Category:  Personal Finance

Personal finance covers managing your money. That can be saving and investing. Personal finance includes budgeting, investments, insurance, mortgages, retirement planning, banking, etc. In other words, it is an entire industry that provides financial services to people and advises them about financial and investment possibilities.

Traders-Paradise gives you comprehensive articles on all these matters. We’re covering all mentioned above but our team stepped forward. Here you can find very useful articles about loans, personal loans, pay-day loans, and why some are better than others.

Traders-Paradise provides you, our reader, full and detailed guides on how to apply for loans, how to improve your bad credit score, how to get out a loan even with a bad credit score.

Here you’ll find all about the process of applying, what documents are required, both for online lenders and traditional banks. So, you can be prepared in advance.

Tredares-Paradise team that has experts in different fields, will guide you, with their articles, trough the personal finance issues and help you to solve them.

We are giving you a key to keep your personal finances on the right track. You’ll learn how to obtain skills that can help you in your personal success or your business success. These articles are all about that but with a concrete explanation of personal money management. How to do that, why to do that, how beneficial it is.

  • Apply For a Personal Loan – Step by Step Guide

    Apply For a Personal Loan – Step by Step Guide

    Apply For a Personal Loan - Step by Step Guide
    Before you apply for a personal loan it’s important to consider why you need the money. Depending on that, you will choose the loan that’s most suitable for your financial circumstances.

    By Guy Avtalyon

    A personal loan is a convenient vehicle to cover a large expense if you have them but many people are confused with it and don’t understand how to apply for a personal loan. The problem is that many of them have not so good credit scores but there are some possibilities to increase their chances of approval during the process. 

    Before you apply for a personal loan you’ll have to define what type of loan you want to take out. There are several types and you have to know each of them before you start the process. 

    Personal loans can be an unsecured, secured, variable-rate or fixed-rate loan, debt consolidation, co-sign, a personal line of credit, and many other types but these are the main. A personal loan is frequently unsecured. That means it uses your credit as a gauge. To take out this type of personal loan the lender will not ask you for assurance in some other asset, for example, house.

    The second checkpoint in your deciding process before you apply for a personal loan is how much money you need.

    That amount should be suitable to cover your expenses but also, your income has to be suitable to cover the monthly charge you’ll be obliged to pay over the life of the loan. Your personal loan should be less than your maximum monthly expense but also not too small. 

    If you take out a too big loan that surpasses your income per month, you’ll jump into big financial problems. So, when deciding to apply for a personal loan you have to plan based on current income, not upon the expected. Also, applying for a personal loan that is too small will not be sufficient to cover your financial needs. So, you should carefully measure the debt you can handle, and before you apply for a personal loan.

    Select the right type of lender

    Think about what is most important for you: support or speed. You might choose banks or credit unions that are both experienced and if you are already a customer of some you might have some benefits, for example, discounted rates. The problem with these traditional lenders is that the application process may take too much time. They always require a lot of papers and that may eat your time. If you are in a rush maybe online lenders are better for your needs.

    If you choose some online lender it is probably because you need cash fast. We hope you compared various lenders before you apply for a personal loan. It is extremely important, you could find some with the lowest rate. Anyway, if you pick an online lender, you’ll have a lower rate, much lower than it is the case with banks and credit unions. Moreover, they’ll give you an opportunity to see the rate before you apply for a personal loan. In many senses online loans are unique. 

    You can compare rates by pre-qualifying, there is no need to go anywhere instead you can apply for a personal loan on a website, and what is most important for those who are in a rush, you’ll get approval in a few minutes and after a day or two, your loan will be funded.

    By selecting the right type of lender can save you money.

    Check your credit score before you apply for a personal loan

    Your credit score determines how much you qualify to borrow or you are not at all. Your chances of getting a loan will increase with a better credit score. Also, your credit score will determine the rate.

    Where to check credit score?

    Find some credit scoring service. For example, we suggest you use FICO. FICO score is a measure of consumer credit risk. It is a standard of lending in the US.

    A FICO score is expressed as a number, and it will determine your creditworthiness. That is your credit score. FICO scores are in the range from 300 to 850, where the higher the number represents a better credit score. 

    The credit score of 740 and over is excellent. Between 670 and 739 is considered as good, between 580 and 699 is rated as fair, and everything below 579 is ranked as poor credit score.

    The lenders will expect good credit and you’ll need one year of credit before they approve you an unsecured personal loan. It is smart to check your credit score before you apply for a personal loan. 

    Check the lender’s demands  

    This sounds logical but many people unveil the lender’s eligibility requirements after they apply for the loan. Don’t waste your time. If you don’t meet its requirements you’ll be rejected promptly. Apply only if you are eligible for.

    Typical demands include a good credit score where the lowest average is 640, also your annual income is one of the lenders’ requirements and you’ll need to have above $25.000. They will also ask you for your credit history of at least 3 years to qualify. The lenders will estimate your debt-to-income ratio or DTI. Lower than 43% is better.

    Before you apply for a personal loan you’ll need to have a good DTI because it has a great influence on your interest rate or loan terms.

    A debt-to-income ratio shows the debt payments you have every month divided by your total income per month. Lenders estimate your DTI to be sure that you can afford to pay a new loan. Usually, the lenders will calculate your DTI themselves but it is much better if you know your DTI before applying. For example, if you find out your DTI is high, think about paying off your other debts. Otherwise, the lender will offer you too high rates or reject your application.

    Examine lenders

    Examine everything, interest rates, fees, terms, payment options, fine print, literally everything before you sign papers, and fill out your application. Why is this important? First of all, you have to be sure how safe you are. For example, you can find in the lender’s fine print a note about prepayment penalties or late fees. That could be a great problem if there are any and you didn’t know before you signed the documents. Check your lender, ask, examine. 

    When it comes to online lenders you should be especially cautious. Choose the lender who is registered and has all information available. If some info is missing, check the lender’s credibility, it could easily be a scam and you’ll end up giving your personal and banking details to a scammer.

    Collect your documents before you apply for a personal loan

    It is always better to have all documents on hand. In that way, your applying will go faster and you’ll receive approval sooner.

    The lender in the US will tell you which documents it demands, but it will frequently be some ID, passport, driver license, or similar. Also, the lender will ask for your proof of employment. You can show your pay stubs for the last three months or a W-2 form. You have to have a bank statement also to provide to the lender information about your total income. To be able to check your credit score, the lender will ask your social security number. 

    Some lenders or online applications will require your current company’s contact info but some will ask you about previous employers.

    So, prepare all these documents to get your loan as soon as possible.

    Consider rate and fees

    The main considerations when looking for a loan should be its rate, fees, and terms. Will you choose an online lender or a bank branch is less important.  Always apply for pre-approval. Online lenders, banks, or credit unions will give you this opportunity. Based on the data you submit, you’ll know some important things such as the rate (maybe not precise but very close) or loan duration and other conditions.

    Some of the best-known national banks don’t have unsecured personal loans in offers. They have some other credit products, for example, mortgages, credit cards, etc. Credit unions are good for borrowers with a bad credit score. But to apply for a personal loan, you need to be their member first.

  • Before Taking Out A Loan Ask Questions

    Before Taking Out A Loan Ask Questions

    Before Taking Out A Loan Ask Questions
    Before you begin the whole process of taking out the loan, you have to recognize what kind of loan you need. Personal loans are unsecured and different lenders will offer them under various conditions.

    By Guy Avtalyon

    Before even starting to investigate opportunities, you have to know what to ask before taking out a loan. Your account will thank you later. The truth is that almost everyone will find a good reason to take out a loan, but keep in mind, that has to be a GOOD REASON. For example, vacations are a bad idea.

    Suppose you already asked yourself all the important questions and you got the answers on them. Did you? Well, it isn’t quite the truth, right? 

    You’re in need and in a hurry to find a lender is a more realistic situation. Before you start examining what are your opportunities or start investigating online offers, for example, you have two main subjects that you should consider: why do you need a loan and what to ask a lender.

    What to ask yourself before taking out a loan?

    Why do you need a loan? It is a personal question. Will that borrowed money help you achieve your goals? Do you really need it?
    Personal loans are tools that must help you to solve your financial problems but you must have a plan for that. As we said, taking out a loan for vacations is a bad idea, rather open target savings account for that purpose. It will take time until you save enough but paying back loans also require time. 

    But the reasonable decision is to take out a loan to pay out some debt with high interest. How much do you need exactly to borrow is crucial. Online applying for personal loans is very easy, but did you determine the exact amount of cash you need to borrow. If you add up all your debts you’ll find that exact amount. 

    How much can you afford to repay?

    Personal loans will provide you cash for your needs, but it’s important to borrow what you can afford to repay. So, before you apply you have to examine your payment options. Calculate your monthly payment. For example, you know the amount of money you’ll need to borrow. But to calculate your monthly payment you’ll need to know the interest rate and loan length. Loan length is an important question and it is often your decision. You may choose to pay a larger payment per month, so you’ll need a shorter time period to repay your loan as a whole. If you choose a longer repayment timeline, you’ll have to pay smaller amounts every month. 

    Also, the interest rates will affect your repayments. Try to find a lender that offers lower interest rates, that will save you money because if the interest rate is higher, you’ll pay more money for the interest.
    When you are searching for some online lender, always seek the lowest interest rate as possible.

    Before taking out a loan ask what is your credit score 

    Your credit score may decide if you are qualified for a personal loan at all. Also, if you are qualified for getting a personal loan, a good credit score may provide you better terms. With a bad credit score, you’ll haven’t such good terms. Yet, it’s still possible to get a personal loan with a bad credit score. 

    Some online lenders will give you a chance to see your credit score without paying and without obligation to take out a loan.

    It’s up to you to decide if an unsecured personal loan is suitable for you. Unsecured personal loans have fixed interest rates and fixed payments every month. Payments for other loans may differ from month to month and as the lifetime of your loan is approaching to the end.

    Can you trust the lender?

    When you’re in a real need and you need that money quickly, there is an army of lenders willing to deceive you and put you in a dangerous situation.
    Trustworthy lenders will look at your credit score, credit report, and examine whether you are able to repay the loan based on the ratio of your debt to income. 

    If they can check you, you can check them also before taking out a loan. For the US-based residents, check complaints reported to the Consumer Financial Protection Bureau. Also, you have plenty of websites where you can find other borrowers’ stories. Thanks to the internet everything is much easier. The trickiest part is that you’ll need to give some sensitive personal information if you want to use an online lender. 

    Check them again and again

    So you have to check them and be sure you are dealing with trustworthy lenders because some risks may occur. Fake lenders can be an extremely dangerous choice. They can promise a lot of beneficial things, but after you pay what is needed for approving the loan, you may not get what you wanted and what you paid nor what they promised. Also, if you choose a fake lender, it is possible to pay more interest or more fees. For example, some trustworthy lenders will never ask for advance fees. With legitimate lenders, the only fees you have to pay upfront are, for example, appraisals or credit checks. But you’ll have to do that only if you are taking out large loans.

    To lenders who allow anybody to take a loan, you’ll pay high interest. They will always calculate the risk they have to take or simply, they want to steal your data or money.  

    Also, be very careful, actually, you have to avoid all lenders that offer you to send the amount requested by wire. 

    Why would they want you to send money by wire? You have a credit card or check to do that. If you find such a lender you can be sure it’s a scam.

    Some of these “artists” added some words to their names that may suggest the U.S. government has approved the lender. Also, some will choose the name of some well-known financial institution but will make small, barely visible changes. That is a sign you are dealing with the false lender.

    What to ask a lender before taking out a loan?

    Ask the lender to explain all about different interest rates and to tell you how each of them could influence your financial situation and loan purpose. The other info you should ask your lender is how much you’ll need for down payments. In most cases, it will be 20% but can be changeable from lender to lender and depending on your credit score. For example, some will demand significantly less.

    Also, you would like to know what all the costs are. This means you have to know even before taking out a loan the cost of lender’s fees, recording fees, taxes, etc. 

    You need to know if you can get a loan rate lock. That is important if interest rates are rising. Of course, they are changing on a daily basis but if that change is notable maybe you’ll choose to lock a loan rate, for that the lender will charge you and you’ll need to know how much the fee will be. 

    Also, are there some prepayment penalties? They are not allowed in every state in the US, but it is important to know if your lender can charge you penalties if you pay the loan earlier. 

    Not everyone is an expert in mortgages and mortgage terms. Ask anything you’re not certain about. There is no stupid questions. You have to know all details, ask the lender for each one before taking out a loan.

    What to pay attention to before taking out a loan?

    When you need money, you may not have enough time to think about your financial future. So, you have to be careful and wise. Take care of how and under which conditions you are taking out a loan. Ask as many questions as you can. Demand the answers because they can save you money. Before taking out a loan from a lender, ask yourself what is the real purpose of borrowing and can you keep your debt under control. For that, you’ll need to know all details about the conditions under which you are taking out a loan. 

    Borrow only the amount you really need and you are capable of repaying. Lenders will try to give you the maximum loan but do you need it? Can you afford it? Always think about the future and possible problems that can arise.

  • Personal Online Loans – Everything You Need To Know

    Personal Online Loans – Everything You Need To Know

    Personal Online Loans - Everything You Need To Know
    The lending process is much faster if you are taking out a personal loan online. The whole process can be made from your home. Very often, you’ll get the funds deposited into your account within one or two days.

    By Guy Avtalyon

    Personal online loans can be easy to apply for. Online lenders usually offer low-interest rates, so it is important to note when you have to decide should you do or not that. The other benefit of personal online loans is that it is so easy to compare different offers from different lenders. Easy and quick. Besides specialized online lenders, many others are allowing you to apply for a personal online loan. Sometimes, you may get a loan under better conditions using their services.

    A personal loan from some online lender can bring money into your account instantly. Sometimes during the same working day.
    Also, for personal online loans, you can apply through solely online lenders or through some financial companies or institutions that also have online loans as an offer.

    What is a personal loan? 

    It is a loan that you, as a private person, take out for a short, limited time. It can be between two and five years. The time is fixed and doesn’t vary, which is different from the line of credit or a credit card. For most US residents personal loan amounts are from $1.000 and $100.000. This depends on your demands and your creditworthiness. Banks and lenders have individual limitations, a set of rules, on how long and how much someone can borrow for a personal loan.

    One of the characteristics of personal loans is that they are typically unsecured. And that is an advantage of this kind of loan because you don’t need to provide some kind of collateral. For example, you don’t need a house as collateral backing the loan. 

    There are many lenders that offer personal loans. Lenders could be traditional brick-and-mortar banks or online-only. They accept borrowers with various credit scores, income, and other conditions needed to get personal online loans.

    We will walk you through the process of how you can find the right lender for you depending on your income, credit history, interest rates. We will explain to you what you can’t use the loan for. Picking the right lender may save you a lot of time but, as more important, a lot of money.

    Personal online loans offer a handy solution

    For example, you need cash and you need it quickly. The main advantage of online lenders is that they can give you a quick answer to your request. So, online lenders are a quick, suitable choice, maybe more than banks or credit unions. 

    The other benefit is that online lenders usually offer lower rates but there are also some other things, very important and useful if you choose to apply for personal online loans.

    First of all, the majority of online lenders allow you to pre-qualify. That is a unique offer because you can compare rates from different lenders by pre-qualifying online and find the lowest. The other benefit is that they can fund a loan very quickly, the approval will come on the same day, sometimes in the space of several minutes. The loan will be funded inside a day or two. 

    Those are important things that make online loans different from others.

    The purposes to get personal online loans

    Personal loans are not an answer to all financial circumstances. Yes, sometimes they are simply a band-aid on incorrect money management. But it can help you if you have credit card debt with high-interest rates, for example, that is almost 25% per year. If you succeed to get a personal loan with a lower interest rate, you’ll be able to pay off your credit card debt faster and pay less on interest.
    Such refinancing is a good example of the purpose to spend your personal loan.

    But we have bad purposes too.

    Don’t try to get a personal online loan if you want to invest in stocks, for example. For that kind of purpose, it is better to save and then invest.

    Maybe the worst purpose of getting a personal loan is for vacations, expenses such as a wedding, expensive rings, or similar. Also, it is better to save for that.

    Someone would like to repair a home and think the personal loan is the best solution. Well, it couldn’t be more wrong. For that purpose, it is better to use a home equity loan since it has a lower interest rate.

    Steps to take before applying for personal online loans

    Before you start the process, decide how much money you really need. The sum you want to borrow should be based on the debt you have to cover and your income. Avoid stretching yourself too thin. If you take out a too-small loan it wouldn’t cover your needs, but also, the too-large loan will put you into paying interest on a larger amount than needed. So, you have to calculate the amount you can handle and do it before applying.
    Also, pick the right type of lender.

    Banks and credit unions take much longer to process your request than online lenders. They also require fewer documents and the application itself is less complicated. And sometimes the speed is most important in getting personal loans.

    The advantages of personal online loans

    Personal online loans have a big advantage – they are comfortable. 

    Doesn’t matter if you choose an online-only or branch-based lender. Both will provide you the loan application online and the possibility to upload verification documents. For example, you’ll need a driver’s license. Well, some branch-based lenders will require your signature on the final documents at a real branch. That is a kind of disadvantage since you would like to apply online. You will not have such a problem with online-only lenders. The whole loan application process will be done online for sure. 

    Prequalification will not hurt your credit score. Moreover, you can submit several prequalification forms to expand the list of possible lenders. 

    The next step is to complete a loan application and agreement to a hard check on your credit reports. Both types of online lenders, online-only or branch-based, require a hard credit check before you sign for a loan. Generally, these inquiries could affect your credit score. But one inquiry will have a small influence on your overall credit score and shouldn’t discourage you from applying for a loan.

    The particularly great advantage of personal online loans is that you can easily compare all your options. The benefit is that you could get the best rates and loan terms for your needs this way. 

    If you want to compare lenders, find a website that allows you to instantly classify and match lenders and loan options based on your situation, and wanted loan sum.

    Disadvantages 

    Online loans may cost you. They are not cheap and usually, they are costlier than loans from credit unions. The problem can arise with different formulas for underwriting because almost every online lender has its own. Also, sometimes it can be difficult to go through the application process for some types of personal online loans. For example, secured personal loans or co-sign loans have complex processes. 

    Also, if you want a loan under $2.000 it might be hard to find a lender since most of them have a minimum at that sum. 

    The main problem is to find reputable online lenders. You can see the ads of some lenders that they don’t care about your credit score or something else that may sound very lucrative at first sight. In most cases they are scammers. Legitimate online lenders will always check your capability to pay the loan. Yes, they will charge you the annual rate from 10% to 30%. The rates will differ based on your creditworthiness, the period of the loan, the loan amount, and, of course, the lender. 

    So, you must be very careful when choosing the lender.

    How to shop for personal online loans? 

    Here are several questions that you’ll need to find the answers for while looking for lenders.

    Online lenders examine extra factors, for example, your education, profession; but only those information related to your credit score and credit history. If you have a bad credit score, you’ll need to fix it first. But remember, it isn’t impossible to get a loan even with a bad credit score.

    What you have to know is the annual percentage rate (short APR) below 36%. That is the amount of the interest rate and all fees. If it is below 36%, financial experts agree it is reasonable for you as a borrower. If some online lender offers APR over 36% you can be certain the loan is unreasonable even if your budget can afford it.

    Do you have all your documentation ready? You can get rate quotes by providing several personal data. But when you decide to apply for a loan, lenders will expect documentation. That is ID form and proof of income, a pay stub or W-2. Still, you can easily upload all documentation, some lenders will accept screenshots, PDFs, scanned documents, or photos taken by your phone.

    The cost of personal online loans depends on your credit score. If you have a better score, you’ll pay the lower rate and less interest. Pay attention to interest rate since it can influence your complete monthly payment as well as the term of payment. If you get a longer-term loan you’ll pay less per month, but the interest amount can be bigger.

  • The Global Recession – How to Survive?

    The Global Recession – How to Survive?

    The Global Recession Is Here
    Are we deep in the global recession? Yes, we are, and if we are not yet, we will be in a short time. There is no doubt about that.

    By Guy Avtalyon

    It isn’t a question, the global recession is here without a doubt. But how long will it last? Will it be short-living or painful? Is there any chance of recovery by the end of the year? What will come in the aftermath of this recession? What will the world look like when the coronavirus outbreak ends? So many questions!

    The COVID-19 pandemic is making changes to the global economy very quickly. Hence, giving any prediction is extremely challenging. One thing is so obvious, this is a shock with a great impact on the economy. 

    Some economists are expecting the global economy to decline by almost 2%. The GDP is down, unemployment is growing, inflation is rising almost all over the world. It looks like the whole world is on its knees. 

    The rapidity with which this COVID-19 pandemic is growing has required another cycle of huge cuts to any GDP predictions. 

    How can we know the global recession is here?

    First of all, no one expected that the virus would spread this fast and only rare economists warned of the impact of the coronavirus outbreak on the global economy. Today, we can claim with the high level of certainty that we entered the global recession. 

    We have lockdowns across Europe, the US, parts of Asia, and many other countries. That has to be the baseline for any predictions. These lockdowns could degrade GDP across the EU and US, for example, by 7% to 8% this year, experts said. 

    Moreover, the global GDP for this year is equal to the planetary financial crisis. The direct stroke to enterprises and jobs in the first six months of this year will be much worse, stated economists.

    The lockdown policies have prompt and dramatic effects on daily economic activity reducing them daily by about 20% from their regular levels. For example, the three-month crisis with a five-week lockdown period reduces GDP by 20% a day. That means a 7% to 8% drop in quarterly GDP.

    Something is very wrong in the global economy right now

    The coronavirus crisis has sent the global economy into a fall. So many industries have ground to a halt. For example, tourism, restaurants are closed, hotels, air travel. Also, many factories reduced production and fired their workers. Unemployment is rising almost everywhere. Everybody stays at home. Almost the whole world is producing less and we’re spending less. 

    The stock market suffered huge losses and enormous daily changes. The trading has been almost halted. 

    So, the global recession is here. But what are the full magnitudes of this? It is pretty obvious we cannot know that now and the question is will we be capable of estimating it soon? Some experts are trying to explain the situation in which the global economy is right now. Also, some of them warned before the coronavirus outbreak there is a possibility of the recession to come this year. Of course, no one could predict the coronavirus pandemic. That just gave speed to the downturn. 

    The economic consequences of the exponential spread of the virus is shocking financial markets all over the world. Market volatility exceeded its peak during the global crisis 2009 and equity markets and oil prices falling to their lowest lows.

    Large drops in asset prices and high volatility will impact economic actions, for example, through credit and investment flows. Lower stock prices can grow the debt-to-equity ratio and restrict their access to credit. The logical end can be bankruptcies. Banks can reduce lending because companies’ and customers’ defaults of loans rise. The result in banks’ balance sheets will be worse. Do you understand that the global recession is already here?

    How to survive the global recession?

    Recession is defined as two consecutive quarters with negative economic growth. It can be caused by, for example, monetary panic. That caused the Great Recession, for instance. Also, the recession may come due to the rising oil price which is defined as an economic shock. One of the reasons behind the recession can be something that John Maynard Keynes described as “animal spirits.” We experienced it with the dot-com bubble. Also, the mixture of all three may cause a recession. 

    Today it is coronavirus and lockdowns caused by its outbreak and the focus on health protection due to it. The companies halt, workers are fired, demand and revenue fall. The only thing that increases is our concern on how to overcome the global recession we have now. But there are several ways to decrease the loss.

    In the article “Roaring Out of Recession,” Ranjay Gulati, Nitin Nohria, and Franz Wohlgezogen noticed that through the recessions of 1980, 1990, and 2000, 17% of the 4,700 public companies they examined done terribly: some went private or went bankrupt, or were sold. Nevertheless, 9% of the companies did manage to recover in the next three years after a recession. They succeeded to exceed rivals by 10% or more in the meaning of sales and profits growth. Moreover, their earnings rose regularly and the companies remained to rise.

    May the global recession last for a long time?

    Almost the whole world is caught in the recession caused by the coronavirus pandemic. The fears are growing. As long as people’s physical communication is a possible danger, companies cannot move to regular conditions. And once, when this pandemic ends, maybe the regular condition before the pandemic will not be regular. What if people start to avoid shopping malls, cinemas, theatres, restaurants, crowded concert halls? Even after the virus is contained or the vaccine is available? The economic recovery may take years and years. The global economy is frozen, the global recession is on the scene. But life will bounce back. The coronavirus will be tamed and put under control, and people will come back to their factories, offices, and shopping malls, of course. 

    But even after that, the new world that will begin will be gagged with stress. And, when that will be? No one knows. Millions of people lost their jobs and that affects the societal costs. What if bankruptcies leave the industry in a vulnerable status, exhausted from investment and reforms?

    The families may stay upset and risk-averse. What if this pandemic makes them tend to save? Some social distancing measures could remain indefinitely. If this situation endures and people continue to hesitate to spend, the whole world will have a big problem. Yes, life will bounce back, but psychology cannot just like that. It is more likely the recovery will be very slow and last for a long time.

    Bottom line 

    Developing countries have severe consequences already. The money is running away, commodity prices are falling, oil for example. This scenario is visible in Chile, Mexico, and many other countries. China is a slowdown and that has a great impact on countries where the factories with components are. Europe is in recession, the US is still fighting with the coronavirus pandemic. 

    People are lonely now, but they will be starting to return to normal life. But if they had to spend all their savings, and if they destroyed the credit ratings or declared bankruptcy, then they will not be capable back to normal life. 

    No one can say with a hundred percent certainty how long the global recession will last. We are pretty much sure that the recession started in March in the US but we cannot say when it will end. Well, the recession in the US or the global recession isn’t officially declared nor it can be. We all hope it is a remarkably deep but short-lived recession. 

    If your days are too long try to short them, learn something new, for example. Read the “Two Fold Formula” book, it may give you some interesting ideas. But before you start to implement the new knowledge, test it by using the our preferred trading platform.

    Stay safe! #StayHome

  • Recession Fears Overflowed Americans

    Recession Fears Overflowed Americans

    Recession Fears Overflowed Americans
    42% of Americans plan to reduce spending, according to the research held by the Consumer Education team at LendEDU
    32% reported having no money in an emergency fund and 55% of respondents reported having $1,000 or less.
    37% believe their finances are too low to resist a recession 

    By Guy Avtalyon

    Recession fears overflowed not only Americans, but the whole world is also in it too. In late August, the Consumer Education team at the LendEDU conducted a nationally-representative survey of Americans to gauge their sentiment towards the situation of an economic recession. The aim of this nationally-representative survey of Americans to gauge was to better understand how the risk of a recession may change consumer spending and investing habits has been said from the Team. 

    And if you have some fears and concerns about the coming recession, you are in the right club. According to this survey, more than half of Americans are somewhat or completely worried about a recession and willing to change their habits.

    The survey revealed that fears of a recession are modifying habits and, also, that many Americans haven’t positive feelings about their current financial conditions.

    Here are some data from the survey:

    42% of respondents are planning to spend less and save more due to recession fears
    32% of respondents reported having no money in an emergency fund and 55% of respondents reported having $1,000 or less. The median amount was $712.
    37% of respondents believe their finances are too weak to withstand a recession and 22% are unsure.

    HERE IS THE FULL REPORT

    We are all afraid of recession

    Even if we are living in a safe-heaven with a booming economy the question of when, not if, a recession will come. The history isn’t helpful, it is contrary. All we know about recession is scary.
    When it occurs, many people could be in a very hard financial situation. Some of them are still trying to stand on their feet after the Great Recession in 2008. 

    That is our reality. The media are full of reports about recession and how fast we will be faced with it. Massive unemployment, doom, misery, and, of course, the stock market breakdown. That is exactly what media reports say.

    To make clear what the recession is. When the GDP is negative for two or more running quarters. The decline in personal income or corporate profits, or when the employment decreases, also the production or retail sales are falling, we can say we have a recession.

    Many factors may cause a recession. But one thing you have to keep in mind, a recession is only part of the business cycle. And it never lasts forever. The economy will never fall forever.

    Why do recession fears grow?  

    The fears come from a willingness to survive. Sounds controversy, but when you are faced with something you don’t know, or you don’t understand, or you already had a bad experience, you feel fear. But the other side of your brain commands you must survive. So, what are you doing? You are going to find a way to meet your brain’s expectations. Well, when we are afraid of recession the first thing we can do is to cut our expenses if our salaries are decreasing. That means, we have to change our habits. 

    And this LendEDU survey showed exactly that. The majority prefer to change their habits in order to survive a possible recession. 

    But when it comes to their investments some intriguing things arose. On a question from the mentioned survey: “Recently, there has been talk about the possibility of an economic recession. While a recession is far from certain, are you planning to change your investment allocation (ex. stocks, bonds, etc.) or investment preferences?”

    The majority of participants responded that they would not change investment allocation.

    Here are the answers:

    No, I am planning to continue investing per usual (44%)
    Yes, I am planning to invest more conservatively (16.1%)
    Yes, I am planning to invest more aggressively (3.8%)
    Unsure, or none of the above (36.1%) 

    Let’s say that 70% of this 44 % have a well-diversified portfolio. That is in the best case. The other 30% maybe are not informed about how dangerous can be if they don’t change the investment allocation in time of recession or awaiting it.

    Recession fears 

    The stock market can also warn of an approaching recession, but that’s not always the case. The member of the Traders-Paradise team has a witty remark on this, saying that the stock market has guessed ten out of five recessions. Yes, it is a joke but in some cases, the stock market can forecast the recession.

    The inverted yield curve, for instance, can show that there will be a recession but not when. One thing is certain, the market can move but the economy couldn’t be changed overnight. The bad data has to be present in the market for a longer period than one month and not even than you cannot be sure that recession is coming. 

    Claudia Sahm, a Federal Reserve economist suggested a method to detect a recession more quickly. In a new paper, she introduced a system to more quickly detect and react to a recession. The full paper is here

    Who can say for indisputable when the next recession will happen? No-one. But if you have recession fears, you are in the great club. A lot of surveys show that Americans are afraid that a new recession will come soon and they are taking some steps as a response. The recession fears are well-known in the whole world. We all feel fears of a recession. 

    So, Americans, you are not alone.

  • Female Entrepreneurs Enjoy More Trust Than Male

    Female Entrepreneurs Enjoy More Trust Than Male

    Female entrepreneurs enjoy more trust than males in later stages
    Female entrepreneurs are faced with rude questions about private life, family, marital status, or children. At the initial stage, investors implied they are a greater risk of loss. 

    By Gorica Gligorijevic

    According to a new report from the Female Founders Forum, female founders are bringing more venture capital funding. More than male founders.
    Startups led by female founders raised extra rounds in the percentage of 52, while the male result is 51%. This is data from the UK. It isn’t a big difference but we can learn something from this data.

    First of all, female entrepreneurs are faced with investors skepticism when starting the business. But as time goes by they gain more trust. So, we can say that the biggest difficulty for female entrepreneurs happens in the beginning stages of setting up a business. Later, when they break that wall, it becomes easier.

    To illustrate how difficult is for females in the early stage of their businesses there is an additional statistical result. The numbers in funding in the early stage are horrible for female-led startups. Only 21% of them have access to any investment. But when they succeed to get it, their startups raise cash faster than males’. 

    The stats show: after 4 or 5 years from the first raise round, 66% of female-led startups are winning second funding round. On the side without a female founder, the result is 62,8%. 

    Female entrepreneurs success

    Female entrepreneurs have long been underrepresented in entrepreneurship. Male entrepreneurs had an advantage but that bias is changing now. Actually, since 2007, for example, in the US the number of female entrepreneurs has grown over 30%. In the moment of the census 2012, females were on the head of 36% overall US businesses. 

    If we take a look at the global entrepreneur scene, according to the Global Entrepreneurship Monitor, entrepreneurship amid women grew bt 13%. In the same period, male entrepreneurship grew by 5%.

    The fact is that females are starting their businesses harder and with more barriers, but when they jump over them they show better results. Some studies revealed that if there could be more gender parity in entrepreneurship, US GDP might grow by $28 trillion by 2025.

    And the picture is almost the same all over the world.

    The worst places for female entrepreneurs

    A study by HSBC Private Banking has exposed that over 30% of female entrepreneurs felt gender bias while seeking investors. Also, females get about 5% less funding than males while trying capital funding. The survey titled ‘She’s the Business’, studied 1200 female and male entrepreneurs in 8 distinct markets. The focus was on the entrepreneurs who have gained a minimum of £100,000 worth of funding. The study titled ‘She’s the Business’, taken by the HSBC Private Banking pointed: “Our research identifies the particular hurdles faced by women in the start-up community at critical points along the way, and explores the underlying, often subtle reasons why female entrepreneurs feel negatively impacted”

    Gender bias

    The scary fact is that some female entrepreneurs were questioned about marital status, children, suggesting them they are a bigger risk for investors. This study reveals that the UK is probably the worst place for female entrepreneurs to try to raise funding. More than half of them said they felt gender bias. The next worst country is the US. The interesting thing, in China, only 17% of female entrepreneurs said they faced similar bias. 

    Women entrepreneurs have made changes that can lessen gender inequality. First is an expansion in business networks for women. That should help them to make connections. 

    The gender inequality can decrease when more women make their wealth. Female entrepreneurs are inviting investors to take effort by making the fundraising process more transparent, incorporating at least one women in the panels, presenting precise criteria, and complete feedback after. 

    The gender disparity between entrepreneurs will not bring progress.

  • Millennials’ Fears to Invest in the Stock Market

    Millennials’ Fears to Invest in the Stock Market

    Millennials' Fears to Invest in the Stock Market
    One of four millennials doesn’t think investing is a good idea.
    Holding on to cash is financial hara-kiri.
    The stock market isn’t out-of-reach and with a little amount, you can start investing.

     By G. Gligorijevic

    Millennials’ fears to invest in the stock market are shown in statistical data. Millennials are skeptical of the stock market at a great percentage. Yes, people! I can understand that. It isn’t easy to understand the stock market and when you don’t understand something, you are getting afraid. Moreover, you have heard a lot of scary stories. But take a look at your peers. Almost 1/4 think that a stock market is a great place to put their money. Are they braver than you? 

    Investing in the stock market has nothing to do with bravery it is all about common sense. 

    I know what you want to say: There are a lot of other ways of saving. Yes, that’s true. But is the return so great as with stock investing? Take a look at baby boomers! They stole cryptocurrencies from you, for example, not to mention other assets. Digital money should be yours. While you are hesitating to invest in the stock market, baby boomers and Gen X have an advantage. 

    Some of you may say: Yes, but they don’t have loans, they have homes, etc. 

    Sorry guys, but I have to disappoint you. They also have debts, mortgages, loans but don’t think the best way to earn more is to put cash in the savings account. 

    I’ll show you how wrong you are if you prefer to keep your cash in the savings account and how much you can lose over the years. Actually, I would like to show you how much you can earn if you invest in the stock market. So let’s make some comparisons. 

    Which are Millennials’ fears to invest?

    Do you really think you need a million dollars to retire? You’re going to be very discouraged. That amount isn’t even close to cover the cost of your bag of groceries. Inflation is what will make it tricky.

    To put it simpler, your parents needed much less money to cover the cost of their bag of groceries when you were born. The costs increased by about 300% over the past 30 years. Scary! But you can’t destroy the inflation. Inflation is good for some things but it is another subject. Let’s stay stick with this one. Having this on your mind, are you still convinced that one million dollars is enough for your retirement? I am not sure. It is more like you will need more. By keeping your extra money on your savings account you will never earn enough to beat inflation. 

    Holding on to cash is financial hara-kiri.

    If you don’t mind, I want to show you something.

    Over the last 90 years, the returns of the S&P 500 was 10%. This is one example but the same is with other stock markets. How much your savings accounts pay you? Let’s say it is a high-saving one so you may have 1,5% per year.

    Assume you have $50.000. If you put that amount on the savings account after 30 years you will have, without correcting for inflation, almost $80.000. This means your savings account could generate only $1.000 per year. But what would be your income if you invest your $50.000 in the stock market? After 30 years of investing in a nice portfolio, you could have almost one million dollars. 

    Can you notice the difference? Millennials’ fears to invest come from lack of knowledge about finances. 

    Why Millennials are afraid to put their money in the stock market?

    Investing has never been easier, but millennials are still afraid to start investing.
    You don’t need the fortune to get involved in the stock market. You are investing to make a fortune. Today we have online brokerages and robo-advisors. That makes investing pretty much easier than ever.

    Further, data is easy to access. You don’t need to read newspapers to gather the info about some stock. Yes, sometimes it can be fun and may bring a lot of entertainment, who likes it. But you have plenty of other ways out there to find the stock. Data is now easy to access and usually totally free.
    You can start at less than $1.000. No one will think you are a loser if you start with less than $1.000 or with just little as $100.

    Take profit of this, and take command of your future. 

    Investing has never been easier

    The stock market isn’t out-of-reach and with a little amount of, let’s say $500 you can start investing. That is an optimal amount that may provide you decently returns. Start with this, try your hand. Of course, for the first investment, you can use some robo-advisor. 

    Ask your bank advisor to create an investment portfolio for you. There is no need to do it yourself alone. 

    Millennials’ fears to invest are without a real reason. The money is like sand. If you squeeze it in your hand, it will go through your fingers. 

    Don’t do that. You can play better and become a real wealthy. Grab your chance to win! 

  • Payment Card and Prophecy by George Orwell

    Payment Card and Prophecy by George Orwell

    Payment Card and Prophecy by George Orwell
    The payment card will make payments easier, it is more convenient than cash but has drawbacks too

    by Gorica Gligorijevic

    Cash or payment card? About this topic, most of us have been speculating on this very issue, but until now mainly from a philosophical point of view.

    The current world seems to many like a dystopia. It’s a tale of the darkest times. Whose dystopia? Which writer best envisioned this time of confusion and dysfunction? Two classics from the 20th century. Aldous Huxley’s “Brave New World” and George Orwell’s  “1984”.

    “A squat grey building of only thirty-four stories,” starts “Brave New World”. 

    “It was a bright cold day in April, and the clocks were striking thirteen,”  “1984” opens.

    What horrible openings! Scary! 

    Both writers wrote about how future governments will operate with a lot of energy spent in seeking to encourage economic consumption.

    What we have today?

    We, together, protect and transmit our secret lives through surveys and social media.

    We are sharing our personal data on which we all commonly depend. And we are doing that so easily.

    Do you feel the importance of this change in our own lives?

    It will be more clear when explained on the example of credit cards or loans.

    Payment Card – The customer is always right

    For example, loan review. 

    From this review, the police, and not just the police, can see: do you drink Coca-Cola or Pepsi Cola, what kind of bread are you eating, what beer you drink, what brand and what size of shoes you wear, what size underwear you are buying, where you were five months ago when you have paid a hotel for the other two people and who they are.

    Scary enough? Who was right? Oh, how predictive was Orwell!

    In some countries, cash payments are canceled, only payment cards are used. That’s the reality. We can go a step further. The government, for “justified reasons”, declares the Regulation: for certain cardholders, daily payment from a card is limited to $500. The other group of owners has a limit of $2,000 daily, while the third group has unlimited card payments. Everything is a nice and computer programmed, based on the personal data of the cardholder and done by the push of a button.

    Cards and chips

    According to the banks’ published data, in the last year, 2018, they have reported record revenues. Of course, by having no limits on making trades with our money.

    It is already known that some of the largest companies are implanting chips in their workers. They put the chip into a part of the body and thus, instead of the cards, they control the arrival (check-in) and departure (check-out). And when you reach your retirement they activate your check-out. 

    Or, for example, Sweden. They have a state program to put chips into citizens. One chip for everything. To take your money on the ATM, to unlock your home, to pay in the store, to make an appointment with the doctor. Even more, with that one chip, you can start your car, use public transportation, make payments in restaurants, buy medications. What a wonderful world!

     

    You are happy! When it will be possible for the whole world?

    Bad experiences with payment card

    Recently, I visited Holland. For a personal reason, I carried the cash. Actually, my payment card was stolen and I had to take this trip before solving the problem with it. Holland is an extraordinary country and I like to travel there. People are relaxed, easy-going and natural (maybe sometimes too natural), everything is full of brightly colored flowers, the buildings are brightly painted too. Public transportation is one of the best in the World, the food is really good especially cheeses, meat has a special taste as much as vegetables. In one word, wonderful! But…

    The first problem arose at the airport. When I tried to find a taxi with a driver who will take the cash. No luck. When I tried to purchase a ticket for the public transportation, the problem was the same. My cash was useless. I had to call my friend to come and pay for everything I needed. Well, I was never so close to anyone like my friend those 10 or 12 days, how long I was in Holland. He would pay with his credit card, and I had to reimburse him with my cash to cover my purchases.

    Payment card yes but cash rules

    It was accidentally that several days after my visit to Holland I was watching some movie, a contemporary one. No one would understand, even me, why I was so happy when I saw in one scene, that in the front of some store was written: Cash only!

    What I want to say, in some countries the law limits how much money you may have in cash. It announces a total cancellation of cash payments.

    And if the rule is to make payments only through credit cards, it is obvious that someone wants to control you. 

    Do we have the liberty to choose the way we want to make payments? 

    Yes, it is more comfortable to have one or a few payment cards in the pocket. But, how to say, no one asked us would we like more than one card, one chip or hands full of cash. And credit cards are not always the best solutions, nor are the chips.

    For example, you have money in the bank and a payment card in your pocket or the chip under your thumb’s skin. And for some reason such as natural disasters, riots, power failure, or simply by someone’s order, or even by mistake, by pushing the button in the bank you cannot pay for anything. And you are out of your home and your environment, who will pay your food and water, who will and how accept your card?

    It’s complete and total control and slavery of a human. Orwell’s “1984” is a fairytale of this.

    Do you have similar experiences? It would be nice to share with others.

  • 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.