Putting Your Money To Work

Many persons today are trying to improve the standard of living but find that it is difficult to save. Being money wise seems to be a mere aspiration and knowledge of how to make better decisions about our income fail to prove beneficial when our overhead is more than our actual income. Despite this there is still the need to save or to make money work for us as many of us aspire to material things to be comfortable. One critical aspect of being money wise is investing your money. Investing simply means putting your money to work, so that it generates more money. You buy or sacrifice something today, with the intent of creating a stream of wealth in the future. There’s usually an element of risk attached, because the more money you’re prepared to take a gamble with, the better the returns will usually be.

However, before you take the plunge, there are a few things you will need to consider.

Investing is a risk, is it one you are prepared to take? If not, you might feel happier with the interest you get from a savings account. Don’t invest any money if you couldn’t live without it, or if it would change your life if you lost it. After all, if you starve yourself you probably won’t be around to reap the rewards of your investment.
Secondly, remember that investment is a long-term plan. If the stock market crashes, you might have to wait some time before you get your money back or make a profit. It’s not a quick fix, and to make any extra cash you should think bout not seeing your investment for a good six months minimum.

Ways to Invest
There are many ways to invest your money:
Stocks and Shares: By putting your money into shares, you’re giving companies your money to help them run their business. In return, if they are successful and their share price goes up, you will benefit from the rise in value. Equally, if the company’s value fails, you’ll be losing money. Right now, we’re in a very unstable corporate environment and many companies have lost value. Be careful investing unless you have received advice.
Unit Trusts and Investment Trusts: You can see with shares, putting your money into one company can be quite dangerous. To combat this, Trusts do three (3) important things:

• Firstly, they put your money into several companies at once. That way, you’re spreading your risk across the fortunes of many companies: some might lose money, but some will rise in value.
• Secondly, a Trust contains not just your money, but many other people’s too. You’re joining a whole bunch of people all committing their cash. Together you have more buying power to spread your risk across companies, and this larger pot of cash usually gets the Trust a better deal.
• Finally, a Fund Manager will look after your funds. It’s a Fund Manger’s job to spend time looking for the best place for your cash – day in day out – which means you need to know much less about the stock market than if you were investing privately.

Bonds: These are a particularly safe investment; in fact, you know exactly how much you’ll get back before you even buy them. Bonds are a loan from you to somebody else (usually the government), for a set length of time, usually between three (3) months and five (5) years. But because there’s no risk, they don’t pay back particularly well.
Property: Buying and selling property can be very lucrative, especially as in many areas property prices have raised dramatically. You will need a lot of money to start with, and if the value of your property falls, you stand to lose a serious amount of money.

Other Goods: There’s a market for most things people want – antiques and collectibles, land, fine wine, etc. But you must understand that buying goods as an investment isn’t the same as picking up a bargain and selling on at a profit. Bargains are rare, and usually rely on the seller being stupid. The value in investing is picking goods to buy that appreciate in value, because demand for them grows over time.

Getting Help
Don’t jump into investment without getting good advice from someone who knows his or her stuff. Get help if you need it. The “do-it-yourself” approach may not be suitable for everyone. If you try it and it’s not working, or you’re afraid to try it at all, then you should seek professional assistance.

Your first port of call is an Independent Financial Advisor
They are qualified to give you entirely impartial advice about your finances, and recommend a course of action.

Arm Yourself with Knowledge
Always do your homework. Understand financial matters and those that could affect you. Understand your current investments and the risks associated with them. Be cautious when evaluating the advice of anyone with a vested interest.

If you’re going to invest in stocks, research companies until you understand them. Remember investment does involve some amount of risk, so choose carefully and make sure you have done your research.

Steps To Wealth – Manage Your Expenses

The process of attaining wealth could be likened to taking a trip along a winding road. Each person will progress at their own pace towards the ultimate end of achieving their financial goals; some will find early success with their dreams, while others will have a journey filled with many obstacles.

As we travel along the pathway towards wealth, there are several signposts that will indicate where we have reached and point us in the correct direction to continue taking. These steps to wealth will be instrumental in helping us to amass and maintain long lasting prosperity.

You need to make right money moves from the time you start your first job, or you could retard your wealth development for many years. However, even if you are advanced in years and have made poor financial decisions in the past, you can still get a fresh start on the road to wealth.

Your objective at the first point in your wealth journey is to learn how to be disciplined in managing your expenses:

Keep track of your spending
If you don’t know how much money you are currently spending, it will be difficult to manage your expenses. For at least one month, write down all your bills and everything you spend money on in a notebook or record them on your smartphone.

Categorize your expenses
Look back at the different items you spent money on and create expense categories such as entertainment, personal, household, transportation, health care, and financial. List the different items under the relevant heading and calculate the total spent in each area.

Be honest about your spending choices
Examine all the things you spent money on over the month – do you think you made the best choices with your money? Did you realize that you spent a lot of money on frivolous things that you later regretted? Did you put aside any of your disposable income for the future?

Don’t forget those one-time costs
It’s not enough to account for just your regular monthly costs when creating your budget plan. You need to manage your spending so that you will have enough money to pay for expenses that come due occasionally throughout the year such as gift purchases or holiday events.

Develop spending discipline
There may be things that will tempt you to throw caution to the wind and spend unwisely. Identify those situations where you may be most likely to falter and try to avoid them. For example, if you have a friend that always encourages you to go shopping, find a nice way to decline her invitations.

Live within your means
When you have limited income, you may desire to have things that are outside of your budget. Society dictates that you should have in-fashion clothes, own the latest mobile phone and attend all the parties. Don’t let peer pressure force you into borrowing money to finance a lifestyle you can’t afford.