Wealth

Wealth Management: A Few Aspects we Should Stop Overlooking

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Wealth creation is largely an elaborate process for most – at least for those who haven’t really amassed it (wealth) overnight. Though we don’t acknowledge it often – a financial cushion is simply not about building emergency funds. As integral a part of the wealth creation process that we are talking about, for us a “financial cushion” is created the moment we start talking about finance management or wealth planning.

As we go through the post in our quest for the less known ways with the help of which we can achieve our desired level of wealth creation, we will understand how important a role the sense of self efficacy ends up playing here.

How is the Concept of Self-Efficacy Linked to our Finances?

Yes. We don’t find ourselves understanding or rather discussing the psychology behind wealth-creation. And once we start doing that, we inevitably go back to Albert Bandura’s concept of self-efficacy, which actually goes on to determine a person’s thoughts, actions, motivation and behavior in the most powerful manner imaginable. He pointed out that people with a powerful sense of self efficacy are capable of viewing difficult tasks as challenges that need to be mastered in contrast to people with a weak sense of self-efficacy who view these same tasks as risks that should be avoided.

Since his revelations, financial experts at large have actually been trying to link the concept of sense of self-efficacy with finance. As Bandura had pointed out, self-efficacy is bolstered by various factors including:

  • Experiencing success
  • Controlling the emotional and physical responses
  • Choosing good role models
  • Reacting to encouragement

Why is it Important to Understand and Acknowledge the Role of Psychology behind Wealth Creation?

When it comes to financial success your sense of self-efficacy is definitely bolstered by your ability to pay off a large debt or for that matter staying away from expenditures on things you wanted to buy but didn’ need. Think about your friends early in their careers – living from paycheck to paycheck and often turning to the expensive quick loans in order to sponsor immediate needs. You are not required to do the same because you had planned your finances way before you had actually started earning. Do remember all these can act as major catalysts as far as laying the foundation of the sense of self-efficacy is concerned.

One of the most overlooked parts of wealth-creation is the psychology behind wealth-creation itself. The way we manage money actually has a lot to do with how we perceive our financial responsibilities. A lot is determined by the role models that we choose for ourselves. For instance, if we see someone in our family or friend circle fulfilling an almost impossible financial task, then we’re bound to be inspired to replicate the sense of self-efficacy. Additionally, a lot is dependent on the role models that we choose to be. The way we deal with our finances – or rather respond—to our pecuniary challenges from time to time- goes on to help us set examples for our kids as well. The need for prioritizing wealth management becomes a habit with them.

Understanding the psychology behind wealth-creation is important because only when you’re estimating your emotional reaction to certain financial responsibilities properly can you work towards changing them if needed.

For instance, today if you think that you will absolutely drown yourself in debts just in order to get out of your mortgage then you probably are someone with a very poor sense of self-efficacy. You can work towards developing a more positive change when it comes to the way in which you’re thinking about your financial responsibility now.
Besides mastering the psychology behind wealth creation, do make sure you are paying attention to these often overlooked aspects of this particular process.

How Often are you Replacing your Car?

You probably aren’t one of them who think that you should only change or rather replace your car when you NEED to! What we don’t realize is that every time we’re taking a loan from the bank to buy a new car the bank holds the title until we clear off the loan. Your car notably depreciates by 25% in the first year and by 50% in the next two years. Most of us end up trading our old car for new ones without even using the previous car optimally. However, we have already paid taxes, insurance, and loans on a depreciating asset. We might as well always refuse to acknowledge this but it’s only the car dealers who end up making profits in this case. There is a dire need on our end to stop selling assets too soon. You will understand how your efforts towards wealth creation will suffer owing to this habit of yours.

Investing

While saving remains a major financial goal at an early age—investing doesn’t. Ask most of the millionaires out there and they will actually tell you that investing is at the heart of prudent wealth creation. The tried and tested mantra in this regard is to subtract your exact age from 100 followed by investing the percentage of that number in equities and related funds including exchange traded funds, mutual funds and index fund.



How are you dealing with your Monthly Subscriptions?

Be watchful of your monthly subscriptions and your membership fees. While it feels great not to pay off all the dues at one go, do let us tell you monthly subscriptions and membership fees will eventually find you at the receiving end if you are not really keeping a check on them. There are so many times when even unused subscription fees end up killing your savings! Don’t underestimate the need for going back to or rather reviewing your subscriptions every month. If you are not using something do make sure that you are cancelling the same without fail. If you are prioritizing control over your expenditures you simply can’t ignore these subscriptions at any cost. Don’t pay up for what you don’t need. That’s perhaps the cardinal rule of personal finance management.

 


3 Steps To Early Retirement!

The dream of retiring early for many, remains just that – a dream! Escaping from the rat race and the 9-5 drudge is a tempting thought, but unfortunately feels intangible. People do retire early though, what is their secret? Retiring early would give you the chance to enjoy life to the full whilst still in good health. You could opt to travel to the places you have always wanted to visit or learn a new sport.

There are ways of planning for an early retirement, but it must be put into action as soon as possible – today preferably! This article aims to highlight ways of saving enough money to enable you to retire early.

early retirement

image source

Invest any savings

If you are lucky enough to have savings, make them work for you. If you take the decision to invest your savings in stocks and shares, or participate in financial trading it could be potentially very lucrative and will be a huge boost to your retirement fund. Investing your hard earned cash is not without risk and you need to be fully aware of the process. The internet has opened up opportunities for everyone to get involved in financial trading, up until recently financial trading was the sole domain of stock brokers in the city. There are numerous trading platforms to choose from and lots of advice available. CMC Markets is a trading platform which will guide you through the process of trading using contracts for difference (CFD’s). Many trading platforms offer the option of “practicing” first before parting with your well earned money. Financial trading is not to be taken lightly, always seek professional advice.  

Create a budget

To enable you to save enough money for retirement you need to budget carefully. This will enable you to squirrel away any money saved into your retirement pot. Saving sounds a simple concept, but it needs to be managed carefully. Start today and don’t put off until a later date. Putting aside a certain amount of money every month doesn’t depend on how much you earn, getting into the habit of putting a little by every month will soon allow your retirement fund to grow. It’s worth remembering that you won’t need as much money to live on once you’re retired. You won’t have the costs associated with the daily commute and any children you have depending on you are likely to have flown the nest.

Property

Aim to have any outstanding mortgage debt paid off by the time you retire. This will reduce housing costs dramatically. You could also release the equity in your home by downsizing, also you won’t need to live close to a commute route, enabling you to move to a cheaper area.

Investing in property could be another lucrative option, you could build up a portfolio of rental properties or embark on a renovation project.

 


Weighing Up The Cost Of Supplying Company Cars

Having the best employees is the key to business success. Without a good team to handle the day to day running of the company, you’re never going to get anywhere. That’s why it’s important to attract the best talent and keep them at the company by treating them right and offering them good benefits and incentives. Good health insurance and a healthy salary are the two main things that people look for but a company car can be a big draw as well. A lot of employers are unsure about supplying a company car to their employees because they’re worried about the cost. But the thing is, the price of supplying the car is often outweighed by the benefits it brings. To help you decide, we’ve added up some of the cost and the relative benefits.

vehicles you buy

Pexels

The Car Itself

Obviously, buying the car itself is going to be the biggest outlay. You can’t really get away with giving your employees a second-hand rust bucket so you’ll have to spend money on brand new cars. That can get pretty expensive depending on how many people you’re supplying cars for. You could just choose a few select employees and offer them company cars but there’s always the chance that will create resentment amongst the other employees, causing a drop in productivity and some may even leave the company.

Insurance

It’s up to you to take care of all of the costs of running and maintaining the company cars that you’re supplying your employees with. That means you’ll have to get car insurance on all of the vehicles you buy. That can get pretty expensive but if you use a good comparison site, you should be able to find some cheap deals. If any of your employees are in an accident, you’ll have to pay the excess and the increased insurance costs afterwards so it’s worth keeping in mind that there’s always the chance that insurance will go up in the future.

Tax

You’re also going to have to pay tax on all of those cars which can add up to quite a bit of money. Cars that get bad mileage and put out more CO2 emissions are going to cost you a lot more in tax as well so when you’re choosing cars, you can save money in the long run if you invest a bit of money in a better car.

Cash Instead Of A Car

A lot of companies are trying to strike a balance and avoid some of those costs by offering cash instead of providing the car itself. That way, the employee buys their own car and handles the tax themselves. You can supply enough for basic insurance coverage but if they have to make a claim, they’ll cover the excess and increased costs afterwards. Your employees still have a reliable vehicle to get to and from work but you’ll save quite a bit of cash.


Why These Dangerous Jobs Are Worth The Money

Have you ever thought of yourself as different? Well, most people like to think they’re unique but some are just wired totally different from the rest of us. There’s something inside them that yearns for a challenge most others would call a step too far. Individuals that almost like to play with fire a little bit and risk their own lives for an invigorating feeling of being alive on the job are rare specialties. Maybe you could call them more nonchalant in how they regard their own safety and worth, but they would tell you they need something that gives them a thrill to feel alive. Thankfully for the rest of us mere mortals, these types of people are the lifeblood that greases the wheels of global economies. Quite literally, these types of people are and so willing to give their lives while on the job. A normal end to the day for most people would be to punch out and try not to get frustrated sitting in traffic on the way home. For those with dangerous but rewarding jobs, it’s a reluctant see you later to their colleagues and role at work; until the next day.

oil rig

Source Agencia Brasil

Oil rig worker

Yes in this day and age where technology can manufacture gigantic drills that weigh many tons and have their tips covered in diamond, oil rig workers are still very much needed. These men do all the dirty and intricate jobs machine cannot do. For example who else is going to look after and maintain the equipment? The rigs are offshore meaning the only way to them is by air transport. A helicopter is the choice vehicle to drop off and pick up oil rig workers that work mainly on tours that last several months each. They are in charge of the daily output of oil each day. Drilling far beneath the waves, the drills must be used in a precise fashion, so oil extraction is not only efficient but safe. It’s very common for workplace injuries both minor and nasty to be a part of the yearly cycle on the rigs. Puncture wounds, slashes and gashes, crushed limbs and broken bones are suffered by many workers around the world. However if you can brave the open sea conditions, love the comradery with your fellow riggers and get used to the physically demanding work, you’ll be paid a handsome sum of $100,000 a year. Many companies ensure they provide the healthcare for their workers too.

police sergeant

Photo source Dave Conner

Police sergeant

A police sergeant isn’t like his fellow officers. He or she is the one calling the shots on the ground. They play the role of a supervisor but don’t let that title fool you; they’re really hands-on. Police sergeants are in charge of teams of officers that are either consigned to a task force or in charge of patrolling a beat. They first must achieve a certified police degree which teaches them the skills of asset protection, security risk assessment, the ability to investigate and handle home and business property intrusions and be adept in sophisticated human intelligence gathering. The average salary is around $70-80,000 a year with the additional option of working toward a promotion to police chief where they head over six-figures such as $110,000.


Understanding Penny Stocks for Day Traders

If you want to reach a state of financial freedom, you need to pick the right lane. Do you want to focus on the big time stocks that are stable and very unlikely to be volatile? Or do you want to trade in a space where the stocks are cheaper, but more likely to make moves to make you profitable? Penny stocks can provide that type of environment even for a new trader.

Penny stocks, as defined by day traders, generally fall into the category of $2 to $10 per share. They don’t actually cost pennies. They represent small cap companies that are trading with enough volume so that active traders can leverage enough shares to make a profit with their trades. It is a delicate balance and it can require trading on margin, which is basically trading on credit.

As an aspiring day trader, you need to be able to anticipate trends and pick hot stocks before they make their moves. It takes time to learn how to do that. That is where a day trading education site can come in handy. Finding a place where you can learn strategies and techniques from veteran traders through online video courses, where you can interact with other traders in a community of like-minded people, that can be a real asset for a newbie. It provides a place to learn valuable lessons before risking real money.

Penny stocks can make huge jumps during a particular day of trading. Being able to anticipate which stocks are about to make a jump is a skill that can be learned. You need to look for the right market conditions, the best historical data and technical indicators that precede a run on a particular stock. If you can jump in at the right bar at the right time, you can position yourself for a trade that makes 20-30% profit. Add up a bunch of those and you are in good shape for the day. Then string 4 or 5 good days together and you will have a profitable week. That is how you start.

The key is to search for the medium sized wins, instead of going after huge scores. You are not going to find the next Apple or the next Facebook in penny stocks. That is looking for a lottery ticket. Playing the lottery is very bad odds. You want to look to be profitable 60% of the time and keep your profit/loss ratio at 2/1. That means that your losses are small enough that your profits are going to come through on top.

Being able to trade in a simulated market with virtual currency gives you a chance to make the wrong moves and still survive to trade another day. That makes the learning curve a lot shorter when you get into trading real money.


To Buy or to Rent? That’s The Question

As we embark on our careers and start a family, many young adults choose to invest their hard-earned money by buying their very first home. It’s an exciting period with a lot of learning involved; from finding the right place to buy, to getting the right kind of insurance, and selling it again a few years later.


Image link: Pexels

In the meantime, however, you’ll see the same generation choosing to rent instead of buying – and they claim to have made the right decision.

While we can’t make a choice for you, we can show you the pros and cons of both options, so that you can find the one that works best for your lifestyle and finances.

Buy to build equity over time

Die-hard tenants can talk about the benefits of renting all they like, but they still won’t be able to build the kind of equity over time that homeowners can. You can always find another way to invest the money you would have spent on a home, though, and those who choose to buy are not joining some sort of exclusive investment club.

By renting, you’ll be paying down on someone else’s mortgage which is exactly why many people choose to buy instead.

Keep in mind that equity does not equal automatic profit, and the area you’ve chosen to invest in may very well take a dip in value over time. Renting your home may not build equity, but there’s also no risk involved as you can pack up and move when the street turns student-friendly.

Relocation is easier for tenants

Those who love the freedom of simply giving a few weeks notice before packing up their stuff and head to Thailand to work for a year or so, would never consider buying a place. Sure, you can become a landlord and find tenants – but it’s tricky to maintain a place when you’d like to trot the globe instead.

Not only can you stay flexible and volatile when it’s time to head abroad, but you can easily upgrade to one of those fancy city apartments without having to go through the hassle of selling first.

Responsibility for maintenance

While owning your own home gives a lot of creative freedom as you may decorate and spruce it up as you please, you’ll also be the one in charge of taking care of whatever repairs and maintenance your home needs.

This can be quite expensive; it’s estimated that you’ll spend about 1 % of its total value each year on repairs.

The furniture in your home may also be yours to keep, but you can include the cost of keeping this up to date as well. Most rentals come furnished and, while you have to take reasonably good care of it, the wear and tear of living there won’t come off your paycheck.

Small families and those who plan on staying put for the next couple of years can really benefit from buying instead of renting. You’ll be involved in the community and feel that sense of belonging that is so important for small families; until then, don’t worry.


Investing; How To, And Where To

investment game

Getting into the investment game can be life changing. If you’re able to play it well you’re going to make a lot of money, but if you’re not then you’re going to lose a lot, so you have to use your head as much as you can! There are loads of different places where you can make money, some more higher risk but more profitable than others, so let’s dive in and find out about them!

Foreign Exchange

The riskiest, but most rewarding out all the 3 things we’re going to cover here is foreign exchange. This is the exchange of currencies from one to another, and there is a lot of money to be made off this, but how? Well, if you’re able to predict the rise in a currency’s value, you can exchange loads of your currency for it, meaning you will have lots of it when your prediction comes true! However this is often a game that you cannot predict, and you’re going to need some assistance with it as doing it manually is ridiculously difficult. Websites like https://www.connectfx.org/ allow you to do all of your currency exchange within their platform so it’s definitely worth getting your hands on something like this to enable you to react quicker to market changes!

Gold

Gold is something that has been valuable to humanity since before we have records of; it’s not only attractive to look at, but it’s very hard to get and is incredibly useful in the 21st century for technological appliances. Because of this, it’s something worth investing in. Buying gold is a relatively safe market because the gold reserves in the world are drying up which means that it’s only becoming more and more rare, which means the prices are only going to go up! This is why you should invest in gold because it’s a very safe market that is going to make you returns, you just might be waiting a few years for it!

Oil

Oil investment works by buying units worth of 1000 barrels in it’s crude form. Crude oil is the most useful form of oil because it’s what companies buy to turn into all kinds of other fuels as they don’t naturally occur. The oil market is relatively stable but is prone to fluctuations so you’re going to have to be a bit more careful with this than you would be with gold! Buying crude oil is simpler than it seems, so if you’re looking for a medium risk investment then this is for you.

All of these different markets cover different risk zones, so it’s up to you to decide what you want to do! Are you going to go for the high risk but high reward foreign exchange market, or are you going to go for the more calm and stable gold market? Or maybe you want something in between that’s a mixture of both, in which case going into the oil market would suit you. Of course you can invest in stocks too but it hasn’t been covered here, so check this out to know what they are and how to use them.


Four Clear Signs You’re NOT Ready To Buy Your First Home

Four Clear Signs You’re NOT Ready To Buy Your First Home

First home

Many of us follow traditional career paths. We go through the educational system, eventually concluding by jumping into the world of work. It’s during this period of transition that we start considering where we’re going to live. It’s time to leave the nest, but is renting or buying a home the best option? It all depends on the situation, of course. If you’re feeling confused, follow our tips to help make your decision!

debt relief

#2

You’re In Debt

This is an obvious one! If you’re in debt, you haven’t got the money to be spending on buying a home. Purchasing a house is a massive consideration and one that can easily leave you with more debt in the future. First, you need to banish those current repayments as quickly as possible. Consider researching the Obama loan forgiveness scheme, and find ways to repair your credit if it has been damaged. For now, this is the most important consideration.

Future

#3

You’re Unsure About The Future

When you leave the educational system, you might feel a little uneasy. Some people seamlessly transition into the next phase of their career, of course. However, others stagnate and grow disillusioned. It might be that you seek a totally different career path entirely. Alternatively, you might need to look further afield to gain employment in your chosen area. If the future isn’t clear, you don’t want to jump into a decision like this. Buying a house is expensive, and selling it can be extremely difficult. Until you know where your future lies, you need to wait.

#4

The Negatives Outweigh The Positives

Sometimes, there just isn’t a good reason to buy your first home. For those who live on their own, buying a big home with multiple bedrooms isn’t worth it. Alternatively, it might just be that the house prices in your area are unreasonable. You don’t know what’s going to happen in the future, so for now, wait it out. There’s no shame in renting a home until a better opportunity comes along. Write down a list of pros and cons. If the cons are the most prominent, save your home-buying ventures for another time.

#5

You’ve Never Lived On Your Own Before

If you’ve spent your whole life living with your parents, it’s going to be difficult making the transition to living alone. Quite simply, you need some experience before making the decision to buy. This is a massive financial consideration, but how can you make an informed decision when you’ve only ever lived in one place? Before long, that big home you bought might seem too large and overwhelming for your needs. For now, take the time to rent and get used to living away from your parents. As you develop more experience, you’ll get a better idea of what you want out of your first home purchase.

It’s important to remember that buying your first home isn’t a race! It’s a decision that should be thought about carefully, and there’s no need to rush into it. Make sure you’re happy before buying that all-important first home.


Top 5 trading pitfalls that hinder success as a trader

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Image Credit: flickr

Getting success in future trading needs avoiding several pitfalls as much or more than it does seeking out and performing thriving trades. Even professional traders don’t have any particular trading methodology that ensures success as a trader though there are certain rules to which you can strictly adhere to keep yourself ‘in the game’ long enough to get success. Be it forex or future market, with the widespread of Internet, today’s traders use future or forex automated trading tools depending on their requirement. But whatever you use, you must avoid getting into any pitfall that would restrict your chance to succeed as a trader.

Here are 5 of the most prevalent mistakes traders generally make in future trading.

  1. Failure to have a plan – Failure to have a winning trading strategy in place prior to a trade is being executed. If you don’t have your own plan of action in place upon getting entry into future trade, you won’t know when and where you need to exit the trade or about how much money you can make or lose.
  2. Insufficient trading asset or improper money management – It obviously doesn’t take a fortune to trade in future market with success. If you have less than $5000 in your trading account you can and do your trade successfully. But if you have more in your account, you can and do even huge loss in just a heartbeat. Part of your success boils down to proper money management and not running after highly risky ‘home-run’ type trades which involve too much money at one time.
  3. High expectations, too soon – Being a new future trader if you expect to quit your ‘day job’ and make a good living trading future in your first few years of trading, you may get disappointed. You must avoid expecting to become successful in the first couple of years of trading. It needs a lot of smart and hard work, calculations and of course firmness to get success in any field and endeavor, and trading in future market is no different. Trading in the future is not that easy and so ‘get-rich-quick’ scheme hardly works out.
  4. Failure to use protective stop – Using protective buying stop or sell stop upon entering into a trade provide you with an effective idea of about how much money you is risking on that specific trade, should it turn out to be a loser. A protective stop is an excellent money-management tool though not perfect. There is plenty of money – management tools in future trading that you can use to achieve success.
  5. Lack of discipline and patience – Though over-worked and often mentioned when determining what a successful trader lacks, even the most veteran traders won’t argue with the merits of these virtues. It is always recommended that you don’t trade for the sake of trading only. Let an opportunity of ‘set-ups’ come to you and then you act upon accordingly in prudent and proper way. The market will go in its pace and you can’t control it.

These are some of several mistakes that traders, especially the newbies make while in the market. Avoiding such mistakes would give you the prospect to become a successful trader.


Galveston Wealth Has a History of success

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Image Credit: flickr

The brokers at Galveston Wealth like to say that you are only as good as your last trade. But they also know that no single trade will make or break a client’s account.

There’s no guarantee of successful stock selection in the markets at home or abroad. Brokers who claim they only pick winners are disingenuous at best.

Research and study of market trends over the last half century have repeatedly shown that it is extremely rare for brokers to accurately predict with regularity the future performance of any given stock or fund.

But investors need not despair. There is a solid strategy that’s been proven over and over to build wealth.

Galveston Wealth has been in business since 2007. Over the last decade, despite market fluctuations and global uncertainty, Galveston brokers have demonstrated capacity to build wealth over the long term.

Every winning strategy is based on a diverse portfolio that employs a range of tools. Diversified portfolios that balance risk with caution and maximize returns over the long term are based on a winning formula that for the last 10 years has been driven by a global economic recovery.

But even a slowing recovery doesn’t dampen the prospects for investors willing to plan for the long term. Galveston has developed a suite of mitigation protocols to reduce outflows when growth slows.

As a result, client expenses contract and assets stabilize during downturns so Galveston’s customers can weather the storm. It also means that investors won’t need to sell when the market bottoms out.

With commodity prices in a tailspin and China’s overheated economy finally cooling down, investors must brace themselves for changes. That’s why it’s imperative that investors incorporate expense reduction strategies into their investment plans.

Galveston isn’t just focused on growth. It’s also focused on shoring up what assets its customers already maintain.

Just as Galveston’s clients entrust their assets with its brokers, the company is invested in its clients. It’s a mutually beneficial arrangement that only works for both parties when they stay invested in the market for the long term.

 


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