Saturday, June 29, 2013

Money Saving Tips

Need a bit more cash to buy that nice house or to get that nice living room set, here are a few tips on how to save money.

1. Don't buy books just about everything you need is available online or at the library.

2. Don't buy movies you can get them online or at the library for free.

3. Share/trade with friends/family everything from unlimited MetroCards to car rides to bikes

4. Open an ebay account and sell your old books, clothes and games.  Get creative you might have some goodies at home that people may want, look around the street you might find free stuff that you can sell online.  I once made a good amount of money selling free street giveaways such as post cards and MetroCards online.  People overseas find it cheaper to buy U.S. items online than to travel here.

5. Use all your space at home if you got a room with plenty of free space open up your own business and you may be able to deduct expenses for the use of your home.

Sunday, June 23, 2013

How The Job Market Is Evolving

In a computer dominated world one can't ignore how the job market has changed.  We live in a world where more can be done with less.  Less time, less employees and less money.  A few years ago I told one of my classmates that I might need her help to do an online project but the more I learned about the internet and computers the less I needed her help.  I searched for all the answers online and I ended up doing it all by myself meaning I did not need to hire her nor pay her.  All the information and tutorials were online and free.  Speed is also a factor you can get more done in less time which has allowed for a lot of jobs to be given to freelance workers letting companies save on employee benefit plans.  Yes, computers are eliminating jobs but they are also making us more efficient and they give people access to a massive amount of information quickly.

Computers and information technology are changing exponentially which will only accelerate the way jobs evolve even more.  Keeping up, adapting and being able to predict change will be the name of the game.  Online social media has changed the way we get jobs; Twitter, Facebook, LinkedIn and even YouTube are some of the new ways of getting that job lead and interview all of which are free. These popular online social media companies make plenty of money but employ very few proving that doing more with less is the new way of life.  Are we to think those high paying jobs of the past are likely to come back?  The number of top paying jobs will only decrease and go to the ones creating or making the best use of the new technology.  A good example of how technology and science are changing exponentially is the rate at which synthetic DNA can be made.  The rate has increased and the cost has been reduced significantly, in the future it will become a consumer product via laser printing.

Sunday, June 16, 2013

Credit Card Vs. No Credit Card

In a world where cash seems to be disappearing some people are opting to get rid of their credit cards replacing them with cash, checks and debit cards.  Is a mountain of debt a good reason to let go of the plastic? When everything else fails then drastic measures may be necessary let's consider the pros and cons of owning/not owning a credit card (CC).

Pros of owning a credit card
1. You can build credit to buy a home, car or start a business.
2. Protection against wrong charges and help with items you want to return (insurance on purchases)
3. Some employers are looking at credit scores to see if you are good with money
4. Better credit scores mean lower interest rates on mortgages and other loans
5. Online shopping saves you money online shopping requires a CC
6. Access to money in tough situations (traveling, lost, running late)

Pros of not owning a credit card
1. You will spend less; research suggests that consumers spend more when using CC's than cash
2. Privacy,you can't be traced as easily when using cash (those really concerned will love the Bitcoin)
3. Lower-income individuals usually end up with high CC debt + high interest rates
4. Consumers are more likely to buy unhealthy food when paying with a CC
5. If you have friends with bad money habits you are likely to imitate their CC shopping patterns
6. You only spend what you earn

A credit card is a good financial companion only if you have the discipline to make payments in full and will not use it to shop until your balance becomes unmanageable.  We are visual consumers when we handle cash we take the purchase more to heart that is why keeping some cash is not a bad idea.

Sunday, June 9, 2013

5 Ways To Save Money

A little more cash never hurts especially if you are young and trying to make it on your own.  If you are a bit older you know that retirement won't be cheap.  The following 5 steps are geared to help you take control of your finances and your future.

Learn To Say "No" To Friends
We all get invited to parties, baby showers, weddings and office parties sometimes for people we don't even know.  Invitations come with an obligation of either buying a gift or a cash donation.  All of these costs can add up quickly not only from invites but from the lady selling Avon and the coworker selling M&M's for his daughter's basketball team.  Learn to say "No" only say "Yes" to a few of these solicitations don't feel bad about sending a thank you card with an explanation as to why you cannot attend.  Saying "Yes" will only make it harder to say "No" the second time around.

Use Your Credit Card Wisely
A credit card can be your best friend or your worst enemy.  Make it work for you not the other way around use a credit card strategically.  Do not use it as a way to buy items you can't afford.  Do not open department store credit cards, these come with the deadliest APRs known to man.  Use the card to build credit to buy a home or to get approved for a loan in the future.  Use it only for necessary purchases that you can pay back immediately.  See the card as an investment opportunity to buy inventory for a business or to start a business, purchases that will pay for themselves and will allow you to free cash to invest elsewhere.

Buy Generic
When it comes to buying prescription drugs and food as long as the ingredients are the same why not buy the less expensive item.  Do you really need to buy the expensive cereal box or the pricey medication?

Free Entertainment
With free sites like YouTube and Hulu there is no reason why you should be paying for cable or a night at the movies.  There are so many options and sites that offer free quality programming and music which can be customized any way you want.   We are talking about true reality shows, from the guy next door shooting a video of himself going to the supermarket to the man on the subway falling asleep while a rat creeps up on him.  You can even invite some friends to enjoy a movie all together whether you get it from Hulu, YouTube or the library it doesn't matter as long as you are all having a good time.

Don't Get Another Degree Unless It's Reimbursed
Education is a good way to secure a job but once you have gotten an undergraduate degree should you really go back to get more education? Let's consider an MBA at a top university which will run you a bit over $100k.  Does it make financial sense to work full time and go to school part time for the next 2-3 yrs to get ahead in your career while increasing your debt heavily?  Once you get your degree you will have to stay at your present job for about another 7 years (that's including a promotion) to pay off your new debt. What if you want to get married and buy a house during that period? Forget about it! You will be at that job for the next 10 years or more.  If you love your employer this will not be a problem but think about the way the educational system is evolving, while you get your expensive degree, online classes/degrees will gain popularity (at a fraction of the cost) when you graduate they may be considered just as good.  Try to get your employer to fund your career if not try to get a scholarship to cover you, otherwise think really hard about your future finances before getting more education.

Sunday, June 2, 2013

It's Not About How Much Money You Have

Would you be happy with a million dollars? Most people would answer "yes" but what if you had made $20 million investing in real estate or stocks and all of a sudden you lose it all but $1 million.  Now let's ask the question again would you be happy with a million dollars? The answer would be "No" you would have a hard time forgetting the $19 million you lost.  Losing large sums of money from an investment gone wrong is one of the worst feelings a human being can experience it can be unbearable.  It is not always about the sum of money you end up with it is about how you get there.  Developing good money management skills is essential to survive and avoid losing money.

On January 14th 2013 I bought 1000 shares of Facebook (FB) at $31.27 (10:43 am-10:45 am) I sold the 1000 shares at $31.38.  I made $110 on the day trade, sure I could've made a little more money had I kept it a few minutes longer but from experience I exited at the right time.  The stock was extremely volatile for the day it is not a stock to trade if you are risk averse.  Holding on to the stock for the long term would have been a mistake as the stock closed at $30.95.  On January 15th the stock closed at $30.10 I would've ended the day with a $1170 loss.  Had I continued holding it with hopes to pocket thousands of dollars in profits I would've gotten quite the beating.  Facebook never hit the $31.27 price point after January, fast forward to this past week FB closed at $24.35 I would be down $7000, on Wednesday I would've been down $8000.  Would you be happy with $24,300? Not after that trade! Right now I would be thinking how I turned a $110 profit in 2 minutes to a $7000 loss in 4 months.

What if the stock comes back up in the following weeks to $40 a share? It doesn't matter that trade should have been exited immediately, $31 would have not been the right entry point for a long term investment.  You lose time and money by holding on to an investment that goes wrong.  A bad trade should be exited at a 5%-7% loss, the moment the trade starts going against you it may be time for the flip, meaning exiting the trade, accepting you were wrong and shorting the stock to profit from the drop in price.  Traders need to know that an $80,000 loss starts out as a small loss that was not dealt with correctly.  Invest wisely remember the more money you have the bigger your losses will get.  The rule is to cut losses quickly to enjoy your ascent to financial freedom.