Think it out loud: Tactics to consider before investing your money

182457_9046Our parents rightfully said that it’s easy to spend money that we don’t earn ourselves. That’s why we tend to burn through our weekly allowance in a matter of days. Now that you’re in one of the most important decisions in your life, how are you holding up? When it comes to choosing the right investment to go for, selecting a one-size-fits-all approach often ends up damaging your finances.

Let’s take a look at some tactics you need to know before you can answer the question ‘what is the best investment for me?’

How much are you willing to invest? Do you want to invest a lump investment, or to set aside a portion of your monthly salary? Maybe a short-term investment or longer? Most importantly, how much money do you currently have?

Some assets require you to pay a lump sum investment, such as corporate bonds or buying a property. Providers like NPBS have fixed rate home loans that make property investments easier to get, suitable for residential investors who want a fixed interest rate with loads of features and no ongoing fees. Properties can then either be rented out or flipped for faster ROI.

Other types of investment offer the flexibility of either a regular contribution or a lump sum, such as stocks and shares. Some investments also practice a minimum financial commitment, so knowing what you can afford and whether you can stick through it or not is a good starting point.

How long are you willing to invest? Or stated another way – when will you need to get your money? Some investment products run for a fixed period of time, which impacts the time when you can access your money. If you have a specific date in mind as to when you have to access your capital, then look at the type of investment you’re going for. Investments, such as shares shouldn’t be considered as a short-term investment option.

What are you planning to do with the money? Everyone has a reason for saving, and the purpose of your investment will affect how much risk you are willing to take with your capital. If your investment is targeted towards your children’s education, then you should invest over a long period of time, and look for a higher return, subsequently you need to choose a higher-risk investment option.

On the other hand, if you are investing money to finance a new car, or an overseas trip, you may want to invest for a short period of time and want confidence that your investment will be returned with bonuses. You should utilize lower risk short-term investments.

Will you need an income from your investment? Expecting an income from your investment will influence your choice of product. The best-known investment vehicle for receiving an income in retirement is a pension.

Other investment products that also provide regular income are annuities, or corporate bond funds. You may also choose to invest in a buy-to-let property to give you a steady stream of rental income.

There you have it! As a first time investor, I also suggest that you seek professional advice first before engaging in any products, as most of them require a huge commitment. Best of luck!

Saving Money Without Breaking a Sweat

It’s definitely more fun to spend money than save it. Nonetheless, saving is crucial to your financial health. Some people downplay the importance of saving money. They know it’s something they need to do, but they’re not willing to take the first step and create a savings plan.

The truth is life is unpredictable. We all have financial curveballs thrown our way, and it’s only by having a savings plan that we can be prepared. You can go to work every day and give your boss 100%. But this doesn’t guarantee you won’t lose your job because of downsizing. Your employer may offer a little severance and you might qualify for unemployment. If this isn’t enough to cover all your expenses, wouldn’t it be nice to have a savings account to meet your needs?

A savings account is also beneficial because it provides resources during an emergency. Financial experts recommend saving enough for a three to six-month emergency cash fund. This money comes in handy when you need an auto repair, a home repair or medical procedure. If you don’t have the safety net of a savings account, using a credit card and getting into debt might be your only option.

But, while the importance of saving money is obvious, some people have a completely different mindset. They want instant gratification so they’re not willing to postpone big purchases in order to boost their savings account. Also, some people are overly concerned with keeping up with the Joneses. Therefore, they would rather blow all their cash than prepare for their future.

Even if you recognize the importance of saving money, you might not know where to start. Saving money has its challenges, but it’s easier than you think. If you need to increase your cash flow before you can even think about saving money, here are a few practical tips for reducing your expenditures.

  1. Reduce your transportation cost

Next to housing, transportation is one of our biggest monthly expenses. You might have a car payment, auto insurance, regular maintenance and you have to put fuel in your car. Owning a car can take a huge chunk of your monthly income, making it challenging to save money. But there are ways to reduce your transportation costs and build your emergency fund.

To start with, evaluate whether you actually need a vehicle. If you live in a city with various modes of public transportation, could you possibly sell your car and take the bus, the subway, or light rail? If this isn’t an option, can you carpool with co-workers a few days a week and reduce your fuel costs while minimizing vehicle wear and tear. Or if you’re paying too much for your car, can you trade down and get a car with a cheaper payment and then put the difference in your savings account?

  1. Refinance your house

Talk with your mortgage lender to discuss the option of refinancing your home. If interest rates have dropped recently, you might qualify for a lower mortgage rate, which can help you get a cheaper monthly payment. Let’s say you’re able to save $200 a month by refinancing your mortgage loan. That’s a yearly savings of $2,400. Rather than waste this money on vacations, electronics or clothes, put this cash in your savings account, preferably a high-yield savings account so you can grow your emergency fund faster. When in need of a loan, one can always leverage the equity of their home. It is important to become familiarized with Home Equity Loan Rates.

  1. Save on energy around the house

Your energy bills aren’t written in stone. There are several ways to reduce your costs and save on a monthly or annual basis. You can install a programmable thermostat so your HVAC system uses less energy. Sealing or plugging holes around your windows, doors, and electrical outlets can help lower your utility bills, as does replacing incandescent light bulbs with LED bulbs. Another option is comparing electricity rates and switching to a provider with a lower cost. You have the power to choose your electric company, depending on where you live. Some providers encourage comparison shopping because they’re committed to “helping consumers save on their monthly electric bills,” according to the experts at Commonwealth Edison.

  1. Cancel unnecessary services

You might think you need certain household services, but after eliminating these services, you come to the realization that they were unnecessary. If you don’t have extra money to build your savings account, it’s time to evaluate your priorities. Think about this: if you were to cancel your cable (or downgrade), your landline phone, your housekeeping service, and your lawn care service, how much could you save a month? Even if you’re only saving $100 a month, that’s an annual savings of $1,200 without breaking a sweat.

If you reevaluate your budget and what you spend money on, you might realize you have more than enough cash to build your emergency fund. But to get to this point, you have to make a few sacrifices and adjust your spending habits.

Managing Portfolios to Index-Beating Growth

MFS has been doing what some critics of managed funds call impossible: beating the indexes over and over. Indexes are the conservative investor’s best friend. Built on all of the best-performing stocks in the world, the index fund investor’s portfolio grows with the rest of the economy, often outperforming most other investment returns. Because this tends to happen, index proponents can forget what happens when it doesn’t work, when the worst happens. The recent stock plummet that originated in China was a reminder of this, and those of us with index mutual funds have yet to see our portfolios recover.

This method is the equivalent of investment autopilot. And while it works out well for a certain type of investor, there are storms which arise for which you will want a pilot, at least if you want your portfolio to survive the storm. That’s where MFS comes in. Using their 3 tiered strategy of 1) Lots of knowledge from lots of experts, 2) Constant Risk Analysis, and 3) Long term planning for each investor’s financial future, MFS manages to beat the odds and outperform the market many times over. Their performance is envied by those who relied on the market forces inherent to index funds during the recent stock fall.

MFS can pull this off because they have so many experts involved in the process. MFS needs their clients to make money. After all, it’s how they make their money. So accumulating real insight from a wide array of qualified people is how they make the best investment choices you are likely to find among fund managers. They’re also always accounting for risk, which helps them to take on only those assets which will be very likely to get their clients paid. This is a company that’s acting in the best interests of you and your portfolio for the long haul. So let MFS get involved with your investment. They’ll be able to guide you to opportunities and away from financial pitfalls.

Short term loan Positives and Negatives

Payday loans also known as payday advances, short term loans and cash advance loans are small short term unsecured loans. These loans are also referred to as cash advances however this term can be confused with a line of credit such as those with credit cards. Payday loans rely solely on the borrower having employment and can provide proof of income such as check stubs. The legislation regarding these types of loans varies widely from country to country.

In order to prevent high rates of interest many jurisdictions have placed limits on the APR or annual percentage rate that any lender especially payday lenders can charge.

There are several ways that the APR can be calculated on these types of loans. Depending on the method that is used the rate can differ dramatically. For example for a £15 charge for a £100 payday loan lasting 14 days the APR could be anywhere from 400% to 500%

Some lenders have stated that payday loans can carry significant risk for them, however, it has been recently proven that there is no more risk with these types of loans than any other type or credit.

There is a process involved with payday loans where the lender provides a short term unsecured loan that the borrower has to repay on their next payday. Usually the borrower’s employment or their main source of income must be verified, however,some sources have state that some lenders don’t run credit checks or verify income.

There are two ways to apply for a payday loan either visit the lenders retail location or apply online. When a borrower visits the retail location they must provide a postdated check that the lender can cash for the amount of the loan plus fees in the event the borrower defaults on the loan. For borrowers that wish to apply online the process is similar except the application and other documentation such as proof of income, bank statement or voided checks must either be emailed or faxed to the lender. Upon approval the funds are direct deposited into the borrowers primary checking account. When the due date approaches (which is usually the next payday) the payment plus any finance charges are electronically withdrawn from the borrowers checking account.

Under the right circumstances payday loans can be very useful and many times have been a relief when an emergency occurs such as car repairs or even an emergency medical bill. But be careful since these quick loans do have what some consider high rates of interest. These are best used for those situations where you know you can pay them back quickly.

How to Avoid a Toxic Work Environment

Having a well thought out business model and employees that are well qualified can make a huge impact on a business’s success. However, if the work environment becomes toxic, the productivity levels within your company can be deeply impacted. In fact, the energy put out by your employees and that which surrounds them can make or break an otherwise successful company. Here are a few tips on how to avoid cultivating a toxic work environment.


Open Allocation and Incentives

Allow your employees the opportunity to move around within to the company with ease to work with projects that are of interest to them. Don’t create a situation where it takes calling in a bunch of favors or schmoozing in order to get placed onto an interesting project team. This can create resentment amongst employees who may very well succeed if they were on a project that fit their interests and skill set if they have to play office politics instead.

Consider offering an incentive plan that allows all level of employees to have the opportunity to earn more based on the quality of work they do or as projects are completed. This allows more ownership in their work and less resentment towards others who may do less but earn more simply become they are upper level.


Grow With Intention

When your company hits a boom it is easy to continually add on to fill the office with bodies to cover all the bases. However, with each addition comes a new office dynamic. Allow your employees time to become familiar with new faces and processes before throwing in yet another group of personalities and roles. Be very clear about the culture you wish to cultivate within your walls and hire people who you believe complement that vision. Then, take your time and allow the employees to get settled into their place within the company.


Increase Energy Flow

Physically creating an energy flow within the work space can reduce a toxic environment exponentially. Utilize an open design concept with community spaces and remove walls that work more as barriers throughout the office. Even if you need to separate zones, you can create the illusion of openness with glass walls and transparent doorways. This not only brightens an area, but reduces the sense of secretiveness that can often encourage mistrust. This doesn’t mean you can’t still maintain a sense of privacy. Sliding doors and sound proofing can allow conversations to remain private while still generating a feel of “transparency” throughout the company.

A toxic work environment can cause negativity to escalate quickly and keep your employees from being able to focus productively on their work. With a few tweaks you can create a positive work environment resulting in employees who are happy and at their best.