Following the Crowd When Handling Your Investments: Smart or Crazy?

If you’ve been reading this blog for a while you’ll know the importance we place on getting your investments in order. If you don’t invest you won’t have any cash put by for future needs. Furthermore you won’t be able to earn any additional cash on your investments, because you won’t have any cash invested in the first place.

But let’s get onto a different tack here. If you are investing, or thinking about doing so, how should you do it? Should you follow what the masses do or you should try something different?

Could you become a millionaire?

There are reasons why few people in the world will ever become millionaires, let alone billionaires. The main reason is most people follow the herd: they do what everyone else does. They get a job and earn what they can, eventually moving up the ladder a little in the process. They might also invest some of what they have, but it will be a fraction of what the richest people will be able to invest and earn from.

If you really want to make some serious cash you have to do something different. Everyone – without exception – who is a millionaire or better has broken away from the herd and done something different. You’ll find they are virtually all business owners, as opposed to working for someone else. This is a very important fact to consider when it comes to the way you work. No one ever gets rich or generates plenty of cash for investments through working for other people.

Finding different ways to invest

Obviously the more you can invest the more money you will amass over time. However there is more to consider than this. You’ll generally find that rich people don’t have too many regular savings accounts or other popular savings vehicles the rest of the world uses. Instead they’ll have different investments.

For example instead of sinking money into a savings account they’ve got enough to sink into a business. The returns from a business can often be much better than the returns from any kind of investment account. Indeed there is really no ceiling on what you could earn in this way.

Points to think about

Put simply, if you follow the crowd you will only achieve as much as the rest of the crowd does. However if you follow your own path – or at least follow the path carved out by other successful investors – you can do something different.

There is a saying that goes something like this: “If you do what you have always done, you will only get what you have always got.” You may understand this a little better now you have read this article, because it does explain how certain people invest a lot more sizeably and successfully than others. Once you discover more about the differences between the two types of people, you’ll know how to upgrade to become more successful with your own investments.

Are you in the Market for Auto Insurance?

If you’re in the market for auto insurance, there are a few things you should think about before finding a quote or meeting with an agent. Here are a few suggestions to ponder.

1. Your Driving Record

Good drivers are less of a liability to the insurance company than those with a checkered past, so they’ll enjoy lower rates and better perks. If your record isn’t that great, either hold off on switching brands or look for one with accident forgiveness.

2. Your Location

The quotes offered by insurance websites aren’t always applicable to your own region. For example, if you’re hoping to find a reputable car insurance company in New Jersey, you should search for local New Jersey insurance providers.

3. Your Age and Gender

Teens will have to pay more than their parents. Seniors might be able to pay less if affiliated with the right groups. Gender plays a role in insurance premiums as well; male adults tend to be charged more than female.

4. Your Vehicle

Luxury cars face a high risk of theft and vandalism, so insurance companies will charge you extra for protecting their value. On the other hand, if you have a “green” or eco-friendly hybrid, insurance companies are often willing to give you a discount.

5. Your Credit Score

Each company has its own standards, but generally speaking, any score lower than 650 will cost you. You might also face higher prices or even denied applications if you have non-payments on record for your previous insurance company.

6. Your Mileage

It may sound strange, but the more you keep your car in the garage, the less you’ll have to pay for insurance. This is because your vehicle can’t get into accidents when you’re not on the road. If you’re looking for an easy way to shave some money off your insurance bills, carpooling to work is a good idea.

Asking the right questions now may save you hundreds in the future. Use these tips to find a car insurance policy that will keep you protected without breaking the bank.

Not Losing Money is Just as Important as Growing It

When it comes to personal finance and the idea of amassing more cash, many people make the mistake of trying to find the investment vehicle that will pay them the most money. While this is admirable in a sense, it isn’t the best route you could take.

You see, some of these people will be leeching money at the exact same time they are looking to invest some elsewhere. Every dollar you lose is a dollar you could be investing elsewhere.

You can lose money in more than one way too. For example you can lose money simply through spending it in frivolous ways. Even if you only blew five dollars a week on odds and ends you really didn’t need, you’d be throwing away twenty dollars a month that could be put into an investment of some kind. Another way to lose money is to put it in a high-risk investment you aren’t comfortable with, something that has a high potential of failing. Very often it is safer to stick with much lower risk investments that will build up your cash over a longer period of time. We know the old story about fools and their money, and it has become an old chestnut for a very good reason!

So if this is the time you start investing for your future, think about the idea of not losing any of your money just as much as you think about investing it. This is an idea that is alien to a lot of people. Many of them think it is better to focus on looking for the biggest and best investment that will deliver profits in the shortest possible time. In reality however it is often better to choose a safer investment plan and to sink money into it regularly. This will help prevent you from losing money and it will also encourage you into better savings habits.

You see, when you become more aware of where your money is going you will see it becomes easier to carry on saving money safely. It becomes a habit and that habit can ensure you are able to carry on building one or more good investments throughout your life.

It might seem difficult to believe you can get great results simply from focusing on the task of not losing your money, whether it be in small or large amounts. However it is such a straight forward method it is worth trying it even for just a short time, to see how it works for you. In reality though this is a method you should employ for life. The more you realize how logical this idea is and how easy it can be to apply, the more benefits you can enjoy as a result. This works even more over the long term as well, since the advantages tend to add up. Not losing your investment and building it up gradually thanks to compound interest – now that’s a great way to start building up your finances more positively.

Why You Should Avoid Investing and Forgetting

Do you invest and forget? Are you the type of person that puts a sum of money into an account that pays really well… only to forget about it later and then wonder why the investment isn’t bringing you good returns?

You might call this invest and forget. It’s the process of doing your research before making an investment, but then forgetting to keep a close eye on it to see how well (or badly) it is doing. This is a common mistake many people make, but the sooner you can get out of the habit of doing it the better off you will be.

Make a point of checking your investments regularly

This applies to all investments. They could be simple savings accounts or complex stocks and shares investments. Whatever the case may be you should make a list of them or at least know where they are held and what return you are currently achieving. You can then check them every few weeks (depending on the type of investment you have) to see whether they still represent good value for money.

Different rules apply to different types of investments

Some investments provide a set amount of interest over a set period of time. You don’t really need to worry about these but it is worth taking a look at them once that set period comes to an end. Sometimes the money might automatically be swept into another account, and other times it might sit where it is earning a lower rate of interest. Either way you stand to lose out if you don’t find another better paid investment vehicle to move it over to.

Obviously with stocks and shares you need to keep a closer eye on what is going on. However you also need to play these for the long term for the most part, so bear that in mind. A loss in value for the short term shouldn’t lead you to withdraw your cash. Generally speaking most shares will gain in value over time so play it safe here.

The main rule of thumb – never forget any of your investments

This is the best way to ensure you are never out of pocket, or at least that you minimize the chances of losing out on the best interest rates. This will benefit you financially throughout your life if you make it a habit to keep track of your investments from month to month.

It also means you can quickly move anything that has dropped significantly in its rate of return to you. We all know investments start with great interest rates – especially with regard to savings account. We also know they tend to drop after a while. However new accounts are normally issued that are a better choice and if you keep an eye on how your investments are doing you can easily sweep some cash from one account to another.

Keep this in mind and you’ll see the results over time.

Do You Have to Invest Cash in a New Business?

The old saying goes like this: “You have to invest money to make money.” One of the ways you can generate more cash to invest in various ways is to set up your own business. Of course you have to have a little cash to invest in that business in the first place, so you can use it to generate some income. It seems to go in circles, doesn’t it?

However not all businesses require a large amount of cash to get them up and running. Perhaps the best example of this is an online business. While you can sink a lot of money into a new website and a huge marketing campaign, you don’t always have to do this. There are ways to earn money online without investing a lot of money up front.

A few dollars a month for a simple website

If you’re going to use WordPress you have a great chance to keep your investment to a minimum when you get a website up and running. A few dollars a month will buy you hosting, and you only need to buy a domain name for maybe a year or two at a time. From there you can work hard at creating content and promoting products to gain a commission on, or do whatever you intend to do to earn money.

If you don’t invest money you will invest time

This is the main thing to bear in mind when it comes to investing in your own business. You don’t have to invest much in an online business but you will have to invest more time if this is the case. This is because you aren’t paying for as many services. For instance you can pay someone to create the exact website you want, but you can expect to pay a lot for it. If you use WordPress and opt for a free theme you won’t pay for it but you will invest more time in getting a site you are happy with.

You could also argue you would get faster profits if you invested some cash in your online business. However if you don’t have the cash available you can wait a little longer for profits. Even the smallest profit will be yours to enjoy since you’re starting from nothing to begin with.

Really the most important thing is to be realistic. You probably have an idea of how much you want to generate from your business to invest elsewhere. However you should be realistic about how long it will take you to get that cash together. You also need to consider whether it might be better investing in your business to generate even better results, rather than drawing out every cent you can to invest elsewhere. The more you think about the options in front of you, the more you realize how important it is to get off to a good start – and that doesn’t have to mean sinking lots of money into whatever you have in mind.

Which Investment Goals are More Important?

Every time you set a new investment goal it will have some kind of importance to you, otherwise you wouldn’t have set it up in the first place. However most of us have more than one goal in this area of our lives, and that makes it important to gauge which goals should take priority.

There are no firm criteria that can be used to figure out which goals are most important to you. Sometimes it might be how near the goal is to being achieved that’s important. Other times it might be the scale of the goal and the reason you have set it in the first place.

For instance, your retirement plans are exceptionally important so you’ll want to set a goal to save for them. This is a large scale goal but it may not hold as much importance time-wise as a goal set to save for the vacation of a lifetime. If the vacation is in 12 months and your retirement won’t be for another 20 years, clearly the vacation will take precedence in this case. However it doesn’t mean you should overlook the importance of your retirement funds for the next 12 months.

The truth is that investment goals will differ for each and every one of us. That’s why there is only so much advice you can read on the subject. The best bet is to make a list of your goals and to consider each one in turn to assess which one is the most important to you at any one time. In addition you should remember that priorities can change depending on where you are in your life. As you achieve one goal it will disappear from your list. Perhaps another one will appear. Perhaps the priorities will alter as well. There are all kinds of reasons why your list might change as you go through life: the main thing to remember is the importance of having a list in the first place.

The other good thing about having a list is you can refer back to it as often as you need to. There is something about the act of writing down your goals that makes them more solid, more real in your mind. It’s fine to think about them but you tend to find those thoughts go to the back of your mind and are forgotten about as a result. You don’t want this to happen. By writing them down you can assess their importance more easily, and this means you can take the necessary steps to ensure you always know where you stand.

So if you are wondering which of your investment goals should go to the top of the list, you now know how to do it. You will also find it easier to spot any potential goals that haven’t made it onto the list at all yet. All in all this should make the process of financial goal setting much easier for you.


How to Raise Capital to Start a Small Business

Raising capital, or the money needed to begin a small business, can be quite the difficult task. However, it isn’t impossible in the least. There are many different options for helping to acquire the much needed funds to get a new business up and going, but they often do take some sacrifice and dedication. After all, any successful small business takes a ton of motivation and effort to get them there, and putting a little on the line helps to reassure investors that you are seriously committed to your new business venture.

Sell Personal Assets

Building a business is indeed serious business, and if you want potential investors to come to your door, you need to be willing to give up some of your own money and comforts first. Look at what you currently own and determine what is of sufficient value that you can also live without. Then decide if it’s possible for you to sell these assets with the intention of using the money as capital.

Use Equity in Your Home

This is a scary proposition, but if you are really committed to getting your business up and running, it is an option. Utilize the equity in your home to your advantage. If you have enough equity, you could actually use this method to get a quick influx of cash early on.

Ask Friends and Family

Most people hate to even think of it, but asking friends and family for loans to invest in your new small business is a very popular way to get up off of the ground. After all, once you’re a little more established, you can apply for different business loans.

Apply for an Loan

A loan is a great option to those who are ready to make the next move in their small business. Using this type of funding allows you to repay your loan over a set period of time with a predetermined number of payments. The term for this kind of loan can range from just a few months to several years. Before applying for a loan ensure you are prepared for it.

Becoming an entrepreneur is hard work, but becoming a successful one requires both sacrifice and risk. Selling your personal assets, utilizing the equity in your home, asking for help from friends and family, and applying for an installment loan are all excellent methods for raising the capital you need. Raising capital to start a small business is not as hard as you may have originally thought.

Investing in a Website You Own

Investments come in all shapes and sizes as we already know. However we tend to look at investments offered by other companies and investment firms more than looking at investments we could create ourselves.

The internet has generated plenty of opportunities to make money in recent years. While some people invest in businesses run by other people, doesn’t it make sense to consider investing in your own?

It doesn’t have to be hard either. All you have to do is buy a domain name and some basic hosting to start with. Once this is done you can start developing your site and its traffic and go from there. You have to pick a topic with an audience that won’t be difficult to appeal to, as well as being something you’re interested in. This ensures you’ll be able to update the site fairly frequently.

So how do you actually make money from it?

Investing in your own website may bring early rewards. Alternatively it may take time to develop an income from it. The main thing to remember is you will be investing very little to earn the potential of bringing in a good return. This cash can then be invested in another vehicle, or alternatively re-invested into your site.

The best way to try earning money from your website is to promote affiliate programs. These schemes enable you to promote other peoples’ products and services free, and to earn a commission when someone buys via your link. Amazon’s affiliate scheme is probably the best known one of its kind, but there are many businesses that have programs like these.

Don’t look for affiliate programs unless and until you have found the topic you want to focus on. Drill down into that topic to make sure you aren’t in direct competition with lots of big name businesses, otherwise you may not get anywhere. For example, basing your website on gardening might be too challenging. However if you base your website on a personal journey to try square foot gardening for vegetables, you might have more success.

The most important thing to remember when investing some cash in your own website is that this isn’t the same as any other investment. Firstly it makes sense to invest just a small amount to begin with. You’re better off spending, say, $15 on a domain and hosting and having $60 to invest in four sites than you are investing the whole $60 in one website. You can trial, test and learn from this process. One site might turn out to be a big success and you can either keep the others going or ditch them in favor of the one that really works.

It is definitely worth considering starting a website that enables you to write about a particular topic and promote it with affiliate programs. This method has brought in good money for many people over the years and there is every reason to suspect it will continue to do so.

Understanding the Difference between Risk Tolerance and Risk Capacity

Everyone who thinks about investments of any kind will think about risk. It doesn’t apply so much in terms of opening a standard savings account, because there is no real risk involved here. However if this is the only type of investment you choose this is an indication of your attitude to risk.

Let’s take a closer look at these two references to risk to see what the difference is between them.

What is risk tolerance?

This is simply how tolerant you are to risk. If you see an investment opportunity that comes with a high degree of risk, you may not feel happy about considering it. If you have a low tolerance to risk you will avoid the riskier investments and stick with the secure ones. In contrast someone with a high risk tolerance is more likely to look into riskier stocks, shares and other types of investments.

What is risk capacity?

Some people get these two elements mixed up. Either that or they think they’re different terms for the same thing. This isn’t the case. Risk capacity is all about the capacity you have to accommodate risk. Your capacity for risk could change frequently depending on what else is going on in your life. For instance you might have a high capacity for risking your investments in the hope of earning more while you are young and single with no ties or responsibilities. Compare this to someone who is married with kids and has a home to pay for. They may well have a much lower risk capacity as a result of this situation.

Understanding where you are on the scale of each

Before considering a new investment of any kind, it is wise to consider your current position on the scale of risk capacity and risk tolerance. Both elements are fluid so while you may be open to riskier investments one year, the situation could be very different the next year. The important thing is to consider where you stand every time you are thinking of investing funds in any way, shape or form.

Of course there are situations in which you believe you have a good appetite for risk when in fact you are not as happy about it as you think you are. This is why it is best to take some time to consider your position. You can arrive at your answers and then put them to one side for a day or two before returning to them. You’ll then have a more accurate idea of how close to the truth you are.

As you can see it makes sense to discover what your own personal tolerance and capacity are for risk. This is essential information that could help you figure out whether or not you will be happy with that new investment, especially if it goes south at any point. Having the best knowledge on this area in advance means you will always have a better understanding of your appetite and capacity for risk.

Living for the Moment – And Why It Could Ruin Your Future

There is a lot to be said for living for the moment. Some experts say we should do more of it. Instead of regretting the past or being sad about it, or worrying about what may or may not happen in the future, we should focus on today.

This is a great concept and one that can rid us of a lot of stress and hassle in lots of different ways. However it is not the right concept to apply to our finances. It can work in some ways: for example it’s good sometimes to treat ourselves when we’ve spent all month saving hard and paying down debt. However you can see the difference between living for the moment financially and living for the moment in other ways.

Let’s dig into this in a little more depth. If you do live for the moment in terms of your finances, the chances are good that you don’t have any savings to speak of. This is fine all the while life doesn’t throw any curve balls at you. But of course we all know that happens from time to time. Living for the moment is great until your refrigerator decides to break down. When this happens you will panic and wonder where on earth you’re going to find the money to fix it or get a new one. The same goes for your car when it breaks down or your house when it needs a new roof. When you hit one of these roadblocks in life – as you surely will, let’s be realistic here – you’ll hate the fact you live for the moment financially.

Clearly you need to strike a balance. The trick is to live for the moment but prepare financially for the future too. You see, if you don’t put plans in place to save for the future – for your retirement, say – you’ll end up not being able to follow your idea to live for the moment in your future. At least, you won’t be able to afford to live the way you want to.

So as much as you may feel as though you are betraying your ideal of taking each day as it comes, you should take the time to focus on your finances too. All it takes is a half-day to sit down and go through everything so you can see whether you are able to put any money aside for the moment. It doesn’t have to be a fortune but the effort of going through this step will make a part of you able to focus on this task as well as enjoying each day as it comes.

As you can see, there is a way to balance things out if you know how to do it. The more you understand how this works the easier it will be to plan ahead financially while still focusing on each day. This is the best balance you could have.


Saving Isn’t Just for Retirement

Plenty of people think about saving for their retirement years. We don’t all do something about it until the time comes but we all know we should take steps to invest for our twilight years.

However saving isn’t just restricted to that period of your life. You shouldn’t spend your entire life saving for this and nothing else. Indeed, if you focus on this and nothing else you could run into problems prior to your retirement years.

Focusing on milestones

There are plenty of milestone moments in our lives. For example you may eventually want to own your own property. You might also have designs on a new car. Maybe you want to save so your kids can go to college. Whatever the answers might be you can set these milestones down and use them to help you figure out your savings goals as well.

Focusing on specific sums of money

It’s no good saying you’d like to save money for the down payment on a home of your own. That’s not specific enough to assist you in saving what you need to save.

Instead you should focus on a specific sum of money. This will vary depending on how big a property you want to buy, where it is and how much it costs. Clearly the down payment on a property worth $300,000 is going to be very different from the one on a property worth $2,000,000. Having a realistic and accurate sum of money in your head is going to be what helps you save enough for your goal.

Focusing on setting up good habits

We’ve talked about this before but it bears repeating. Setting up good habits for all kinds of areas of your life is great because it helps you replicate those habits elsewhere. For example you may want to buy a $150 hard drive for your computer. You could use a credit card to buy it but it works better to save up over the space of a few weeks or months to get it. Figure out how much you can save each week or month and work out how long it would take to get enough cash together to buy that hard drive. This is a pretty simple goal to set and it will help you work through the principle of setting goals and saving for them.

Focusing on prioritizing your goals

Some goals will be a lot more important to you than others. For example, saving for that down payment will probably be more vital than saving for a new computer when your existing computer is perfectly fine. Yes you may well want a new computer but spending the cash on that is going to mean you take away the same cash from that down payment.

You can see how important it is to focus on different areas of your life when it comes to saving money for the future. The principle of saving is the most important thing – once you have that down pat you’ll find it much easier to set those savings goals.

Is your personal data at risk when you buy online?

Security of data is a serious priority in any business. For e-commerce businesses of any kind the potential risk becomes multiplied due to the sheer volume of transactions involved. However, retailers recognise that they need to tap into this potentially huge income stream as the online retail market continues to grow. The e-commerce trade association IMRG reported UK online sales in January 2014 were up 18% on last year, amounting to an estimated £8.1 billion of sales revenue. So for retailers, the challenge is worth the reward.

Unfortunately, not all e-commerce sites have the necessary security software in place to keep customers’ personal details safe. This leaves data submitted to these sites vulnerable to being seen by anyone on the internet who wants to look. Of course, this also means that private data could potentially be used for identity theft, fraud or other criminal activity. With frequent reporting of internet threats and leaks of personal data, consumers naturally tend to shop with online retailers they trust can keep their personal and financial information private and secure. For this reason, investing in data security protocols is a must for all e-commerce businesses.

Keeping private data secure

Trusted e-retail sites have Secure Socket Layer (SSL) encryption software installed on their servers to protect the data flow between their servers and the consumer’s online device. All sites which have SSL installed will have an SSL Certificate. This will also show in the web browser address line as a padlock and is often also highlighted in light green. Usually, customer facing web pages have a private SSL Certificate, as these use the retailer’s own domain name in the URL address. However, it’s also possible to buy shared SSL Certificates, which could be suitable for non-customer facing transactions. From the customer’s point of view the difference is that the site address of a shared SSL will include the SSL provider’s name, not the website domain name, which could cause confusion. These are cheaper to buy, so if it’s not essential to have a private SSL this could be a useful alternative.

As consumers become more tech-savvy they expect the best possible solutions to their online buying needs. At the top of their list will be security of personal data. As a result SSL security is essential for e-commerce businesses to remain attractive to this market.

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