Financial Tips that will help you establish yourself and ensure that you will achieve your Goals
First of all, congratulations! You graduated from high school and you are ready to begin a new chapter in your life. Whether you have decided to attend college and work part-time, or work full-time for a year after high school, these financial tips will help you to establish yourself and ensure that you will achieve your goals.
1. Develop a positive relationship with money. That may sound really strange, but you need to realize that money itself is simply neutral. It’s how you handle it that determines whether money is going to serve you or you are going to serve it. The way to develop this positive relationship is to make sure that you are always in control of your money. The key to staying in control is to never spend more than you earn and to get into the habit of saving wisely.
2. Think before you spend. You are now on your own. No one is looking over your shoulder and asking you how you are spending your money. It is up to you to be responsible with your money and only buy the things you really need. Sure, you can treat yourself once in a while, but remember, only spend money you actually have, and never buy things on credit that you can’t afford to pay back.
3. Start saving regularly and automatically. The best way to save is to think about what you want to save for. You will never be motivated to save until you have a definite purpose for saving. Once you have a goal in mind, the next step is to set up a savings account or a Tax Free Savings Account and set up pre-authorized payments into the account. This way you don’t even have to think about saving, it will literally happen automatically.
4. Apply for a credit card to build your credit. In Canada, it is very important that you build your credit. If you don’t have any credit history it is very difficult to be approved for a loan or mortgage down the road. The best way to build a good credit history is to get a credit card with a low limit. Use it once or twice a month for a small purchase, and then pay off the full balance every month. This way it won’t cost you anything in interest but you are showing the Credit Bureau that you can handle credit responsibly. Note: Just simply getting a credit card and not using it will not help you build credit. Note #2: Carrying a balance very close to your limit is not a good idea either.
5. Ask people you trust for advice. Not everyone has a good financial role model. Sometimes parents can teach you bad habits rather than good ones. Seek advice from someone you trust who you know is financially responsible. It’s better to learn from other people’s mistakes instead of having to learn from your own, so don’t be afraid to ask for guidance.
If you can follow these tips, you will be well on your way to becoming a financially responsible adult, and you will be far more likely to achieve your goals, whatever they may be. Good luck!
Fixed and Variable
The concepts of fixed income and equity are two concepts that should be clear if we learn to invest our money properly.
When it comes to fixed income and equities, generally refers to income generated by financial assets or securities (stocks, bonds, bills, etc.), but these terms actually apply to the income generated by any type of investment (including savings schemes).
Fixed income
Fixed-income investments are given where it is known in advance (or at least acceptable prediction level) what the income flow generated (which may not necessarily be consistent or regular).
Example of fixed-income investments are financial assets or securities such as bonds, debentures, letters, and notes, real estate for rent, and systems such as savings deposits and savings accounts .
Generally, fixed income investments generate lower returns than equity investments, but have a lower risk. Generally, these investments are long term.
Equities
Furthermore, equity investments is given where it is not known in advance what the income flow generated (which may even be negative) because they depend on various factors such as a precipitous business, market behavior, the evolution of the economy, etc.
Such equity investments are stocks, shares in mutual funds, and bonds and convertible bonds.
In general, equity investments generate higher returns than fixed income investments, but are at increased risk. Generally, these investments are made in the short to medium term.
Conclusions
Fixed income investments have a low profitability and low risk, while equity investments have high returns and high risk.
The best way to reduce or manage risk is through diversification, i.e., “not putting all your eggs in one basket”, but rather to diversify investments.
One way to diversify investments is by buying fixed-income investments and equity investments, i.e. building a portfolio that combines the two types of investments.
The proportion of these investments depends on the objectives and profile of the investor, for example, searching for higher returns, greater investment must be equity, and the lower the risk tolerance should be greater investment income fixed.
The Easiest Way to Get Rich
Most people live obsessed with wealth. Many spend most of his adult life trying to get it, but very few find a way to reach your goal.
Ways to achieve wealth is more, we can create a multinational company, to be famous artists, athletes be successful, be world-famous authors, winning the lottery, inherit a fortune, etc.
Unfortunately most of these get-rich are complicated and, in most cases, are beyond the reach of most of us.
An interesting method of how to get rich, although not come to follow to the letter; we can take as a reference to start our road to riches.
1. Getting a good paying job
The first step of this method is to get a good paying job, which may require a great effort from us and take us some years, but is a necessary step if we have a good source of income.
2. Get good tax advice
In most cases a good portion of our revenues will go to government funds, so if we take seriously our quest of wealth, an important requirement is to get a good tax advisor to help us reduce legally pay our taxes.
3. Saving 20% of what you win
As soon as we receive our payment, we must deposit 20% of it in a savings account, most banks can do this automatically for us.
4. Conservatively invest the money that accumulates in the savings account
Once a month, we go to our savings accounts, divide the money, and invest equally in the next three conservative assets: private equity investing, real estate investment trusts, mutual funds and cash.
5. Reinvest all income from assets
All revenues generated by the assets listed above, must be reinvested in the same mutual funds that generated them.
6. Never touch these funds
We must never touch those funds, we must try to ignore the news on speculation or market movements and maintain the strategy of investing 20% of our revenues in these assets, we must bear in mind that every market has ups and downs, but the long run, all markets will almost certainly increase their value.
7. Wait a decade
If we follow the above steps in a decade we can probably say that we are rich, probably are not going to be a Bill Gates, but almost certainly will be within 20% that make up the wealthy, if we wait another decade, we will be within 5% or even more.
