Procrastination and Its Dangerous Role in Investing

Do you procrastinate? Let’s put it this way – if you’re a human being like me, you probably procrastinate. We all do it from time to time, some of us more often than others. Sometimes it doesn’t do much harm to put things off for another day. However on other occasions it can do a lot of damage – and this applies just as much to your finances as it does with many other areas of your life.

Its effects on compound interest

If you remember a couple of weeks ago I created a post about compound interest. You can click through the link to read more about it if you wish, but the main concern here is that the power of compound interest will be greatly affected if you start procrastinating about your savings.

If you plan to save, say, $100 a month every month for ten years, you’ll have $12,000 by the end of that period of time. However you’ll also have additional cash that has built up through the interest that has been added over the years.

Now if you start by saving money each month but then put off continuing with it for a while, you’ll have a lot less to show for your efforts by the time you get to the end of the ten year period (or however long you’re saving for).

Its effects on your security

Everyone would like to have financial security throughout their lives. However, unless you happen to get lucky and win the lottery, you’re likely to have to invest for it instead.

Again, if you procrastinate and you put off looking for the right investments to suit your needs, you’ll end up saving a lot less over time. This also means you’ll have proportionately less security to fall back on as you get older.

It could even lead you to exercise kneejerk reactions

Who knew procrastination could be so dangerous? This is probably the worst part about putting off your investment decisions. There is bound to come a day when you realize you haven’t yet acted to protect your financial future. When this happens you might end up acting faster than you should. You may cast around for ideas and potential investments, diving into one or more of them without due care and attention. If this occurs you could end up losing money rather than saving it.

As you can see if you turn the occasional bout of procrastination into a serious habit you could be heading for financial trouble. Always make sure you can get the best habits in place now and try not to procrastinate over anything if you can help it. This will improve your life in lots of different ways, both in terms of cementing good habits into daily life and in terms of developing a nest egg for the future you can hopefully rely on. If you know you have a tendency to procrastinate, perhaps now is the time to make changes.

3 MORE Ways to Free Up More Cash to Invest in 2014

In the last article we looked at three easy ways to find more cash to sink into your best investments next year. Now we have three more ways for you to get you into the saving and investing mood in time for 2014.

1: find ways to cut your food bill

There are countless ways you can do this, including couponing, which some people regard as something of a hobby. You can save incredible amounts of money doing this as well. Some ideas include using cheaper cuts of meat and making them go further by bulking out meals with cheaper vegetables. Look out for special deals that allow you to buy in bulk too. Just be sure you would usually buy these items and don’t be swayed by deals on things you wouldn’t normally buy anyway. Check the price against the single unit price as well, just to be doubly sure you are getting a discount worth having. Some stores are crafty and try to make things look better than they are.

2: refinance the mortgage on your property

One thing all homeowners should do is to check the terms of their mortgage every year or so. And yet few people do. This means there is every chance you could be paying more than you need to each month.

You have two choices here if you can refinance more cheaply. You can either keep paying the same as you were so you overpay on the mortgage and pay it off sooner, or save the additional cash for some other investment. The former is a great idea but make sure your mortgage allows for it.

3: stop spending!

This isn’t a frivolous addition to the list. Indeed it is one of the easiest and best things you can do when it comes to freeing up more cash to invest. The vast majority of us spend more than we really need to. Using the tips provided in this article and the ones in last week’s article will certainly help you invest more, but reducing your spending will do a lot to help as well.

Perhaps you can find some time over the festive season to think about your spending habits and whether you can change even just one or two of them. This should help you get an idea of where you waste money. For example you might treat yourself to a Starbucks coffee every morning on the way to work. It may cost a few dollars a time and over the course of a five day week this can really add up (especially if you buy a croissant or something similar for breakfast to go with it). If you add it up over the course of a month (or even a year) you might be surprised how expensive it can get. Buy a travel mug and make your own coffee to take on the go instead – it will save you $$$.

Starting From Zero: Investing for Newbies

If you’ve just left school or university, and you’re about to embark on your first full time position, congratulations are in order. This is a big time in your life – not just in terms of your career but in terms of your finances too. If you’ve attended college or university already you may have some student debts to pay off in the future, which makes it all the more important to focus on moving ahead with strong financial habits that will support you in the future.

Managing a larger income for the first time

Your first full time job won’t net you a huge income, but it is likely to be a lot more than you have ever received in the past. This opens the door to temptation, and the desire to spend it all as fast as you receive it. Don’t do this if you can help it.

Instead, take the time to sit down and focus on all the plans and goals you have for the future. Even if you have nothing in particular in mind at this stage, it still makes sense to start some good savings habits right from the start.

For example, make sure you figure out your outgoings each month and subtract them from the money you’ll earn. Even if all you do is get the best instant access savings account on the market today and put your money in there, you’ll be allowing it to build up while you decide what else you can do with it.

Is it too early to invest for your retirement?

It’s never too early for that. You don’t have to make it your first priority but it should be near the top of your list of financial things to do. The more you save and the earlier you do it, the more financially sound your retirement will be.

Take your time to make the decisions that will affect your future

You may start finding out more about the stock market and other investment opportunities that will come up. There is no need to focus on getting involved in these to begin with if it doesn’t suit you. Perhaps the most important thing at this stage is to learn more about various investments so you can figure out which ones will suit you best. No two people ever live the exact same lives, so you don’t need to follow the lives lived by others in order to find the results you want.

Whatever your initial monthly earnings are from your full time job, they will seem huge. However you will have deductions from your gross income before you get to see any of it, so you’ll have less to spend and invest anyway. This is one of the reasons why it makes sense to get things right from the very beginning. Learn about investing and saving now and you’ll be glad you took the time to do so. It will repay you long into the future.

Should You Think About Investing in Crowdfunding Projects?

No doubt you’ve heard of crowdfunding by now. The idea is you pledge a certain amount of money to a project through a crowdfunding website. If the project hits its target the money is used to set up a business or achieve whatever goal the project set out to achieve. Investors receive something in return for their investment, although the nature of the return depends on the specific project.

This form of investment has certainly made headlines in recent times. It has been around for a few years and plenty of projects have been successfully funded in that time. But is this the ideal investment opportunity for you?

Know your limits

The great thing about crowdfunding is you generally get to choose how much – or how little – you want to invest in a project. Sometimes this could be as little as five or ten dollars. This isn’t much of a risk if you believe in the project and feel supportive of it. However you can invest thousands and in this situation you are taking on much more of a risk. No matter how successful a new business start-up is at the beginning, it can fail – and for a number of reasons too.

What do you get in return?

You should be very clear on this before you invest. The rewards can be very diverse. The upcoming Veronica Mars movie – funded purely by fans of the former TV series – has granted walk on parts to those who invested a certain amount in supporting the making of the movie. Artists have given free tickets to exhibitions funded in this way, while businesses of all kinds have granted discounts to those who invest in the business model. Make sure you know exactly what you get in return for your investment.

Don’t expect miracles

This is definitely an innovative model for investing in all manner of different businesses and projects. This is undoubtedly what attracts many people to this form of investment. However you should be aware of the risks that are involved. Don’t be tempted to invest without finding out as much as you can about the project first. Furthermore you should consider a sensible amount to invest, rather than being tempted to sink too much into a single project.

Indeed, it is wise to follow the ‘eggs and basket’ theory, in that you should have more than one basket to put them in. If you spread the wealth, so to speak, you stand a chance of reaping more back for your investment.

It should be said that crowdfunding is not for everyone. It is an easy investment to make and there are plenty of worthwhile projects to look at. But it may not be right for you, especially if you want reasonable odds that you will get your money back and more besides. As a side dish to your main course it may work, but be sure to consider all the options before you start investing.

Does Age Have a Bearing on Investing?

This is an interesting question, and yet it may not be one that has ever occurred to you before. However when you look at it more closely, you’ll come to the conclusion that the investment goals of a 57 year old person will be very different from the goals set by an 18 year old. Indeed you could say the teenager may not have any goals at all because they’ve got plenty of time to think about stuff like that. Conversely the person who is nearing retirement has to think about their investment goals now, and whether it is too late to set up any new ones.

So yes, age certainly does have a bearing on how you invest, why you invest and what you hope to get out of it. It also stands to reason that you should review your investment goals from time to time. You might start out at the age of 20 with a firm investment goal in your mind. But if you let that goal stand and you reach the age of 30 before you review it, you may find it no longer serves your needs as it did originally.

This means it is well worth thinking about whether you should get different investments at different times of your life. In reality an investment that is ideal at the age of 18 isn’t as likely to suit someone aged 57. However there are conditions to that assumption. For example, if the investment was a short term deal it may be suitable for both age groups. However if it is a long term investment, perhaps over ten years or more, it may not be ideal for the person who is nearing retirement.

This is why it makes sense to think of your age and circumstances whenever you consider starting a new investment. It also makes sense to bear these factors in mind when you are thinking about changing an existing investment or bringing it to a close. Life changes and sends us curve balls from time to time, and what may have worked once may not work anymore once you get to a certain age.

Of course, every investment must be carefully considered before you jump into it with both feet. However some investments will make more sense to people of certain age groups than they will to others. For instance, someone aged 18 is in the perfect position to set up a pension for their retirement, even though this is several decades into the future. Someone aged 57 won’t consider this type of investment because they may only have a few short years until they retire. As you can see, age has a bearing here, and this isn’t the only situation it is relevant to.

So the next time you consider changing an investment plan or starting a new one, make sure you are able to bring your age into the equation. It may make your decision easier to make.

3 Good Reasons to Review Your Investments on a Regular Basis

Whatever investments you have – from simple savings accounts to complex stocks, shares and property investments – it is important to review them regularly. As most people are aware, life has a habit of changing on a dime. This means that even if you previously spent time organizing your finances, they may not be perfectly organized now.

With this in mind, let’s delve into some reasons why you should always review your investments from time to time.

1. Life changes – and so do your goals
It’s a good thing to set goals to see if you can achieve them. However, goals change, and if you set a financial goal some time ago it may not suit you today. Furthermore as we mentioned above, life changes too. You may have set a financial goal to save a certain sum of money to help fund a move to another location. However if something happens in your working life this may no longer be a viable move.

2. A financially sound investment may not always stay that way
It’s good to base our investments on carefully researched information that points to the best investment for our needs. However, we all know things change. Even though one particular investment may have seemed ideal a while back, it could be anything but today. If you don’t keep an eye on your investments on a regular basis, you won’t realize if they suddenly become less appealing.

3. You should keep abreast of any investments that are going to come to an end soon
This is another aspect of investing that needs to be monitored. While some investments can be kept long term, others are designed to last for a specific length of time. In this case it makes perfect sense to consider the options you have to transfer those monies to another account or investment opportunity. If you don’t keep track of where your money is or when an investment ends, you will find yourself with a sum of money and no idea of where to put it next.

It’s obvious the best path to take is to check the condition of your investments on a regular basis. If you make it a habit you’ll be far less likely to end up with investments that aren’t serving your interests properly.

As a rule of thumb, you should check your financial position every time something major happens in your life – something like marriage, a new job with a higher salary or even an inheritance. As you can see from the above suggestions, it’s good to make a list of the deadline dates for any investments that are coming to an end.

In the end, if you don’t already review your investments on a regular basis, you should definitely start doing so from now on. Your financial position could markedly improve if you do this, and that is never a bad position to be in. Once you’re in the habit of doing this you’ll never look back.

Diversifying Your Home’s Investments the Right Way

Diversifying your assets is one of the smartest decisions someone could make when it comes to reducing risk in their investments.  In terms of your home, this essentially means that should the market take a turn somewhere down the road, you’ll have made enough investments into your house in various areas that you won’t be entirely affected by what’s happened.  It gives you much more freedom later when it comes to your money.

Those homeowners who take up residence in Texas will be able to peruse an interesting website that collects information on all of their local electricity providers and find a wealth of helpful knowledge about what people can do to help increase the value of their homes.  They have compiled great lists of the different upgrades and daily routines one can take to help grow their house from just a living space to a much better investment.

One of the biggest investments homeowners can put into their homes is taking the time to reevaluate and replace their front doors.  This is the first thing people will notice about the house, outside of the yard area, and it’s an extremely easy way to get interest as many people have the tendency to judge a book by its cover when it comes to browsing homes.  A stable and good looking entrance into your home can give you a return of as much as eight-five percent on this particular investment.

Windows are one of the most expensive upgrades that can be made when investing in your home, but it’s also one of the most important if you’re really looking to get a good recovery from the money you’re putting into your house.  For most households, much of the heat or air conditioning goes quite literally straight out the window all year round, making them one of the biggest absorbers of energy and utilities.  Quick fixes such as caulking or those store-bought draft mats can help this a little bit, but if you really want to put your money in the right place, you’ll need to upgrade those panes. If you’re lucky enough to live in Florida, there are numerous credits and incentives in place you can take advantage of in upgrading your windows.

There are tons of windows on the market now, both premade as well as completely customizable and homeowners can find anything between energy efficient models to those that help keep out the sunlight for the most part.  Figure out what it is you’re looking to do (cut down utilities, keep down the sun’s glare, allow better airflow, etc), and replace them accordingly.

Homeowners should keep in mind that the current real estate experts are saying that natural lighting is one of the biggest assets a home can have in the current market.  More than ever consumers are obsessed with large windows that allow in tons of light and give houses a nice organic feeling, particularly if there is a nice backyard or garden to be seen.  These types of windows will bring the biggest return later down the road.

For many people, their homes are their biggest investments so it only makes sense to do what they can to keep their assets as profitable as possible, which includes diversifying where they put their money.  There are quite a few ways that homeowners can invest further into their homes and still be able to get most of that money back, especially if they research the market.


Are You Investing in YOU?

Whenever you hear someone talking about investments, you probably immediately think of the different types of investments they (or you) should make. But it can pay dividends to think along different lines too. This is particularly true when you start thinking about your own needs.

This is where we get to the idea of investing in you. If you were to read any definitive guide on investing, you’d notice that while some of the advice applied to you, not all of it would. The same would apply to other people. In reality no two people will ever have exactly the same requirements for their finances. Once you figure in their situation, their job, their future plans and so on, you’ll see how true this is.

So what do we mean by investing in you?

You have to figure out what you want from life in terms of your finances. If you do this you can work out how to gain the best possible results – not to mention amassing the largest sum of money to invest in your future. This is where we’re starting to get to the root of what it means to invest in you.

The idea here is to invest in your skills so you become better able to choose the right investments, and better able to free up more cash to put into them. The first way to do this is simply to educate yourself on how to invest your money for the best. If you have little knowledge of how to invest money, you could improve your knowledge by going online or buying books that will tell you more about the different investments available. The more you know about them, the less likely it is you’ll invest in the wrong ones or make any financial mistakes.

The other way of investing in you is to further your career so you are capable of earning more money. The investment here could be in a course or further qualification of some kind, so you are able to increase your worth to gain a better job.

As you can see, both of these methods invest in you as a person in different ways. Yet they both have one end goal in common – the ability to achieve the results you want by improving your own knowledge and ability to generate money to invest.

Decide where your investments need to be made

Of course you may already know a great deal about investments of all kinds, or at least of the kinds that interest you. However this is only the first step. You now need to ensure you generate enough money with your skills to be able to create those investments.

Conversely you may have the cash available to make investments but you may not have the knowledge required to help you place that money in the best way for your needs. This is why it makes sense to decide where best to invest in YOU, so you get the results you want.

Tips for Choosing High Yield Mutual Funds

If you are considering investing some cash in mutual funds, it makes sense that you’d want to invest in the best ones you can find. So called high yield funds are the best ones to look for, since they provide you with the opportunity to enjoy the highest possible yield you can.

So with that in mind, here are some tips on choosing the best high yield mutual funds on the market today.

Do your homework

It should go without saying, but it is surprising how many people are so eager to invest in these funds they’ll slap their money down on anything that looks good. They do this without researching it properly first, so it makes sense to ensure you don’t fall into this group.

Start looking online to see how many mutual funds are out there that fall into this type. Of course you shouldn’t just trust everything you read. Everyone is keen to stress the positives without focusing too much on the negatives. This means it’s your job to do both.

There are plenty of well known and reliable websites that are long established online that can be relied upon to give out good information. If you search for the phrase ‘high yield mutual funds’ you will find lots of these sites popping up on the first page of Google. Use these results to help you find the companies you need to look at more closely.

Choose a fund that fits in with your investment plans

It goes without saying that most mutual funds will perform better over the long term as opposed to the shorter term. But there can be a difference between investing for five years and fifteen years. Think about the goal you have in mind and how long you want to save for, and consider which funds most closely match your ideal.

You may find some perform better over the period of time you want to save for, in which case you should add these to your shortlist. Now it is time to delve into each individual fund more closely. Find out everything you can about each one – get the literature and speak to those managing the funds if you can.

You should also bear in mind that while looking at the most successful mutual funds for this year will help in some ways, it doesn’t necessarily mean those same funds will perform just as well next year. Be sure to look back over a longer period, say five years or more, to get a more accurate pattern.

As you can see, it is wise to focus on the details of all the high yield mutual funds you have come across that you are thinking about sinking money into. Choose the one that appeals to you the most. While you cannot get rid of the risks inherent in investing in this type of fund, you can vastly reduce them and hopefully get the highest yields in the process.

Low Minimum Mutual Funds to Consider Investing In

Are you looking to invest in some mutual funds for the future? Many people are, and yet the toughest problem of all is finding ones that are affordable. Even a cursory look will reveal plenty of mutual funds that require $1,000 and up to invest in.

If you need a much lower minimum fund to consider, perhaps these will be of use to you. Remember though that it is a good idea to look into all these funds in more detail before considering whether you should invest in them or not. Remember too that it’s not just a question of whether you are able to afford to invest in a particular fund – it’s a question of whether the fund is set out as you would like it to be.

American Funds American Mutual Fund Class A

This is a mutual fund with a very affordable $250 as the minimum investment you need to get through the door. It has performed well over the past year and is a large cap investment fund, so it might be worth a closer look if you want a super low investment amount to work with.

American Funds AMCAP Fund Class A

Here we have another fund that only requires a $250 minimum to get in. In common with the above fund it has done well during the last year, so it could be a good one to consider. This is a growth fund, whereas the one mentioned above is a value fund.

FAM Value Inv (Fenimore Asset Management)

Do you want the maximum number of $500 options to consider? Here is another one to add to your list. It is a blended fund and has risen by more than 12% in the past year.

American Funds EuroPacific Class A

If you feel that even $500 is a little too much to stretch to at the moment, you will be pleased to know you can invest in mutual funds for even less than this. How about trying $250 for example? In this case the fund has performed exceptionally well once again over the space of the last year, giving you more to think about if you want to keep your initial investment as low as possible.

American Funds New World Class A

One final suggestion for you here – and it also requires a minimum of just $250 to get started. As the name would suggest it points to a selection of new markets to invest in, and has performed well over the past year. Remember though that the long term is the idea for this fund, rather than a quick investment for quick profits.

So there you have it – a few suggestions worth exploring in more detail if you only want to sink a few hundred dollars into your first mutual fund. The more you learn and the more you know, the easier it will be to figure out which mutual fund will be the best one for you.

What Kinds of Mutual Funds Can You Get?

Many people have heard of mutual funds. But even though they are often talked about as if they are all alike, nothing could be further from the truth. Mutual funds can be classified in all kinds of different ways, although there are several main kinds that can be noted to exist if you are a beginner. Here we will go through these types so you can delve into each of them in more detail.

Stock funds

If you are considering getting involved with stock funds you must remember they are better focused on for the long term. It would be unwise to assume you could get a good return over the course of a few months. We are all aware of stock market crashes that have occurred in the past. However, even with these crashes in mind, the overall trend for the value of stocks has still been on the rise.

One other point to remember is that this category of mutual funds is generally best if you are happy to take on a little more risk in the hope of gaining a bigger reward.

Bond funds

Those who feel more secure knowing they have a more reliable source of income will likely feel more confident investing in bond funds. Of course they come with risks, much like any other mutual fund, but they are greatly reduced when compared to the other types. One of the key risks is a potential rise in interest rates. This has the effect of reducing the value of the bonds, thus making them less successful.

Balanced funds

As the name would suggest, these are normally a balanced mix of both stocks and bonds. This might be suitable for you if you want to invest in both types but you want to keep them together in one mutual fund. Obviously it makes sense to identify exactly which types of stocks and bonds go to make up any specific mutual fund before you invest. And remember, there will be a degree of risk involved so bear this in mind as well.

Money market funds

This type of mutual fund traditionally carries a far lower risk of loss than the kinds of funds mentioned above. However this is tempered by the fact that the returns are usually lower than the others as well. It is the classic case of less risk, less reward. The other kinds of mutual funds offer a higher degree of risk, but if that risk pays off you can expect a higher return as well.

Understanding the differences – and choosing the best mutual funds for you

Everyone will have their own ideas as to which type of mutual fund will be best for their financial needs. Risk appetite, expectations and finances will all play a part, but it is wise to understand what options there are and which type of mutual fund will be the best choice. Once you know the options you can make an informed choice.

10 Tips to Succeed With Mutual Funds

Investing in a mutual fund is one of the easiest things you can do if you want to get more involved in the financial markets. They enable you to invest in a range of ways that wouldn’t be possible any other way.

Here are some tips to ensure you reap the rewards from your own mutual fund investments.

  1. Are the returns consistently good?

This is very important to find out. Some mutual funds do not perform as well as others. Always look into past history to see whether there is a good or bad pattern there to consider.

  1. What are the fund managers like?

If they are not well known or do not have a good track record, steer clear and find some who do. If you cannot research their history, ask why.

  1. Stick with no load funds.

These will provide you with more in the way of profits and you’ll pay fewer charges too. There are other options but this is the best one.

  1. Learn more about the stock market.

Don’t dive in without finding out more about how the stock market works first. The more knowledge you have, the easier it is to pick a good fund.

  1. Know whether you want to opt for passive or active funds.

Passive funds tend to be safer than active ones, so you should think about whether you want to strive for a potentially bigger return, or whether you’re happier being safe.

  1. Know which strategy the fund managers will adopt.

Find out how they decide how to manage the mutual fund. This could have a large bearing on whether or not you want to join that particular fund.

  1. Buy into an established fund.

Never opt to get involved in a mutual fund that has only just got started. Look for an established one instead – it will have a history that may help to predict its future.

  1. Consider what else you are investing in.

What other financial vehicles have you invested in, or want to invest in soon? Will a mutual fund fit into your overall plan?

  1. Think about your appetite for risk.

Some people naturally gravitate towards risk, while others shy away from it at every opportunity. How much risk would you be happy with? Choose a fund which appeals to your sense of risk.

  1.  Think about growth or value funds.

Different mutual funds offer different things. For instance value funds can offer a better outcome than growth funds, which are more likely to backfire and lose money. Nothing is certain of course, but you should know the difference between the two.

So you see there are lots of things to consider if you are thinking about investing in mutual funds. The more you know and understand in advance, the easier it is to ensure you are going to invest in the right mutual fund for your needs and goals. Go back through those ten steps again to see how they assist you.