General objectives that guide the activities and relationships of one state in its interactions with other states.

Source:.lifehack.org

Investing, Personal Finance, and How to Make More Money — Faster

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Sticking to personal finance goals can be really tough, but the goals themselves are rarely complicated. Here’s what you should be doing to keep your financial house in order:

  • Spend less than you earn
  • Save the difference
  • Invest your savings

Simple, right? Of course, in practice, we have a few more things to talk about.

Budgeting and other personal finance basics

Source:thebalance.com

Spending less than you earn can be tough (to be fair, it’s actually impossible for some people — but don’t say that’s the case with you until you’ve tried everything you can to limit spending). The key to keeping your spending in check is to budget. Budgeting is no fun, we know, but it’s the proven way to balance your finances. Reign in spending by identifying discretionary expenses (as opposed to the stuff that you absolutely must spend on, like groceries) and by avoiding toxic short-term debt, like credit card debt.

Create an emergency fund. If you lose your job or encounter a sudden expense, your emergency fund will help you avoid having to take out loans. That way, you can start right back in with our healthy habits when you start earning again.

Once you’ve saved your emergency fund, put the rest of your savings into a savings account with a decent interest rate. If you don’t, inflation will rob you of your hard-earned purchasing power over time. And when you have enough liquid cash in your savings account for any near-term expenses you’re saving up for, start investing!

Source:daveramsey.com

Why? Simply put, because investing offers you the best possible balance of risk and interest. While stocks can go down, they tend to go up, and your earnings in the stock market will outstrip savings account interest even when you’re very careful about your investing.

Basic investment strategies, safety nets, and more

Being pretty careful about your investing is, by the way, a very good place to start when you’re new to investing. The stock market can offer big profits, but it’s a complex thing, and it is possible to lose money if you’re not careful.

Start simple. Learn how to use a straightforward long-term strategy such as a buy-and-hold strategy. Buy-and-hold just means getting safe “blue chip” stocks, index funds, and other “safe” investments, and holding onto them. Simple, right?

Source:usatoday.com

If you invest steadily in the stock market in a diversified way (and those index funds can create diversity for you very easily), then you’ll tend to make money over time. Is the market up? Keep investing. Is the market down? Keep investing anyway. Over time, a basic strategy like this will give you fairly steady results.

You can fine-tune this strategy with the help of a financial adviser. For many people, this is all that’s necessary for a sensible financial future. For others, we have our next section.

Bigger money sooner: more aggressive investment tips

Investing for the long run is a pretty simple thing that anyone can do. But the market doesn’t offer opportunities to slow-and-steady investors alone. There’s a reason that the stock market has a reputation for high stress levels, high stakes, and huge profits (and losses, too). You can get much more aggressive than a basic buy-and-hold strategy.

More aggressive investors won’t just buy stocks. They’ll sell them. That means determining when stocks are at their peak value. If you’re hoping to become a more active investor, learning how to read earnings reports and evaluate things like price-to-earnings ratios is a must.

Source:cnbc.com

You should understand the market as a whole, too. “Timing the market” means getting out before big crashes and buying back during down periods. Knowing how to time things right is extremely tough, but advanced math may have answers: some investors are big believers in the Ichimoku Cloud, a complex indicator that measures market equilibriums.

If you’re making trades often, you’ll become what is called an “active investor.” If you trade stocks as your primary source of income and work at it during usual workdays, you’ll be a “day trader.” And if you are any of these things, you’ll need a few things: a great broker, great financial news sources, and a financial safety net that is a bit larger than the average person. So beef up that emergency fund! Your risks are higher than those of the typical investor — but so are your potential rewards. Being an active investor isn’t easy, but it can be immensely rewarding.



Ricardo is a freelance writer specialized in politics. He is with foreignpolicyi.org from the beginning and helps it grow. Email: richardorland4[at]gmai.com

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