The temptation to consumerist life. But it’s not that easy you purchase various items for credit. Grow a garden healthy financial habits starts from simple, as it does not have debts of consumerist.
- minimize the consumptive spending. Meet old friends to exchange ideas in the cafes sometimes indeed necessary, but does not mean you should do it on every Friday afternoon. You can use this to save expenses or meet the needs of others.
- set goals or financial goals. Arrange financial targets that you want to reach on a regular basis, together with a partner. Set specific goals, realistic, measurable and within the specified period. These goals help you focus more designing financial. For example, aspire to have international standards for preschool education fund and so forth.
- saving, saving, saving. Change habits and mindset. Soon after receiving a salary, set aside for savings in the amount of days you plan appropriate goals or financial goals of your family. Preferably, you have a separate account for savings and daily needs.
- Invest! Of course You will not be satisfied with just waiting for your savings soaring. Whereas your goals for the family “exorbitant”. This is a good time to also think of the investment. Now its messes. Fear of investment risk?! No need to worry, you just need to learn on the experts. Consult your finances with reliable financial experts!
The Primacy Of Capital Market
The economic crisis of 2008 actually could have been avoided if the flow of funds to spur supply housing sector using the instrument-based financial stocks and/or bonds. Not to rely on the means of derivatives. Both the stock and bond instruments have advantages, i.e. in terms of transparency. Whereas the instruments do not yet have a standard raw derivatives in terms of transparency. Similarly, the rules applied in the world capital market and bond market so tight, so everything works under the law or
In addition, the level of efficiency and productivity of the housing sector that was built through the market mechanism is much better and more secure than other markets. Consequently, the pool of funds from the capital markets are really creating a sufficient economies of scale. Thus, a banking capital markets use the funds effectively for the construction of the housing sector is not only going to produce an efficient source of funding but also able to give a very broad impact follow-up.
Other advantages of the construction of the housing sector-based capital markets is no terpsichorean in capital and production factors in the effectiveness of the use of capital thus increasingly effective and efficient. An almost homogeneous price conditions could be kept and maintained in the housing market-based capital market.
Here’s what could avoid the housing industry from economic bubble or bubble. It supported again by the Konstantine between house prices and the stock price of the property sector. Antisepsis condition can occur when the stock price drop property does not run with the price of the property itself so that it requires intervention to prevent the occurrence of the condition of the market bubble.
Kahneman and Tversky (1974) reminds will risk in trading shares of transferability. Kahneman is finally getting the Nobel Prize in Economics. Stock trading in fact is the personification of the theory of Capital Asset Pricing Model (CAPM) where risk can be defined as the risk of the individual and systemic risk. Kahneman has finally received the Nobel Prize in Economics.
Housing Authority of China, for example, try applying the upper limit of the price of the House. That step is necessary when the economy of the people in the country – as seen from the per capita income — not yet in a position to take off as said by Rostow. Or when the lack of income per capita is also very wide. That’s what’s forgotten by the authorities of housing in the United States.
Another example of financial innovation is to have as many assets consumptive than productive assets. Have you seen the merchant who lived in a Shop house, where the bottom floor is used for trade, while the upper floors used as a residence?
That is, a place of business and residential into one. In other words, the merchant houses are not just houses, but has become a productive asset that can generate money, aka the place to do business. What about you? Perhaps you have the house for more than one. And you do not live in the house every month instead drain your pockets because it must pay the cost of electricity and other maintenance costs. In fact, housing conditions continued to decline due to aging and so forth. Concretely, some houses you have not only not productive, but instead become a burden. Therefore, the house must underproduction, in the sense of providing an income, such as leased to another party.
In addition to the house, try to see again those resources you have. Pay attention to whether the asset is an asset just as consumptive, or a mere tool to maintain prestige, or is quite productive. If you have gold jewelry whose value increases, the jewels belonging to the productive assets that can increase your wealth. So also with paintings whose value could be increased. In summary, productive assets are assets that have investment value.
Financial innovation can also be done by way of selection of appropriate investment. Understanding the right investment here is how to send your money “work” for you. So, money making money. How do I? Do the active investment.
Investment is active on a regular basis to select and evaluate investments that have been done. In capital markets, for example, some people buy stock, then keep holding it in a long time, with the hope of obtaining dividends and capital gains. It’s not wrong. However, in this period, could have held the stock price decline in price. Among those who hold these shares may not care or even sell it for fear that stock prices will further decline.
Investment is one of the most effective way to achieve financial prosperity. In fact, through investment, a person can send money “work”. So, the money to make money. You’re not looking for money, either as workers or entrepreneurs.
That is why someone who should be setting aside some fixed income fixed income to invest that in the future, when in question does not work anymore, still have an income through investment returns. It is the ideal situation investing.
However, in reality, the investment could also make a person lose the prosperity that has been owned. How so? Yes, because the investment also has a dark side associated with personality (personality) a person. Therefore, this paper will discuss some of the dark side so that you avoid the problem in investing.
First, the yield of the trap. There are a thousand and one choice of investment, both in financial markets and real sector. From the sensible to the insane. But for some people, which is used as the indicator is a large yield. That is, if the investment promises lucrative profits, many people who would be interested. In fact, the yield must be accompanied by a big risk too great.
Therefore, in investing, which should be seen not offer investment returns, but how the target return on investment that you want to earn. By custom, if you can earn investment returns twice the rate of inflation, it is considered good. Concretely, if the rate of inflation of 7 percent per year, return on investment of 14-15 percent per year has been very adequate.
Second, the “greed” investment. You would never hear someone who has suddenly become wealthy through stock investments, but then suddenly all become poor again. Why? Only one answer, ie greedy. When a person invests his chosen stocks and shares already reaping capital gains, is likely to begin to be interested in other stocks, which do not necessarily have a good fundamental performance. Other stocks that move was triggered by the price because of market sentiment or ‘fried’ “by dealer stock.
Never rely on the Pension Fund which is available from the office where you work. That amount would not be tailored to your individual needs. When you compile the Pension Fund, you must take into account the lifestyle you want and inflation you have to face.
Here are some things you can consider in planning for retirement:
Examine Cost of Living In Your Retirement
The amount of expenses in retirement will depend on the lifestyle you expect. At least you would want adequate financial conditions to pay the basic needs of daily life is not it? You also need to consider in retirement you will not get salary payments again. While on the other hand, the cost to your health care will increase. All of this funding are quite expensive, so plan for retirement for 20-25 years is feasible.
Price Increase in Retirement
Prices of goods and services tend to be higher because of inflation. Maybe you do not realize this now because they still get a paycheck every month. And salary increases each month may still be offset rising inflation. At the time of retirement, if you do not have a side business, then the savings you have should be able to keep pace with inflation.
Determine the amount of funds that must be saved
After researching the cost of living and inflation on your retirement, your next step is to calculate how much money you’ll need at retirement. A good reference for an estimate of how much you should prepare is about 70% to 80% of the income that you would get before retirement.
Investing for Retirement
There is never a two investors are exactly alike. Different objectives require different strategies to achieve them. Over time you need to adjust and monitor the progress of your funds according to age and changes in investment objectives.
In financial planning, you should include insurance as protection for the value of your Economies, Health, Critical Illness and of course with him makes you comfortable. You when the less fortunate, having an accident then the insurance that will work for you.
Happy retirement plan
First, commitment. When you settle down, it means you’re ready to share the income for your household. If you are still using the ideology of the individual in your household, it’s no different than life itself. Will ultimately lead to financial problems. Therefore, a commitment to share a foundation in managing family finances. If during this husband and wife was already using the paradigm, income is the right of each, then change the paradigm. Not too late.
Second, determine the financial goals together. How many assets who want to have? How to prepare the child’s school fees? And so forth. Every family has the right to determine their financial goals. However, that being said the key is how to make a priority of these financial goals. Who should relent and what should take precedence.
A simple example is the need for a family vehicle. Could be, because the inequality view of the family of funds eventually run out to buy things that are not productive. The most common is about the car. It could be that the husband wanted the sedan type car. The goal, so if the office could be more stylish. However, the wife wants the type of vehicle that can carry a lot of people because each wanted to travel together his extended family. If there is no meeting point, the family then bought two cars which in fact is not productive.
This sort of thing could lead to swell the funds for the purchase of cars, and can interfere with family financial goals. Therefore, in the context of these financial goals, both parties must be willing to yield real and prioritize the assets that are productive. As for consumer assets should be based on the functions and basic needs, rather than mere desire.
understanding your goal and objectives and how trading will achieve these. It means understanding yourself and how your personality affects your results. It means understanding the markets and instruments you trade.
In order to succeed you really need to become an expert in your own trading business to understand how it all fits together, when it is broken, and how it can be improved. As with all worthwhile endeavors, this takes commitment, hard work, dedication, and more hard work.
Don’t trade scared money
Lastly, no one ever made any money trading when they had to do it to pay the mortgage at the end of the month. Having a requirement to make X dollars per month or you will be financially in trouble is the best way I know to completely mess up all trading discipline, rules, objectives, and
leads quickly to disaster.
Trading is about taking a reasonable risk in order to achieve a good reward. The markets and how and when they give up their profits is not under your control. Do not trade if you need the money to pay bills. Do not trade if your business and personal expenses are not covered by
another income stream or cash reserve. This will only lead to additional unmanageable stress and be very detrimental to your trading performance.
Some trading systems have only marginal profitability, and trading implementation costs (commission, spread, and slippage) can be the difference between profitability and making a loss. With the easy availability of modern electronic brokers, and fully-automated trade processing and
execution, it is definitely worthwhile looking for a very low cost way to implement your trading system. High commission, wide spreads, and large amount of slippage can be reduced considerably simply by carefully choosing a broker. This can be the difference between a system
(especially a high frequency one) being useable or not. Paying too much for trade implementation is an avoidable way to lose money.
In order to compete at the highest level in the trading business and be one of the few truly successful participants you must be well-educated about what you are doing. This does not mean having a degree from a well-respected university – the market doesn’t care where you were educated.
Being well-educated means that you have thoroughly researched and tested your trading ideas and know why your trading system worked in the past and is continuing to work now. It means understanding all the technology and applications that your system needs to perform accurately.
One of the few trade management rules that we can state we never break is ‘Never add to a losing trade’. Trades are split into winners and losers, and if a trade is a loser, the chances of it turning right around and becoming a winner are too small to risk more money on. If indeed it is a winner disguised as a loser, why not wait until it shows it’s true colors (and becomes a winner)before you add to it.
If you do this you will notice that nearly always the trade ends up hitting your stop loss and does not look back. Sometimes the trade turns around before it hits your stop and becomes a winner and you can count yourself very fortunate. Sometimes the trade hits your stop loss and then
turns around and becomes a winner and you can count yourself unlucky. Whatever the result, it is never worth adding to a loser, hoping that it will become a winner. The odds of success are just too low to risk more capital in addition to the initial risk.
Don’t take too much risk
One of the most devastating mistakes any trader can make is risking too much of their capital on a single trade. One thing is certain in trading and that is if you lose all your capital you are out of the game. Why risk so much you could be prevented from continuing? There is a saying in
poker than going all-in (risking all your chips) works every time but once. This is true of trading.
If you risk all your account on every trade it only takes one loser to wipe you out (and no trading method is 100% accurate), so you will be out of the game at some point – it is only a question of time.