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Could You Invest More Cash if You Were Self Employed?

June 03, 2013 Tushar Mathur No comments

It’s an interesting question isn’t it? Plenty of Americans are employed with businesses of all sizes, but in recent years there have been an increasing number of self employed people carving out their own businesses as well. This is partly due to the economic crisis, as more and more people have been made redundant. Armed with a redundancy package (if they’re lucky) and no prospect of an employed position in sight, many people are looking to create their own opportunities instead.

The picture of self employment is often painted as a challenging one. You’ve no guarantee where the next job is coming from and you might end up with a very uncertain cash flow. However, many self employed people are doing well, and when you compare this to the uncertainty of being employed, you can see there may not be such a big gulf between the two after all.

All of which brings us to the question posed in the title: could you invest more cash if you were self employed as opposed to employed? Would it really be possible to do this?

Every situation is different

No two people are ever the same, whether they are self employed or not. An employed person on a low wage might save more than a self employed person on a high income, simply because they have better savings habits. But let’s consider a level playing field here for a moment in terms of income and the working situation you might be in.

Let’s suppose there are two people each earning $40,000 a year. One is employed and the other is self employed. By the nature of self employment, this person is able to earn money from a number of sources (clients). The employed person relies on their company to pay them their wage. If the employer lets them go, they’re out of a job and have no more cash coming in.

In contrast, if the self employed person loses a client, they still have other clients to fall back on. Their income might dip, but they can go out and look for other clients to make up the shortfall. Indeed, they can also look for new clients to earn still more money.

Which is best?

This is where the difference becomes clear and you see why there is a greater chance of saving more if you are self employed. Clearly the real difference comes when discipline and good savings habits come into the fray. However, there is more potential here to earn more money as a self employed person. Since you are in control, you can create all manner of schemes and ideas to bring in more money and more benefits to you and your business.

Of course not everyone is cut out for self employment. Whatever position you are in and however promising your future looks, make sure you set good financial habits in motion now. They will help you achieve the level of savings you want to have in the future.

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Should you take out an Income Cash Advance?

May 11, 2013 Tushar Mathur No comments

Many finance firms are wiling to offer a sum of $1000 to those in need of a short term loan, provided the beneficiary has a provable source of income and agrees to repay the amount as per the firm’s outlined repayment schedule. However, needless to say that you would end up repaying more than you acquire from the cash advance firm. This is because the cash advance firm is likely to charge an interest on such credit lending.

Getting hold of a $500 cash advance won’t be easy by any means. You would have to carry out a preliminary research of reputable cash advance firms willing to lend $1000. Though it’s easy to find cash advance of around $250 to $500, you might have to shop around a bit in order to bag $1000. It is recommended to keep several options open during your quest for a cash advance. This way, if one cash advance firm leaves you high and dry, you could easily switch to another.

Sums of $1000 and below are considered trifling amounts by bigger loan firms’ standards. Therefore, it is highly unlikely to acquire a $1000 loan from a loan firm. However, cash advance firms are a viable option for people in urgent need of around $1000. Cash advance firms would gladly approve your application, provided you have a provable income source. But, cash advance companies normally charge a higher rate of interest relative to bigger loan firms.

All in all, cash advance is a nice and quick way to acquire that much needed cash in a jiffy. But since the rate of interest is on the higher side, it’s best to take up a loan from a loan firm, if possible. In general, you should turn to a cash advance firm only when you have no other means of acquiring cash.

If you live in the UK , see what the most common types of household units are and what they like to spend their money on. Learn more about the basics by checking out our infographic.

QuickQuid provided me with this Infographic and they’re one of UK’s premier, short-term cash lenders.

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3 Things You Absolutely Must Do if an Investment Fails

April 22, 2013 Tushar Mathur No comments

However good you are at picking investments, you will have one that fails every now and then. It is impossible to go through life picking all the right investments and never tripping up. If you could do that, you’d make a fortune making recommendations for everyone else!

If you’re relatively new to investing, it makes sense to be realistic in what you can achieve. To this end, here are three things you should do if you trip up with an investment and end up losing money.

1: don’t panic
Yes, it might be the first thing you think of doing, but it’s worth hanging fire before you do. Firstly, as we’ve touched on above, it pays to be realistic. However many investments you have, it’s logical one or two of them won’t turn out the way you’d hoped. This is part of the reason why we don’t put all our eggs into the one proverbial basket.

Take a fresh look at the situation once you’ve calmed down – it may not be as bad as you think. You might be able to minimize the damage or at least decide whether to exit the investment or whether to wait it out to see if it improves.

2: look at why it has failed
If your investment really has turned up its toes and died on you, find out why. In terms of stocks and shares, it could be you’ve bought and/or sold at the wrong time. The only way your failed investment will be a total failure is if you don’t learn from it to prevent the same thing happening again in the future.

For example, let’s say you have lost $1,000 on some shares. By looking at them more closely, you can see you sold at the wrong time. If you had paid attention to the latest news reports and guidance and hung onto them for another week, you’d have minimized your losses, even if you hadn’t made a profit.

3: consider the implications for the future
This really follows on from the point I made above. Let’s look at the failed shares example again. You have two thoughts to consider here. Will you chalk it up to experience and not worry about buying shares again, or will you learn from the experience and use that knowledge to assist you in future purchases?

The decision is yours of course, and it is a very personal one. Some people will be put off by the experience, whereas others will resolve to do better next time so they can choose more appropriate investments with more knowledge.

Whatever path you decide to travel down, you can see how following these three steps will be useful in every case. The more you know and understand about your investments and your approach to them, the easier it will be to minimize the failures you have. These three steps could even make it easier to achieve bigger and better successes in the future.

How Complex Should Your Portfolio Be?

March 25, 2013 Tushar Mathur No comments

Some people seem to think their investment portfolio isn’t doing the job unless and until it becomes highly complex in nature. But how true or helpful is this? Can you really say your investment portfolio is better for being more complex?

Too complex is as dangerous with regard to investments as being too simplistic. Striking the right balance can be tricky and it can sometimes feel as if you’re trying to get a pendulum to stop at the exact right point for you. Let’s look at the pros and cons of being simplistic or complex with regard to your investments.

The pros and cons of staying simple

The main advantage of keeping things simple is you will be able to gain a better understanding of where your investments are and what they are earning. The more you have the more complex it becomes and the more likely it is you will miss a trick somewhere.

Of course, keeping things simple can backfire on you too. This is because you can end up with too few investments that don’t really serve your needs as well as they should. However different people have different requirements so you have to think about whether a simple investment plan would suit you, or whether you want something more involved.

The pros and cons of being more complex

Here the main advantage is you can put money into a wider range of investments. However the downside is clear – there is a higher chance of investing in something you don’t fully understand. You may also find it harder to keep track of your investments, so you won’t find it as easy to see when they are no longer working as well for you.

What is the bottom line?

The bottom line is you should be able to understand your portfolio. If you can’t understand it you’ll end up with no idea of whether it is performing well for you or not. You cannot make a confident decision about an investment if you cannot understand it properly.

Some people rely on advisers to give them the information they need to build a portfolio. Yet while advisers can be useful to an extent, there is a tendency to rely on them a little too much. This is why you need to make sure you can understand your own investments instead of taking the easy route and trusting someone else’s explanation and signing on the dotted line. This is never a good way to approach things and it should not be your main method for choosing investments. Do your own homework and make sure you understand every investment you sink money into, whether it is one investment or ten.

There is no clear answer to the question of complexity. Yet it is fair to say being either too simplistic or too complex makes it more likely you will run into problems in some way. Consider your own investment plan and ask yourself whether it veers into either extreme.

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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.

Should You Look Into Unusual Investments?

March 11, 2013 Tushar Mathur No comments

When you think about investments you probably think of stocks, shares, mutual funds and various other investments of a similar ilk. However you have more options than this, including some rather unusual investment opportunities you may wish to consider.

So let’s focus on some of these now, so you can see whether your interest is piqued by them.

Wine

For many people wine is something to be drunk and enjoyed on an evening spent with friends and family. For others, certain choice wines are to be invested in with an eye to the future.

There are certainly plenty of wines that appreciate in value over the years. Of course you have to know your stuff – it’s not enough to buy a few bottles from the local store and put them away for a few years to capitalize on your investment. However if you are willing to focus on learning more about wine – and in particular which wines to look out for and invest in – this could be worth sinking some money into.

Art

The more you know and understand about art, the easier it will be to stand a chance of investing successfully in this medium. This is perhaps one of the more challenging but unusual ways to invest some cash.

However there are some simple rules you can bear in mind. Don’t aim to buy expensive artwork from famous artists. Instead, look for ones who have not yet been discovered. If it turns out you have an eye for the best artists who achieve fame in the future, your investments could appreciate by a significant amount. In addition, make sure you recognize the importance of quality and store your artwork properly so it does not become damaged.

Memorabilia

This is another example of a tangible investment you can think about. Memorabilia can relate to investments in lots of different areas. For example you could invest in sports memorabilia, or opt to sink some money into toys from years gone by. You may even find you already own a few things of this ilk that have a value beyond what you originally bought them for.

This often begins as a hobby for many people; indeed there is arguably a lot more enjoyment to be had from investing in memorabilia than there is from investing in stocks and shares.

What could you invest in?

These three suggestions are just the tip of the iceberg when it comes to unusual investments. They should perhaps act as an additional way of investing your money as opposed to being an alternative to stocks, shares and whatever else you invest in. However it is wise to make sure you don’t just view these possibilities as quirks. You need to be sure you apply the same diligent research as you would to any other investment before sinking your money into it.

This is all part of not having all your eggs in one basket. As you can see, it is worth having a few more unusual baskets in your collection too.

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How Often Do You Review Your Investment Plans?

March 04, 2013 Tushar Mathur No comments

We all know how important it is to invest in our futures. For some this may mean investing in new skills so we can earn more money. For others it may mean searching for stocks and bonds that seem likely to bring in the best returns. Still more people will consider investing in property. Some are likely to do all three (and more besides).

This is why you need an investment plan, so you can be sure you are going in the right direction. However it is not just a case of setting up a plan and then forgetting all about it. Just as our lives change direction from time to time, so our investment plans can change too. A plan you set up five years ago with good intentions may no longer be relevant today, so it makes sense to review it from time to time.

How to review an investment plan

Firstly make sure you have the time to sit down and carefully look through the plan. Remind yourself why you set it up in the first place. What goals did you have in mind? What were your aims at the time? Once you remind yourself of the answers to these questions you can see whether they are still applicable to how you live your life today.

The next step is to mark those sections of the plan that are still valid. Not everything will change, and some investments may still prove worthwhile. The trick is to separate the parts that are still working from the parts that no longer prove their worth. By doing this you can narrow things down to the parts that need attention.

What should you do when changes are needed?

You will need to consider whether you can change or stop certain investments without losing money. For example you may only be four years into a five year investment plan that would lose you money if you were to quit now. In this situation it is best to continue for the remaining period and then switch the money into another investment. You can use the intervening time to find something more suitable.

In other situations you may be able to terminate an account or investment with no such trouble. However before you do this it is best to consider the other options you have available. Once you have revised your investment goals and your investment plan, you can focus on where to move your money to. Once you have all the answers you need, you can move ahead and make new investments where required.

You can see how important it is to review your plans every now and then. Even if you only do it once a year it is one of the most important things you can do to keep an eye on the security of your future. Just because something works now, it doesn’t mean it will continue to work in the future. Finding the right investments is always something to work on.

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Penny Stocks Could Cost You a Pretty Penny

February 28, 2013 Tushar Mathur No comments

Okay so the title is designed to catch your eye. But if you are thinking about investing in penny stocks it is worth realizing you could lose a lot of money in doing so.

This is not meant as a scare story, merely as a way of reminding you that investing in penny shares doesn’t make them any less volatile or safe than regular shares. Indeed, they are generally even more volatile, which is the reason why they are available so cheaply anyway.

Think about the value of a company before you invest

Let’s say Company A has shares valued at one cent each. Company B has shares valued at $6.78 each. Clearly there is a lot more value in the shares of Company B than those of Company A. This is because penny shares are made available by those companies who show promise for the future. They are created largely to generate funds to put back into the company so it can expand and develop.

Of course we all know lots of companies and businesses fail in their early days. So your task is to invest in penny shares released by companies that have the biggest potential for a great future. Lots of people wish they’d invested in IBM or Microsoft when their shares first came out. They’d be worth a lot of money by now. And when you think about the idea behind penny shares it is easy to see how such an investment can seem extremely tempting.

The reality behind penny stocks and shares

Let’s take a look at the reality of the situation now. The truth is penny shares are affordable for many people looking at getting into the stock market. But they are the riskiest shares of all. You may be able to afford more shares from Company A than you ever could from Company B, but that doesn’t mean it is a wise investment.

The bottom line here is to consider how much you can afford to invest – and also to lose. There is a bigger chance of penny shares nosediving in value and becoming worthless than there is of shares in any other company doing the same thing. There are exceptions of course, which is why you should never invest in any types of stocks or shares unless you know what you are doing and what to expect.

Many people say you should only invest money you wouldn’t miss when it comes to penny shares. There is a lot of truth in this. You should never really invest in it to gain a particular amount of money in return. It is far more speculative than other shares, which is why they are not for everybody.

This doesn’t mean you should avoid them at all costs of course. It just means you should be aware of the pros and cons and of what you are investing in. The more you understand about penny shares, the better your chances are of getting it right.

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Tips for Understanding Commodities Spreads

December 31, 2012 Tushar Mathur No comments

Let’s face it, the term commodities spread betting is enough to make most people’s eyes glaze over. But if you’re thinking about getting involved in commodities trading, it makes sense to find out everything you can about spread betting. If you don’t you could end up with a major loss on your hands. And since you’re understandably looking to make some cash from this form of investing, I’m guessing that wouldn’t be very good news.

The good news

Spread betting on commodities can be done tax free. So there is your first indication that this is worth a closer look.

The bad news

Well not so much the bad news but the realistic news – spread betting is a risky proposition. It’s a bit like penny stocks – they’re cheap and attractive and you can make a lot of money on them if you pick the right ones. But if you get it wrong (as many people do) you could lose a lot of cash. Spread betting is much the same.

So what is spread betting?

Well it is a form of betting, let’s get that clear. You are betting on whether a particular commodity is going to go up or down in value. For example you might think grain is woefully underpriced at the moment and is ripe to rise in value. So you put a spread bet on that fact and hope you’re right. If you are right you’ll make money on your bet. If you’re wrong you’ll lose the money.

Some people compare spread betting to wagering cash on a horse race. You can look at form and history and use those as a guide to what could happen in the future. But of course anything could happen in the actual event, and that is what makes spread betting so risky.

A key tip for improving the odds

One thing you can do is to become educated in the commodities you want to put spread bets on. For example you can learn more about house prices and where they currently stand if you are interested in putting spread bets on them. Or you can look into any other commodities to see how they work and where the prices currently stand.

Another good tip is to practice and follow spread betting and examples of betting to see whether you have got things right. Think of it as using play money to see whether you would have made a profit on your chosen bet. This is a good way to play realistically and to set aside those romantic notions that you’ll always be in with a successful result.

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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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How Did the Commodities Market Begin?

December 17, 2012 Tushar Mathur No comments

If you are considering making an investment in the commodities market it makes sense to find out as much as you can about it first. This can lead you to make a better investment than you would otherwise. In addition to this there is the opportunity to learn how the market began – and it might actually go back a lot further than you think.

Before the days of money

While we are used to using coins and banknotes by way of making payment nowadays, there was a time when money didn’t exist. Ancient times saw people using commodities to make deals with each other. Sometimes a token would be made in clay that would feature the number of animals a person would agree to trade with another. While this is far removed from the way the commodities markets are run today, the principle is very much the same. Many people would be surprised to see how many hundreds of years’ back the history goes.

The modern commodities market

Of course the commodities market in the present day is a totally different thing. Nowadays it must be properly regulated to ensure the deals are fair for everyone. Indeed this was one of the reasons why the first proper commodities market was created in 1849.

You may recognize the name of this market, since it is the Chicago Board of Trade. This was not only the first market of its kind it is also one of the most successful of its kind today. Nowadays it is part of the CME Group, which is comprised of the Chicago Board of Trade and the Chicago Mercantile Exchange.

How the commodities market has changed over the years

There is no doubt the creation of the Chicago Board of Trade in 1949 made a big difference to things. More regulations have been put in place since that time to make sure the market is protected and that trades can only be made in a certain way.

Typical examples include The Commodities Exchange Act, which came into being in 1936, and the Futures Trading Act, which came into force several decades later in 1982. The good news is that all these acts and rules mean it is easier to know what to expect when you delve into the commodities market.

In a similar fashion we can no doubt expect this marketplace to change even more in the future. Nothing ever stays the same for too long in this sense, and this goes for commodities too. We will always need commodities and lots of people like to invest in them because they can provide a more consistent profit than you might get in regular stocks and shares.

But regardless of whether you decide to invest in them or not, you will see how fascinating it is to look back into history and explore what commodities meant in the past. Things may have changed in many ways, but the principle is still there.

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Britain’s high street banks launch new schemes to boost lending to SMEs

November 15, 2012 Tushar Mathur No comments

In the wake of new schemes to apparently make loans more accessible for SMEs, Vince Cable has hinted that these may not be the way to go.

Despite the seemingly good news for small to medium businesses, Cable suggesting recently at event organised by makeitcheaper.com that companies also explore other options such as Handelsbanken and Aldermore as they may be more SME-friendly.

What do these changes and statements mean for SMEs then?

The larger banks, such as Lloyds and RBS, have announced that they are now offering loans of between £250,000 and £25 million to smaller businesses which they think would be able to benefit from them.

It’s not a surprise to anyone that small businesses have been struggling; you only have to step into towns to see shop fronts boarded up and “closing down sale” signs seemingly everywhere. The credit crunch hit these smaller companies first, the ones who had little equity in reserve in the first place.

These loans seem like they could be a positive thing for struggling companies who need some extra cash flow in order to make more money. In which cases, it could – however it is not necessarily the right answer for all businesses, as Cable has pointed out.

Although some companies may just need a one-time loan so they are able to “speculate to accumulate”, it may be a bad decision for many.

While banks are promising up to two years before the capital is payable on their loan, this two-year period may not see a return on the investment of the loan so that the business may be worse off than before they took the loan out.

The answer may be in a smaller loan with repayments that would be more manageable. Some other banks are offering smaller loans, from £1,000, to any type of business. This size of loan could make all the difference to a small, struggling business.

Another option is to seek out a specialist company who assess a business and see the areas in which they could save money. Companies like Make It Cheaper will provide companies with an expert who will be able to suggest the best deals on things like cheaper business electricity, which could in turn end up saving them thousands a year.