Tag: Personal finance

All personal-finance related articles are found here. Educative, informative and written clearly.

  • 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

  • Financial Matters Before Getting Married

    Financial Matters Before Getting Married

    Financial matters before getting married
    Talk to your partner about the personal finances, financial goals even before getting married
    By Guy Avtalyon

    Financial matters before getting 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 mind: 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 with 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 the 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.

    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 for spending money on?

    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 surveys 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 the 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.

  • Where To Find Investors For Startups

    Where To Find Investors For Startups

    Where To Find Investors For Your Startups
    An old story tells that almost all important brands begun as startups. Is it really true?

    By Gorica Gligorijevic

    Startups and corporate venture capital are yet underestimated and discredited category. The entrepreneurs are broadly seen as capricious and attached with dishonest strings. In some people’s minds, startups take the money and have protection from a powerful partner.

    Is it true in real life? 

    Some researches show that corporates are becoming more skilled at working with startups. It is a kind of out-sourcing. The fact is, big companies invested more than $50 billion last year into startups. The year before their investment was about $36 billion.

    It’s similar to Europe. You can read about very powerful companies like Bosh or Daimler that investing in innovative startups. The point is to stay in the game and it is easier to financially support some small startup than to develop the whole new section inside the corporation.

    Many big companies began as startups

    For example, Lyft is one of those startups, also Monzo, Bolt, etc. You just have to look at the giant’s investment portfolios.

    But, it isn’t the main subject. It is good to have such big corporations ready to invest in venture capital. The problem is if you are an entrepreneur, which company is ready to invest in your business, what is their interest, how to contact them. If you want to invest in Europe you will need some valuable information. So, Traders-Paradise recommends Dealroom, where you can find fantastic data.

    We will present you with the list of three but with the promise that we will update.

    Robert Bosch Venture Capital

    Its headquarters are in Stuttgart, Germany. As the sub-organization of Robert Bosch, it is normal that engineering technology is their focus. Its investments in AutoAI, Actility, Movidius, etc are well-known. With offices in Stuttgart, Frankfurt (both Germany) and Tel Aviv, Shanghai, and Sunnyvale in California, US we can say it covers almost all continents. 

    The company says about itself:

    “With offices in Europe, Silicon Valley, China, and Israel, we are working with Deep-tech companies worldwide. Having our investment sweet spot at an early stage we are also looking into later-stage companies, as well as seed-stage in selected cases. We prefer to syndicate our investments with existing or new investors in the company and can take the lead, co-lead or follow as necessary. Beyond the financial commitment, startups receive access to our vast network and support in commercial collaborations. Up to EUR 15m per company for 5-25%, Equity Position and 100% Commitment”

    When they are investing in startups and venture capital their focus is on AI/Deep Learning, IoT, Distributed Ledgers, Analytics, Next Generation Computer Architecture, AR / VR, Mobility Solutions, Autonomous Driving, as we found on their website.

    Novartis Ventures is one of the startups

    Their headquarters are in Basel, Switzerland and they operate as sub-organization of Novartis, a multinational pharmaceutical company also based in Basel. They already have been invested in Nabriva Therapeutics, Proteus Digital Health, Galera Therapeutics, etc. 

    The essence of their investment strategy we found on their website: 

    “Our primary focus is on the development of novel therapeutics and platforms. In our investments, we look for unmet needs and clinical impact, novel proprietary science, and understanding of the mechanism, management, and board experience and capital efficiency in the program. Foster innovation, drive significant patient benefit and generate superior returns by creating and investing in innovative life science companies. NVF is stage agnostic, engaging in investments from seed- to later-stage life sciences companies across Biotechnology/Biopharma. NVF manages over $800m in committed capital and more than 40 portfolio companies across North America, Europe, Israel, and Asia/Pacific. We invest in North America, Europe, Israel, and Asia/Pacific with approximately USD 800 million under management in committed capital and more than 40 portfolio companies. We continue our strategy of making larger focused investments and anticipate total investments up to USD 30 million per company over its life. We make equity investments in Biotechnology/Biopharma life sciences companies. NVF is stage agnostic and engages in seed investments as well as later-stage investments. We typically lead or co-lead an investment and play an active role on company boards.”

    So, you can see that health is their focus while investing in startups.

    Swisscom Ventures 

    With headquarters in Zurich, Switzerland operates as a sub-organization of Swisscom. Their business focus is on communications. Since now, they have already invested in startups like SimpliVity, Symetis, Quantenna Communications.

    What they say about their investment strategy Traders-Paradise found on their official website:

    “We are investing in Swiss and global technologies to foster digital transformation. More than 40,000 new companies are set up in Switzerland every year. We look in particular at the Swiss high-tech companies and University Spin-offs as they are fundamental contributors to the economic growth and innovation of Switzerland. We are typically leading or co-leading financing rounds from the early beginning and also take board seats. As a strategic investor, we offer entrepreneurs to access a broad range of portfolio services in addition to financial support. Those comprise the use of Swisscom’s technical infrastructure but also access to market channels and key experts in the lines of Business.”

    They say about their investment focus:

    “Artificial Intelligence – Digital applications utilizing artificial intelligence technologies and that are deployable across various industry sectors including data-driven internet services

    Cybersecurity – Advanced applications and tools to protect the integrity of networks, programs and data from attack, damage or unauthorized access

    Telecom and IT Infrastructure – Next-generation IT and cloud technologies that constitute the backbone and underlying enabler to the digital transformation comprising software, hardware, and services”

    How to start up your own bussines

    Just take a look at the list of supported startups and you will see how good is to have the strong arms behind you when starting your own business. Sometimes it looks really hard to find an investor to give life to your good idea. But, did you try? How many contacts you have? On how many doors were you knocked?

    Just don’t sit in your room and don’t cry how nobody understands you.

    Take the initiative. Be proactive! And have confidence in your abilities. Who never try, never knows. Try! And the door will open to you. Find an investor!

    Traders-Paradise will update the valuable information of this kind.

     

  • Getting a Personal Loan

    Getting a Personal Loan

    Getting a Personal Loan
    How is possible to get a personal loan even with a bad credit score

    By Guy Avtalyon

    A personal loan is a good choice if you need funds for a particular purpose. But you have to consider many factors when deciding the variety of loan that suits you. You can use a personal loan to decrease debt, repay unpredictable payments, make home repairs, and more.

    How to get a personal loan?

    Personal loans allow low-interest rates for people with good credit. They are usually smaller loan products than other kinds of loans. We have to say, they aren’t undoubtedly the best choice for everyone.

    Before getting a personal loan, you have to consider several important things.

    The first thing you are asking yourself is: How much money can you get?

    Well, loan sum varies from lender to lender.  Usually, you can expect between $1,500 and $100,000.  That depends on your creditworthiness. This means that the lender will estimate your ability to pay them back before they decide to lend you money.

    How does a personal loan work?

    You will get a fixed sum and have to pay it back with interest in monthly parts until you pay back the whole amount.

    That can be after 12 to 84 months. After you pay back all, your account will be closed and you, if there is a need, can apply for the new one.

    Nevertheless, before you apply for any loan it’s crucial to consider why you require the money. Depending on that, you may choose the variety of loan that’s most suitable for your financial situation.

    What are the types of personal loans?

    You see, there are two types of personal loans: secured and unsecured.

    Unsecured loans are not backed by collateral which means that the bank determines are you qualified to get the loan. The lender will estimate your financial history. If you don’t pass for some unsecured loan maybe you’ll find the lenders who want to offer secured options.

    Secured loans are backed by collateral. Collateral is a savings account or CD. Why this is called a secured loan? Because if you are not able to pay on time, the lender can require your asset as payment for the loan. Your asset, a savings account or CD is the guarantee that the lender will get its payment.

    Where you can get a personal loan

    In the first place, it is a bank. But you must know they are not the only place where you can get a personal loan. There are other lenders too. For example, online lenders, consumer finance companies, or credit unions are places where you can acquire a loan.

    The one thing is important, you have to be qualified applicants.

    Also, you can take a risk and contact some online lenders. There are plenty of them. But you must be careful. It’s true you can get a personal loan very quickly from them. But some of them are not legit and often they are scammers. Check them first. 

    As we said previously, personal loans can give the money you need, but they are not, at the same time, the best choice for everyone. Sometimes, a credit card could be a better alternative.

    But be careful with this too. If you take a balance transfer card and you are not able to pay off your balance, you may catch an enormous amount in interest charges.

    For homeowners, there is a home equity loan. This kind of loan will give the aid you need. Usually,  it is a larger loan sum at low rates. You should be aware, you are giving your house as collateral for these kinds of loans. If you fail to pay, your lender has the right to use your house as payment for debt for the loan.

    How personal loan may impact the credit score?

    When you demand a loan, the lender will count your credit as an element of the application process. This is recognized as a hard inquiry. It will regularly reduce your credit scores by a few points.

    On the other hand, the lenders that you previously had an account with will just review your credit. This is identified as a soft inquiry and will not affect your credit score.

    It is obvious where to ask as first.

    Interest rates and fees

    Interest rates and fees can create a big distinction in how much you will pay to the end. Here are several circumstances to consider.

    Interest rates typically vary from around 5% to 36%. That depends on the lender and your credit. Meaning, if you have good credit, the interest rate will be lower. But, you will pay more interest if your loan is long-term

    Some lenders will charge you a fee to cover the expense of processing the loan. That is origination fees. It can be from 1% to 6% of the loan sum depending on lenders’ rules.

    Some lenders will charge you a fee if you pay off your loan early. What? Yes, if you pay off early the lenders will lose the full interest that they would have earned in established agreement.

    You have to know all of this or you must be informed by your lender about all the circumstances before signing anything.

    A personal loan may be a good solution when you need extra money for a particular intent. But there are many circumstances to consider. You have to decide what sort of credit is best for your condition.

    You must feel comfortable.  Also, you must find the payments like the one you can afford and not feel captured. Measure twice, cut once.

     

  • 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

  • Economic Downturn – How to Prepare

    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

  • Bad credit loan – How to improve the financial health

    Bad credit loan – How to improve the financial health

    Bad credit loan - How to improve the financial healthIf you have no other option you’ll take a bad credit loan. But it isn’t the end of the world.

    By Guy Avtalyon

    Bad credit loan isn’t the end of the world. Here are several ways how to overcome them. I’m gonna introduce some of them.

    What is a bad credit loan?

    In the first place, let me be clear about what is a bad credit loan.

    A bad credit loan is a relief option for consumers whose low credit scores limit their borrowing options. In other words, a bad credit loan, or just another name for a personal loan, can secure you out of a financial emergency. Even if your credit score is lower than you would like it.

    The good thing is that you can get a loan with bad credit, but it’s harder to get a good deal.

    Yes, I know! Nobody likes to be judged. But when it comes to loans, creditors are going to look deep into your credit history and make a decision about whether or not to lend to you.

    They need to define how risky it would be to lend money to a borrower. And if you’ve got bad credit, you could expect to show you the exit space. But, even if you have bad credit, there may be ways to get a loan. Here’s how.

    You can get a loan from a bank, but if you’re looking for a reasonable interest rate and adjustable qualifying requirements, you better don’t even think to open that door. Even than, you have several options available. But you have to know that loans are typically more expensive.

    With low credit scores is easy to slip into expensive traps. But a bit of homework can help you avoid the problems. After you prove you’re able to repay on time, it shouldn’t be hard to rebuild credit so that it’s easier to borrow next time.

    How credit scores and credit reports can fix bad credit loan

    Keep in mind that bad credit has different meanings to different lenders. Lenders know your credit score, and you should too. So, check out your credit reports. Especially if your credit card issuer reports to the consumer credit bureaus. This is important because some of the information contained in them is necessary to calculate your credit scores.

    You’ll want to make sure there are no incorrect derogatory marks on your reports before applying for a loan. The major consumer credit bureaus aren’t perfect, so it’s important to read your credit reports carefully. If there are false negative marks, you should contact the specific credit reporting company.

    Along with correct information, the provider will remove the error.

    Your credit scores are important, too. Your credit scores, along with other factors, can affect your approval odds for a loan and the terms you qualify for. Don’t be discouraged if your scores are not what you’d like. A little bit of work could help put your scores in better shape.

    How to improve your credit status

    So, it’s time to start improving your credit status. Your scores are calculated using different credit factors and scoring models. Just be focused on the factors with the greatest influence. For example, payment history is one of them, but check out everything to improve your credit overall score.

    You can’t change the past,  but make all of your current payments for at least the minimum amount. And on time. This is key for payment history.

    Speaking about usage, keep the amount of debt you owe low compared to your total credit limit, ideally less than 30%. Maxed-out or over-the-limit lines of credit can be particularly harmful. Also, keeping old accounts open instead of closing accounts after they are paid off can help increase your credit history length.
    Mix. Frankly, you shouldn’t apply for a new type of credit to influence your scores. But it can naturally grow over time as you experience major financial events, such as buying a home, for example.

    But be careful. Applying for several new credit accounts in a short period of time can make you seem risky to lenders.
    The best bet is opening new accounts only when necessary and when you know you can handle them responsibly.

    Shop around to compare options

    Shop around for loans, and include credit unions in your search. Those institutions may work with you even if you have bad credit. Credit unions are often smaller than large banks. Also, they are focused on the community. Usually, they will review your application personally and discuss it with you. If you sit across the desk from a human being, they can understand what you need.

    So, it’s time to start shopping around for the best loan for you. Some people simply choose the first loan they’re approved for.

    But, that could be a major mistake.

    Different lenders may offer different interest rates and loan terms. Lenders have their own methods for evaluating these factors.

    There is a selection of lenders and loan facilitators who can help low-credit applicants obtain affordable financing. But not all loan features are created equally.

    For example, one lender may offer you a loan with a 19.99% annual percentage rate while another can offer you a loan with a 15.99% APR (annual percentage rate). If you don’t shop around and accept the first offer of 19.99% APR, you would be overpaying by 4 percentage points.

    Shopping around for loans is easier than ever. We have the internet. Yes, you should check into your local options, such as banks and credit unions. But you can easily view the estimated loan terms of various online lenders in one place using the internet.

    How to compare loan terms

    If you have bad credit, the loan could be approved but also will cost you more. The lenders may recognize you as risky. Since personal loans for people with bad credit can be so much more expensive, it’s especially important to compare loan terms to find the best deal. To compare loan offers, there are a few basic terms to pay attention to.

    Loan repayment period: Loan repayment period is the time frame in which you’ll have to repay the loan. Personal loans require fixed monthly payments for an established period. The longer the repayment period, the more interest you’ll pay, and the more the loan are likely to cost you.

    Monthly payments: Monthly payments are determined by the amount you borrow, your interest rate, and your loan term. Make sure the payments are achievable.

    Loan maximum and minimum: Lenders usually establish a minimum amount and maximum amount they’re willing to lend. A lender may not be well suitable for you if it won’t loan you enough money or if it requires you to borrow more than you want.

    Annual Percentage Rate (APR): APR is the total cost you pay each year to borrow the money, including interest and fees. A lower APR means the loan will cost you less. If you want to take out a personal loan with bad credit, you’ll probably have a higher APR.

    Try online lenders to fix bad credit loan

    Peer-to-peer lending services are one option for getting a loan with bad credit. Instead of borrowing from banks, you can do it from individuals. They may be more willing to take the risk, but they’re not looking to lose their money.

    These non-bank lenders have different risk tolerance and use different ways to evaluate your creditworthiness. Online loans evolve. They may approve you with lower credit scores.

    Just be sure to avoid payday loans. They are costly short-term loans and they have heavy promotions online.

    Use collateral

    It isn’t the best choice, but if you have trouble getting approved, you may need to put up collateral. If you pledge something valuable, your lender will know you’re serious. In such a case, lenders will have a better chance of collecting on the loan because they can take your collateral and sell it.

    But be extremely careful when pledging collateral. If you have a property, you can probably borrow against it. But the risks are worthy of your attention. If you can’t make all of your payments, you might be forced out of your home. Think twice to avoid making a bad situation even worse.

    Some con artists take advantage of you when you’re down. They particularly target people who are urgent to borrow. These lenders charge enormous fees, so make it almost impossible to dig yourself out of debt.

    Sometimes, you won’t even deal with a real lender: Scammers advertise loans, but you need to pay steep application fees upfront. In the end, you don’t get approval, and you don’t get your money back. This is well-known as an advance fee scam. Don’t pay upfront fees to get a personal loan. Any processing fees should come out of your loan proceeds.

    Think more than twice about a payday loan

    If you need money right away, need an amount less than what a traditional lender might be willing to give, or have been denied a personal loan because of poor credit, you may be tempted to try a payday loan.

    A payday loan is a short-term loan for a small amount — usually $100 to $500 — that you secure by giving the lender a post-dated check or electronic access to automatically withdraw your bank account. The loan is usually due on your next pay date, along with fees. Depending on the state, payday lenders can charge from $10 to $30 per $100 you borrow.

    According to research by The Pew Charitable Trusts, for example, if a payday lender charges you $15 for every $100 you borrow per two weeks, it amounts to an APR of 391%. The Pew research found that fees from online lenders can be even higher, averaging an APR of 652% as of April 2012.

    Never mind where do you live, a payday lender may not check your credit in order to approve you for a loan. Many only require you to be an adult with an active bank or prepaid card account. Also, they will ask for proof of income and valid identification. It may be easy to get a payday loan when you have bad credit, but the high cost could make it difficult to repay.

    Don’t take out a payday loans

    Some studies found that many payday loan borrowers can’t repay their loans without taking out another payday loan.
    High-cost payday lending is prohibited in some countries. Others set limits on how much payday lenders can loan.
    The regulation varies from country to country.

    If your credit scores are low and you need a loan right away, finding an online lender or some other source offering personal loans for borrowers with bad credit could be your best option.

    Just proceed with caution and be sure to compare the terms of each loan to find the most affordable lender. But, if you can’t find such an option that you can easily repay, it may be better to wait and work on your credit.

    Applying for loans, especially if done the wrong way, can further damage your credit.

     

  • Personal finance – How to Manage?

    Personal finance – How to Manage?

    Personal finance - how to manage? 1Traders Paradise will walk you through some suggestions on how to manage money in your 20s

    By Guy Avtalyon
    Update on Feb 12, 2019 

    We received an email from our visitor Christopher Trum, Content Manager LendingTree Brands, that asked us:
    ”I was reading a recent article on Traders Paradise (traders-paradise.com/magazine/2019/01/personal-finance) and wanted to thank you for including data from our research study!”
    With his permission, here is the link with full access to the original source
    https://www.lendingtree.com/finance/places-millennials-carry-the-most-debt/

    Personal finance is something that has to be well managed no matter how old is someone.

    Who is going to take care of your own personal finance so early, for example in the 20s?
    You may not think of your 20s as the time to buckle down financially. Between beginner salaries and student loans, many young people at their 20s bearly sustain to live from paycheck to paycheck. I know that. But what I also know is that your 20s are the best time to set the base for your financially secure existence. Yes, it is the right time to take care of your personal finance. Both, now and in the future.

    Current status and future

    You’ve probably graduated from college, started your first job, and are starting to make decisions on your own. Your adult life has just begun and retirement seems years away. But this is the right time to discuss your personal finance choices, how to manage your money responsibly, and to plan your financial future.

    Personal finance exactly that: how you manage your money, your income, expenses, and savings, all of them. The truth is that you have to put an effort into managing your personal finances. In that way, you’ll better understand where your money is going. Also, you’ll better recognize if you have to make changes to meet your future financial goals.
    Managing your personal finance better is something that can literally pay off. It can help you stay on top of your bills and save thousands of dollars each year. With that extra savings, you can pay off any debts you might have. Or maybe you would like to put that money towards your pension or spend them on your holiday or new car.

    Create a budget to protect your personal finance

    I know, for many of you creating a budget is critical. But without a budget, you’ll have difficulties to track your finances. Moreover, how will you identify key savings opportunities? So, if you don’t have one yet, take a time to map out your living costs.
    Budgeting is the process of tracking your income, bills, and expenses in order to assess how much you can spend and what you can afford each month. Creating a budget and sticking to it is the foundation for personal financial success as it helps you to live within your means and avoid debt.

    You don’t need any advanced tools to create a budget. All you need is to open up a spreadsheet on your laptops or phones and add your all expenses. It’s okay to add the random ones that pop up once a year. Then compare what you’re spending on what you’re earning. If the numbers don’t align, then you’ll need to work on making some changes to ensure that you leave yourself enough space for savings.

    When creating a budget, you have to write down:

    • Your income: How much are you making per pay period?
    • Your expenses and payments: How much you spend on rent/mortgage, utilities, groceries, etc each month?
    • Debts owed: How much do you owe for student loans, credit card debt, and similar?

    Pay yourself first – Start your emergency savings

    The recommendation is to pay yourself first. That means the first bill paid each month should be some paybacks if you have any. The second is to pay for utilities, put aside money for living buyings. And everything left over at the end of the month is your extra money. Open a savings account and put it there. The biggest mistake is the young people make is not saving early enough. They tend to put off savings until their 30s. That is wrong.

    Just because you’re on the younger side doesn’t mean you’re immune to financial emergencies. Quite the contrary. Without emergency savings, you may have no choice but to get out costly loans. A better choice is to have an emergency fund. It has to be at least the amount you need for three months’ living expenses. Ideally, more like six months’ worth.

    Having emergency savings is very important. In fact, it should trump any other financial aim you may have.
    Let’s look at an example: Assuming you want to have $1 million in savings by the time you retire at age 65. This is how much you’ll need to invest each month:

    Personal finance - how to manage?

    Time is on your side when you’re young. You should save about 20% of your earnings. That should help you maintain your current lifestyle in retirement. If you want to travel more and more entertainment when retire, you should save about 30% of your earnings. That will help you have a lifestyle better than what you currently have.

    A little bit of money saved now is going to make a big difference later in your personal finance.

    Pay off present debt to secure personal finance

    According to a recent study by LendingTree, the average millennial has an average of $24,000 in debt. This can paralyze your financial, and even your physical and mental health.

    AVAILABLE FOR US residents ONLY

    Large amounts of debt can seem daunting to pay off. Hence, it’s important to make a plan. You have to start paying it off quickly. Just include it in your budget as a monthly payment. But if you have more than one debt, which to pay off first?
    You have to consolidate debt to one payment with a lower interest rate when possible.

    But you may be more driven to try the debt avalanche or debt snowball methods of repayment.
    Never focus on just one expense at a time.

    If you owe money to a friend or family member and paying that debt off is a mental relief,  pay that as first and then move on to other debts.

    It’s important to make a plan to pay off and manage your debt to avoid heavy interest fees.

    Get out of credit card debt

    Credit cards are the worst enemy in anyone’s personal finance. Anyone who runs out of cash simply turns to credit cards. But can you afford to pay the balance? Combat the urge to use your credit cards for the shopping things you can’t afford.

    The U.S. credit card debt increases every year. For example, the average household debt is nearly $16,000. So much!

    The essential part of your good account balance is to eliminate the debt from the credit card as soon as possible. Actually, you’re wasting your hard-earned money on interest costs. By doing so you’ll have a double benefit: you’ll get out of debt and you’ll improve your credit score. And that is crucial if you plan to buy a home or lease a car in the near future.

    Build credit

    Never live above your resources and use credit for money that you don’t have. Never buy things on credit if you don’t have the resources to pay it off in full at the end of the month.

    A credit report is a report that shows your credit history and is used to determine your creditworthiness. Building a strong credit history and maintaining a high credit score is essential for your financial health. In your early 20s, it’s important to build your credit by paying your credit cards and utilities on time but avoiding debt in the process. Instead, use a credit card to build credit. That could be a smart use example. Of course, if you can’t afford to pay it off by the end of the billing statement, you apparently can’t afford it.

    It is important to make sure you don’t break the terms of your agreements. So even if you want to pay down added debt, you have to pay at least the minimum on your credit cards.

    Investing your savings if you want to take care of your personal finance

    When your savings start to grow, you can add more money to your pension. It’s a great way to make sure you’ll be able to live more comfortably later in life. Or you can make an investment plan based on your goals and timeframes.

    If your savings goal is more than five years away, putting some of your cash into investments would allow you to earn more from your money and keep up with rising prices. Investments are something where you put your money to get a profit. You can choose from four main types of investment:

    Shares – you buy a stake in a company
    Cash – the savings you put in a bank or building society account
    Property – you invest in a physical building, whether commercial or residential
    Fixed interest securities  bonds) – you loan your money to a company or government

    There are other types of investments available too, including:

    Collectibles, such as art and antiques
    Commodities like oil, coffee, corn, rubber or gold
    Contracts for difference, where you bet on shares gaining or losing value

    The different assets owned by an investor are called a portfolio.

    As a general rule, spreading money among the different asset classes will lower the risk of your overall portfolio. More on this you can find HERE.

    For emergency savings, the best place for your cash is the bank. For long-term savings, investing in stocks is efficient for growing wealth. And you don’t need to take an extreme amount of risk. Sure, the stock market can be volatile, and it’s had its share of ups and downs through the years. But it’s also historically delivered a roughly 9% average annual return, which is about nine times more than what you’ll get from a savings account today.

    The good news is, you don’t need to be an expert to enter the stock market. If you’re not comfy investing in a particular company, just put your money into exchange-traded funds or ETFs. These low-cost funds simply seek to track existing indexes, like the S&P 500, and because they offer instant diversification, they’re a less risky prospect than buying up individual companies’ stock.

    Protect yourself financially

    As you enter maturity, you’ll want to make sure that you are protecting yourself and your finances with adequate insurance. Take advantage of the benefits offered at work: health insurance, life insurance, short and long-term disability insurance. You may consider some benefit packages outside of your current work offers.

    Fight for a higher salary if you want to take care of your personal finance.

    Your 20s are a time to pay your dues but that doesn’t mean you shouldn’t fight for more money along the way. In fact, the more money you receive at your current job, the more you’ll probably get at your new job. So, boosting your salary won’t just put more money in your wallet now, but also throughout your working years.

    Knowing how to manage your money and where start with financial planning can be terrifying and difficult. Especially when you’re in your 20s. Finances can be complicated, but it’s crucial to find out what is available to you. So, it’smart to start working on financial matters earlier rather than later in life.

     

  • Investment Opportunities – How To Identify

    Investment Opportunities – How To Identify

    How To Identify Investment Opportunities
    It isn’t easy to find investment opportunities and anyone can fall into many traps while seeking that. Here is how to avoid them.

    By Guy Avtalyon

    Someone would say: We all know the basic words to successful investing: Buy low and sell high. But it isn’t so easy to find good investment opportunities.

    What else or different you can tell us?

    First of all, I have to tell you that investors need to have rules.

    Otherwise, the common saying can be difficult to perform, especially when many of your friends and colleagues are doing the opposite. If you don’t have a solid structure and order you are predestined to fail.

    Investing or trading is like a robotic work, without emotion and always strong adherent to your rules.

    You can find more and more investment opportunities opening themselves up to the investors. But not all of them are good investment opportunities. In fact, so many opportunities have drawbacks. First, you can be confused and may not pick the right one. Second, you might want to pick too many. That is dangerous per se. You can end up running like a headless fly, monitoring too many stocks, with investing more than it is reasonable. Hence, you may neglect something very important for your investment goals and financial security. The consequence easily could be your empty bank account or you’ll end up in debts.
    The following are things to look for when finding an investment opportunity.  If some investment opportunity has most of these things or all of them, you are looking at one that is likely to bring you wealth.

    For example, if you don’t see yourself owning stock in a company you are looking for in the next ten years, then you should stay away from investing in that company. Most of the money made in business investments come from owning stock in the company. Investors are leaving it alone until the value rises and reinvesting your dividends versus rapidly buying and selling your stock in a business. That is the so-called long-term viability.

    You have to measure the risk involved in a market investment against the potential reward. A good ratio is one to three. After that, you should set up a maximum acceptable loss.

    What is the first rule of investing?

    BUY LOW!

    Determine the baseline value for an investment or trade, and wait to buy it until the price is below what is reasonable. When the stock market declines and other investors panicked and start short selling, that is the best time to look for buying opportunities. Ideally, you want to purchase an asset after the price falls significantly, with the expectation that it will rise again in the future and produce a good return.

    All rules of investing

    The second rule of all investment is to SELL HIGH!

     

    After the price rises dramatically it is time to consider selling an asset. This is often a time of stock market growth when many people are impatient to buy into a rising market. When some investment shows significant gains, this is the ideal time to cash out and lock in your return. You could gather the income into a secure investment or look for a new underperforming asset and try to repeat your success.

    How to find investment opportunities?

    The golden rule is to LEARN FROM YOUR LOSSES! Yes!

    In trying to buy low and sell high, you are forced to make some mistakes. If it is easy to buy low and sell high, everyone would do it. Try not to lose sleep over it or give up investing altogether when you lose money on some investment. Maybe you just have to take a break for a while and later capture market returns with an index fund. Or you will learn to more carefully research investment before putting more than you can luxuriously afford to lose on the line. Your fears can’t be the limiting factor that mutes your potential. Let that storm be the fuel that moves you to success.

    Where to find investment opportunities?

    Use your fear to produce better outcomes!

    You should have a list of the investments you have made in the past. Think about what you could do to produce better outcomes in the future. You can get colossal insight from physically writing down outcomes you would like to avoid. That can prevent you from making emotional investment decisions. If you have a financial planner or adviser or someone else who will look over your investment ideas, that adds gravely deeper layers of reliability and responsibility.

    You have to have a plan to avoid later regrets!

    Of course, that large loss can cause you to regret because of bad investment decision. There’s also the regret that comes from watching other investments got wings. When you have a good plan of inventorying and you analyze your investment options often, that can help avoid a negative result. Writing it down makes it easier to stick to a plan.

    Ultimately, investing is about finding the lifestyle that you want to live. So, you can’t do that if never find good Investment opportunities.

    Choosing wisely may produce enough wealth to allow you to retire sooner or walk away from an annoying job. All you need is to use logic and stick to a financial plan to successfully build wealth.