Tag: Millennials

All millennials related articles are found here. Educative, informative and written clearly.

  • 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! 

  • How Long It Takes to Have Enough to Buy a Home

    How Long It Takes to Have Enough to Buy a Home

    4 min read

    How Long It Takes to Have Enough to Buy a Home

    To have enough to buy a home is everyone’s dream. This is a tricky time for millennials who want to buy a home. Some research, for example in Canada, shows that young people need between 13 to 29 years to purchase their first home. That’s too much. 

    While millennials over the world are striving to get on the property, about 70% of Chinese millennials reached the milestone. 

    Mexico is the next with 46% of millennials homeowners, the following is France with 41%.

    For the majority of millennials, owning house persist too expensive and they can’t save enough for a deposit. Property prices have increased in the last several years and the rise in salary did not follow this

    Almost 2/3 of millennials declared they would need higher incomes to buy a home. 

    According to Forbes, China has seven of the world’s 10 most expensive cities for buying such a property.

    So how have so many millennials in China have enough to buy a home?

    There are no secrets. For most of them, a parent’s help was crucial. Also, they have some benefits for married couples. For sons in China, parents will do almost everything to help them get married.

    Thanks to the One-Child Policy, next year will be 30 million men more than women who are looking for marriage partners. Parents in China want to improve the chances for their sons and support them financially to have enough to buy a home. Speaking about, gender equality. But it isn’t the subject of this article.

    We want to show you how to ensure your deposit in order to buy a house, to have enough to buy a home.

    There are some other ways to get on the property on your own.

    Let us ask you something.

    1) Are you able to save each year?

    2) When you save, where you put your money?

    The message of the following story is: start saving early and try to save often. We want to show you the influence of compounding.

    Let’s estimate how long it will take you to become a millionaire. Yes, why not?

    We will start with the Rule of 1.5, likewise recognized as Felix’s Corollary. 

    This rule says that for a flow of investments where the number of years times the interest equals 72, the final value will equal approximately 1.5 times the amount invested. 

    Say, investing $10,000 per year for 8 years at 9% interest.

    8 x 9 = 72 

    The value of the investments at the end of year 8 will be about $120,000.

    Or make it simpler

    $10,000 x 8 x 1.5 = $120,000

    It’s so far from being a millionaire but…

    We will use Felix’s Corollary again. All we need to do is decide how long it will take you to save $720,000 at a contracted interest rate. 

    To explain why $720,000. Because $720,000 times 1.5 equals $1,080,000. This describes why we didn’t use $1,000,000. 

    This is easier than it looks, you will see.

    Say, with a saving of $90,000 per year you will need 8 years to acquire $720,000. 

    And at 9% annual interest, you would save $1,080,000 over 8 years. Of course, most of you don’t have $90,000 per year to put on savings. 

    That’s why most of us are not able to collect a million dollars in 8 years. 

    So let’s expand it to 16 years. 

    Now, what do we lack to be a millionaire? Again implementing a 9% rate of return? Yes! Here is where the rule 72 again in the scene. Using the Rule of 72, we know that whatever we have saved over the first 8 years will double over the next 8 years because 72 divided by our interest rate of 9% equals 8.

    So we can break the 16 year savings period into 3 equal portions: 

    1) the amount we save over the first 8 years; 

    2) the doubling of this amount over the next 8 years; 

    3) the amount we save the second 8 years. 

    And here it is: $720,000 divided by 3 equals $240,000. That is the amount we need to save each of the two 8 year periods. That is $30,000 per year if my math is good. And it is, so you just follow the rest of this. That means $2,500 per month, which is a reasonable saving for some people.

    But you want to determine what it will take to be a millionaire in 24 years. All you have to do is just divide $720,000 by 7 and then again by 8. 

    So, $720,000 divided by 8 equals 90,000 divided by 7 equals about $12,800. Right? Hence, investing just a bit over $1,000 per month at 9% interest during 24 years period will make you a millionaire.

    Invest in stocks with little money to have enough to buy a home

    But, how to know when to get in a position in investing?

    Investing takes time to grow. It requires a relatively moderate risk and moderate returns in the short run. But investing may produce bigger returns by placing both, interests and dividends to hold for a longer period of time. So, you are taking a long position while investing. 

    You would like to hold your stock for several years and have a decent return. In most circumstances, you should take the profit when a stock grows 20% to 25% of the buy price.

    When to get out in the investment

    The general rule of investing is never getting out of your investment just because the stock price is dropping. The rule “buy high/sell low” isn’t valuable while investing. Otherwise, you will never earn money in the stock market.

    A selling an investment too quickly can hurt your portfolio.

    Have Enough to Buy a Home

    Can you “ensure” some positions?

    All beginners, no matter how smart they are, have illusions, so they have losses. You have to keep your losses small, don’t let them scare you and survive.

    The rules for managing the risk that we’ll show you may feel disturbing for beginners because they have small accounts. Well, the proper risk control may limits trade size. I know that. But it is important for you to know that it is a protection in the first place.

    The crucial rule of risk control is the 2% rule: never risk more than 2% of your account investment on any opened trade.

    Start by writing down three numbers for every trade: your entry, target and stop. Without them, a trade may become a gamble.

    I want to share with you one of the best advice I got when I become an investor.

    If you see your stock rises by 40% you should sell 20% of your position. When the stock later increases 49% more, sell the other 20%. That will provide you to have 125% of your primary position.

    You have 100% of the initial position. And it grows 40%:

    100%*1.4=140%

    You sell 20% of it, which means that now in your hands you have 80% left:

    140%*0.8=112%

    Stocks rise for another 40% progressively:

    112%*1.4=156.8%

    Now you sell 20% of the stock you have in your hands:

    156.8%*0.8=125.44%

    You end up with 125.44% value of the initial position.


    The bottom line

    To know how to structure your portfolio just implement this rule:100 minus your age.

    This rule is used for asset allocation. Subtract your age from 100 to find how much of your portfolio should be allocated to equities

    If you are at your 30s you should have 70% in equities and 30% in debt. 

    Investing doesn’t have to be difficult if you start early, understand investment opportunities, and invest in different assets to minimize risk. And provides you to have enough to buy a home.

  • Young investors feel stress and insecure while investing

    Young investors feel stress and insecure while investing

    Young investors feel stress and insecure while investing 1The survey “War on Stress” showed young investors feel stressed and insecure while investing.

    By Guy Avtalyon

    Young investors are stressed when investing. Janus Henderson, the Financial Planning Association and financial portal Investopedia recently conducted a survey named War on Stress about the young investor and their feelings about investing. 

    This survey is important because the result showed a high level of stress among young investors.

    The main concerns among millennials are increasing student loans and stagnant salaries. That makes them stressed more than anything. Those circumstances are in line with their stress.

    This survey shows that 53% of millennials are not earning enough to satisfy their financial obligations. So, they have no possibility to invest. The advice coming from financial advisers and experts that exactly Generation Y should start the first investment as soon as possible, sound pretty nice but not relevant for the young people

    Stress has an influence on the young investors

    Yes, but in other fields of their lives too. The survey shows that stress is a “significant” or “moderate” for their spirit, prosperity, and well-being because it is present in their everyday life.

    Young people under the age of 35, said that they are somewhat or very concerned about the effects of a market downturn.

    It is very strange because early investing gives them an opportunity to invest for a longer period of time and make corrections in their portfolios if it is necessary. They have much more time to recover if they hit the losses. Anyway, they have much more time than older.

    Stress among millennials

    On the other hand, a high level of stress among millennials is logical.

    The majority of young investors started to work during or near the time when the financial crisis has begun. People under 35 have fears about their jobs and financial chances, which is in correlation with the possibility to lose jobs and financial support.

    And they still didn’t pay off their student loans.

    Investing is triggering more stress for them.

    Their salaries are $2,000 lower than that it was the case before the crisis., according to the National Association of Colleges and Employers in the US.

    Young investors are disappointed with their financial condition.

    More than 32% of them under the age of 35, points exactly that problem in this survey.

    Previous generations never had such difficult and heavy packages on their shoulders. For example, their student debts were much lower. But not only younger investors feel uncertain. The whole range of investors between 35 and 44 age have worries about retirement. So, stress is the problem for each group younger than 45 age. All of them are upset with the level of stress that they’re feeling.

    The 2019 War on Stress survey recognized an important distinction between younger and older investors. It is the difference in the mindsets and stress levels. Millennial investors with some level of financial security and financial goals claimed that they feel less stress.

    The conclusion of this survey is that ‘financial literacy and an established plan may have an effect on reducing stress. Well, that is common with other investors.

  • Millennials – Five stereotypes about them

    Millennials – Five stereotypes about them

    3 min read

    Millennials - Five stereotypes about them
    Millennials, also known as Generation Y or Gen Y, are the demographic group following Generation X and preceding Generation Z.

    The results of the survey showed that 59 percent of people aged 18 to 34 years of age consider their peers egoistic, 49 percent that they are useless, and 43 percent greedy.

    Only 36 percent of the millennials stated that members of their generation are hardworking, and 24 percent are responsible.
    Is that right?

    Generation Y is often characterized as a group of young people who are lazy, irresponsible, and who expect to be served almost for nothing. A survey by the British magazine Guardian suggests the opposite, indicating that stereotypes about the millennials are largely ungrounded assertions.

    A lot of articles have been written about what the millennials have ruined.

    This is the generation that changes the world by not agreeing to a job of 9 am to 5 pm, to conventional jobs.

    They are shaped by the fact that the state did not provide the job for them as it was normal for older generations after the education.

    Contrary, they are working in a world that is in ever-increasing debt.

    But all of them were born in the period from 1980 to 1997. Today, they are a majority of the working-age population that is increasingly taking over the labor market and imposing his rules. And these are the ones that the older generations call “the youngsters”.

    What are myths about millennials and their business habits and how correct are they?

    Prejudice about Generation Y is not rare. 

    For example, they are spoiled, lazy and dependent on technology.

    It’s important to know these prejudices, whether you are millennials or need to employ them.

    Let’s break down some of the prejudices.

    All the millennials are the same.

    Although it is quite easy to identify some common values and habits among the millennials, the fact is that their number is so large that any generalization at the start must be wrong.

    Even marketers who target millennials are always choosing subgroups within this generation.
    Millennials - Five stereotypes about them 1

    Millennials are not all the same

    That can vary drastically!

    The millennials are equally, a guy with 24 who lives with his parents and drink in front of the drugstores, as well as the successful 36-year-old CEO.

    That’s why, in the first place, they should be viewed as individuals, not as homogeneous groups of people of certain generations.

    Millennials are lazy.

    The fairly widespread prejudice of the millennia is that they want higher and better status. And much before they earn them and without any efforts. Besides, many are ready to say,  they are not prepared to do as much as necessary to achieve the set career goals.

    Millennials - Five stereotypes about them 3Personal development is goal 1 for Millennials

    However, research once again shows a completely different picture: the majority of millennials said that learning opportunities and personal development are extremely important. That means they are not passive or spoiled lazy people, which is often assigned to them.

    The Millennials are disloyal.

    This is one of the more prevalent prejudices. The millennials are not loyal to the companies that employ them and that’s why they “jump” from work to work.

    In reality, research shows that Generation Y stays longer with their employers than Generation X in their ages.
    So, back off!

    The millennials are inert.

    You can hear they are satisfied with themselves and therefore do not perceive the work as a struggle.
    Reality shows a different picture.

    Many of them have student loans, and they are often poor because they work badly paid jobs or are unemployed.

    They have average less income than two previous generations in the same ages.

    This means that many of them are willing to work to provide economic benefits. This is supported by the fact that 59% of the surveyed millennials said that competition was the only reason why they got out of bed in the morning. This option was chosen as the most motivating by 50% of Baby Boomers, born between 1946 and 1964.

    Millennials only deal with the digital world.

    Although you certainly know at least a handful of fully digital-ignorant persons under 35. The fact is that 98%of millennials aged 18 to 24 have smartphones and are familiar with digital technologies.

    Learn to earnMillennials deal with the digital world

    However, this does not mean that this is the only world they are dealing with.

    When it comes to learning new skills, Generation Y prefers live contact, rather than via the Internet.

    It is certain that this is not the end of the list of prejudices about the millennials.

    To observe the whole of this group of people as homogeneous at the start is a serious error in the mind.

    That’s why every person, whatever the generation belongs, should be observed as an individual who has his own characteristics and things in common with his generation. That may not necessarily determine its qualities but it will help you to understand them.

    Millennials and their finances

    Generation Y makes up a significant and growing percentage of the workforce, and it is estimated that by 2025, they will make up about 75% of the total workforce.

    Given from GenXMillennials are overflowed by debt

    The majority of millennials are overflowed by debt.

    The big expense of education takes to significant debt. Some surveys show that more than 70% of millennials have at least one long-term debt.

    The same source point that 30% have more than one. That may be student loans or revolving accounts. Also, Generation Y has unpaid medical bills.

    All this touches millennials’ capacity to handle their outgoings. One in four, meaning 25%, has overdrawn their checking account in the past year. In the same period, 23% withdrew the money from their retirement accounts.

    “Young adults may not understand how taking money out of their retirement accounts now has an exponentially negative effect on account balances in the future,” says Ted Beck, former president and CEO of NEFE.

    Our question is, did they have some other possibility?

    There must be some ways to earn money.

    According to this research, the majority of Generation Y feel they have significant debt and they are generally disappointed with their financial position.

    The fact is that paying off debt ASAP is the priority but how to do so if there is no steady paycheck?

    Rising a career is a difficult and individual path.

    We heard it so many times: Generation Y should think about long-term possibilities.

    They have to find a solid career that will produce the income to finance expected goals.

    How? Where?

    Many of millennials are already in high corporate positions. But the majority still have a problem to handle their debts.

    Maybe this can be the solution.

    The early ages are a good period of life to save for major purchases.

    Do you want to know how?

    Don’t waste your money!

     risk disclosure

  • 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.

     

  • Alexandria Ocasio-Cortez – is she right?

    Alexandria Ocasio-Cortez – is she right?

    2 min read

    Alexandria Ocasio-Cortez - is she right?
    Alexandria Ocasio-Cortez, who just took her House seat to represent the Bronx, has sparked headlines by suggesting tax rates as high as 70 percent to finance a “Green New Deal.”

    Alexandria Ocasio-Cortez,  said in an interview with Anderson Cooper on Sunday’s 60 Minutes, “There’s an element where, yeah, people are going to have to start paying their fair share in taxes,” she said. “Once you get to the tippy-tops, on your 10-millionth dollar, sometimes you see tax rates as high as 60% or 70%. That doesn’t mean all $10 million are taxed at an extremely high rate. But it means that as you climb up this ladder, you should be contributing more.”

    On Friday morning, Politico reported that “exasperated” Democratic leaders on the Hill were striving to control Alexandria Ocasio-Cortez, U.S. Congresswoman and Bronx-native.

    Alexandria Ocasio-Cortez proposed higher tax rate

    She proposed a higher tax on the super-wealthy as part of a plan to finance the Green New Deal program.

    AOC is proposing to lift the top marginal tax rate to 70 percent on incomes starting at $10 million. This idea has drawn both praise and mockery from the whole the political spectrum.

    The opponents’ argument is that high taxes can make people work less. For example, if a well-to-do person takes home only $5,000 per hour instead of $7,000, he might cut back on the number of hours he works. But in real life, the effect is minimal.

    Truth is that higher taxes are unlikely to reduce incentives, as the incentives to work are governed by the marginal utility of lost or gained income. Simply put when the wage of someone earning $22.000 per year can go up or down by $1.000 that person is well incentivized to make a decision about cutting back work hours. But when a person earning $10 mill a year, $1.000 of lost or gained income makes no change of the standard of living.

    In support of this thesis, the Nobel Prize-winning Paul Krugman speaks.

    Paul Krugman, in full Paul Robin Krugman, (born February 28, 1953, Albany, New York, U.S.), American economist and journalist who received the 2008 Nobel Prize for Economics for his work in economic geography and in identifying international trade patterns.

    A few days ago he asked one simple question in his column for the New York Times:

    “What does Alexandria Ocasio-Cortez know about tax policy?’‘

    And he gave the answer:

    ”A lot.”

    Detractors try to discredit this young woman by publishing allegedly, compromising photos and videos. AOC was dancing in college. What?

    That’s the right’s hysterics! Also, some of them try to show that her policy is insane.

    Paul Krugman wrote:

    ”The controversy of the moment involves AOC’s advocacy of a tax rate of 70-80 percent on very high incomes, which is obviously crazy, right? I mean, who thinks that makes sense? Only ignorant people like … um, Peter Diamond, Nobel laureate in economics and arguably the world’s leading expert on public finance. (Although Republicans blocked him from an appointment to the Federal Reserve Board with claims that he was unqualified. Really.) And it’s a policy nobody has ever implemented, aside from … the United States, for 35 years after World War II — including the most successful period of economic growth in our history.”

    And Krugman added:

    “A policy that makes the rich a bit poorer will affect only a handful of people, and will barely affect their life satisfaction since they will still be able to buy whatever they want.”

    and

    “In other words, tax policy toward the rich should have nothing to do with the interests of the rich, per se, but should only be concerned with how incentive effects change the behavior of the rich, and how this affects the rest of the population.”

    Alexandria Ocasio-Cortez belongs to millennials generation

    Almost half of the millennials say they prefer socialism to capitalism. What do they mean?

    “My policies most closely resemble what we see in the UK, in Norway, in Finland, in Sweden,” Alexandria Ocasio-Cortez told “60 Minutes.”

    On the other side, critics of high taxes claim the policy stifles economic growth by reducing the incentive for people to work. But Sweden’s employment rate is 77.5%, beating the U.S.’s 71%. In terms of economic growth this decade, expanding 2.7% a year in Nordic countries, on average, compared with 2.2% for the U.S.

    For a real-world example, critics and fans alike should look to Sweden. This Nordic country has a marginal tax rate of 69.7% on salaries above $79,000. That’s almost 30 percents higher than in the U.S.

    It is fantastic how many people don’t understand progressive taxation and marginal rates.

    YOU WOULD LIKE TO READ THIS: Embarrassingly algorithms make fails more often than you expect.

    Most interesting, it shows how few people understand that without progressive tax, you don’t get the infrastructure which allows people and businesses to prosper.

    On the other side, some do.

    Soak the rich. They should be happy we are not moving for a wealth tax.
    Indeed. High marginal tax rates or guillotines. Seems like an easy choice for me.

    So, we can say that Ocasio-Cortez’s tax plan isn’t radical at all.

    And it certainly won’t damage the economy in any significant way. But will the plan to yield a bounty of tax revenue for a Green New Deal or other major spending programs?

    This question is more about maximizing revenues than about the marginal rates.

    Krugman pointed:

    “Or to put it a bit more succinctly, when taxing the rich, all we should care about is how much revenue we raise. The optimal tax rate on people with very high incomes is the rate that raises the maximum possible revenue.”

    Wealthy people have eye-popping incomes. But there really aren’t that many of them.

    The amount of money the tax would raise would yield roughly $72 billion a year. That would increase federal personal income tax revenue by about 3.9%. It would certainly not be nearly enough to pay for Ocasio-Cortez’s Green New Deal.
    Alexandria Ocasio-Cortez - is she right? 3

    Chart: The Balance  Source: The Office of Management and Budget

    But the point is, why wealthy people don’t like to share or, more important, to invest in their country’s progress.

    Survey shows

    According to a Pew Research Center survey conducted Aug. 15-21 among 1,893 adults, more Americans say tax rates on corporations and higher-income households should be raised rather than lowered.

    The result is: 24% say taxes on incomes over $250,000 should be reduced; 43% say they should be raised, while 29% favor keeping them the same as they are currently.
    Alexandria Ocasio-Cortez - is she right? 1

    According to the same survey, majorities of Democrats and Democrat-leaning independents favor raising tax rates on both corporations (69%) and high incomes (57%), while Republicans are more divided.

    YOU WOULD LIKE TO READ THIS: Traders Paradise wants to present you how rich is this world of scammers.

    But while 70% of liberal Democrats say tax rates on household incomes over $250,000 should be raised, fewer than half of conservative and moderate Democrats (46%) say the same.

    The bottom line

    Historically, America used to have very high tax rates on the rich, even higher than AOC is proposing. The highest growth rate period was when the top marginal tax rate was 90%. That was the golden era of the post-WWII U.S. economy.

    Let’s conclude this article with Krugman’s quote:

    “Well, on the tax issue she’s just saying what good economists say; and she definitely knows more economics than almost everyone in the G.O.P. caucus, not least because she doesn’t ‘know’ things that aren’t true.”

    Risk Disclosure (read carefully!)

  • Cannabis VS Bitcoin Both Are the Two “Sexiest” Plays.

    Cannabis VS Bitcoin Both Are the Two “Sexiest” Plays.

    Cannabis VS Bitcoin
    Cannabis stocks just like bitcoin stock can be hot investment choice these days

    By Guy Avtalyon

    If you have a dilemma in selecting the stocks, cannabis vs bitcoin, this exactly you have to read. Cannabis shares are a temporary hum. Wait! Didn’t they say exactly the same about Bitcoin?

    Traditional Wall Street and media gatekeepers are late.

    The fact is that Bitcoin lacks a time-tested business model and fundamental backing, and it pays no dividend. The other fact, marijuana is illegal in almost every country, putting the business model in jeopardy.

    Pot stocks are more tangible speculative investments, traded and regulated on recognized stock exchanges, but still subject to a variety of market and regulatory risks. We know that advisors can caution their clients on the risks of investing in cannabis stocks, and the risks are there at current merits. It was the same in the case of Bitcoin.

    Cannabis industry

    But the cannabis industry may offer trace to the future of Bitcoin. Because despite their different paths, the crypto and cannabis are siblings. Why? Just spend a few minutes on Reddit pages committed to trading, Bitcoin, and cannabis and you will see similarities of the group. According to TD Ameritrade Inc., trading in pot stocks is superiorly done by millennial-aged males. The stats for crypto look almost the same.

    We are witnessing an explosion of interest in cryptocurrencies, cannabis stocks, and ETFs. And particularly from millennials. What do younger clients need? They love technology. They want to be educated investors, that’s why they are in need of education. They’re younger in their investing and trading careers. But they know what they want. They want to trade 100 shares of stocks at the table in the restaurant using some bot. They don’t want to miss the boat.

    Cannabis vs Bitcoin

    If you’re a  long-term investor type who’s not at all interested in trading, then you’re on the right track to becoming a wealthy investor over the long term. Sticking with such a reasonable investment strategy can be tough, however,  especially if you constantly hear about how a friend of a friend of yours got rich overnight by investing in Bitcoin or Canopy Growth (TSX:WEED) (NYSE:CGC) stock.

    You can ignore the hype, as it has nothing to do with you. It’s difficult to tell the difference between a bubble and an actual paradigm shift that could lead to massive riches over the near term.

    Today, cannabis stocks and Bitcoin are the two “sexiest” plays.

    While the word “bubble” has been thrown by some experts, other equally qualified, are on the other side and are thinking “opportunity of a lifetime.” Being on the right side isn’t a matter of how clever you are. You can find a lot of examples of how some very smart guy has fallen as a victim on the wrong side of the “sexy play” of his time.

    When it comes to subjects like the rapidly emerging rising cannabis market or blockchain-based cryptocurrencies, it’s hard to know what you’re dealing with as an investor. Nobody really knows how much new entities will act in the public markets over a long period. Attempts to make comparisons to events that happened in the past can make some sense but can’t help a lot.

    Neither cryptocurrencies nor cannabis are suitable for conservative investors. It is for visionaries, for those who can perceive the future and recognize the chances. Set a limit and stay within it.

    There are many people in the crypto industry believing in a bright future. As well as there are supporters of the legalization of cannabis. Technology companies, for example, SinglePoint and POSaBIT, are working to create a payment method for dispensaries and consumers using bitcoin. Recently, some cryptos emerge specifically for cannabis transactions.
    This isn’t the first time that stocks in a hot niche have risen. We all know what happened with bitcoin stock a year ago. The companies specializing in the crypto have had fantastic gains.

    Some investors never look back at overhyped fields once they aren’t trending, but investors who invested hard-earned money into most popular stocks usually learn the harder way what results can be.

    Currently, a limited number of marijuana stocks is accessible to most investors. We’ve seen some massive moves in marijuana stocks. Those gains stem from the fact that investors who want to invest in marijuana have limited options available to them.

    Why cannabis vs bitcoin?

    The same case we already saw with many Bitcoin stocks.

    In 2017, the top-performing Bitcoin stocks have less liquidity than many others. They stood very low on that list. But it reversed. In 2018, bitcoin declined in its volatility.
    Of course, speaking about cannabis stocks we can expect winners, but we can’t be sure where to expect. Maybe cannabis investors could learn something from the bitcoin incredible boost in the past. Perhaps the same could occur. Sometimes, success may occur in unexpected places. As an investor in cannabis stocks, just be ready to see the secondary effects. Try to recognize how they can influence the companies that are not always obviously related.

    Investors want to get rich from cannabis stocks, but past investing crazes and experience with cryptos have often left people wishing they hadn’t fallen for the allure of these markets. You can avoid repeating those mistakes and improve your chances of being successful with your investments in the long run. Just get more knowledge, learn permanent, test, and measure everything twice.

     

  • Millennials Have Nothing Saved For Retirement

    Millennials Have Nothing Saved For Retirement

    1 min read

    Hey, millennials! What are you trying to do? Are you saving for retirement?

    You have really upped your game when it comes to saving for retirement: only 1 in 6 millennials reportedly have $100,000 socked away.

    In fact, most millennials are not on track when it comes to saving for retirement. Statistics show that 66% of people between the ages of 21 and 32 have absolutely nothing saved for retirement.

    I know, you are not surprised. I’m not either. Young people do not have leftovers for savings. Many have started to work at a time of stagnant salaries and high unemployment. 

    Pensions are disappearing, the future of social security is uncertain.

    It’s likely we’ll live forever.

    Millions of millennials have little or no savings.

    In the first place, they believe they’d be better off by putting their money elsewhere. Some have to pay off student loans.

    Some are trying to build up their own business.

    Many started to work at low-wage jobs for a few years and then went back to school to improve their employment chances. And some have more immediate costs like childcare and rent.

    We can recognize the ruthless pressure to save more for a distant future.

    And it is completely disconnected from your reality.



    We each face different circumstances and desire different things in life.

    But supposed experts continue to implore this entire generation to save in retirement accounts.

    Do they know that only focusing on saving for the future means the possibility to neglect more pressing financial issues?

    Such common sense rule about savings disregards life cycle priorities that differ from those of the generations past.

    Instead of cashing out after working at the same job for 40 years, many of millennials would rather enjoy a more entrepreneurial career while earning well beyond typical retirement age.

    Let me be clear!

    There’s nothing wrong with saving for the future and using the tax advantages of retirement plans. It’s mathematically true that starting to save early in the life improves our odds of having enough later.

    But, it’s necessary to recognize the cost of missed opportunities. Saving reflects the safest choice, that’s true.

    But doing as experts try to advise, might hold back millennials from taking any financial risk to pursue more entrepreneurial efforts now.

    Many young people have finance-related fears of an uncertain future and how to make their career choices.

    This is not to say everyone should avoid stable jobs or great retirement plans.

    No, that means that millennials avoid sacrificing but they are taking risks.

    And that makes sense.

    Taking a risk by investing in yourself to build a business could not only lead to greater wealth but could provide a far more fulfilled life along the way.

    Their different needs and preferences should define their financial plans, not any of the many generalized “rules” we often hear. But they shouldn’t completely abandon long-term savings, they should think about how best to use their extra dollars, both to establish their financial security and to find more fulfilling careers and happier lives.

    About 25% of millennials said they were not eligible to participate in an employer-sponsored retirement plan because of their part-time employment status.

    In terms of preparing for retirement, millennials have three strikes against them from the get-go.

    First, because of limited access to retirement plans at work, millennials will struggle to build retirement savings.

    Second, they are less likely to have bought a home, and home equity is a valuable retirement asset.

    And third, they are more likely to be burdened by student loans.

    That’s why a lot of millennials take chance in trading and investing with low fees.

    As a generation which is forced to plan from day to day, it is not a problem for them to trade on a daily basis.  Or to put their extra incomes in some stock investment.

    That’s good work, guys!

    Your job in this world is not to solve the problems that baby-boomers left to you, but to take care of yourselves and make your life better and easier.

    In that way, the whole world will be better placed.

    But before you start your adventure try some free demo account and learn and test your skills. 

    And you have to be very cautious when you have to decide which brokerage to choose.

    You have a plenty of them to choose from, and for the good start.

    We recommend you to read some of our recommendations and predictions.

    Good luck to all of you, millennials!

    Risk Disclosure (read carefully!)