June 2018 -

The 7 Best Investing and Business Books Out There

So you would like to make an investment into something, but don’t know where to start. Or perhaps you already have made one or few, but need some help to better understand the world of investing to earn better returns for yourself?

Investing and business books are a great way to solve this problem. They can help you in the way you think about business, investing, and became more and more successful. How?

Knowledge is everything! By reading some of this books, you can learn so much and after that, you can act in a way that some of the authors have written about.

So here are some of the best-investing books that I am sure will help you by reading them and after that making money. Isn’t that great?

1. “Think and grow rich” – Napoleon Hill

This book has sold more than 20 million copies and is, in fact, a mix from some wonderful thoughts from very successful men in the late 1800s and early 1900s.

It teaches you how to think, how to perceive the business world and how to make abundant wealth.

It also contains many inspirational and educational thoughts and anecdotes from a man like Thomas Edison, Henry Ford and many more.

All I can say to you about this book is: you can become what you desire. You will need perseverance, hard work, and a proper mindset.
But, in the end, if you have all those things I bet you will succeed.

2. “The Millionaire next door” – Thomas J. Stanley, Ph.D. William D. Danko, Ph.D.

Interesting title, isn’t it? Here you can read about financial habits of some millionaires. Also, the fact that some people can look just like ordinary people, but are indeed millionaires or even billionaires.

In the past, the men of wealth were known, they had family background, wealth, power. The 21st century changed it all.

Everyone has the potential of becoming a successful and wealthy person.
This book is worth reading, because it inspires by presenting you the millionaires of today, which could very well be ordinary, not well dressed, don’t have the family backgrounds, don’t spend a lot of money on style and image etc.

Imagine that your neighbor has a millionaire living next to him and that is you. How amazing would that be?

3. “The 4-hour work week” – Timothy Ferris

You will enjoy reading this book – it’s funny, it’s talkative. The title tells a lot. It’s about a group of people who spent, believe it or not, only 4 a week hours to make money.

Imagine that you have so much free time to make things that you love, things that fulfill you and yet, making wealth more and more. This is the book that explains how to do it.

If you want to have so much free time, way less stress in your life and so on.
Give this wonderful book a shot, and I promise it will make it worth your time while making you laugh while reading.

4. “Rich dad, poor dad” – Robert Kiyosaki

Are you maybe that one person that always works hard, but never earn enough? This is the right book for you. Also, if you are a young investor, I think this book is a must-read for you.

Rich dad, poor dad is a book that describes how to achieve financial independence. It counters the idea that if you go to school, get high grades and a good job you will have the good job that allows you your financial independence. This is very important because the system is set in such a way that by finishing your college you will be in so much financial depth, that it will take you a lot of time to come even close to zero.

It is a great inspirational book about the way you think for yourself as the best and how, in a different way you can have a look at both – money and business.

5. “The Intelligent Investor” – Benjamin Graham

The best investing book ever, and I’m not the one who says it!
Written by Benjamin Graham, one of the best investors in the 20th century and mentor of Warren Buffet.

The book is driven by its 3 principles of investing:
1. Intelligent investing – where you will get the idea how to invest, where to invest, never to chase fast and crazy profits and always to pay more attention to the company history and long-term evolution.

2. Never trust Mr. Market – describes how you should focus on doing your own research on the market and not paying so much attention to the current stocks or ups and downs.

3. Always stick to a strict formula – set a fixed budget you’re going to invest every month, and then invest that into the stocks you’ve previously picked – no matter the price.

Read this book and it will lead you to your investing success.
And keep in mind Graham’s words “Those who don’t remember the past are condemned to repeat it”.

6. “The richest man in Babylon” – George S. Clason

Always work hard! This book teaches you how to separate your needs from your desires, at least in the way of expenditure. And the main idea of the book: Always save at least 10% of your income.

You have few simple rules of making money, that in my opinion will help you a lot. Appreciate the value of the money, be curious and never doubt to ask a good, close friend about advice – you will be like one of the richest men in Babylon.

7. “Secrets of the Millionaire mind” – T. Harv Eker

In only 2 and a half years, Eker moved from nothing to a millionaire.
In this book, the author tells you how to identify and revise your money blueprint in order to increase your income greatly and accumulate wealth.

Everything you know about money, in general, has been thought to you since your existence. It has been programmed in your brain and psych and in this book you are thought the 3 key money blueprint programming sources as well as how to reprogram it in order for you to make a great financial success.

You should really read this book, it will turn your world around. It will change your mindset in a way that you wouldn’t imagine and will make you a lot of money.

In the end, I would like to wish you the very best in whatever you do. And never forget: knowledge + hard work + positive thoughts = success for sure.

Invest Yourself to $100,000 in 7 Steps

Who doesn’t want to reach a $100,000 in their investment portfolio. Me and Alex managed to reach 100K within 2.5 years, although it is still quite far from our goal of retiring early, for which we need $800,000.

Despite that, 100K is still a very good milestone. If you can reach that, you’ll be sure to reach whatever you desire. The hardest part is the beginning. You can start small but remember every dollar and every cent counts towards that achievable first $100,000.

There has always been economic uncertainty which have put our financial security at risk but that should not stop you from getting closer to your financial goals.

You can move forward to your goal through careful planning and budgeting. Keeping your personal financial situation problem free also helps.

We can keep your personal finance in pace with your financial goals by predicting the unpredictable like unwanted price rises or unexpected bills and keeping them under strict control. So that getting towards that first $100,000 becomes easy and the next one easier and the next one easiest.

7 Steps Towards $100,000

1. Have the right attitude

Now that you have made up your mind set to save $100,000 every small step of financial sacrifice counts. You should achieve that by avoiding excess luxury and taking that hard way home like availing public transport rather than leasing out or out rightly buying that expensive car. You have made up your mind to achieve a long term financial goal, so you should put every effort big and small towards achieving it, for that keeping the right attitude always helps.

2. Stick to your financial goals

It is always hard to give up something presently for a distant future. The temptations to break your financial goals towards that first $100,000 will be great. So, you need to stay motivated for the long run. This means you should create small achievable financial goals like weekly savings target to achieve the monthly ones and the yearly ones. That steady savings will add up to quite a good amount. You can also invest in money market deposits or treasury bills for the short term to save up towards that goal of $100,000.

3.Reduce your taxable income

It is very likely that you are employed in some way or the other and in that case you should go for such a scheme that reduces your taxable income, either through a roth 401k or a roth IRA.

You can sign up for a 401(K) savings plan. Since these are tax free, you reduce your taxable income. You can also sign up for an IRA or an Individual Retirement Account which also reduces your taxable income and saves money.

4.Clear all expensive debts

Clearing or reducing your debts is an essential step towards achieving your dream because you are on a long term savings plan. In case of credit card debt, you should try to get rid of it as soon as possible or start reducing your interest rate burden. You should also need to avoid the additional temptations of buying unessential items like a second television or a double door refrigerator.

5.Maintain a budget

You should always maintain a budget, to see where your hard earned money is going. It is also important to do so because you need to create a plan on how much to save daily, weekly, monthly and yearly towards your $100,000 savings goal. You can achieve this by focusing on meeting the essential requirements of everyday life and cutting down on those costly habits like liquor or extra shopping. This does not mean that you cannot enjoy yourself now and then but those occasions should be countable and within your means and budgets. Whatever you do you cannot over spend and not maintain a budget if you like to see that $100,000 in your bank.

6.Increase your streams of income

Taking up a second or third job always helps if you are young, healthy and strong. Even if you are not so, you should always look towards finding new sources of generating income. For example if you are a professional accountant by day, you can start teaching accounting to students for a couple of hours during the evening. You can also learn a new skill that will increase your likelihood of a second job. The extra you make will help you get to that goal of saving $100,000 more quickly.

7.Cut down on your expenditures

You need to cut down your costs and it is achievable if you are motivated and willing to take that hard road. You can always buy your groceries at a cheaper price if you buy in bulk for the whole month. You can cut down on unnecessary costs like gym membership if you can walk or cycle to work back and forth every day. You can save on home expenditure by buying recycled products. You can choose to have home cooked meals rather than visiting expensive places to eat alone or without any occasion.

You should always remember that no matter what you do to cut down expenditure, there always will be some reason in your head or some temptations to miss that weekly savings goal. In that case you should remember that week’s add up to months and months to years. So your every little sacrifice counts towards that goal of saving $100,000.

If you think you will be living a frugal life because of that, you are certainly wrong. What will happen is you will live a more healthy and prosperous life because you will be cutting down on unhealthy habits to save and you will be happy in the long run as you feel better because of your successful decisions.

This does not mean you will not face setbacks like missing a savings deadline or incurring unexpected costs but if you can jump right back and make that extra effort to save more, you will be the winner at the end of the day.

To Summarize..

Saving money is always a good habit and the sooner one gets to it is the better in the long term, although you will face new challenges and uncertain economic conditions and personal financial drawbacks. But what is most important is not to lose that motivation towards achieving that goal of $100,000 in savings.

How Much Does it Actually Cost to Own a Car?

Owning a car has become almost a necessity in the modern world. Especially when you live outside of major cities.

Cars have become such a common part of our lives, that families often have more than one per household. In a normal family, one parent may be working, another doing the school run and two cars are necessary.

Whilst the convenience of owning a car is undeniable, the true cost of owning a car might surprise you.

Costs associated with owning a car

The initial cost of purchasing a car is high by itself. Once the car is purchased, the first thing to consider is car insurance. It’s important to get this organised as soon as you purchase the car. Accidents have been known on the way out of the car dealership.

Then there is the cost of taxing your car. This needs to be done quickly too, which means spending a lot of money in a short span of time. Obviously, you need to have a licence, it may sound obvious, but it has to be paid for.

So, you’ve got the car, it’s taxed and insured. Now you need to run it. Petrol or diesel has increased over the last decades, but it’s an essential cost of running a car. The car then needs to be serviced regularly and washed, and all this can add up. Cars get burst tyres and broken windscreen wipers.

All these costs add up and you will need to have your car in a roadworthy condition to stay safe and to ensure you can get an MOT certificate. If you leave problems to escalate, they can end up costing much more in the long-term than if you had fixed them sooner.

If you have multiple cars in your household these costs can escalate. A larger car will be more expensive to run, as in general they consume more fuel. Different brands of cars can be more expensive if they have powerful engines, or the parts are pricey and have to be imported.

How to minimise your expenditure

The initial outlay for a new car can be hefty. One option is to buy a second-hand car, as brand new cars depreciate in value dramatically. However, if you don’t have the capital to purchase a car outright, one option is to use personal finance.

You can take out a loan from a car financing company and pay the car off in instalments. Bear in mind, that although this is a more practical option to owning a car and having it quickly, you will end up paying far more ultimately due to interest charges. So, if you are considering personal finance, do some research and see what the best deal is.

Insurance should also be carefully researched too. Use a car insurance comparison site to find the best deal for your circumstances. If you are a high-risk driver, there are specialist sites that can accommodate those needs.

If you need insurance for a younger person who is a high risk according to many insurance firms, shop around, and consider adding them to a family insurance policy as this might reduce total costs.

Many supermarkets offer cheaper fuel, so it is worth shopping around until you find a garage that does the best deals on fuel. This can reduce costs significantly, especially if the car does a lot of mileage.

If you are in an area which is served by public transport, it is worth considering taking some of your trips using public transport. These costs can be significantly less than the cost of owning a car. In other words, if you don’t have to drive, don’t. it will save you money in the long run.

Also, when you are driving, be conscious of how much fuel you are consuming. Rapid acceleration and deceleration uses more fuel. If you can maintain a steady speed and make use of higher gears on a manual model, you can save money on fuel costs. Also, you can wash the car yourself rather than pay to have it cleaned by a valet. Get the children involved, they can earn their pocket money with a weekly car wash.

Other options

There is also the option of car share or car pool schemes. Many websites exist which put people together who are leaving and ending up in the same place. Take advantage of these schemes if you can, it helps save costs and improve the environment. This can be particularly easy if you have children who live nearby and go to the same school as your children, or if your co-workers live in your area.

If you want to be extra environmentally friendly, you can consider an electric car or a dual fuel car. There are subsidies available in some areas as an incentive to buy these cars. More and more places have recharging points, so it can be a practical way of maintaining a car, and the maintenance costs are much less. As the environment is such a major issue for many people, these cars may become more common as time goes on and there will be more charging points available.

So, there are massive costs associated with the luxury of owning a car. Add into that the cost of parking your car and it really adds up. Hopefully, there won’t be too many parking tickets or fines, but they need to be budgeted for when they arise.

Cars also depreciate in value quite fast unless they are collectors’ items or high-performance cars in good condition. So, don’t bank on being able to sell your car for what you bought it for, or even close to that figure. There are guides, such as the Blue Book which can keep you up to speed with what price you can hope to get for a car of the model and age of your car.

In fact, for the year 2017, it was estimated that if you drove your car for 15,000 it would cost an American $8,469 per year to run a car. That’s over $700 a month. When you see it in black and white like that, the bus and train seem a lot more appealing.

Financial Tips for People That are Broke

This is a guest post by Mike Piper from the Oblivious Investor. Mike packs a wealth of knowledge so I am sure you’ll enjoy his article.

Nobody anticipates being financially broke at any point in life. Unfortunately, our financial habits might lead us into this situation without our knowledge. This can be disastrous on many levels: it could lead to serious debt problems, loss of housing, debt collections, and even filing for bankruptcy.

However, running into financial problems is not the end of life. There is room for one to do a lifestyle appraisal and financial audit regarding their expenditure, savings and above all budgeting.

This article is a run-through about the do’s and don’ts of budgeting when you’re in a bad place financially.

Do a lifestyle audit

1. Revisit your entertainment habits

If you are already broke then it means that you can’t continue living the way you used to. It is imperative that you let go some costly habits. Entertainment is one of those.

This may mean cutting back on habitual drinking with buddies, going out for movies, going for ball games, etc. It is utterly impossible to start a budgeting program while financially broke and continue to spend money on entertainment.

You may limit entertainment to those things that don’t cost you anything, for example watching a game with friends or family at home.

2. Cut back on all your expenses

For a successful budgeting journey, you have to get to the point of running through your expenditure habits. Does your budget reflect on things that you really need at the moment? If it doesn’t then strike out the expenditures that you can do without.

3. Seek ways of reducing your utility bills

Monitor your utility bills and seek ways of reducing them. For instance, if you feel that you can cut back on the frequency of doing laundry, please do. If you can be switching off lights when you leave the room, please do.

4. Cut back on travel

Some people who love doing road trips do not realize how much of a toll it puts on gas expenditure. Even if you end up budgeting on travel, most road trips, for example, end up incurring a higher cost on gas than budgeted. Therefore, cut back on road trips or any form of travel you are currently involved in.

5. Pay attention your credit limit

Be honest with your credit habits. Monitor your credit balance and observe payment due dates. In a matter of fact, if you are in the habit of journaling begin to write on the side of a weekly or monthly sheet payment due dates. Improvise ways of getting alert notifications on due dates.

6. Prioritize your life goals

It is of utter importance to learn how to prioritize on life goals. Most big budget allocations are usually directed to where priorities are high. If you prioritize automobile, then most of your budgeting goes to acquiring cars that you don’t need. However, goals such as an education, or anything that might secure you a better job or job promotion should be prioritized by your budget.

7. Eat at home

It is understandable that eating outside is convenient, but at the same time it can be costly. To avoid spending more unnecessarily on restaurant food, learn to budget for groceries. Begin to cook and eat at home. It saves money in the long term.

Increase your income

1. Try to work smart not just hard

As people like to say, on’t work too hard,’ they are partly right. If you want to help your budgeting habit you work smart not just hard. For example, get a job that pays better to keep up with life’s demands. If one job can’t, then get a second job that is less tiring and leaves you room to rest. That way, you can keep up with important bills and develop a structured budgeting system. Without a stable income, it is hard to sustain a stable budget.

2. Look at your budget in light of income

When penning down a budget, look for ways that you could increase your income to cover for some aspect of the budget. It is no point trying to budget for items that leave you asking yourself, nd how I am going to pay for that?’

3. Track down paydays

Some people receive paychecks bi-weekly while others weekly. Keep track of paydays in a month to enable you to know when to take care of bills. At times when money comes in, it is tempting to spend on items that you hadn’t budgeted on.

Improve Your Credit habits

1. Avoid late fee payments

Since budgeting does go hand in hand with payment of bills, you cannot afford to make late fee payments. Late fee payments come with a late fee payment penalty. This penalty could range from $25 – $35 charges. These charges will definitely dent your budget significantly. This is because charges are a minus to your budget, they don’t add any value to your finances.

2. Make at least minimum payment per month

Add credit card minimum payment on your budget. It counts! Paying minimum balance on your credit card is better than not making any payment at all. Making that payment helps to reduce the bill each time you do. Let it be reflected on your monthly budget.

3. Make it a goal to clear your credit card bills

Whether financially broke or not, you do not anticipate to live on credit forever. There has to be a time when you will be credit-free! Rather, let your budgeting anticipate a release from credit bills. Pursue financial freedom no matter how long it will take. Eventually you will pay off your credit card bills and open a new page of your financial life.

Conclusions..

If you are going through a financial difficulty and are in low waters, realize that you can still keep a budget. A budget will help you order your life in crises so that you do not crush and sink financially.

Therefore, do a lifestyle audit and minimize on expenditures that you don’t need. Look for ways of increasing your income earnings. Watch your credit habits and project on being debt free someday. Lastly, save if you can, if not, it’s still okay. Be real to yourself!

The Financial Behaviors That Keep Us Poor

Our paycheck defines whether we’re rich or poor, right? In reality, true wealth comes less from a pay check and more from your behaviors.

Each financial decision you make or habit you sustain has an impact on your finances, and you’ll be surprised to discover all the financial behaviors that are keeping you poor.

#1 Spending More Than You Earn

One in five Americans spend more money than they earn. Are you one of them? It’s easy to get overwhelmed by bills and rent, but the extra spending usually comes from spur of the moment purchases, like fast food, when you decide what you want now is more important than your future financial stability.

#2 Not Building a Savings Account

When you get your paycheck you more than likely start right away on the bills and expenses. However, by paying yourself each month, simply 10% of your income, you can build up a sizeable nest egg in no time that will give you peace of mind for a rainy day.

#3 Being Too Generous

We all want to treat our friends and family every once in a while to make us look good. However, if you’re constantly paying for dinner or buying the next round, that debt is going to catch up to you. If you’re really in a pinch, allow others to pitch in instead of spending money you don’t have.

#4 Using Credit Cards Like Cash

Credit is not free money. The average American has over $15,000 in credit card debt, and that’s just the average. By changing your mindset about credit cards and thinking of them more as a debit card that needs to be repaid, you can avoid racking up a total.

#5 Overdrawing From Your Account

The easiest and fastest way to lose money is through unnecessary fees. Over drafting is an automatic $35 fee of hard earned money. Always be aware of your account balance and never try to take out more money than you have.

#6 Not Planning Ahead

Most of us are on top of our monthly expenses. That’s what our monthly paychecks are for. However, other expenses come quarterly or annually that we need to be prepared for. By putting a little money away each month you won’t be caught surprised and empty handed when the payments are due.

#7 Ignoring Debts

When you’re broke, sometimes it’s nice just to curl up under a blanket and hide from those big red numbers. Unfortunately, all debt accumulates interest, and all interest is simply money down the drain. Ignoring debts doesn’t make them go away, it allows a bad situation to get worse.

#8 You Have No Emergency Fund

Emergencies happen, and they always come at the most inopportune moments. Put a few dollars away each month until you have a solid $1,000 set aside specifically for emergencies or unexpected expenses.

#9 Spending Too Much on Housing

Maybe it’s time to consider moving to a smaller place. To be financially responsible, you shouldn’t be spending more than a third of your paycheck on housing. If you’re spending more than that, you’re only setting yourself up for failure

#10 Not Making Adjustments

Maybe you have a routine where you buy donuts every Saturday, or you make large car payments because you’ve always had a nice car. However, when things aren’t working out financially it will take adjustments, such as getting a smaller car, going without donuts, or buying cheaper brands at the grocery store.

#11 You Don’t Budget

If you don’t know exactly where your money is going then you’re losing it. By creating a budget you can track your expenses and move any excess money to the areas of your finances that need it most, like debt.

#12 You Believe Wants are Needs

Wants are not needs. Needs are food, clothing, and shelter. Wants are fast
food, high-end brands, and a big house. You can want those cupcakes all you want, but you don’t need them. If you can’t differentiate between wants and needs, you’re losing more money than you know.

#13 Lack of Money Management Skills

If you don’t know how to manage your money, you’re destined to spend more than you should. Research classes, workshops, or websites that will teach you skills and knowledge to manage your money in ways you’ve never considered before.

#14 You Settled for a Job

How many times have you complained about your paycheck? Have you ever asked for a raise? Have you ever looked for a different job, or considered getting training or education in a different field of work? Don’t get stuck unable to make ends meet. Try to increase your income any way you can.

#15 You Want to Get Rich Quick

Not going to happen. People waste thousands of dollars on Get Rich Quick schemes and they never come out on top. The key to wealth is a wise use of time, so stop throwing your hard earned money at sketchy opportunities.

#16 You Want It All

People want everything too soon. However, once you’ve left your parents and are out on your own, you can’t realistically afford a nice car, a house, or expensive holidays in Hawaii. By saving your paychecks for large purchases one at a time, you’ll be able to achieve your goals in a more practical and financially responsible way.

#17 Not Investing Properly

Buying a fancy house or boat is not investing. Properly investing means putting your money toward yourself in things like your career, education, or savings. All of these will benefit you in the future.

#18 You’re Unwilling to Sacrifice

If you can’t sacrifice, you’ll never get on top of your finances. Going without or “making do” are essential to getting yourself financial security and to a point where you can afford more luxury in life.

..To Summarize

Feeling a little guilty? It’s not too late to make some changes. They say the best time to start something was a year ago, and the next best time is now. By living more responsibly and following some of these steps, you can be sure to have a more secure financial future.

How to Start Investing for Early Retirement

How can I retire early? What must I do to save up enough for my retirement? What must I do to ensure that I live comfortably when I retire?

These questions have been pondering in the hearts of so many, and had left many of them with sleepless nights. To be honest with you, I’ve had my fair share in the past. To be happy in the future, you need to create a sustainable income that would take care of your needs when you’ve stopped working.

The absolute best way to achieve this is to save and invest for the future.

If you want to learn how to start investing for early retirement, then this article is for you. You’ll gain a first hand knowledge on how to make money investing in stock market, which is a better alternative for early retirement plan.

If you’re a pro investor, I think you’ll be familiar with the context of this article, but you can still learn some strategies on how to improve on your wealth of experience. However, if you’re just hearing of “investing in stock market” for the first time, or you’re trying to get hold of some materials that would gear you towards the right direction, then this is a step towards the right direction.

People who don’t invest in the stock market have their reasons, and their opinions about the stock market are different. To some; it’s the fear of losing their money, and to others; mistrust, maybe they’re lucky or not, or just curious of the outcome, whether they can beat the market based on instinct.

Some newbies believes that trading or investing in stock market is a gamble (Although it is, if you invest blindly, or out of emotions and improper calculations), however, they are wrong about it. You’ll only say that investing in stock market is a gamble because you don’t know how to trade to win.

If you’re confident on how to successfully invest in stock market, then you’ve bought yourself a lifetime ticket of steady income for your retirement plan with no effort or work.

What you need to know about stocks.

Buying a stock of a company means owning a percentage of that company. When you own a share of a company, you’ll become a shareholder, and have rights to participate in decision making, voting, and sharing of the company’s future earnings (which is known as dividend). Dividend are percentage of the company’s profits that are shared among shareholders, based on their amount of shares.

Some companies pay a fraction of their profits to their shareholders, while they grow gradually, while some invest 100% of their profits into the business for rapid growth.

How valuable is the company you want to invest in?

The value of your stock is calculated based on how much profit (dividend) it fetch you. The higher your shares in a company, the higher your percentage when it comes to profit sharing.

Several factors makes the price or value of a stock to increase or decrease. For instance; the stock of an oil company would definitely skyrocket if there’s an increase in the demand of oil commodities. On the contrary, if there’s a sudden change from the usage of fuel combustion vehicles, to electric vehicles, then value of the stock of the oil company would decrease because the demand for oil commodities would decrease.

Buying stocks for the first time

If it’s your first time investing in stop, then the first step is buying them. It can be very exciting for beginners, most especially after seeing people raking 6-7 figures from stock. However, it can be very challenging. You need to learn how to be cautious and play safe. Therefore, I’ll advise to learn it properly before venturing into it.

Here’s a good article covering this topic: https://www.nasdaq.com/investing/start-investing-1000.stm

Long term vs Short term

Stock prices fluctuates always, due to the volatility of the market. Short term trading is more of a gamble, because you never can tell the seconds when the price would drastically rise or fall, and if you’re not careful, you might go bankrupt in a blink of an eye.

Long term investment is a better option. Sometimes even if your stock value falls, it would gradually rise again, and you’ll have the opportunity to make profit from it.

Which stocks to buy to make money?

The best way to invest in stock without much headache is to buy ’em all. Several smart researchers suggests that the best way to make money from stock market is to buy an “index fund”. This is a mutual fund that automatically buys an equal fraction of all the major shares in your country.

When you buy all of the major stocks, some would rise, and some would fall, but in overall, you’ll make above average. This is the best strategy for even that anyone can use to make money from the stock market.

If you choose to do some calculations, then invest your whole cash in a particular stock, and it fails you, then your retirement plan would fail. So it’s better to invest in index fund, and have peace of mind. It’s no doubt that you can only earn very large if you invest a huge sum in a particular stock that grew so rapidly, however, would you be able to survive it if it falls so drastically?

What type of index fund you should invest in?

Invest in The Vanguard Total Stock Market Index Fund, and you’ll thank yourself later for doing so. They track the entire of U.S, with the expense of just 0.17%. This is the cheapest you can get, however, if you’re looking of employer-sponsored plan, maybe you should try the S&P 500 Index fund.

There are the International trust funds as well. They are great buy, most especially when the U.S is hurting, it would give you a high ROI.

In conclusion

Whichever stock you’re investing into, the main goal is to retire early and have enough to take care of yourself. Just remember to never lay all your eggs in one basket. Learn how the stock market works, go about it slow and steady and I’ll bet your retirement would be a luxurious one.

Magic Formula Investing – What it is and How to do it?

If you are investor who wants to consider a money-making strategy that could help you in value investing, the Magic Formula Investing is a wicked strategy that can actually yield impressive results.

Joel Greenblatt, a Columbian professor and a fund manager, introduced the “magic formula” in his 2005 book, The Little Book That Beats the Market, and since has remained a common strategy in the stock investment market.

The formula relies on the quantitative screening of stocks and companies thereby highlighting the annual returns of a particular market.

What is in the Magic Formula?

The magic formula was designed to help all investors like you to “buy good companies on an averagely fair price.” With this non-emotional, straightforward approach, you will be able to screen companies that have high investment value and make the right investment decisions.

Instead of carrying out a comprehensive analysis of stocks and companies, you are able to use the formula to obtain top 30 ranked companies which you are able to invest.

The magic formula utilises the earnings yield of stocks and capital returns to make company rankings as these two factors can be used to efficiently measure how the companies generate their earnings based on asset values.

Since the magic formula is commonly incorporated among companies whose capitalisation value is worth $100 million and above, it would not be advisable to apply it if you intend to invest in small cap stocks.

With the strategy, you are able to sell your losing stocks to benefit from the income tax provision as well as sell your winning stocks to take advantage of the low income tax rates.

How do you use the Magic Formula to make investments?

The easy way:

Joel Greenblatt has actually put together a website where he does all the calculations for you for free. You can choose 30-50 stocks from the list. Buy them, wait for one year and then rebalance your portfolio. It’s as simple as that.

The website is: https://www.magicformulainvesting.com/

The hard way:

Choosing a company or stock to invest in using the formula involves simple steps. First, you will have to master the rules of the formula application. The investment approach has nine specific rules that you must follow:

Only consider stocks that have market capitalization value of $100 and above.
Do not include utility or financial stocks
Exclude any American Depositary Receipts (ADRs) or foreign companies
Understand the earning yield of the company of interest; this is known as EBIT/EV
Identify the return on capital of the company i.e. EBIT/(working capital + net fixed assets)
Based on the above 5 steps rank your findings based on the capital returns and earnings yield. Rank your findings using percentages
Over a period of 12 months, invest in top 20 to 30 ranked companies as you accumulate 3 positions every month
Rebalance and compare their portfolios every year, selling your winners after a period of 53 weeks from the purchase date while selling your losers 51 weeks later. This step is important to allow you take advantage of the tax shifts.
You are required to utilize this formula only for long term i.e. you should be willing to invest to up to a minimum of 5 years

After mastering the rules, the second step is to implement the formula by yourself. In order to pick the “magic” stock or company, you will need to screen the stocks with the least market capitalisation value. After this, you will need to exclude the financial and utility stocks due to the fact that they have different business models as well as the ways through which they make money.

The next step involves determining the earning yield (EBIT/Enterprise Value) of the company you have chosen keeping in mind that all non-USA companies are excluded.

You will then determine the Return on Capital of the companies then rank them based on the Return on Capital and Earnings Yield values. You can now invest in the top 20 or 30 companies by taking stocks after every 2 to 3 months over a period of one year; this is followed by a continuous re-balance of the portfolio annually.

Implementation and expectations

Individuals always observe variable returns amidst the fact that they are following the same steps. The two key determinants of your returns include the type of stock you buy and the time at which you buy the stock. Keep in mind that the screener might produce variable results in different days as stocks exchange in the top identified companies.

Thus, Greenblatt had recommended that investors implement the formula for at least a period of five years. A short period of one or two years may result in the underperformance of the indexes. It is only over a long period that you will be able to purchase good companies at a favorable price.

Understanding the two ratios in the formula

After going through the magic formula, you are able to see two financial ratios that Greenblatt had included:

EBIT/EV—this ratio represents the earnings before taxes or interests divided by the value of enterprise. Although earnings/price is a simpler version of the ratio, Greenblatt considered EBIT more preferable since it accurately measures companies with different rates of taxation. EV is more applicable in comparing share prices since it factors in the debts of a company.

EBIT/(working capital + net fixed assets)—this ratio focuses on the earnings in relation to tangible assets. Net fixed assets refer to the fixed assets (such as machinery) minus all liabilities and accumulated lifetime depreciation associated with that identified assets. Rather than considering fixed assets, net fixed assets provide an accurate real value of the assets that a company owns.

Do not underestimate the relevance of these two ratios. They are actually giving the computations of different data reflecting the inner functioning of the companies. They reflect: the actual earnings, tax rates, interests, debt, price of equity, asset depreciation rates, and current liabilities and assets.

Does the Magic Formula work?

Based on past studies and Greenblatt’s calculations, it is evident that the magic formula works. According to Greenblatt, the investing strategy is able to generate up to 30% of annual returns.

Similarly, one study tested the formula between 1999 and 2009, and found that there is an average return of 13.7% every year.

Another study conducted between 1993 and 2005 also found that the formula outperformed the market index of the United States by 3.6% while in the UK and Japan, the index rates were outperformed by 7.3% and 10.8% respectively.

Although the values differ, they all show a positive investment return of the magic formula.

21 Personal Finance Tips That Will Change the Way You Think About Money

Before we share personal finance tips with you, it is important to learn what personal finance really stands for.

Personal finance is an art of handling the money you earn. It involves all money related matters whether it is your own expenses or household expenses. Personal finance is also about making the right decisions about earning, saving, investing and spending your money.

If you are still wondering which matters are directly concerned with Personal finance, let us make it crystal clear for you. In our day to day life, there are many things which are happening around us also involves personal finance such as credit cards life or home insurance policies, mortgages and vehicle instalment plans etc.

If you are planning to take control over your personal finances, then look out for short-term and long-term financial plans like:

Cash flow
Purchasing Insurance policies
Filling taxes
Savings account management
Retirement plans

Saving money is a hard job especially when you don’t have a solid plan sheet. How to earn, spend and save or invest your money would have a long-lasting impact on your life as well on the lives of others associated with you.

Unfortunately, there are hardly any schools who are teaching personal finance tips to its’ students. All we were taught while growing up was basic math.

Too many people spend half of their lives without knowing how to manage personal finance. They lack the ability to make a plan of their budget, expenses, and savings and have no idea how to invest the remaining finances. Planning for old age or retirement plans are nowhere to be discussed let along planned.

Here we are going to share top 21 tips on how you can manage personal finances easily and proactively.

#1 Formulate A Budget

First and the foremost tip is to formulate a budget according to your expenses on per week or per month basis. A well-devised budget is all that keeps you on track. It also helps you to track where your money is going and from where you can cut down your expenses etc. it is like a blueprint for achieving your money goals.

#2 Set Priorities

Decide which loan and mortgages you have to pay first. When tuning of your car is due. When are you going to pay for the house rent. Set priorities while managing personal finance. First things should be on the top of the list and catered accordingly.

#3 Take Record Of Daily Expenses

Buying a coffee while driving or walking to your office in the morning? Stopped by a McDonalds to catch a quick snack? Beware! These are the expenses which you make daily that eventually disturbs your budget. Cut down unnecessary daily expenses and save every penny you can.

#4 Admire Yourself

Save money and spend it wisely is a way of admiring and loving yourself. If you save today, it will help you out tomorrow.

#5 Set Smaller Goals

Setting long-term money goals often tend to fail. Setting small term goals helps you to achieve them more easily and quickly and it will also motivate you to save more and finally achieve your bigger goals.

#6 Use A Credit Card Wisely

If you are using credit cards for making purchases online on in the stores, purchase only if you are sure you will pay the complete bill all at once at the end of the month. Never buy anything if it only seems attractive. Buying unwanted things will only pile up your expenses and ultimately disturbs your budget.

#7 Find A Good Company

Find friends who are also into saving money and like to manage their personal finances because humans tend to follow habits found in their company.

#8 Never Lend Money

Never lend money to someone whom you don’t know personally or who will not be able to pay it back. Never invest in such scenarios except it is for close relations.

#9 Get The Right Insurance

It is very important to go for a right insurance policy. It includes medical, life and property and casualty insurance. God forbid if any unexpected situation arises, it would be more devastating if you have invested in the wrong policy

#10 Pay off Student Loans Faster

There are many opportunities available for graduates to pay off their student loans. It includes graduated repayments which progressively increase the monthly payments and extended repayments, which stretches the loan period to over 25 years. So choose a plan wisely.

#11 Plan For Retirement

None of us ever think about getting old and retired. But believe me, it happens with everybody. So start setting some money aside for your retired life.

#12 Never Be Allured By Others

If you are shopping with friends, never be tempted or influenced by your mates. After all, it’s you who is going to pay for your shopping, not them.

#13 Start Saving Now

Tomorrow never comes. Start saving now. Don’t wait for the perfect time to save money. The right time is now.

#14 Depend On More Than One Source Of Income

Warren Buffet said; “Never rely on a single source of income. Make investments to create a second source”. Choose any second source of income whether it is a second job or investing in the stock exchange.

#15 Never Overspend On Gifts

No matter how important he or she to you, never spend a fortune on gifts. It will bring you nothing but a huge bump in your budget.

#16 Spend Less Than You Earn

Always manage your expenses and spend less than you earn every month. For example, if you earn $13000 per month, spending $15000 would not be wise.

#17 Plan Dinner Menus Beforehand

Plan your monthly dinner or food expenditures at the start of the month. This is how you can reduce as well as save food expenses.

#18 Always Pay Bills On Time

This will not only save your time but will also save unnecessary late fees. So pay beforehand or opt for auto payments option.

#19 Take Professional Courses

Take professional courses to groom yourself professionally. This could be online or by attending classes. Invest in yourself so that you can grow professionally and can earn more.

#20 Use Coupons When Buying

Utilize coupons whenever you can. It will save you a lot of money. Take advantage of internet promotional codes and coupons as well.

Being savvy and consulting the right consumer guide that advertises coupons and flash sales or clearance deals can mean that you are able to get high-quality brands.

Coupons have a reputation for being something for low-end brands. Before you buy anything online, do a quick search to see if there is a coupon for the item you want.

#21 Take An Overview Of Your Personal Finances Every Once In A While

Overlook and review your personal finances after every other month. This way you can increase or decrease certain expenses or realign your priorities.

Remember, no one is in charge of yourself but you. Follow your own rules and make the right financial decisions for yourself and for your family. No one cares about your money but you. So use it to create your own financial future.

The 7 Best Personal Finance Books Out There

Even after working hard at what we do, most people still do not have a lot of money left over. Saving up money is something that most people struggle with.

The size of your income doesn’t really pay that big of a role here. People earning 30K a year could be saving and investing more than those earning a 100K a year and spend most of their income.

The statistics are drastic – only 39% of Americans have money set aside to cover a $1,000 emergency (source). So in essence, if you want to become richer than your friends or coworkers, all you really need to do is start saving and investing.

Below you’ll find a selection of the best books to kick start your early retirement.

1. Multiple streams of income by Robert G. Allen

This book shows that the disadvantage is that the flow of only one income is not a good idea, because there is only one-way money that can come to me – through my salary!

Having multiple income streams do not necessarily have a second job or even a third job! Several streams of income generating systems so that that money can flow through your life.

This means that you are investing both time and money to learn how to build these systems. It can be one way to invest in real estate, where you get a “stream” of income from monthly rent to tenants.

Another “stream” may be the receipt of portfolio income, such as “dividends” or “interest” of your equity or investments in bonds. One “flow” may be another of the royalties you get from publishing a book or recording music if you’re a singer.

Having a lot of “flows” where money can come to you is better than relying on your “business” alone to make money. The challenge is how to use your time, skills and money to create these income streams.

Conclusion

This is an essential guide on how to invest our money. This book provides a reasonable explanation of the world of stocks, bonds, and common property. It’s very detailed and easy to use.

2. 4-Hour Workweek by Timothy Ferris

The book tells about the “new rich,” a group of people who have the time, money and traffic to spend only 4 hours a week to create wealth and the life they want.

The rest of the time is spent on what they like to do, like dancing in Buenos Aires, diving in Panama or enjoying the sun in Hawaii.

Who does not want to spend only 4 hours of his time on work instead of the usual 40 hours a week? Who among us does not want to have the luxury of time to do what you like?

Who among us does not want to spend an extended vacation on the beaches of Hawaii, while you care, and your Maltese will still come?

For employees, he offers practical advice on how to negotiate with your boss to organize workers at home.

It also presents ideas on how to plan your “mini” retirement benefits so that money is still available without you. He even discusses how you can “redirect” your life!

Easy-to-read work week, which takes 4 hours. Ideas are presented in a simple and uncomplicated way that you think you are reading a comic. The book is talkative and funny. Reading is like a face-to-face conversation with the author. Sometimes you can laugh at his jokes.

3. The Wealthy Barber by David Chilton

Some people have noticed that this book is one of the most beloved financial books of all time. A rich hairdresser offers reasonable advice and tips on how this affects our lives.

It’s very easy to take it by writing a book as a short story or novel, and easy.

The book is always recommended to those who risk understanding the management of personal money because even if you do not have a lot of experience in finance and accounting, you can easily understand.

The book guides the reader to take measures to manage his money, thinking about what we really want in life, and how we can get it.

He also has a great difference in getting rid of material thinking, receiving costs under our control and reducing our debts

4. The Millionaire next door by Thomas J. Stanley, Ph.D. William D. Danko, Ph.D.

The book is based on a comprehensive study of the financial habits of millionaires. The results are surprising in the sense that most of these millionaires are not what we usually expect them to be, as accurately described in the book,

“These people cannot be millionaires! They do not look like millionaires. They do not wear the same clothes as millionaires. They do not eat like millionaires, and they do not act like millionaires – they did not even have millionaire names.

Many “close” millionaires are the first generation. They did not inherit their wealth. They built it. Few of them spend more than $ 100 an hour. Others do not wear a jumpsuit to work!

They engage in types of work that can be classified as dull – ordinary. Some are welding contractors. Some of them are rice farmers. Some of them are pest controllers. Other traders of coins and stamps.

What separates the millionaires from the rest is their habit of money. They are modest by nature. They value money. They invest at least 20% of their income. They even have a “go to hell” box that can save their expenses for at least ten years without work at all.

Conclusion

A valuable lesson of the book is not that we know who the real millionaires are, but also the realization that it can be you! If they can, you can! It’s time to build your rich cash habit and become a “millionaire in the neighborhood”!

5. Your Money or Your Life by Vicky Robin and Joe Dominguez

The book tells you about managing your money and even looking at it in a very different way. Your money is only an integral part of your life.

There is also time. There is also your dream! What do you like the most? How to spend your money? What do you do in your time? Do you still do what you do, even if you have all the money in the world?

The book emphasizes the management of resources that you have like money and time. It offers unique tips to monitor your spending and whether each contributes to your goals.

It also has some ideas on how to accurately define what you want to do and manage your money and time so that you can do more of what you love to do and less than you do not like doing.

He even has some charts to help you understand and talk where you are, and when your day of freedom.

Conclusion

The central message of the book is not to choose money for life or vice versa

6. Rich Dad, Poor Dad by Robert T. Kiyosaki

The book is a story about how to develop knowledge about the funds of two fathers: the first rich, the other poor. The story unfolds to describe the different customs of the wealthy and impoverished father’s money, each of which produces a different financial result.

The book makes a very complicated world of money and business sounds simple. It is merely that ideas can be interpreted as a child using only superficial graphics.

The figures show how cash flows from your pocket to the bank when you pay your bills and how they come from your company when you receive your salary.

What you do with the money after you get it, it determines whether you are rich or poor. Do you use the money to buy assets such as real estate investing or business creation? Or you can use it to purchase commitments, such as the new LCD TV in 12 single monthly payments with zero percent!

Conclusion

The book inspires you to become the best and watch business and money in a completely different way. Expands as money works!

7. Think and Grow Rich by Napoleon Hill

The central message of the book is that you have to “think” about money before it becomes real. This is a direct translation of the phrase “what your mind can understand, your body can achieve.” When you think about money, and you have this “urgent desire” to make it a reality, the whole universe conspires to build the means to bring it to you.

Money is, above all, just an idea. This is unrealistic. The money you keep when you buy a bag with a product is as real as a “mutual” agreement with other people that the paper you own deserves what you buy.

The book does not say “hard work and richer.” Hard work means different things to different people. For an employee who does not like what he does and receives a little salary, he is “hard work.” For someone who loves what he does, “hard work” is not in his vocabulary.

Top Seven Free Budgeting Tools

Planning is a very crucial aspect not only of the business organization but also to nations. It helps you set goals and also strategies on how to achieve your goals and attaches a timeline to them.

Planning has now been made easier by technology through the introduction of very many online budgeting sits. This
means that you can monitor and implement your business plan at the comfort and convenience of your laptop or your mobile phone.

Not only does this makes work easier but increases your chances of eradicating losses in the organization.

Some or most of these online budgeting sits offer advisory services and tips and they will help you be realistic and implement your plan. For this reason, you will need the best, most efficient and reliable budgeting tools there is in
the market.

1. YNAB(you need a budget)

As the name suggests this is an online budgeting application that will help you analyze and manage your money and account. The YNAB can be linked to your bank account and will, therefore, work with actual fat s and figures.

This platform uses a user-friendly layout which will allow the user to make a plan in a couple of minutes. It will always help you manage your account. The data used in this platform is mostly reliant on previous incomes and earnings rather than project for the unseen future. This unique factor will mostly give accurate results.

It has a very secure encryption from their server to your bank account. That makes sure all your details are safe and they are accountable for every account and make sure to keep your account an affair between you and them and will only provide information at the authorization of the customer or the law.

This application helps monitor your rate of income and expenses and provides an overview of how you have spent your money. It also gives advice on how you should plan your money and this will always give you the benefit of making informed decisions.

They will make sure they change your mindset to seeing every dollar as an investment. They will give you choices on how to invest also. They also motivate students I school by giving them a one-year free account and this is what will build tomorrows mega-investors. This is probably the best budgeting tool ever. YNAB offers you a 34-day free trial.

2. Personal Capital

Some of us will always want a third party’s confirmation on issues before implementing them. This is why the personal capital account offers a two based kind of account offering serving both as a financial tracker and financial advisor.

The difference between this YNAB and this kind of account is the YNB offers paid for financial advice. It has new and improved new feature like the retirement planner, educational planner, investment checkup and the assessment allocation target.

The personal capital account has a very sophisticated security system that is simply a headache for hackers. The application has also been customized to be accessible by a couple of devices ranging from smartphones, laptop computers, and smartwatches.

NB! They also offer a one-month free trial.

3. Mint

Coming in this on the budgeting online application is the mint application. It offers its services on a 24/7 basis and will alert you personally on bill reminders, over budgeting and even large transactions this will keep you financially fit as you will have a reminder and a clear image in mind of what you are doing. Do you want a fast track way to your goals then this is your kind of sit? It is also accessible on mobile device and on smartwatches. They have a very high-security feature and will send you a randomly generated verification code which you will use to gain access to it.

4. Moneyspire

Derived from the word inspire and money, moneyspire is the site to look for all your budgeting needs. It has special feature that supports multiple currency setting.

It also makes sure to have a personal relationship with their customers and reach out to customer service via email or telephone. Their security detail is well organized and your passwords and accounts remain on your device and in your head as they do not collect any data unlike other sites that collect personal data.

For a onetime simple fee of $54, and from there you can manage unlimited accounts from your linked accounts.

5. Moneydance

At $49.49 you can now have an account with the money dance group. The money dance makes investment decisions.

It has a wide database of data concerning investment and making an effecting action plan with the best budgeting there is. It has an offer of free 100 transactions made on the side per client.

They also have vast access resources as you can access it on any device may it be a smartwatch, smartphone or even a laptop computer.

6. Count about

Offering a 15-day free trial, count about takes care of your financial budgeting process and will act as your financial and does not offer budgeting advice and it leaves you to make your calculations and evaluations.

This does not provide a database for references though it has majored on customer base security features and works in conjunction with a third party.

However, a weaker budgeting tool as it has limited feature. It is however charged at arrange of between $9 and $99 for an account.

7. Banktivity 6

With a rating of 8/10, the activity 6 is one of the better tools to use for your financial needs.

Formerly known by the name iBank, the Banktivity takes a personal interest in their clients and will do a daily personal check up on your accounts and budgetary.

They follow up on your deposits and withdrawals and will advise in case of large withdrawals. They will, through their financial advice, prevent you from making hasty decisions.

Conclusions

From the seven budgeting tools, it is only fair to say that they will ease your financial trouble and will offer both accountability and security for your accounts. So the next time you are looking for an account to invest in make to consider these tools.

Look for a tool that will accommodate a number of accounts and also gives you tips, suggestions, and warnings on your financial matters.