0 Invest in Stocks: a Must for 2014

The beginning of the year is a perfect time to make solid financial commitments toward gaining financial freedom, such as increasing their savings and paying off credit card debt. In order to achieve these, some people choose to place investments able to yield the best possible returns and profit.
One of the most popular investment options for 2014 is stocks. Although investing in stocks have many risks due to the volatile nature of the market, they still remain a popular investment option. Below are some of the reasons why stocks remain popular for 2014:

1.     Easy to Acquire

It’s easy to acquire stocks. In the past, you’d need to contact a broker or a financial planner to buy stocks. Now, you can purchase stocks simply by going online and doing some research.

2.     High Returns

Although stocks do not guarantee a fixed amount of profit, investing in stocks for a long period of time can yield good returns. As the economy grows, consumer demand increases. In turn, revenues of the companies you invest in also go up.

3.    Easy to Sell

Because investors are buying and selling stocks regularly, this makes stocks not only easy to buy, but easy to sell, as well. In comparison, other forms of assets such as houses, jewelry, or cars can be harder to sell because there are more factors to consider such as the condition of the property you’re selling, and the fact that there are other people selling the same assets, some of them in better condition or at cheaper prices. Stocks, on the other hand, can be sold any time you choose. Also, the rules are rather simple: buy low and sell high.

4.     Gets You Ahead of Inflation

According to CNN Investing Basics, stocks usually have an average annual return of 10%, a rate significantly higher than the average annual inflation rate of 3.2%. This means you can prevent the value of your purchased currency from decreasing because the companies you’re investing in will still yield higher returns than the annual inflation rate. Even if the economy gets bad, people will still continue making purchases, which is why you can still be ahead of inflation when you invest in stocks.

5.     Tax Relief

Purchasing stocks doesn’t entail having to pay taxes on what you earn every year, just like what investors do for bonds or bank accounts. When you purchase a stock, and its value increases, you’re not required to file a return on your earnings. You’ll only be required to file your stock profits when you sell your shares. You can also adjust the taxes you file for stock gains when you lose money in purchasing a stock.

6.    Higher Interest Rates

If you are finance-savvy and like to save, then you’d be pleased to know that money invested in shares will yield you higher interest returns compared to other forms of investment. For instance, fixed-deposit accounts generally yield around 4% compounded interest per year, while investing in a unit trust fund can yield 5%-20% compounded interest.

By comparison, investing in stocks can provide you with 50%-100% compounded interest. For those who want more interest rates in terms of profits, you can try investing in foreign exchange trading. However, remember that higher-earning stocks also come with bigger risks.

7.    Extra Funds

Whether you hope to earn money for a short period of time or aspire to grow your money in the long term, you can have additional funds for better cash flow management through stock investments. Investing in stocks can provide you with a source of income so you wouldn’t have to rely solely on credit cards any more to supplement your regular income.

With all these advantages of investing in stocks, it is easy to see why the number of Filipino stock investors is growing year by year. So for 2014, make it your goal to set aside part of your savings to invest in well-researched stocks and watch your money grow. 

The article is contributed by Michael Vincent from Money Hero, Hong Kong’s up and coming financial comparison website. Users can compare a broad range of financial products like credit cards and insurance plans side by side, thus enabling them to make better financial decisions when looking for financial products.

2 Basic Money Savings Tips for Dummies

It is difficult to achieve peace of mind and quality of life if you are constantly struggling to save money and feel constant stress due to overwhelming debt. Starting small to achieve financial success is possible for anyone, no matter how small their income or how big their debt.
 

Cut down on your spending by clipping coupons for groceries and othe rpurchases. Even a 5 to 10 dollar savings per week adds up over time. Stop spending your money foolishly. If you are addicted to drinking expensive coffee from a coffeehouse enroute to work, invest in a gourmet creamer in a comparable flavor and an insulated coffee cup. Taking the coffee from home helps put money in your pocket and soon you may actually prefer the homemade version to the more expensive. Cutting corners in this way adds up to a large amount of extra money over time.

Make a budget that curtails frivolous spending for everyone in your family. Do not make the budget so rigid that there is no room for fun purchases. Allocate each person a small amount of cash to spend however he or she desires each week. If the individual has his heart set on a high price item, tell him that he then has to save his money until he has enough for the purchase. One of the most important categories in a budget is the savings account. Treat this just like a bill and if possible, have the money automatically deposited each time you receive a paycheck.

Concentrate on building an emergency savings account for car troubles, house repairs or other inevitable problems that pop up. Once you have the savings in place, you no longer have to resort to credit cards to pay for these money crunches. A wise amount for an emergency savings is about $1000. After building this type of savings, strive for a larger savings of 3 to 6 months of living expenses.

Pay the minimum on every credit card you have each month to avoid late fees. Choose the credit card with the lowest balance to pay any extra cash you have on hand on each month. Soon the balance will be zero and you can take the money you were paying on that credit card and apply it to another one. Following this method steadily and consistently enables you to pay off the credit cards. It also enables you to avoid the high interest rates on these accounts. Never buy a new car unless you can pay cash for it. If you need a relatively new car because you transport clients or drive long distances to work, purchase one that is at least two years old. Once you drive a brand new car off the dealer parking lot, the value diminishes rapidly.

Save up so that you have a hefty down payment for a house. The bigger the down payment is, the less your mortgage payments will be each month. Make it a goal to have enough of a down payment so that you don’t have to buy private mortgage insurance – or PMI. This protects the lender against default if the homeowner does not make the payments. This type of insurance is costly. In most states if you put down 20 percent or more on your home, you are not required to have the PMI. In addition, purchase a home that you can easily afford on one salary is you and your spouse both work. This prevents unhealthy financial stress if one of you is laid off, fired or disabled.

7 How To Utilize Gold Price to Make Wise Investment

There are many big and small investors all over the world. People do invest their money with respect to get positive returns in terms of profit to their investment. Investment on gold can be done in a number of ways such as through stock exchange secondary markets, via banks etc.

Gold prices keeps fluctuating for which there is a need of keeping a track on the change in price of the gold. The change in gold prices depends on multi-factors in the financial markets. A proper financial planning is required for investing in gold. Buying gold is a good investment as the price of the gold is rising with each passing day.

 

Gold as investment

Out of all metals which are precious,gold is considered as one of the most favorite and popular in the investment point of view. In gold market gold is always subjected to some or the other speculation in comparison to the other markets, mainly by the use of derivatives and futures contracts.In the ancient history of gold standards, gold reserves has played a very important role in the central banking along with the low correlation of gold, and prices of other commodities. We can also say that gold being a commodity behaves just like the liquid cash which can be converted into cash any moment with an ease.

Factors which can influence gold price

Some of the factors which influences or drives the gold price are s follows –

• Demand and supply – the demand and supply highly affects the gold prices. When the demand is excess over the supply, its price started rising and as soon as the supply becomes excess over the demand the price started falling down.
• Speculation – it is a practice to get engaged in such financial transactions which are risky in nature. People do speculation with the attempt for making profit from either medium or short term fluctuations of gold in market value of the tradable goods for example the financial instruments instead of attempting to making profit from financial attributes which are underlying which embodies in such financial instruments like dividends, interest, capital gains etc. many speculators do not pay much attention to fundamental value of security rather they focus more on the price movements of gold. Speculators are common in financial markets for commodity, bonds, stocks, derivatives, real estates, collectibles, fine art, currencies, futures and many more.
• Savings and disposal –savings and disposal is playing a very important role for affecting the price of commodities but as far as the gold prices are concerned it focuses more on the consumption. The gold which have been mind in all the years most of which are still existing in an accessible form like jewelry which are mass produced, bullion which has a very little value on the fine weight. It can potentially come back into gold market at right price.

More about the value of gold and investments

The quantity of the stored gold above the ground as compared to annual production, gold price is affected mainly by the change in its demand or sentiment rather than the change in supply o the annual production.

Some of the important gold based questions which knock every mind of an investor are as follows –

• Whether the investment on gold is a wiser decision or is it only a store of value simply.
• Is investing on the gold at higher price is a good decision?

For answering the above questions it is very important to follow expert’s advice in the financial market as well as on keeping continuous track of the changing values and prices of the gold time to time. You must analyze and understand the trend of the prices of gold before making your investment or before risking your money into it. Only a very few knows about the relationship between the gold prices and the silver prices. However it is complimentary and related. 

Author's Bio:

Criss Derek is a specialist in global resources as well as a contributing writer. He writes on Gold Price to make people aware about the pros and cons of investing in gold. Read his blogs to stay updated about the price fluctuation in gold.

0 Don't Forget To Set Some New Year's Money Resolutions

By AMP Financial Planner Ali Mohammed

The New Year is a time when people tend to reflect on the past 12 months and the changes they'd like to make in their lives.

Many resolve to quit smoking, lose weight or do more exercise. And if you're keen to get on top of your finances, some New Year's money resolutions are the way to go.

Here are 10 things people can do, regardless of their income levels, to improve their financial well being in 2013.

Top 10 New Year money resolutions:

1. Start with a budget It's essential to have a household budget and stick to it. If you spend more than you earn, it can quickly land you on the roller coaster of debt. Make a promise to start living within your means.

2. Differentiate between 'wants' and 'needs'
Don’t be too hard on yourself, but do you really need the $100 per month pay TV package? You probably don’t watch half the programs.

Cars are big traps too. It’s nice to drive the latest and greatest, but don’t live for your car. Be sensible.

3. Shop smart
Look for ways to reduce your spending such as using discount petrol dockets, taking your own lunch to work, cutting back on take-away dinners and car pooling.

Reduce your weekly grocery bill by shopping for your fruit and veggies at farmers' markets, buying generic groceries and planning meals to avoid waste.

Always shop around for the best deal when purchasing big ticket items.

4. Use credit cards wisely

Credit card debt is fine if you pay it off each month before interest is incurred. But if you have a large amount of debt sitting on your card, it could be costing you an astronomical amount in interest each year.

Interest rates on credit cards are sometimes as high as 20 per cent or more, so it's important to pay off this kind of debt as fast as possible. To do that you will need to make more than the minimum repayments each month.

If you have several cards maxed-out, consider rolling all the debt in to one low interest-bearing card to save on interest. Once you have finally paid the card off, cut it up and switch to a debit card if you have to.

5. Have an emergency fundAs a contingency for life's unexpected expenses, it's vital to have an emergency fund or access to cash through a mortgage redraw facility or offset account.

A good rule of thumb is to have at least three months salary in the kitty. This will avoid the need to rely on credit cards in the event of an emergency.

6. Get savvy with your superAustralians are losing around $1 billion a year in fees, lost payments and earnings by holding several super accounts they aren't contributing to (Rice Warner Actuaries 2008). AMP has introduced a simple service allowing customers to consolidate their super online for free at amp.com.au/consolidate, or by calling 133 888.

Also consider topping up your superannuation by salary sacrificing another two to five per cent of your income, depending on how much you can afford. Lower income earners should also make the most of the government co-contribution scheme.

7. Review your mortgage The most effective way to save interest on your home loan is to make extra repayments each month. The monthly repayments on a $300,000 mortgage over a 25 year term at 7.25 per cent are around $2,168.

But a person could pay the loan off 10 years earlier and save $158,277 in interest if they increased their monthly repayments by $575. People can also attack their loan faster by paying fortnightly instead of monthly and making lump sum repayments whenever they can.

It's also now easier for consumers to shop around for a better deal after home loan exit fees were abolished on all mortgages taken out from 1July 2011. However people with loans taken out before this date need to carefully consider the costs associated with moving a mortgage.

8. Have a debt strategy Financial worries can be very stressful, so it is important for people to take control of their debt before it starts controlling them. The general rule of thumb is to pay off 'bad' debt like credit cards first as they usually have the highest interest rates.

Once bad debts are under control, a person can then target other debts such as their car loan and home loan and save even more in interest.

As the interest rates on home loans are much lower than other loans, this type of debt should only be targeted more aggressively after your credit card and other high interest loans are under control.

9. Protect your family

It's not something we want to think about, but you need to ask yourself how your family would cope financially if you or your partner were injured in an accident, became too sick to work, or even worse, passed away.

These days, insurance doesn't have to be a big drain on the budget. If cash flow is tight, you can get affordable life insurance and income protection through your superannuation. After a change in regulations a few years ago, it is now possible to obtain income protection insurance from some funds to age 65 inside your super.

10. Save for the future

While most people are pretty good at saving for short-term goals such as end of year holidays, they often forget to put money aside for the future.

Make sure you have a savings plan for medium-term goals such as a deposit on your first home and longer-term milestones, like retirement funding and the kid’s education.

*Ali Mohammed is an Authorised Representative of AMP Financial Planning Pty Ltd, ABN 89 051 208 327, AFS Licence No. 232706.

Any advice given is general only and has not taken into account your objectives, financial situation or needs. Because of this, before acting on any advice, you should consult a financial planner to consider how appropriate the advice is to your objectives, financial situation and needs.

0 Tips for Saving Money, a Little at a Time

Over time, small changes can add up to big results. Whether your are working on the small lifestyle changes that can result in weight loss over time, or whether you are working to save up for retirement, the little things you do can add up over time.

Identify Waste in Your Budget

Experts estimate that the typical household in America wastes between 10% and 15% of its income each month. This means that you probably have money that you can set aside for the future. Instead of letting that money go to waste, consider how you can find the small money leaks in your budget.

Look for what you might be wasting money on, whether you get take out three nights a week, or whether you spend too much on convenience items rather than shopping around. You don’t have to find huge money wasters; look for the small things, and you might be surprised at how they add up.

If needed, use debt counseling services like Consolidated Credit to help you identify the waste in your budget, and put together a plan for getting rid of the waste, and paying off debt, so that your savings will be more effective.

Work Up to Saving More

The best thing to do is to start small and then work up to saving more money over time. It can be a shock to your budget to suddenly saving a ton. Instead, start small. If all you have right now is $50 a month to save, start saving that. You can work up to more later. Start saving a small amount, and then look for little things to cut from your budget, like subscriptions you don’t really use, buying lunch every day, or making those impulse purchases at the store.

Start small and work up to saving bigger. Do it a little at a time, in steps, and you’ll see better success.

Make It Automatic

Another good way to get moving on your savings goals is to make it automatic. Figure out how much you can save as a base figure, and have that automatically saved. You can have it taken from your paycheck each month, or you can have it automatically transferred from your checking account to a savings account. If you make it automatic, it is easier to be sure that you will save each month.

You can boost the amount as you go along, or you can set a base amount, and then make a game of looking for more ways to save over time. Look for small savings of $5 here and $10 there, and it will add up eventually.

Use a High Yield Savings Account

You can maximize what you save by using a high yield savings account for your money. Look for an account that pays out a competitive yield. That way, your money will earn interest as you save it. You will see better results, and be more interested in finding ways to save even more money. Look for an account that makes it easy to transfer money in, and then watch your wealth grow a little bit at a time.

If you aren’t using your savings for an emergency fund, consider using a discount brokerage for some of your savings. The potential returns could really turn your small savings into something large over time.

It really does help to start small. While you’ll want to increase your efforts over time, a small start can be a good way to get in the savings habit.

This guest post comes courtesy of Consolidated Credit.

0 What Secrets Does Your Budget Hold?

A personal or family budget can reveal a lot about a person. What secrets does your budget hold? I'll share how to look at your budget along and where to make cuts that will help you save more. 

Stop borrowing and start saving

Our natural inclination when we are faced with a large or unexpected bill is to borrow the money to get out of a fix. What you are doing of course is actually making your financial situation worse in the long run simply as a way of dealing with an immediate financial crisis. The vast majority of us really don’t like budgeting as it is not a very exciting or pleasant way to spend an evening going through what you spend and how much money you don’t have any more after just getting paid. If you can bear the pain of your finances being laid bare you will be potentially be rewarded with savings that you make and the chance to build a stash of cash that will help you deal with an emergency when it comes along.

Make a budget and set up a savings strategy

To make an accurate budget you have to make a comprehensive list of all your expenditure and that means not just the rent and the car payments but also the amount you spend on donuts and coffee so you can see exactly what you spend compared to how much you earn each month. In preparation for the savings you are looking to make from your outgoings set up a separate savings or deposit account so that you can transfer any spare money into there. Having a separate account for your savings is vital and you will often be pleasantly surprised how quickly even $30 a month will build-up a bit of a buffer against the unexpected.

Cash is king

We all love the convenience of credit cards but try leaving the credit card at home and taking out a weekly amount of cash that you have worked out will cover all your basic and discretionary expenses not paid by standing order such as fuel, food and entertainment.

0 How To Budget Your Money

My previous post talked about what to avoid when spending money in general. Pretty much most of them were basic tips as I am just starting out this blog, I thought that I should start from the basic concepts of saving money. One of the most important things I said in the post was to make a budget. It was pretty hard to elaborate the idea in a paragraph or two, and so I made this post to further broaden the subject about budgeting. Budgets are necessary evil and I must agree to that, as much as we want to spend all the fruit of our hard labor we must also take in mind that money come and go – in my case it's more of a go sad to say.

Many people have trouble saving money as it seems to go out faster than it comes in. This effect is mostly due to an unequal ratio of purchasing days to pay days. Most people only receive a pay check about twice a month, yet spend money on a daily basis. In this regard it can be difficult to keep track