time and include a list of your monthly expenses.

All expenses must be included. To be sure of that go through all your paid bills, check register and credit card receipts to find expenditures that recur every month and expenditures that happen less frequently. Personal finance budgeting requires some small sacrifices. To be able to make good personal financial decisions and set priorities, you must know where your money is actually going. Start your budget and accomplish your goals.

Get an electronic bill pay. This is a very convenient way to pay your bills. You pay them electronically, by direct withdrawal from your bank account. The transaction is processed immediately. You can even link your bill pay service to your personal finance budget, so that your expenditures are automatically entered in the appropriate category. Personal financial management can be really easy.

Make an investment and finance plan. Now that the fundamental state of your personal financial security has been established, the time has come for the more prosperous part of your personal financial life. You need to make a personal finance plan of what you really want in life that money can buy. Your personal financial plan can be as simple or as detailed as you want it to be. Find out how to finally start to implement this plan and get the money to finance it. This is the long term part of your financial. This journey is the most interesting and exciting part of personal financing you can have toward financial freedom.

You can prepare for a secure personal financial future by following these simple tips. When you take control with your money, you don’t have to worry about debt taking control of you.

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