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Does Age Have a Bearing on Investing?

June 17, 2013 Tushar Mathur No comments

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

June 10, 2013 Tushar Mathur 1 Comment

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

March 21, 2013 Tushar Mathur No comments

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?

February 11, 2013 Tushar Mathur 3 Comments

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.

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Tips for Choosing High Yield Mutual Funds

December 24, 2012 Tushar Mathur No comments

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.

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Low Minimum Mutual Funds to Consider Investing In

December 03, 2012 Tushar Mathur No comments

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.

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What Kinds of Mutual Funds Can You Get?

September 03, 2012 Tushar Mathur No comments

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.

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10 Tips to Succeed With Mutual Funds

August 21, 2012 Tushar Mathur No comments

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.

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.

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.

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.

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.

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.

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.

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.

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?

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.

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.

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Are You a Knowledgeable Investor?

August 06, 2012 Tushar Mathur No comments

How much do you know about investing? Many people stick with what they know, rather than trying to expand their knowledge in any way. For instance they might stick with plain savings accounts instead of looking into the potential returns offered by investments in the stock market. They will limit their outlook depending on what they already know, instead of trying to learn more about the potential opportunities available to them.

The question here is obvious – how knowledgeable are you and do you make any effort to expand the knowledge you already have? It’s a bit like going to your local bakery and assuming it bakes the best rolls in town, simply because you don’t have anything else to compare it to. If you started looking a little further afield you might discover a bakery two streets away that bakes the most amazing rolls – far better than your local bakery produces. Wouldn’t you start going there instead to get a better return for your efforts?

It’s all about expanding your field of vision. If you don’t see stocks and shares, you won’t consider investing in them. The same holds true of tax free options and any other investment you may care to think about.

The good news is you don’t automatically have to opt for a new investment you find out about as a result of your exploration. However it will enable you to learn more and take a more educated approach to your investments. You may be missing out on the best investment for your needs, simply because you don’t even know it is there.

You might feel put off by the word ‘educated’. This makes it sound as if the process of learning more about investments is going to be dull and boring, like taking lessons at school. But it doesn’t have to be this way. You can learn as much or as little as you like. If you don’t have any interest in penny stocks, don’t learn about them. If you find you like the idea of investing in long term bonds, start exploring the nature of these bonds so you know what to expect. You’ll soon see you can drift towards those areas of investing that appeal to you, and which might turn out to be profitable for you to sink some money into.

Being a knowledgeable investor isn’t about learning everything there is to know about investing. It’s about letting your interests take you in specific directions. It’s about learning how you can best invest whatever funds you have available in the right areas for you. It’s about developing your own knowledge in the directions that make sense to you. It’s not about following in the footsteps of others or doing certain things because you think that’s what you should do.

So if you feel like you want to develop your investment knowledge, let your own ideas and thoughts lead the way. You might be surprised as to where they take you.

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Another Golden Rule for Investing: No Plan is Set in Stone

July 09, 2012 Tushar Mathur No comments

If you want to invest money you need to have an investment plan. This much is certain, but you also need to know the limitations of that plan. For example you should know the circumstances that led you to create that plan to begin with. And you should also know what type of circumstances could lead you to revisit that plan with the intention of altering it in some way.

Life gets in the way

Here is an example of what I mean by this. You might have an investment plan that has been created with the intention of letting you retire early. This is all well and good, but supposing you lost your job? What would you do then? You may well have to revisit your plans to see whether they are still valid in light of such a major change to your circumstances. Your idea of early retirement may have to be shelved; alternatively you may be able to put your investments on hold rather than cancelling them and opting for something else instead.

The point of all this is that your investments can work wonderfully for you in some situations. But if those situations change the investments may have to change as well. It is wise to be alert to this fact when you set the investments up in the first place.

Looking for a get out clause

Most people realize the longer they can tie their money up for, the more they are likely to earn from it as a result. But with that said, it is also the case that circumstances could lead you to cancel an investment you were previously very keen on. If you suddenly needed access to more cash because you had lost your job for example, it would be very frustrating to know you had the cash you wanted but couldn’t get to it.

So whenever you think of investing in something new – whether it be property, stocks, shares or any other investment plans – make sure you know what you can do if you needed to get your hands on the cash in a hurry. Is it possible to cancel an investment without getting penalized for doing so? If you are penalized how much will it cost you? Hopefully you won’t need to cancel anything, but it is wise to find out what you can do just in case the time should come.

Revising your plan

If you should need to revise any investment plans you already have, don’t make any kneejerk reactions. Take some time to consider all the options – you may not have to make any adjustments at all. The last thing you want to do is to panic, cancel an investment and then find out later on you needn’t have done it at all. A little time and a level head are the two best things you can have on your side at this point so always bear that in mind.

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Logical Tricks to Find More Money to Save and Invest

June 25, 2012 Tushar Mathur No comments

You can read and talk about investing all you like. But if you don’t have money to invest your talk will get you nowhere.

You may look at your income and expenses and think that you couldn’t find any money to invest at the present time. You need to get out of this mindset if you are going to push towards putting some successful investments in place for the future – whether it is for the short, medium or long term.

So with this in mind, here are some tricks for doing just that.

1: reduce your bills

Some bills are fixed. But others can be reduced. Shop around for a new mobile phone deal that suits your needs and costs less than the one you have now, for example. Repeat the process with all the other bills that can be adjusted in a similar way.

2: earn more money

Can you find another part time job to earn a little extra? This depends on your circumstances and the jobs that are available that you can do, of course, but it is worth thinking about. You could also consider moving up in the industry you are already in. Look for another position that would allow you to earn more money.

3: sell off anything you no longer want or need

This is another good way of generating extra cash that can be funneled into investments of all kinds. It is said that we all have a few thousand dollars worth of items we don’t use or need. If you could find those items and sell them – maybe on eBay for example – you might be surprised how much cash you can generate as a result. Go through each room at a time if you feel overwhelmed doing your whole house and life in one go.

4: look for an investment that pays more interest than one you have at the moment

Even if it is a regular savings account, you’ll probably find a better deal somewhere else if you have held the account for a while. Always check regularly to see if you can find anything better with another bank or provider. You could be losing money on existing savings or investments without even realizing it.

Summary

As you can see it doesn’t matter what situation you are in, you can always find a way to generate and create extra cash to invest in some way. Make sure you go through all the above techniques. You may be able to use all of them to some extent. If you find, say, $20 from one technique and $40 from another one, you’ll have more cash all told than if you just used one technique.

It will take time to make the most of these techniques but the outcome should be more than worth it. This is especially true when you have investments to create for the future – you never know what you can achieve when you try.

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Good Budgeting Habits Mean Better Investment Success

April 16, 2012 Tushar Mathur 1 Comment

How good are you at budgeting? Do you even have a budget? If the answers are ‘not very good’ and ‘no’, don’t be too surprised if you haven’t had much success at investing either. While the two areas may seem to be unrelated, nothing could be further from the truth. People who are good at budgeting on a daily basis will typically have more cash available to invest, and thus will be able to build a bigger nest egg with it.

How to reserve more cash for investments each and every month

Since most of us aren’t lucky enough or fortunate enough to get a pay raise every single month, it’s best to tackle this challenge from the other direction. You should focus on your outgoings so you can find ways of reducing them. Don’t look to reduce one thing in a big way – look at ways of reducing lots of things in small ways. This is the best way to get a bigger amount of cash left at the end of the month that you can invest in whatever way you wish.

Keep it up

Anyone can create a budget but it takes real determination to stick to it for the long term. You are more likely to do it if you write your budget down instead of doing it in your head. Put it somewhere where you will see it every day.

You might find it easier to pay for some things in cash too. For example say you work out a budget that provides you with, say, $10 a day for incidental expenses. Having that money in cash makes it a lot more difficult to spend. If you pay for everything by credit card you’ll find it more tempting to go over your budget.

Fix a reward for sticking to your good budgeting habits

Saving money and investing it wisely is definitely a good thing. But in reality you should also think about rewarding yourself when you keep up these good habits.

For example, if you manage to meet your budgetary constraints for one month, treat yourself to something that will mark your success. Think about eating out or grabbing a takeaway for example. Perhaps you go enjoy going to see a movie or celebrating your good habits in some other way. A monthly goal like this makes it more exciting to try and meet your financial targets and stick to your good habits for longer – preferably for good.

Be prepared to fail

You should also be aware that you will very likely slip off your path and spend too much from time to time, especially in the early stages. Don’t worry too much about this; just acknowledge that it has happened and be ready to get back on track again. It’s up to you to decide whether your good habit is ruined for a single day or for a much longer period of time. If you opt for the former you’ll be back on track again the very next day.

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