HOW TO GET STARTED IN THE STOCK MARKET

Monday, June 22, 2015

HOW TO GET STARTED IN THE STOCK MARKET

By imoney

Becoming an expert investor is hard, and most of us don’t know where to start. But for Marvin Germo, Registered Financial Planner and stock market trader, he had a goal from the get-go. He wanted to have a better future for himself, and saw that investing was the way to go. “My parents never taught it to me. But I saw the effects of not investing, so I said to myself “When I get older, my life should be different than what they’re experiencing right now,” and that pushed me to educate myself in how to invest in different things.” He started investing in his early 20s and hasn’t looked back since.

Now, Germo is a prominent stock trader and investor with two best-selling books about investing in the stock market, who often appears on TV to talk about investing and has given talks all over the world about the subject. But getting to that point wasn’t easy. So iMoney spoke to Germo about how he educated himself in investing, and how you can get started in the stock market as well.

Why Is Investing Important?

“It’s the best way to earn,” Germo says simply. “We’re sitting here talking, but since my money’s invested, it’s working hard for me, and I’m earning as we speak.”

Not only is investing the best way to earn, but it also protects your money from the effects of inflation. “The price of things gets higher each year, so you must find a vehicle that will beat the rate of inflation. A savings account is not the answer,” according to Germo. “For example, college tuition fees go up on average 10% every year. If your money’s in a 1% time deposit, you’re actually losing 9% every year!”

Investing also allows you to take part in the economic boom that the Philippines is experiencing. “Jollibee was only P10 12 years ago, now it’s P202. The only people making money off of this are foreign investors and the super rich. The middle class aren’t investing and they don’t get to enjoy that growth,” says Germo. “It makes me sad. We need more investors.”

But perhaps the best argument for investing is the freedom it can give you. Germo himself has quit his job and lives off the income from his various investments and entrepreneurial pursuits. “Investing gives you the liberty to do that. You know you can beat inflation, you know you can achieve the goals you want, whether that’s education for your kids, your wedding, or retirement.”

“Now I can revolve my life around what I’m passionate about. Achieving this liberty one of the best things I’ve ever done, and I hope more Filipinos get to do the same thing.”

What’s Holding You Back From Investing?

A lack of financial literacy holds a lot of Filipinos back from discovering the freedom that investing can give them. “They always want to buy the latest gadget, go to the latest gimmick place, have a vacation … they prioritize things that aren’t important,” Germo says. “They deprive themselves of opportunities to save and invest.”

Other factors that dissuade the regular Filipino from investing are:

The mistaken belief that you need a lot of money to invest.

No desire to watch their investments every minute of every day.

Not having the expertise of an accountant, economist, or financial analyst.

But Germo says that these doubts are unfounded. You can get started investing in the stock market with as little as P1,000. And if you pick a good company, you can invest your money in it and not have to monitor it every day. And by studying the basics, you can learn enough to make smart investments and earn good returns.

“The stock market is not as hard as people think it is, but it’s also not that easy that you can go into it without studying,” Germo says. “You need to have the right foundation, so when you start investing you know what you’re getting yourself into.”

Lucky for you, there’s no shortage of trainings and seminars available if you want to educate yourself about the stock market. “They get to learn from our mistakes, the things I didn’t know before, and access to information is easier now,” Germo says.

Besides reading books (like Germo’s own Stock Smarts trilogy of books) and attending seminars, another good way for you to build knowledge is by finding a mentor who is actually trading and can share their experiences with you.

How Do You Start Investing?

1. Open an online trial account. If you’re still a little tentative about investing, online brokers allow you to open a trial account so you can simulate the experience of buying and selling stocks without actually spending any money. BPI Trade, for example, gives you a 7-day trial so you can get a feel for investing.

2. Start with a very small amount. Once you’re comfortable with the idea of investing, you can start small. Make sure it’s an amount you can afford to lose, or an amount you don’t plan to touch for a very long time. Even if you have, say, P100,000 to invest now, if you don’t have the knowledge to back your investment up, you could be setting yourself for a very costly fall. “If I plan to invest a million pesos, I would start with P10,000,” Germo advises. “Because that P10,000, I don’t care if I lose all of it, but the knowledge I will get from how I trade that money will allow me to trade larger amounts in the future.” Start with a small investment, and allow your knowledge and skills in the stock market to grow along with your gains.

3. Find the investment approach for you. There’s no magic investment strategy that fits everyone. Learn as much as you can before diving into stocks. If you don’t have the time to learn complicated strategies, start with something simple like the peso-cost averaging strategy. Then, as you gain more confidence, you can start adapting your approach to maximize your investments.

4. Pick companies that are making money. You don’t have to be a financial whiz to figure out which companies are making money. Look at financial statements, easily available on the company’s website, or read the business pages, to make sure that the company you’re considering isn’t suffering net losses every year. “This principle alone would spare you a lot of sleepless nights,” says Germo.

5. Learn, learn, learn. Ultimately, you will have to take responsibility for the decisions you make in the stock market. “You have to understand that when you make a mistake, the broker won’t reimburse you, your friend who gave you the tip won’t reimburse you. It’s your money, it’s your life, it’s under your control so you have to equip yourself to make the right decisions.” To succeed in the stock market, you have to keep learning. Learn from your losses and gains. Seek out ways to develop your investment strategy further, and practice what you learn from reading books or attending seminars. The more knowledge you have, the more wealth you can build.

“Study and start now.”

If Marvin Germo could give you one piece of advice, it’s to study and start investing now. “Studying gives you the confidence to start. And starting now allows you to put that knowledge into action. It’s easy to forget things you don’t practice.”

Hopefully we’ve shown you that stock market investing isn’t just for the rich and powerful — it can also be a powerful tool for you. Time is on your side, so start now.

Fore more financial tips Visit : http://www.imoney.ph/

To start your journey in stock market join us in Truly Rich Club just click the link below

http://bosanchezmembers.com/amember/go.php?r=60865

7 TIPS KUNG PAANO KUMITA ONLINE

7 TIPS KUNG PAANO KUMITA ONLINE
bamaquino.com :  By: ListAvengers

Ilang oras sa isang araw ang nilalaan mo para mag-stalk sa Facebook, magpa-cute sa Twitter, at magpost ng mga #selfie at #ootd sa Instagram? Alalahanin: Time is money. Explore mo na rin ang mga iba’t ibang paraan upang kumita ng extra online!

1. Magturo at Magtutor. Kung may sapat na kakayahan o kaalaman sa mga napapanahong paksa, bakit hindi mo subukang magturo online? In demand din ngayon ang mga online English teachers at tutors. Magtraining at magtutor kahit ilang oras lang kada linggo at, tulad sa pelikulang English Only Please, baka mahanap mo pa ang Derek Ramsay ng buhay mo!

BONUS: Maaaring bisitahin ang RareJob Home-based English Online Tutorial para sa possible online teaching career.

2. Magmanage ng social media accounts. Isa sa mga nagiging trend ngayon ay ang paggawa ng mga kumpanya ng sariling FB page, Twitter at Instagram accounts. Paraan nila ito para icommunicate ang mga messages, announcements, promos o mga updates. Sa halip na i-check bawa’t minuto kung ilan na ang nag-like ng post mong mega drama o i-stalk ang ex mo, magmanage ka na lang ng mga social media accounts ng iba – brand man o celebrity!

3. Maging blogger. Ang hobby na ito ay puwede maging source ng income! Magsulat ng mga makatotohanang karanasan, magbigay ng travel tips, magreview ng mga pagkain o damit, o di kaya ay magdocument ng mga kaganapan sa inyong lugar. Ilan lamang iyan sa mga puwedeng laman ng iyong blog. Sumali rin sa mga blogger groups tulad ng Nuffnang Philippines upang makakuha ng tips, makilala ang iba pang mga bloggers, at makakuha ng advertisers para kumita!

4. Magfreelance. Sino ba ang hindi ma-eengganyong kumita ng extra?  Bukod sa iyong official na trabaho, puwede mong gamitin ang iyong mga skills para rumaket online. Bisitahin ang website na E-lance o di kaya naman Odesk, at magbrowse ng mga online jobs na pasok sa kakayahan o schedule mo. Ang maganda rito ay ikaw ang sarili mong boss at may kontrol sa oras mo. Siguraduhan lang na huwag gawin ang raket during office time at matatapos mo ang lahat ng commitment na makuha mo!

BONUS: The 15 Best Freelance Website To Find Jobs

5. Magdevelop. Hindi lang feelings ang puwedeng madevelop, pati website! Imbis na gumastos sa panliligaw, kumita ka na lang bilang isang developer na taga-design o taga-maintain ng website. Kung wala pang programming skills, nag-ooffer ang TESDA ng vocational course para dito. Go! Go! Go!

6. Maglaro. Marami ang naa-adik sa mga online games gaya ng Clash of Clans o DOTA. Sa computer shop man o sa sariling bahay, marami ang naglalaan ng oras para makapaglaro ng mga ito.  Gamitin ang oras sa paglalaro para magpakadalubhasa at sumali sa mga e-sports competitions. Ilan sa mga competition na ito ay nag-ooffer ng mga premyong pera na puwedeng ipunin at gamitin pang-tuition o panggastos sa mga bayarin sa bahay. Gawing inpirasyon ang TeamRave na kilala na sa buong mundo.

7. Magbenta. Simulan na ang matagal-tagal mo ng inaasam na negosyo. Magsimula sa maliit lang muna. Para walang gastos sa renta at tao, magbenta na lamang online gamit ang iba’t ibang platform. Puwedeng simulan muna sa Facebook kung wala pang sapat na puhunan para sa website. Magbenta ng mga kung anu-anong items tulad ng damit, pagkain, gamit sa bahay o gadget, siguraduhin lang na may market ang ibebenta mong mga produkto. Marami na ring mga Pilipino ang umangat ang estado ng buhay dahil sa pagbebenta online.

BONUS: Bukod sa Facebook, maaaring magbenta ng inyong mga produkto sa OLX o Ebay.ph

Fore more financial tips Visit : http://www.bamaquino.com/

SUCCESSFUL SAVINGS: TECHNIQUES THAT HELP YOU KEEP YOUR MONEY

Sunday, June 21, 2015

SUCCESSFUL SAVINGS: TECHNIQUES THAT HELP YOU KEEP YOUR MONEY
By Mark B. Aragona for Yahoo! Southeast Asia | BDO Money Matters

Do you find it difficult to save?

If yes, you’re not alone. The latest survey of the BSP indicate that less than 25% of the Philippine population has any savings at all, even for emergency purposes. Limited income and poor spending habits both factor in, but the rest of the survey reveals something more: a staggering 40% of those who save just keep their savings at home, instead of putting it anywhere that nets interest. Which leaves the financial future of many in serious doubt.

Given that it isn’t easy to save, how do you make it work? Aren’t there ways to help you keep what you earn and make it stay longer with you?

1. Define your goal

All financial experts agree that for savings to get anywhere, you must set a target. This goal provides direction and milestones that will show you that you’re making progress.

I recommend the following financial milestones, in this order:

•    6 months worth of emergency savings. In the event you’re unable to work, this may help you keep a comfortable lifestyle long enough to get back on your feet.

•    Health and Life Insurance. Famous journalist Roger Ebert once said, before he died of cancer, that “nothing cures wealth like illness.” You are your own greatest asset, so it stands to reason you should protect yourself first, ahead of your own car or house.

•    Medium-to-long term savings. This is for retirement and pension. Your later days may mean less work on your part and thus less income. Your savings now determine your quality of life later on.

2. Understand compound interest

This is best illustrated by an example: a can of soft drink may cost an average of P25. If you didn’t buy that can and instead placed P25 in a UITF or mutual fund with 10% interest, after 20 years you would have P168.

That’s a tiny amount of money, you might think—BUT consider that a regular person will actually buy soft drinks or similar products several times a week. If you bought a can every other day, you may end up buying 4 times a week, or 16 times a month. Now take that amount (P400 a month) and imagine paying that monthly to the same fund for the next 20 years. If you do, you would end up with P274,920!

That’s the power of compound interest: your money builds interest on the interest of the years that came before it. Every peso you set aside will work very hard, even while you sleep, to grow and give you a good return.

Of course, it works both ways. If you DON’T save the P400 a month and spend it on frivolous things, you actually take away its future value to you. This is called opportunity cost, and the cost of not saving your P400 a month at 10% interest is P274,920, in 20 years’ time.


3. Set aside savings ASAP

Get your monthly income from all sources. Then tabulate all your regular monthly expenses and subtract them from your income. Then the crucial part: make savings a priority expense on your budget. That means you put away cash for savings ahead of everything else. This means that once you get your salary you immediately set aside the money as soon as you get it. Make this your rule: at least 10-20% of your income goes into savings. You can do more if you like.

If your cashflow cannot accommodate savings and you can't pare down your expenses to help it, then you will need to find ways to increase your income. Thankfully, modern times has made it easier to find means of augmenting your cashflow. One may takes sales as a sideline, or market their skills on freelance sites, or open up an SME (Small-to-medium enterprise). It depends on what your skills are.

However, just because you have more money, doesn’t mean you’ll save more. Usually the opposite is true: you’ll spend more. The mind wants what it wants when it wants it, and usually it wants immediate gratification. Again, you must train yourself to make savings a priority if you don't want your new income to go up in smoke.

4. Let savings grow as income grows

Don't keep it a steady amount but a percentage of your income—10 to 20% of what you earn. This is doable even if your income is irregular, as is the case with commissions. Whatever income stream you use, abide by this rule. Set aside the right amount according to what you earn.

5. Keep your savings out of easy reach

The closer your money is to your wallet, the sooner you will spend it. If the bulk of your savings is in the ATM, you don't have to wonder why your account reaches zero whenever you're hungry or feeling the need for new clothes. Out of sight, out of mind; keep your emergency savings in a time deposit or a fund that isn’t easy to withdraw from.

6. Automate your savings

One of the best ways to ensure savings is to take willpower out of the equation—by using a system where money is automatically debited from your account and placed in savings. If your company offers retirement plans, then they’re doing this for you, pre-taxed. But even if you’re not among the lucky few with this system, don’t despair. You can set up your own where money is automatically debited from your account and stashed away for you. Banks and some financial institutions offer such a service.

Savings are a wonderful thing to have. There’s nothing like the feeling of being in control of your finances. Having new computers, cellphones, cars, and clothes may make you happy to you have them at first, your satisfaction diminishes over time. But as your savings grow over the years, your satisfaction with it will keep growing as well. Just stick to your rules and you’ll do well.

Fore more MONEY tips Visit : https://ph.she.yahoo.com/money-matters/

7 USEFUL TOOLS TO EXPAND YOUR BUSINESS NETWORK

7 Useful Tools To Expand Your Business Network
PRODUCTIVITY BY JUSTIN STENSTROM

Ah yes, the ever-important expansion of your business network question. How do you do it? What are the best ways to network with potential partners, collaborators, and associates these days?

In a constantly evolving world, it’s incredibly important to know how to make connections using the newest and most helpful technology.

If, for instance, this networking conundrum was proposed in the 1990s, the best answer would probably be things like phone calls, business functions, and business cards. Today, these things are terrible for actually making new business connections. No, instead we must turn to our online resource, the internet.

Here are 7 online tools that help expand your business network. Use them wisely.

1. LinkedIn - A lot of people still aren’t familiar with LinkedIn and how it works. But then again, these are the people who aren’t making the right business connections. With over 300 million users, LinkedIn is no longer that little-fish social network. It has become the go-to social networking site for all business professionals and is currently the biggest business fish in the social sea!

The best way to network with people on LinkedIn is to connect with them, endorse a few things that you know they are good at, and then reach out to them in some small way. Do not pitch them on something, but rather, just message them with a compliment or something similar about something they’ve done that you’ve enjoyed. After building up a bit of a rapport with someone, over a period of time, then you can start to inquire about things and perhaps try working with them.

2. Twitter - Twitter is a personal favorite of mine for connecting with business associates. It’s great because everyone from Richard Branson, to Mitt Romney, to Tim Ferriss is on there. Just about every celebrity, politician, entrepreneur, athlete, or anyone else you could think of is on Twitter. So, in theory, no one is impossible to connect with.

The average-Joe business man up the street can connect with somebody like Richard Branson on Twitter by using some clever Twitter tactics and saying the right things.

For instance, if you want to connect with someone (maybe someone a little easier to reach than Branson), the best way to do it is to Follow them, and then start Favoriting and Retweeting their posts. By doing this, over a period of time, you will get their attention. You can then start commenting on their posts, and voila! The next thing you know they’re commenting back and you’ve built up a relationship with someone who can help you out! You can either private message them at this point (if they’ve Followed you back by now), or just ask them in a post thread if you could connect with them beyond Twitter. That’s it!

3. Podcasting - One of the best tools for making connections is creating a podcast. Why podcasting, when we live in a video, in-your-face, visual world you ask? Because radio still rules! People love hearing podcasts and the podcasting industry is growing more and more each year.

By having a podcast and interviewing people, you can invite all sorts of guests to come on your show. Everyone loves being interviewed and thought of as being special, so many people will typically accept your invitation. By creating a podcast show, you can connect with people in the business-world who would otherwise pass on an invitation to collaborate.

4. Guest Posting - Similar to Podcasting, Guest Posting is such a great way to connect with others. It’s the one, tried-and-true way for bloggers to join forces with one another online.

Reach out to some of your favorite websites and blogs, and ask them if they’d like to exchange articles with you. You could write them an article that fits their site’s criteria, and they could write an article that fits your site’s criteria, and in turn, you both win! By offering up your service, in the form of a blog post, you are giving them a great incentive to want to work with you and connect.

5. Facebook - Although not as good as LinkedIn or Twitter for connecting with business associates, Facebook still holds a solid place on this list. Especially if you connect with someone’s personal page. Business pages are no good for connecting with. Oftentimes, these pages have way too many followers or people for the person running it (the person you’d like to connect with) to keep track of. A message to a fan page is a message lost.

Instead, if you can Friend Request someone on their personal page, and you can actually get them to Accept, you are figuratively “In.” Don’t private message them right away, but just like LinkedIn and Twitter, Like some of their posts, Comment, Share, and build up a rapport for a while, and then message them. The message has a far greater chance of being returned if you take your time before sending it!

6. Email - Email is the universal form of contact in today’s world. Almost everyone has an email address. And if someone puts their email address on their website, then you should take that a sign that that they are open to connecting with you. Now, don’t take that to mean you should Spam them with absurd requests. Don’t do that . . . ever!

No, instead, send a thoughtful, well-planned, and respectful email with your inquiry. Tell them why you are reaching out to them, why they could benefit by working with you, and what you would like them to do if possible. That’s it. Keep it short, respectful, and sweet!

7. Let’s Lunch - This is a really cool app that sets up lunch dates with potential business contacts. It connects with your LinkedIn profile and easily integrates your schedule with the people you’d like to bond with and sets up a scheduled time to meet face-to-face.

This face-to-face meeting of course is the hands-down best way to really build a relationship with someone, although these days it’s becoming ever-more-difficult to do so. With a helpful little app like Let’s Lunch, however, the old-fashioned way of creating a relationship is being renewed.

Use these 7 tools right now and start building your business network today. Who knows, you’re next connection could change your life!

Fore more MONEY tips Visit : http://www.lifehack.org

6 Sales Traps You Need To Avoid If You Want To Get Rich

Monday, June 1, 2015

6 Sales Traps You Need To Avoid If You Want To Get Rich
MONEY BY LEWIS HUMPHRIES

Most of us have an inner desire to develop wealth, primarily because it affords us the type financial security that makes life easier. There are a number of misconceptions that surround the accumulation of wealth, including the assertion that people can’t get rich simply because they earn too little. This is a consequence rather than a cause, and the fact remains that people struggle to accumulate wealth largely because they spend too much time and money on things that lack value.

A reckless approach to expenditure or a lack of focus will undermine any attempts to generate income, whereas frugality and hard work will drive success. In practical terms, those with a desire to build wealth must avoid prominent sales traps. These schemes are used by companies across multiple sectors to target those with a propensity to spend impulsively, although they rarely offer anything of tangible or long-term value. This is also an issue with short-term investment plans, so you must tread carefully when faced with the following examples:

1. Marking down a marked up price
When companies or distributors hold sales events, you could be forgiven for thinking that any subsequent purchases represent far greater value than usual. It is not unusual for sales teams to inflate the price of a particular product in the weeks prior to a sale, however, before reducing this drastically and creating the false impression of value. Although huge reductions in excess of 50% are extremely enticing to customers, this means nothing if the original sale price was manipulated to mislead individuals about a particular product’s value. To avoid this, you need to take responsibility as a customer, recognize the dangers and shop around aggressively for the best possible deal. A specific percentage discount does not translate into pure savings, as it simply reduces either the manufacturer’s suggested retail price or the one initially set by the distributor. By comparing prices across the market, you can delve beyond individual deals and achieve value for your hard earned money.

2. The lure of exclusivity
Online price comparison technology has proved extremely challenging to retailers, as it creates an informed and motivated army of customers who are less susceptible to traditional sales techniques. This is where the concept of exclusivity comes into play, as this is a ploy used by stores to justify high price points and deter consumers from shopping around. By marketing goods as part of an “exclusive line” that is not available anywhere else, retailers can drive a far harder bargain and force the hand of impatient customers. This has proven to be a successful scheme, especially when it is aimed at impulsive spenders who are in the market for a specific product. Exclusivity deals are usually restricted to specific regions, meaning that you may be able to find your chosen product elsewhere. These deals are usually signed for a fixed period of time, and once this has passed the product will become available in other stores nationwide. Patience is therefore crucial, while more flexible customers can also shop around for a similar product that serves the same purpose.

3. Persistence wins the day
The majority of successful salespeople are aggressive self-starters, meaning that they are generally self-reliant and persistent in the pursuit of their goals. This leads us to another common sales trap, through which customers are implored to make a purchase as a way of satisfying a relentless and driven sales effort. Although this is an obvious trap that relies more on direct communication and tenacity than psychology, customers can easily be influenced to buy if they feel pressured by the attentions of a sales representative. In this instance, the key is to remain grounded and communicate authoritatively with salespeople. If you have no need or desire for a specific product or service, remember that this is unlikely to change throughout the course of any dialogue. By focusing on this and communicating your stance clearly to a sales team, you can quickly discourage them from pursuing your custom. Time represents money to salespeople (especially those who rely on commission), so they are unlikely to chase leads where the customer shows a clear and unwavering lack of interest.

4. The art of accessorizing
Have you visited a furniture store recently? If so, you will have probably noticed perfectly standard centerpiece items, such as beds or sofas, adorned with a number of high end and visually engaging accessories. While the store will justify this by claiming that such a practice helps customers to visualize how their property will look in a fully decorated and accessorized room, it actually serves to enhance the appeal of ancillary products that are not included in the sale price of the core product. Not only does this make the core product itself look more enticing, but it also drives additional purchases. Awareness is crucial in this instance, as once you recognize this sales trap you can refocus on your needs as a consumer. The first step is to make a concise list of everything that you need prior to hitting the high street, while also establishing a fixed and viable budget for the trip. In order to ensure that the core product in question meets your needs, you should also look to strip it of any accessories or ancillary items before making a final decision. You could even bring in some of you own accessories from home, as this will present the product in a more realistic light.

5. When insurance has no purpose
In addition to corporeal items, there are also a number of lucrative insurance products sold on an annual basis. As the ongoing controversy surrounding PPI claims proves, however, not all of these products offer value to the buyer or are sold in an ethical manner. There are two damaging sales traps to be wary of in this instance, as vendors will either sell erroneous policies that offer no discernible value or inadequate coverage that fails to deliver long-term, financial savings. The former policies tend to be sold aggressively by call center operatives, and they usually look to capitalize on client ignorance or gaps in knowledge. How do you avoid the insurance sales trap? The first step is to assume the role of aggressor when communicating with service providers, especially if you are in need of a specific product. More specifically, you will need to set out exactly what you are in the market for, detailing your need, budget and any additional data that helps to reduce risk. If you are contacted directly by a firm offering their products, you should also look to challenge their knowledge and ask them to clearly explain the terms, purpose and salient points of the policy.

6. The quest for high-yield, short-term investments
In the quest to build wealth, you may be tempted by any of a number of investment opportunities. You will need to be cautious, however, as the demand for instant, high returns has triggered a rise in the number of risk-laden schemes and ill-considered investment traps. While some of these investment opportunities may well have the capacity to trigger quick returns, they are primarily aimed at inexperienced investors who fail to understand the relationship between risk, return and long-term gains. To avoid this, you will need to research your chosen market and ensure that there is an opportunity to earn reliable, long-term gains that offer a suitable reward for your investment. The market for sustainable assets and green investment is particularly strong at present, for example, especially when you consider that there are now viable technologies that reduce carbon emissions and consumption in sectors such as fuel, energy, and even data storage. This trend is likely to continue for the future, making this a far more suitable investment option than those that revolve around real estate flipping and pyramid schemes.

Fore more MONEY tips Visit : http://www.lifehack.org/money


Featured photo credit: Wallet Credit Card Cash Money/Steve PB via pixabay.com

10 FINANCIAL TIPS FOR YOUNG PEOPLE

Friday, May 29, 2015

10 financial tips for young people
By Barbara Whelehan • Bankrate.com

If I could go back in time, I would do certain things differently. I'm not saying I have a lot of regrets. But when I was younger, I tended to have myopic vision. For instance, it was hard to imagine that one day I would be older. Even today, sometimes I look in the mirror and wonder, who the hell is that?


I wish that, when I was younger, someone had sat me down and told me a few things. Or else I wish that I'd listened when someone attempted to do this.

If you're young, take a seat and listen up. These gems will help you on your quest for financial success.

1. Go to college. You may want to do something that doesn't require a college degree. For instance, you may dream of playing professional golf or running a barn and training horses. But give serious consideration to enrolling in college anyway. Yes, it's a major investment, but if your parents are unable to help you pay for it, make it happen yourself, even if it means taking out loans. One way to save on costs: Go to a community college first; then transfer to a four-year university after two years.

It's easier to get a degree when you're young than when you have a home, family and all the adult responsibilities that go with these things. Your earnings potential increases significantly with a college degree -- which will come in handy if your other dreams don't materialize. Plus, you will likely experience a love of learning that you will never outgrow.

2. Find your purpose. If you're having trouble figuring out what you want to do with your life, look within. You were born with certain talents and natural abilities. You know which subjects you excel in and which ones you struggle with. Choose a career that enables you to maximize your gifts in a way that fulfills you or helps others. As you grow, your career may change along with your desires. But for now, gravitate toward a field that feels like home.

3. Begin retirement planning with your first job. This tip is so important. If the company you work for offers a 401(k) plan, sign up at your first opportunity. If there's no such plan, divert some of your paycheck into an IRA. Believe it or not, if you're lucky, one day you'll find you are older, so it's best to be prepared. Setting up automatic contributions to either one of these retirement vehicles at a young age will help you build wealth painlessly.


Just as an example, let's say you invest $200 a month beginning at age 25, and you earn 7 percent annually on that money. By the time you turn 65, you will have about $525,000 saved up. If you wait until you're 35 to begin saving, assuming the same monthly investment and rate of return, you'll have amassed less than half that amount -- about $244,000. This illustration simply shows the impact that a 10-year head start can make on your savings, thanks to the magic of compounding. Do the math yourself with Bankrate's retirement calculator.Naturally, the more you earn, the more you can stash away. A better way to invest: Rather than target a specific monthly dollar amount, sock away 7 percent of your earnings in the beginning, and increase it each year a little bit until you're diverting 15 percent a year.

4. Place a value on money. It doesn't buy happiness, but it can certainly make you comfortable. Just understand what it's worth. Money is what you earn in exchange for your time in some productive pursuit. Let's say you earn $20 an hour at your job, and you're considering purchasing a TV for $500. You may calculate that you spend 25 hours, or about three days, earning that money. It's worth it, you may think. But that's not an accurate value estimate. If you're single, you're in the 25-percent tax bracket, so you actually spend about 33 hours earning the net income required to make the purchase. It still may be worth it, but there may be competing demands for that money, such as rent and car payments, not to mention your retirement fund. Each purchase represents a trade-off. Make these decisions wisely.

5. Use the credit card sparingly. This tip is also really vital. Bankrate receives tons of letters from strapped consumers who regretfully overused their credit cards and now find themselves in really dire financial situations, some contemplating bankruptcy. It's easy to spend now with plastic and much harder to pay later. Use credit responsibly. Comparison shop for your card. Remember that you'll be relying on your future earnings to pay for today's credit card purchases. And if you keep a running balance, you'll also be paying interest, sometimes at usurious rates. Don't fall into this trap. Instead: Save money to meet financial goals.

6. Follow the golden rule. Contrary to popular belief, the duplicity and craftiness of Machiavellian tactics won't really help you survive, but instead will engender mistrust in your relationships. Treat others fairly, the way you wish to be treated. No one looks good when trying to make others look bad. When you're on the job, avoid gossip. Beware that when someone takes you into his or her confidence to point out someone else's foibles, it's only a matter of time before your foibles come to light. Always be honest in your dealings with others. Seek out the company of people who are positive and supportive of your efforts.


7. Select your partner wisely. Choose someone whose values match your own -- not just where money is concerned, but more importantly, ethical and moral values. Get to know your soul mate over the course of at least a year. Passion is important, but trust more so. Make sure you are free to be yourself. If you hook up with an angry or overly critical partner, you will be subjected to hostility and may lose your sense of self. Conversely, if you're the one with anger issues, resolve them before they poison a perfectly good relationship.

8. Be prepared for the unexpected. Someday you may lose a job through no fault of your own. Prepare today by stashing money into an accessible emergency fund. The easiest way to do this is to automatically divert a portion of your earnings into a savings account in addition to the amount you're contributing to a 401(k) plan or IRA.

Try not to use that 401(k) money for emergencies. It will cost you plenty, between income and penalty taxes. For instance, if you have $10,000 in your account and you're in the 25-percent tax bracket, you'll lose $2,500 to taxes, plus pay another $1,000 penalty for breaking into the money before you reach age 55. (For IRAs, the early withdrawal penalty applies up to age 59 1/2, with certain exceptions.) Bottom line: Your $10,000 dwindles to $6,500. Worse, you will have lost the opportunity for that money to compound and build wealth for your retirement.

But don't leave that money behind with the former employer either, lest you lose track of it. Instead, in a trustee-to-trustee transfer, roll it over into your new employer's plan or into a rollover IRA.

9. Learn about investing or hire help. It's not rocket science; in the beginning you just need to overcome fear and select one or two good, cheap mutual funds. Ask the human resources department for help with that. After you've amassed some wealth, it may be time to hire someone. If you do, you will obviously have to pay for the service. Get referrals and then check out the qualifications and credentials of a prospective financial adviser or broker.

Make sure you understand the fee structure of the services. Is it commission-based or do you pay an hourly fee or a percentage of assets or some combination of these fees? Ask for a complete breakdown. Also, check with the appropriate authority to see if any disciplinary actions have been taken against a certified financial planner or broker before you initiate contact. The Financial Planning Association website is a good starting point to search for a qualified planner.

10. Be thankful for your good fortune. It's not all about money. If you work at it, you will have abundance -- through strong family ties and solid relationships as well as monetary assets. Take some time out each day to reflect on the good in your life. Spend at least one day a week in a recreational activity or hobby that you enjoy, and take a minimum one-week vacation annually if you possibly can. My aunt Genie advises that you travel throughout your life, rather than waiting for retirement to do it. Again, save for the trip.


If you have children, spend as much time as you can with them when they're still young and dependent on you. Before you know it, they'll be old enough to get a driver's license, and you'll see less and less of them from that point on.

Peso-Cost Averaging: The Easy Way To Invest

Peso-Cost Averaging: The Easy Way To Invest
By imoney . 24 April 2015 

The stock market is a tricky beast. You never know when it’s going to go up, down, or sideways. Even the most seasoned of stock market analysts can only predict so much. This volatility in stocks scares a lot of people off from investing, because they don’t have the time to spend analyzing companies and stocks and market movements with the scrutiny required to make the most informed investing decisions. And it’s just plain scary.


But what if there was a way for you to invest in the stock market at amounts you can afford and a schedule that works for you, all while providing lower risk? Even if there are no guarantees with the stock market, you can mitigate the risks by taking the easy, beginner-friendly way to investing: peso-cost averaging.

What is peso-cost averaging?

Simply put, peso cost averaging means you buy stocks or securities for a set amount of money each month or quarter over the medium- to long-term. This could be as low as P1,000 a month for three years, or as high P100,000 every quarter for five years. The amounts and time frames are up to your budget.

Because of the nature of the stock market, when you buy shares at a set limit, you’ll buy fewer shares when the prices are high and more shares when the prices are low. So if one month shares of Company X are at P5 each, you’ll get 200 shares for your P1,000. But if the next month the price goes up to P10, you’ll only get 100 shares for the same amount. You keep doing this for the amount of time you set, ideally at least five years. And then, when you feel that you’ve made a healthy profit from your investment, you can sell your shares and reap your reward.

Let’s say you decided to spend at most P5,000 a month on Universal Robina Corporation shares, a stock that Wall Street Journal analysts believe will outperform the market in 2015. And let’s say you do this for two years, starting two years ago (January 2, 2013). The following chart shows you how much you’ll spend in total for two years of peso-cost averaging, as well as the gains you’ll make:

*notes: historical values obtained from Yahoo! Finance and converted at the rate of 1 USD = 44.20 PHP, and may not directly correspond with the peso historical prices. Stocks are bought in multiples of 10 because of PSE board lot rules, which determine the minimum amount of stocks you can purchase. Stock prices are adjusted closing prices from the first trading day of the month. Costs like broker fees, transaction fees, and taxes are not included in this example for the purposes of clarity.

 As you can see, by simply sticking to the peso-cost averaging system for a blue-chip stock like URC, you stand to gain over 60% of your investment after two years – and maybe even more if you stay invested longer in a good performer. Try to find a deposit account that can beat that.

Of course, nothing is for sure in the stock market, so keep an eye on the trend for your chosen stock, and have a contingency plan for when things go south. But if you choose blue-chip stocks, it’ll be much more likely, but not guaranteed, that you will come out with a healthy profit when you decide to sell after a few years.

What are the advantages of peso-cost averaging?

You can start with a small amount. A main deterrent to investment is the false belief that you need tens of thousands to even get started. But you can start peso-cost averaging at the manageable price of P5,000 a month. If you do that for a whole year, that’s P60,000 you invested in the stock market already!

You can invest at less cost and less risk. Because you’re spreading out your investment, you lessen the risk of “investing a large amount in a single investment at the wrong time,” according to Investopedia. For beginning investors who don’t have the time or expertise to carefully study stocks, peso-cost averaging is a good solution. Instead of focusing on timing the market, which requires a lot of effort, your focus is on accumulating assets. This method reduces your average share cost and spreads your investment risk over time. So your mistakes will be more controlled, less expensive and often offset by the good decisions you’ll make over time.

Even if the whole market is down at the end of the year, you can still come out ahead. Let’s say you had P100,000, and you decide to invest all of it at once in a stock priced at P100 a share in January. But by December, because of bad market conditions, the value of the stock went down to P90 a share. You thus lose 10% of your initial investment, and the market value of your shares is now down to P90,000.But what if instead of investing that P100,000 all in one go, you decided to peso-cost average and invest P25,000 per quarter?  Take a look at this scenario:

Even as the year ended with the value of the stock going down by 10%, the market value of your shares is actually up by 4.58%. Not too shabby.

What are the disadvantages of peso-cost averaging?

You would have less profit than if you studied the market and performed analysis. This method won’t make you a lot of money very quickly since it’s focused on averaging out your losses (and thus your gains) over a long period. But since you’ll still need to buy and read the market you’ll be learning as you go along, preparing you for the real share trading fun!

You could pick the wrong stock and end up losing a lot of money. Cost-averaging by no means insulates you from loss entirely. If you keep using peso-cost averaging on a stock on its way down, and it never recovers, you’re still going to lose. But you can reduce the likelihood of this by investing in stable, dividend paying stocks like blue-chips. “Apply cost averaging on companies which have shown stable growth and performance over the past years to minimize your risks,” writes Fitz Villafuerte of the Ready to Be Rich blog in an email exchange with iMoney.

Studies show that lump sum investments outperform cost averaging 66% of the time. This is true, but if you get the timing wrong, market volatility will affect lump sum investments more. If the effect is particularly bad, you might get scared off by the losses and veer away from investing forever. Peso-cost averaging smoothes over the bumps of the market and gives you an investment plan that’s easy to stick to.

How do you do peso-cost averaging?

1. Figure out how much you can afford to invest. No matter if it’s P5,000 or P50,000 per month, you have to start somewhere. But to maximize the benefits of peso-cost averaging, you must be consistent with your investment amounts. As your income increases, you can increase your set amount as well.

2. Set a schedule for your investment. Will smaller monthly investments be more manageable for you, or would you prefer quarterly investments? Whatever you decide, make sure you can stick to it for years into the future.

3. Choose the right investment.

The best investment products for peso-cost averaging are blue-chip stocks and pooled funds. “Particularly, equity and growth funds perform very well if you do cost averaging on them for many years,” according to Villafuerte.

Do not use peso-cost averaging on a stock on its way down with no bright future ahead of it. If you do this, your losses will add up rapidly.

4. Remain committed to your investment schedule for at least 3 – 5 years. Peso-cost averaging works best in the long term. As long as you’re confident that the stock isn’t going down, don’t fret when you find that at one point in time you’re buying at a higher price than before. Remember, it’s a long term play. Stick to it.

So with a little bit of effort, and a lot of discipline, you can get started on investing right away with the peso-cost averaging method. All it takes is that first step!