Check Interest Rates Regularly to Stay in the Money

How often do you check the interest rates on your investments? Even if you found the best home for your surplus cash a few months ago, there is no guarantee the interest rate is still just as good. Things change regularly in the world of finance and investments, so you must be diligent if you want to get the best return on a regular basis.

Set it and forget it

Many of us are guilty of using the above method to set up our investments. We do the hard work to find the accounts offering the best deals in our situation and then forget all about them. It can be many months or (in the worst case scenario) years before we realise how poor the interest rate has become.

Clearly we need to take a different approach. We need to make sure we check on our investments regularly – something we should be doing anyway – to make sure they are still performing well for us.

Set a reminder

How do you remember other important tasks you need to do? Do you set reminders or alarms on your cell phone? Maybe you have a desk calendar – either online, on your computer or an old paper and pen version – that gets updated with important notes.

Whatever method works for you, add a reminder to your schedule to check the performance of your investments on a regular basis. Ideally a monthly check is good – interest rates can change at any time and you don’t want to miss out on more than a month’s worth of interest if you can help it. This is particularly important if you rely on your investments to provide you with an income. In this situation it is best to make sure your investment check happens every month without fail.

Set a course for a more positive attitude towards your investments

It’s easy to become lazy when it comes to investments. We arrange them, sink the money into whatever account, bond or other investment vehicle works best, and that’s it. The rest takes care of itself.

But of course we have to keep an eye on these investments otherwise we may find they take a downward turn. As we’ve seen, this can happen very easily and it does happen to plenty of people every single day.

The most important thing to remember is that you and you alone are responsible for your investments. Interest rates change all the time and it is important to always get the best return if you want to make sure you can stay ahead of inflation. This alone can diminish the value of your investments, and when it is combined with lower interest rates you can see the damage it can do.

If you do just one thing with your investments today, make sure it’s this: set a reminder for the next available weekend to spend an hour or so checking interest rates. You will be glad you did.

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.

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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.

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