MoneyMatters


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emergency-fund

In life you should expect the unexpected, and this is why you need an emergency fund. The best you can do is to prepare for emergencies that require access to additional money and having an emergency fund is the ideal solution.

None of us have the ability to foresee the future or predict the hurdles which lie ahead of us. This makes building an emergency fund a financial priority. People who are living on a lean-and-mean budget will have the toughest time setting aside money for emergencies. If it’s possible to squeeze out another $40 or $50 each month and put it in a money market account, it’s worth doing.

Establishing an emergency savings account is vital in good times and in bad. The purpose of the fund is to sock away three to six month’s living expenses. But this money could also be used when you’re staring at major, unplanned expenses such as a car breakdown or a leaky roof.

Housing a small rainy day fund should be a vital part of an individual’s financial goals. This is of high importance if you don’t already have readily available funds in your account for covering any unanticipated expenses. They provide financial security because they give you funds to fall back on if you become ill, or if you or your spouse loses your job, you incur large medical bills, or have an unexpected large bill such as a major car or home repair. You do not want to end up in a situation where you have to buy daily necessities on credit.

Saving your money in a small account for emergencies is definitely a better alternative to taking a loan or cashing in your long-term investments. If you take a loan, there is the additional burden of paying interest. Encashment of your investments before maturity means not only will you lose out the interest, but also some part of the original investment. This will also set you back significantly in your overall financial plan.

I echo the idea of treating the emergency fund as a bill, put the money away and don’t be tempted by the latest sale. Success at building an emergency fund depends on consistency of saving money on a regular basis and keeping this money separate from the general savings account. Otherwise you will be tempted to dip into these monies even if you simply run over your budget at a certain point.

The size of the special savings account will depend on your personal situation. I always advice my clients to keep between three to six months salary in the reserve. But you will have to decide on an appropriate amount based factors such as your Dependants and fixed monthly expenses.

therebalacingact-624.jpgIt’s a dangerous time for investors when any and every investment makes money. I do realize that I must be sounding like a lunatic when I say that. How can things be dangerous when money is flowing into investors’ account statements as if it grew on trees? And for mutual fund investors, it does appear to be growing on trees. Of course investors in the best funds made an absolutely humongous amount of money.

Something similar has been happening for stock investors as well. Even though there were some stocks that lost money, an overwhelming number of them went up by huge margins. There isn’t really any stock or mutual fund investor out there who didn’t make a great deal of money. Therefore, what we have here is like an examination which everyone clears because the passing marks have been reduced to zero.

These are abnormal times which are very dangerous precisely because it’s impossible to make mistakes. You can invest in bad companies and bad funds and still make money. And that means that when the going gets even slightly tougher, a lot of people will find that they actually did invest in bad companies and in bad funds.

It’s an old saying that more investment mistakes are made in good times than in bad times and since the times are so good right now, the potential for making mistakes is that much higher. Investment markets change direction very quickly. Nothing prevents what look like good investments today from turning out to be bad ones.

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Beginners who are not aware of current trade investments and who don’t have enough capital to invest may face a lot of setbacks. These factors, however, should not discourage an individual from investing. If you are too scared to take the risk, you lose a lot of opportunities.

Investing gives you the leeway to increase your income. If you just simply put your money in a savings account, a 2-5% interest will not do to secure your future. Since in this set-up you can easily pull out your savings account, it increases the likelihood of you spending the money in unnecessary expenditures. In a short span, your money is gone and that leaves you with nothing.

Lay down the cards. For beginners, the first thing to do when you plan to invest your money is to have a reality check. To start off, do you have a capital to invest on? It is not just capital but do you have a risk-capital?

Add up your assets and check which of these you are willing to bet and let go. This may be hard at first especially if all of which are valuable to you. But if you carefully choose which assets are of lesser value to you, this will make it easier for you to accept loss if your first investment fails. Since investing is also an expense, consider it a loss anyway but with a potential to grow.

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Fascinating, isn’t it, this stock market of ours, with its unpredictability, promise, and unscripted daily drama. But individual investors are even more interesting. We’ve become the product of a media driven culture that must have reasons, predictability, blame, scapegoats, and even that four-letter word, certainty.

We are a culture of investors where hindsight is rapidly replacing the reality-based foresight that once was flowing in our now real-time veins — just like in basketball, golf, and football.

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Money is a token that functions as a medium of exchange that is commonly accepted as payment for services or commodities, including repayment of debts. Another property of money, that distinguishes it from other medium of exchange, is that it has the mark of an authority (or the mark of anyone who is generally accepted) that coins it.

Money comprises of both currency, specially the numerous distributed currencies having legal tender status, as well as other kinds of financial deposit accounts, like savings accounts, certificates of deposit and demand deposits. In contemporary economies, currency is the most basic part of the money supply.

Money is not the same as value, the latter being the basic element in economics. Money is central to the study of economics and forms its most cogent link to finance. The absence of money causes a market economy to be inefficient because it requires a coincidence of wants between traders, and an agreement that these needs are of equal value, before a barter exchange can occur. The use of money is thought to encourage trade and the division of labour.
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U.S. taxpayers are still owed $132.9 billion by companies that benefited from the financial bailout and haven’t fully repaid. Some of that money will never be recovered, a government watchdog said.

Big companies like General Motors and AIG, which benefited from the bailout, still owe U.S. taxpayers $132.9 billion. Some of that money will never be recovered, a government watchdog said.

Christy Romero, the acting special inspector general for the $700 billion bailout, has said the bailout that began in September of 2008, could actually last for several more years. Romero told The Associated Press that some bailout programs such as the effort to reduce home foreclosures will last up to 2017 and such programs could cost an additional $50 billion or more.
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Here is the plain truth for everyone, yet people will continue to do the same shit over and over again, voting for the same moron, having the same stupid arguments over two sides of the same corrupt coin, begging for the same entitlements.The West, esp the US, thinks they can have their cake and eat it too. They deserve the shitstorm that will be coming, they have been warned way too long and have ignored it like the arrogant idiots they are.




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Here are a few money management pointers for women. Are there any aha moments for you when you read this list? Post your comment!

Tip 1: Balancing your cheque book is not rocket science
Contrary to what women believe or in many cases are lead to believe by the male influences in their lives, it is not difficult to work out personal finances. The basic principle is not unbelievably complex. What is paid into your account should cover what you pay out.

Spend what you have. In fact preferably not all you have, put some away. But start with balancing the incoming and outgoing as your first baby step towards financial intelligence.

And if that means cutting up the credit cards, then do so right now. If you cannot afford to pay the full amount due on your credit card at the end of the month, then you have a problem. You are trying to eat more than you have.

2) Take care of your own money
In line with balancing your own cheque book, let’s also understand then that you do not need to abdicate the money management function to anybody else. Regardless of what your father, uncle, partner et al says, guess what – you can do it yourself.

Just because you are a woman does not mean you are incapacitated, even handicapped, when it comes to working with your money. This you might have heard your father say often. Mother doesn’t know how to manage money; I can’t leave it to her.

Do not believe this. You can do the money sums. Trust yourself on this score. And in case you might not be able to add up to ten, go and do a course and learn.

3) Treat your money with respect
Where does it say in the handbook on life that you should throw your money at rubbish? You don’t need that expensive hair cut, the designer jeans, the brand spanking new car.
Because guess what. Nobody cares.
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