Bank Accounts

The Low-Interest Rates Could Lead You to Great Earnings

The Low-Interest Rates Could Lead You to Great Earnings

3 min read

The Low-Interest Rates Could Lead You to Great Earnings

When interest rates are low you may think:  Oh, what a good opportunity. Loans are cheaper, banks or and peer to peer sites will fight for loan clients. Yes, at some point of view and for a short time it is favorable.

But on the other side, the low-interest rate means lowering returns for lenders. If interest rates are low for a long time, where is the benefit for lenders? That is the very clear relationship between demand and supply. Low-interest rates can damage lenders, and the borrowers can be damaged too because borrowing money becomes difficult.

In periods when the interest rate is low, banks are in a difficult situation. They don’t have a strong deposit base, the income from loans is lower too which causes the banks to don’t want to take a risk by giving cheap loans to borrowers with the lower credit rating.

And here we come to the point. It is difficult to finance, for example, small businesses, and investing becomes more difficult too. But not impossible yet.

Low-interest rates inhibit investors from putting money in savings accounts. They rather use the funds to pay their debts or use their money to invest in shares or buy some property. 

For example, if the interest rate on deposit is about 1%, why would you put your money on savings? The better choice is to buy shares, the return is bigger.

Instead to put your money on your saving account, invest it

The Low-Interest Rates Could Lead You to Great Earnings

When the interest rate is low, investing is a great opportunity for many people. The truth is, if you put your money in the bank, the returns will not follow the inflation rate. Investing demand more risk, that’s the fact. But the returns, if not defeat the inflation, will follow the speed of it.

You don’t want to miss this: Economic downturn – How to prepare for it

The point is that you will take more risks to get bigger returns. How much risk you should take and stay calm? You can decrease risk by diversifying your investment portfolio. Investing in higher-risk assets gives higher returns. 

So, where to invest when you withdraw your money from the bank account? 

The most popular are bonds and stocks that are paying dividends.

The yield is what every single investor wants, no matter if it is an individual investor or institutional. The aim is the same.

Invest in fixed income assets, that will give you a high return. But if you invest in different asset classes, meaning you build a diversified portfolio which is the best strategy, you may be sure you will have increased yields.

In any case, bigger than if you leave your money in the bank while the interest rate is low.

The stock market is one of the best long term capital raising opportunities. 

Yes, the stock market levels are high at this moment. To explain this. When interest rate drops, people will think they are safe and accumulate their capital or savings into stocks.

This action is driving the markets higher. The demand is bigger and the prices are high.

Increased stock markets are a difficulty for many people. So, what you have to do is to keep your money for a while, just wait for the market correction or invest for the long term. The long-term investing is a good choice because how could you know the market will weaken. 

The stock market doesn’t like high-interest rates but likes the low-interest rates. High-interest rates can boost costs for companies which can lead to lower profits, hence lower stock prices. But it is a great opportunity for everyone who wants to buy. Low-interest rate rises the price of the stocks because the people will rather invest in stocks than to keep their money in the banks. So, the demand is bigger, hence stocks prices are higher.

The worse scenario is to leave the money in the bank during the period of low-interest rate or inflation. You don’t want to watch how smart people defeated inflation and you were the victim. Don’t be the looker-on, take your place in the game.

Financial matters before getting married

Financial matters before getting married

3 min read

Financial matters before getting married

Financial matters before married are always a risky topic.

Getting married isn’t as simple as it seems. Yes, you love each other, but some financial issues must come to the table before you put rings on the fingers. Talking about future finances can lead to the break of your relationship but you have to have one thing in your minds: When poverty comes to the door, love might fly out the window. That’s why you must have a clear situation before getting married. You must consider some questions with your partner. 

Financial matters very often can give you the right picture of future life. What if you are not compatible on that field?

First of all, you must have at least a basic idea about your partner’s financial goals for the future. Has your partner any idea to change job? Does your partner plan savings and how? Where you will be after 20 years? Compare the answers with your personal financial goals. 

What is your most important financial intention?

The financial intentions can run the range from paying off all debts to buying a house. Maybe your partner is planning some several-months traveling to the far East to find itself or to purchase the car. What is about you? Can you place yourself in that image? So, you have to discuss some financial matters before getting married.

Is your partner a saver like you are?

It’s necessary to have a sense of how your partner manages money. Are you similar or two different worlds? Don’t avoid talking about this. What if you are raised from your childhood to put aside for example 10% of your earnings as savings and your partner is more willing to live largely, spending today no matter what will come tomorrow? If you don’t open this question you may find yourself disappointed and frustrated later in your life. 

What are your priorities to spending money on?

Financial matters before getting married

You must discuss this before getting married. Your priority may be buying home and save for that, but your partner’s priority could be traveling every year to some exotic place. Nothing is wrong with that. The main point is to understand each other and find where you can or cannot support your partner’s financial goals and respect that. Understanding a partner’s financial goals is a good base for the future.

Is it crucial for you to have what your friends have?

Financial issues before getting married can be inspired by other people’s habits. Maybe you want something that others already do or have. So, take care. You must set your own financial goals, not copy others. Do you really need those high-tech gadgets your friend already has? Does your partner plan to travel with its friends or with you or both? How will you share the costs?

How much your partner earns?

Some survey showed that 4 in 10 couples don’t know how big their partner’s income is. Why is important to know about your partner’s salary? Because of future financial plans. For example, your partner’s salary is $2.000 per month but plans to purchase a house worth $300,000 in the next several months. Is he/she serious? To be sure your partner has realistic expectations about finances, you have to discuss financial matters before getting married.

How stable are you in your profession?

Any conversation about the future should involve some issues about job security. Maybe your partner is considering changing profession. maybe wants to continue the education. You have to be prepared for similar occasions. Some survey showed that 42% of millennials want to leave their jobs in the next two years. If your partner is one of them that will influence your finances. 

Do you or your partner favor financially independent?

If you want to move in together money is a big issue. Will you share your funds? Maybe you want to share a part of it? Will you open a joint account? The other study revealed that almost 1/3 millennials prefer to keep their money separated from the partner’s account. Among Gen X-ers it is the case with 11% and among Baby Boomers 13%. You have to talk about this.

A healthy relationship is based, besides love, honesty, respect to each other’s desires, understanding the differences. When it comes to money, spending habits can be crucial for the quality of together life.

As we said at the beginning of this article: When poverty comes to the door, love might fly out the window. So, discuss financial matters before getting married.

Why Zero Bond Yields Happen

Why Zero Bond Yields Happen

3 min read

Why Zero Bond Yields Happen

Zero bond interest rates mean that the yields of the bonds are 0%. This indicates a monetary policy that aims to stimulate the economy but is approaching its short term limits as the short term interest rates can’t be negative. This situation indicates that monetary-policy makers and markets see increased deflationary pressure on the currency of the country.

This leads to long term bonds’ interest rates to be negative. For example, in Germany the ten-year bond yield is negative, it is minus 0.02 percent. Actually, $13 trillion worth of bonds is giving negative rates. This interest rates will be accruing nominal loses to investors until 2030.

In Japan, low-interest rates on a bond are predicted to stay zero or negative even longer. The 10-year bond yields in the US are a bit above 1% and the UK about 2.4%. Both countries suggest minimum or no tendency of raises in the near future.

 

Zero Bond Yields

 

Moreover, bond yields in high-level markets are decreasing for the last 20 years which was unbelievable just 2 decades ago.

How did we come to this?

The financial crisis in 2008 loan growth shifted negative and continued to be depressed for a long time. It happened because households and companies had too much debt and they wanted to pay down debt. They wanted to have no debts even when the central banks started cutting the interest rates closer and closer to 0%.

The same case was seen in Japan in the 1990s during the Lost Decade.

Bonds interest rates are market prices, meaning they are a measure of the supply and demand of bonds. The demand is driven by a desire for low-risk assets. And bonds are a less risky asset than stocks because they offer fixed payments for an exactly fixed time. The bondholders will take something even if the country or company that issued bonds experience the crash. The interesting thing about bonds is that the riskier bond is, the pay-out is higher because investors are compensated for accepting the higher risk.

Today, the bonds are less risky than ever. The investors are buying bonds with lower yields. Low-risk assets are exceptionally good-looking when markets are unpredictable or uncertain. For example, today in the US you have investors’ worry that a recession caused by a trade war with China could crash the stock markets. 

That’s why even negative bond yield rates are more desirable than the other choices.

Moreover, the pension funds usually are buying bonds, no matter how high or low is the rate. Either from prudency of fund managers or the regulation. For instance, German pension funds hold bonds more than other assets because they can invest only 35% in risky securities.

How does the zero bond interest rate impact your investments?

Well, it depends on what is your outlook as an investor, meaning are you, borrower or saver. That will determine your benefit from zero bond yield.

Low rates can be very bad for retirees. They more often hold more bonds. Retirement investment expenses have grown amazingly costly. Baby boomers may have profited from economic increase and growing stock markets. But their retirement is much more costly also. Anyway, savers and pensioners are punished when the nominal value of their investment falls.

Actually, everyone will get a lower return on investments, or be forced to take more risk to generate a higher return. 

If stock prices decline that will cause more economic instability. On the other hand, a lower cost of capital can boost investment and push more growth. That will be the benefit of everyone. And this possibility is the driver behind the policy of cutting interest rates by central banks.

Not all is good with zero bond yields. 

If the price is zero, savers will accumulate less and get less return on prior savings.

Why a zero bonds yield is bad?

Imagine this deal as an example on zero bond yields. You borrowed to some company $1,000 today and it will return $900 or $1,000 with no interest rate to you in a decade.
What?
This is exactly what is happening with negative or zero bond yield. That is not how it should work.
You have to make a profit when you put your money in the market or the bank.

Nicholas Colas, the co-founder of DataTrek, explained: “Bonds are supposed to pay the owner of capital something to pry the money out of their hands.”

But, some really wise investors have invested almost $15 trillion in government bonds that offer negative interest rates, per a report of Deutsche Bank. That is approximately a quarter of the overall bond market.
Negative interest rates of long term bonds in a situation of the zero-bound interest rates allow politicians to give more promises waiting the day when interest rates return to rational levels, and taxes rise to pay for it all.

Money Management

Money Management

Money Management
Hans Stam

by Hans Stam

A little off topic but well received within my group how I manage money.

So I decided to put this in writing to your benefit. 

Many don’t know where all the money went at the end of their month. 

Usually, they have a bit of month left at the end of their money. 

Others make a lot of money but always seem to have a shortage anyway. 

Some are doing just fine but don’t seem to get ahead in their finances. 

The process of Money Management

Here is the process I went through personally.

I had one account at my bank as most people have. 

All my money came in on that account and all payments were made from that account. 

I started to write down all my expenses.

Then I noticed I was overpaying for some services like my phone, so I contacted the phone company for a better deal and instantly got more than 50% discount. That was my first step in money management. 

Same with other bills, I noticed some things I spent but didn’t really need or that could be done differently. 

When I had a complete picture of all my expenses per month, I divided it into daily portions. 

2nd Account in the process of Money Management?

I opened a second bank account at another bank, and whatever income I had I placed at that central account. 

Not only the usual income but also whatever money I got like tax returns or bonuses, etc.

Then I set up automated daily payments from that central bank account to the initial bank account where most bills were deducted automatically. 

The way it was set up plus perhaps a few bucks a day was taking care of the bills and it grew a bit every day. 

Why another bank? 

Anything can happen, and when it hits the fan, you better keep control yourself instead of letting the bank decide for you!

3rd Account?! 

Then I set up a third Bank account. I decided on a number I needed to do groceries on a daily bases.

So from my central account, I got daily payments to use for shopping.

Now I knew what was there every day to use and not overspend.

4rth Account!!

I also got Gas money from jobs I do.

So I opened a Fourth Bank account.

Every time I’m getting gas money, I deposit it in that account. 

Most times I’m getting more than needed so all other car bills like taxes and maintenance are being paid from that account. 

Central Account for Better Money Management

When I did set it up that way, all I needed to focus on was the central bank account and I knew exactly what I needed a day, week, month. 

I noticed at first it wasn’t easy but I was determined to get it right.

So then I realized I needed a buffer of 3-6 months based on my daily payments. 

I knew what I needed to survive 3-6 months without any income in case something happens. 

This has saved me several times as I do not have a steady income. 

Interest

I noticed I was paying interest on open balances.

So how did that happen? 

I was in need of a car, and that’s a huge sum for most people. 

So that had to be paid from the Gas account, but there wasn’t enough. 

So I had to loan from a bank, but I paid more due to interest. 

I decided to calculate the interest and paid the same interest amount into my central account as well. 

Basically, I was paying back the bank, and now also myself. 

Over time I needed more money on bigger spendings.

So I loaned from the central account and paid it back from the account I needed it for with interest!

How does that work?

When I saw something in the shops I really wanted to have, I just paid it from the central account to my Groceries account. 

Same goes for Gas-account when in need of more cash instantly like buying another car.

Then by the daily income, I was getting on those accounts, I paid it back to the central account with interest.  

It also made me aware that at times I did not really have to buy whatever it was I wanted, so it kept me from buying the item. 

All I need to watch for is the buffer on the Central bank account to keep my internal economy going. 

But before there was a buffer, I took care of small bills that were past due and made them disappear quickly. 

Doing that gave me more and more control to work towards my buffer.

Investments as the best way for Money Management

When I wanted to start investing, I didn’t really have much money to do it with. 

So I loaned money from my central account, and whatever money went out, I paid back with interest from my income. 

So even if that investment was not working out, it was covered by future manageable income, bit by bit. 

Whatever the investment did produce was placed back into the central account which also helped to pay off the initial loan. 

If the investment made more, I was free to either let it grow or to fund the central account after the internal loan was settled. 

When I invested more I considered it to be a separate loan which re-entered the process. 

No logic

It doesn’t seem logical to work with your money like that, it seems too complicated.

But what it did do for me was that it gave me control over my bills which all happens automatically and it made me think twice before spending outside the balance on the cards. 

So in a way, it made me focus and I know what I have to do next. 

If my investments are not providing enough for my buffer, I know I need to get another job and quickly maintain my Central Account.

Anything can happen in life, and I never really valued stability really going day by day without much thought until the day came I got stuck financially.

So through desperation and a whole lot of debt, I decided to set it up to the way I have it now. 

And although it did not help me overnight, the action alone to contact another bank and set up the accounts gave me a feeling of control.

It also made me go look for other ways to make an income like another job to maintain the central account. 

This got me moving with a plan in action and it has given me many benefits in my financial life.

Back on control

I took back control, and I crawled back from a deep hole which made me an investor and Trader. 

Hopefully, you are not facing that mountain of debt in your life and you might not give this a second thought as long as you always have enough, but even millionaires can go bankrupt if they don’t pay attention. 

Be wise, don’t let money become a problem where it doesn’t have to be. 

I surely hope this off-topic article will benefit you, as money is not everything and it should not control your life. 

Yes, we need it, so let’s deal with it and go on with other important things in life. 

If you can support my work as a Mentor, please click here for a donation

I really appreciate your encouragement. 

Also, any support you like to show through PayPal is very much appreciated!

to your success,

Hans Stam

Best money apps for 2019 3

Best money apps for 2019

3 min read

Best money apps for 2019

We all remember how our parents did that.

They didn’t have an app to manage their money, they had to do all alone. Several envelopes “loan” “electricity” “heat” “phone” etc. were usually on the table with slips filled.  

The pile of bills and a checkbook on one side, envelopes on the other.

And a notebook where they wrote everything they spent.

As the envelopes became fatter, the bunch of bills would become tiny.

Today it is completely different.

We have apps for almost everything.

We have automated payments. So, it is easy to track all payments and where our money goes.

We can know our net worth in a second.

Traders Paradise came across numerous reviews to find the best money apps. Of course, our personal experiences were valuable too.  

So, here are some of the best money apps we estimated.

All available to download for Android and iOS, which was the very first criteria.

The second was a free download.

Mint is a free money app. It comes from Intuit (the creator of TurboTax and QuickBooks). Mint provides you to set up and link all your accounts and cards into one place.

The app automatically classifies banking and credit card transactions and its Trends feature provides you to track your credit cards, spending, cash, net worth. Also, you are able to set your financial goals or payment reminder, bill reminder or receive suggestions on how to reduce fees and save some money. Mint will signal you when you are going over your stated budget.
Mint has over  20 million users.

The app will automatically classify banking and credit card transactions and there is a Trends feature that allows you to track credit cards, cash, spending, income, and net worth over time, along with the ability to set up financial goals.

This app is available for iPhone or iPad, as well as  Android and Windows devices.

Best money apps for 2019 1

Goodbudget is previously known as Easy Envelope Budget Aid or EEBA.

You can download the free app on iOS and Android devices from the App Store and Google Play store.

This is an automated version of the old envelopes.

The idea is to split up your money into digital “envelopes” based on your wants or needs.

You can pick from pre-labeled envelopes or design your own.

Start by adding your income and listing a financial “account” like a checking account or savings account, credit card or cash.
Customize your envelopes.

You should log to your Goodbudget every time you spend or receive the money,  allocate some amount to each of your envelopes. For example, you allocated $200 per month to your hygiene. Every time you bought something from that kind of supplies you should click “add a transaction”, insert the store name and the value you spent. That value will be taken out the certain envelope. And you will see how much you can to spend on hygiene more.

You can pick one of two Goodbudget offered plans.

A free plan and a paid Plus plan that costs $5 per month or $45 per year.

The envelopes balance is colored: green means you have money to spend, red means you have gone over the budget.

This isn’t only a money budgeting app.

This app is the best if you have a lot of subscriptions or memberships and you wanted to cancel them.

Trim helps you save on all subscriptions you don’t apply that are still cost you money.

This app employs your credit card and bank transactions to warn you of forgotten subscriptions. Trim will load only the transactions linked to subscriptions.

Then you will receive a text message with all your subscriptions so you can cancel them if you want.

Trim is a truly assistant.

It can send your certified letter telling you aren’t coming on some event. There is no need for phone calls.

Also, Trim will negotiate your cable or Internet bill down for you.

It operates with Comcast, Time Warner, Charter, or any other provider.

Best money apps for 2019 2

With MoneyStrands you’ll get prompt access to your account balances, transactions, budgets, saving goals, and more.
All you need to win smart financial decisions today.

Moreover, you don’t need to link it with your bank accounts. There is a possibility to do that but it isn’t necessary.
Millennials like it very much.

And you have a calendar. Well, it is easier to see when your bills are expected if you have a calendar in front of you.

You can set goals and track how much you’ve saved.

This app suits those who need a good money app but don’t like to link bank accounts.

The bottom line

When you plan your money you can see where your money goes and save more.

You can observe your spending for some time and then rearrange the budget if it is necessary.

You can secure your payments on time and never go over the limit on credit card fees.

These money apps are very helpful, especially if you never update your budgeting skills. We recommend you best money apps from our own experience.

Don’t waste your money!

risk disclosure

Economic Downturn - How to Prepare 2

Economic Downturn – How to Prepare

2 min read

Economic Downturn - How to Prepare
Foretelling an economic downturn can seem as mystical and convoluted as reading the horoscope charts. However, financial experts are warning that the economic winds are changing.

There are some economic indicators causing financial analysts to prognosticate slim financial time. First, economic growth is postponed. The rate of salary increase has stagnated. As the economy continues to slow down, consumer interest rates will rise and investment earnings will lose momentum, possibly even losing money.

We have to be honest, there’s no magical way to predict just how bad things will get. Anyway, burying the head in the sand is a terrible idea. Here are a few things you can do to protect your finances against the coming economic downturn.

Economic Downturn - How to Prepare 1

Dow Jones Industrial Average Market index

When the storm is approaching, the first thing you do is preparing your home for that attack. You cover windows and surround your home with sandbags. An emergency fund does the same thing financially. It’s the added layer of protection that can assist you when the economy drops. Also, it provides you a fighting chance to protect what you’ve increased.

Grow your emergency fund

The emergency fund is anywhere from three to six months’ worth of daily living expenses. During the meager economic time, you want to have more than the standard recommended amount.

Under normal circumstances, the average period of unemployment lasts roughly three to six months. But experts assume that number is sneaking and could double in an indolent economy.

To be more clear, when it comes, you have to plan

To be unemployed at least one month per every $10,000 you earn. So if you earn $80,000 a year, you should plan for unemployment that lasts at least 8 months. This formula is a great measure in helping you discover how much you need in your emergency fund.

Balance your budget and allocate debt

In anticipation of a natural disaster, people buy supplies and lasting food items. Balancing your budget by reducing expenses in preparation for a financial collapse follows the same principal.

Your holiday and home renovation may have to pause. The key is to prioritize your expenses. You have to recognize what you can skip. Also, you have to stop living on overtime, bonuses, and side-gig money. It is better to put that money into your emergency fund.

You must be focused on quickly paying down debt. Get rid of some of your smaller debts fast. If you reduce debt, you owe less and have more money at your control. It can be your care package during a downturn.

Increase professional skills

This is a nonfinancial thing. Let’s say you have a primary job, but you also have a bunch of hobbies. These things can be turned into job opportunities.

Take time to renew your resume and hone or add to your skill set. There are a lot of companies out there offering training.

Take those opportunities now, don’t hesitate.

Evaluate your investment portfolio

The stock market usually becomes extremely volatile during an economic downturn. Financial experts recommend not to remove your money off an investment while you panicking. Fear should never encourage your decisions.

Look at your investment portfolio now. Try to find if there are any additions you’d like to change. Generally speaking, risky funds will probably lose money during a downturn. But truth is, they also rebound instantly during an economic restoration. Safer investments may not lose a lot, but you will not earn much too.

One method or investment technique isn’t superior over another. They all have pros and cons. The key is to evaluate yourself. Do you have a weak stomach? If so, go with something less risky. But if you’re convinced you can manage the turbulence of a risky investment, stay seated. Don’t forget to take financial advice before you decide, anyway. And remember, the knee-jerk attitude is the fastest way to lose big when it comes to investing.
Stay in control!

The bottom line

These are just a few of the small steps you can take to prepare yourself and your family for potentially difficult times, for the economic downturn.

The economy has been expanding since hitting bottom in mid-2009. That makes this recovery three years longer than the average growth cycle since 1945. If it reaches 10 years, it will match the record for the longest expansion. We have a few months to see that.

Maybe the slow pace of the recovery will allow it to run longer than usual. The odds of it ending get stronger as time goes on.

risk disclosure

Managing money online - nightmare or bright future 3

Managing money online – nightmare or bright future

3 min read

Managing money online - nightmare or bright future 2
Managing money online can be a tricky game.

Cryptocurrencies, often associated with “geeks” or with those who want to get money quickly, have become a popular form of payment.

According to a recent report by Kaspersky Lab, every tenth user (13%) has used crypto for purchases so far. However, cybercriminals also accept this trend and increasingly target crypto-markets. By transforming the old threats, these new scammers attack investors.

Kaspersky Lab examined the habits of 12,448 consumers in 22 countries.

The crypto users are at constant risk of losing their savings stored through this technology. The hackers develop sophisticated techniques for accessing others’ finances. There is an increasing number of companies offering cryptocurrencies as a payment method, where they are now accepted by both retailers and, for example, food stores.

Interest for crypto is raising, and even major sports teams are joining on crypto-exchanges. However, people show more interest in using cryptos for investment as well as for spending money. Hence, their digital assets are increasingly subject to theft. Incidents, where stolen digital tokens worth nearly $ 530 million, are known.

Managing money online

Visiting the favorite online retailers is fast growing the most comfortable way to make must-have shopping.  Their advantages are fast-tracked delivery, exclusive discounts, and free returns. This made online shopping an interesting and vital part of the present life.

It’s determined that three-quarters of us have shopped online. Even browsing for goods has become a popular pastime.

Frankly, all of us are doing it when we are on our breaks, traveling to work or sitting in front of the television.
The e-commerce boom has made it easy to spend money online. You can buy almost everything online, from groceries and gifts, clothes, through to paying service providers or buying a yacht. The opportunities are infinite and the variety of payment options is expanding.

Managing money online - nightmare or bright future 1

The image source: kaspersky.com

The majority of retailers are encouraged us to use whatever payment method we prefer. Of course, in order to stop us from moving elsewhere. From credit card transactions and bank transfers to cryptocurrency, subscriptions, and loyalty points, we can pay for assets and services in more ways than ever before.

A large-scale spectrum of payment options offers us both choice and flexibility. But it also gives us the difficulty of protecting our financial details in various areas.

Kaspersky Lab figures suggest that 60% of consumers are worried about online banking fraud. The majority of people having various online shopping accounts, digital wallets, and login credentials. So, it can be a big challenge to hold everything in order and remember every PIN, password, and code.

Nowadays it isn’t so easy to stay in control.

Some of us have the problem to remember the email address we used to register with a particular service.

Kaspersky Lab has uncovered how people manage their finances online. They examined their attitudes toward financial cyber threats. In details, how safe their money is and how they value it against the security of other sensitive information.

And they revealed the risks people are prepared to take when making transactions online. What do the people do to protect their credentials to avoid their hard-earned money to fall into the wrong hands?

Is our money safe?

Online shopping now is standard. So, cybercriminals are ready to take advantage of those who fail to protect themselves online. You can’t even imagine how vulnerable our financial information is online.

For example, in October 2018, American HSBC customers’ account details were accessed by hackers through an advanced breach. That was affecting hundreds of thousands of people. This is a great example of how important is taking control of our own security and not relying on others. No one will keep our information safe as we can do it by ourselves. What can we do ourselves to minimize the chances of becoming a target?

Trying to write down your financial credentials puts you at risk. Writing a credit card PIN in a notepad, or saving a bank account passcode on a laptop, could expose you more to attack. Hence, result in monetary losses.

Kaspersky’s survey revealed that a fifth of people (20%) still rely on their smartphone or other devices as a way of noting down private banking information. This is the potential to fall into the wrong hands.

Managing money online - nightmare or bright future

The image source: kaspersky.com

How to remember all our passwords

Kaspersky Lab found a third of people (31%) still struggle to remember their online banking credentials, admitting that they have either forgotten them or do not even try to remember them.

Signing up for subscriptions services is also incredibly tempting. Because it gives us the opportunity to quickly access our favorite television shows, movies, and products. The registration is easy, but it can become very tricky to track spending. 32% of people who answered the survey do not always remember every service or automated payment (direct debit) they have subscribed to. Signing up for two streaming services, a few magazines, and a gym plan can quickly lead to costly fees from multiple brands.

Password panic

Kaspersky Lab statistics show that more than half of people (52%) are worried about being vulnerable when buying products or making financial transactions online. This result means that a small number of them would prefer if this could be done more securely. The survey also revealed that nearly half of the people (46%) would like to pay for goods online more often. All they need is reliable protection for these financial transactions.

A third of shoppers (32%) revealed that they had a financial incident in the past year. This left many of them (26%) out of pocket. As we all know from personal experiences, they were not compensated by any payment provider or retailer involved.
The good news is that the strong majority of people (83%) believe the most important thing is to set a strong password for online banking, speaking about managing money online.

The bottom line

Managing money online, keeping expenses in order, and planning a budget can be tough. You can use personal finance sites that do everything from tracking your spending to helping you get out of debt to managing your bills for you.
Best of all, if they’re all free.

risk disclosure

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