The Importance of Budgeting, No Matter Your Age

No matter where you are in life, you can benefit from an evaluation of your finances. Even if you’re financially stable, there’s a definite benefit in setting up some type of budget. You never know when your circumstances may change or if you might suddenly want to use extra money toward an emergency or to splurge on something. Budgeting helps you keep track of how you spend your money and make sure you aren’t wasting it on anything unnecessary. With budgeting, you’ll gain greater control over your life and be able to prioritize your spending.

You could lose your job

I’ll start with the worst case scenario; you could be financially stable and not have to worry about money, but then you (or a spouse) could suddenly lose your job and realize that you have to make do with a lot less money. With budgeting, you understand how to live within your means and you’ve had time to save up extra money. Avoiding overspending helps discipline you, especially if money is scarce at times.

You can save up for big purchases

The better you budget, the more money you’ll have to save up (if you have expendable income that’s not going toward living expenses or debt). Avoiding overspending allows you to save money for larger purchases, like a vacation, a house, or even simply your future. After creating a budget, if you find that you have extra money, consider putting as much as you can toward a retirement fund if you don’t already have one.

You can quickly pay off debt

As you cut out overspending, you can put extra money toward debt. While you should also regularly be saving money, it’s almost equally important to pay off your debt as fast as possible. If you find that you have extra money, consider paying more on your debt each month. You’ll save interest and also have that many less payments to worry about.

You figure out what’s most important

When you start examining your budget and decide where to cut costs, you begin to realize what’s important and where you can avoid spending money. Maybe you have monthly subscriptions for services or products you rarely use. Maybe there’s another service you could use that would cost less. You might spend considerably more than you realize. It’s important to take an honest look at your spending habits and evaluate what matters most. This step allows you to stop wasting money and actually put it toward what matters.

You have more control

Maybe it doesn’t feel like it or maybe you feel overwhelmed by monetary concerns, but once you start budgeting, you’ll feel like you have more control over your life. Being financially stable frees you up to make decisions instead of always feeling like you have to worry about bills or when you’ll get your next paycheck. Gaining control over your finances leaves you feeling much more confident and reassured.

How to Teach Yourself About Investing

Far too many people are unaware of the basics of investing, even though it’s one of the best ways to build your wealth. Public schools do not teach anything about it and if you go to college, you really only learn about investing if you take business or finance courses. This lack of knowledge leads to people shying away from investing and relying on a steady and reliable source of income. They often view the stock market as a way to simply lose money, especially if they lack basic knowledge about investing. This viewpoint is completely understandable, but not one you should subscribe to. If you know nothing about investing, it’s never too late to learn! Here are some ways you can teach yourself more about investing and get ready to start a portfolio of your own!

Take a look at your finances

The first step you’ll need to take is examining your finances and determining how much money you want to put into investments. If you’re heavily in debt or have no savings, you should take care of those issues before attempting to invest large amounts of money. Get an accurate picture of your finances so you know how much you have available to invest.

Learn the basics

When you first begin looking at everything that goes into the markets and investing, it can feel overwhelming. People spend years trying to learn the secret to investment success. Instead of feeling intimidated by these approaches, simply start by learning the basics of investing. Learn what different terms mean and how creating an investment portfolio works. But, don’t take too long; the sooner you begin investing, the better!

Check out online resources

After you feel like you have a basic understanding of investing, it’s time to start learning about the different approaches people take and cultivate a deeper understanding of the market. A great place to look is online, because there’s a seemingly endless amount of online resources, such as ebooks, blogs, podcasts, and many websites that offer expert advice. Check out the credentials of a source before believing everything you read, but most information on investing can be useful, even to just teach you what not to do.

Find experienced people

You might know someone who’s a financial advisor or who spends a lot of time following the market and knows about investing. These are the people you should talk to. Even if you don’t personally know anyone like this, you can certainly find a forum or website where you can chat with someone who can give you actual advice about investing.

Set your goals

Before you actually start investing, take a bit of time to set your individual goals. How much money do you want to invest? Why are you investing? What return do you hope to see? People invest for different reasons, not simply to generate wealth. Once you’ve decided what your individual goals are, you can start investing.

Start small

As you begin your journey as an investor, remember to first start small. You definitely shouldn’t take your entire savings account and invest in high risk stocks; use a smaller, manageable amount first and invest smart. Research the best types of stocks and start out with moderate risk.

The Importance of Risk When It Comes to Finance

Risk is involved in every aspect of life. The risk of taking your first steps is falling; the risk of asking a person on a date is rejection; the risk of interviewing for a job is failure; the risk of parallel parking is hitting another vehicle. So, it is guaranteed that creating a business or investing in something financially, as well as physically, involves considerable risk.

What is risk? According to Google, risk is the possibility that something unpleasant or unwelcome will happen. However, according to the business dictionary, risk is a probability of damage, liability, loss, or any other negative occurrence that is caused externally.

From a finance point of view, risk is the probability that an investment’s return will be less than expected. However, risk also offers the chance of reward. For example, a reward could be an increased return compared to a lower expectation. Financial risk is comprised of multiple categories: basic risk, capital risk, delivery risk, exchange risk, interest rate risk, political risk, settlement risk, underwriting risk, and much more.

Examining financial risk includes looking at daily finance operations, such as cash flow, transactions made by the business, and the business’ financial systems set in place. You may consider things like which clients owe the company, how the company plans to retrieve the money, insurance, and its coverage, as well as whether the business can extend credit to customers and how.

When calculating financial risk, external factors like interest rates and foreign exchange rates should be considered. Those factors can affect company competitiveness with services produced abroad; changes in interest rates and exchange rates can immediately affect debt repayments.

All businesses should extensively discuss risk management within the business’ strategic management. Doing so allows the company to identify and tackle any risks before they become an issue, which will in turn aid the chances of reaching defined business goals.

Once the risks have been pinpointed, there are several ways to address them: accept it, transfer it, reduce it, and eliminate it. Acceptance of a risk might happen if the costs are too high to handle it in any other way. The risk could be dealt with by transferring, which typically takes place with the company insurance. Reducing a risk is merely introducing safety measures to keep the risks from occurring, and eliminating the risk could be something like changing the production process. Once the risks have been determined and the type of management has been decided, take steps to put the measures into place.

Risk management is not a one time kind of deal; it requires consistent monitoring and should often be reviewed to ensure the management approach is successful. Set the plan in stone by creating a risk management policy that will identify the company’s approach to risk, and it’s management. The CEO’s and the board should all be on the same page before moving to the management policy phase.

All choices in life and business involve risk to some extent. By understanding what risk is and how to manage it, business and employees are more likely to meet their financial goals.

Easy Ways To Save A Lot Of Cash

Do you feel like you are always strapped for cash? It seems that a lot of people feel that very same way in today's world. There are just so many bills to keep up with and ways to spend our hard-earned money that it becomes easy to fall a little short on extra cash. Everyone wants to know what some simple ways to save more money are so that they can bank some extra cash.

Check Out Coupon Sites

The Internet provides plenty of ways to spend your money, but from time to time it also produces ways to save some of that cash as well. Coupon websites are plentiful and often feature some of your very favorite products at a discount. If they have a coupon for something that you already plan to purchase anyway, why not take advantage of that opportunity?

Even if you do not go directly to a coupon website, at least check to see if there are any coupons for what you plan to buy in that moment. Places like pizza restaurants and the like frequently have coupons available for the taking for those who are ordering delivery.

File Your Tax Return

The vast majority of us are required to file a tax return every year by law. For some reason some people like to drag it out. This might make sense if you are one of the unfortunate ones who has to pay money into the government. However, if you someone who is expecting a tax refund, why would you wait even another minute to file? As soon as the new year rolls around you can file your taxes and start having that refund processed. The sooner you file, the sooner that money can get to you.

Buy In Bulk

A lot of retail and grocery stores count on you buying items in just the quantity that you need at that very moment. If you indulge them in doing this, then they are the ones who really benefit. Stores can mark up smaller quantity items a lot more than what they would sell the same item to you for in bulk.

Bulk purchases means fewer trips to the store (less temptations to buy more things!), and you get a better price per unit when you shop this way. Check out the price comparisons by either doing the math on the per unit price for yourself, or check the price tags to see this broken down for you on many items in many stores. The difference can be truly astounding.

How do you Value a Sports Team?

I’ve always found it interesting how economists assign value to sports teams. What dictates one sports team being worth $4 billion while another is worth $2 billion?  You’d think it would be the abilities of the players, right? How many games they’ve won? Feats they’ve accomplished? While I’m interested in the economy of sports, I take a bit of nuanced view on the subject because it find it pretty arbitrary how an economist decides how much a team is worth, to an extend sealing the team’s fate. Because there is some kind of system they follow though, and I’m interested in both finance and sports, I thought I’d try to shed some light on the subject.

Let’s take a look at the most valuable sports team from 2016: the Dallas Cowboys. Now wait a minute, you may be thinking. The Broncos won the Super Bowl in 2016, and the Patriots in 2015 and 2017...what makes the Dallas Cowboys so valuable? At $4 billion, the Dallas Cowboys are the world’s most valuable sports team, even though they haven’t won an NFL championship in 20 years. Instead, we should consider the team’s $1.2 billion home stadium built in 2009, which they sold the naming rights to AT&T in 2013.

According to financial firm Mercer Capital, “Sports business mandates constitute an amalgam of traditional valuation approaches applied to a specialized industry niche possessing its own distinct value drivers and considerations.” Various factors, both internal and external value drivers, play into the value of a sports team. For the sake of time and space, I’ll explain it in simple terms. A sports franchise’s value is often determined from its future benefits, and sentimental value often plays a larger role in determining a team’s value than factors that would seem to be of more importance, such as the win-loss record of the team and the skills of individual players.

The valuation of sports teams is complicated and has its own set of rules, with there often being significant differences between fair market value and price. Sometimes a team’s worth is influenced by a wealthy investor who has some kind of sentimental connection to the team, and in that case the team’s ability has nothing to do with their value. A sports team’s value can also be incredibly difficult to define, because it is derived mostly from future benefits looking at projected factors such as the management team, trademarks, brands and logos, customer “fan base” relations, player relations and contracts, customer contracts, broadcasting contracts, arena ownership and lease agreements, and local demographics.

In short, the economy of sports is complicated and often arbitrary. It follows its own set of rules. From the words of economists at Mercer Capital, “...sports properties encompass a highly specialized segment of our profession that is subject to its own distinct challenges.”

Originally published on nicholasfainlight.net

3 Awesome Finance Podcasts

If you’re going to be in finance, you’re going to have to read. A lot. As a student, I am inundated in fundamental texts on a daily basis, but textbooks set aside, there is just a lot of reading that goes into the job—pouring over reports, staring at data to identify trends, drafting up proposals and strategies—the works. That’s why I appreciate being able to approach learning from a different tac. The tac of podcasts. Here are four of my current favorite finance podcasts. If you have recommendations others than the one’s I’ve listed, I’d love to hear your thoughts below!

Planet Money

If you’re going to write a blog about finance podcasts to listen to, you would be remiss to not include Planet Money. It’s an NPR production, so you can bet that it dives in deep, while also still being approachable.

For the full blog, go to NicholasFainlight.net

Black Friday Mirror: 5 Investing Nightmares for the 21st Century

It’s Halloween, which means its the time of the year where (people dressed as) ghouls and goblins emerge from their creepy, crawly places to spook us out. Depending, on what information you have access to, that isn’t the only spooky thing happening. Tensions are high for individuals aligned with both political parties in the US. The polar icecaps are getting smaller and smaller. And at any given moment there are a handful of financial nightmares that threaten to keep people up at night. Here’s a look at five:

Hyper-Connectivity

More people have more access to more information than ever before. Every day more and more devices are connected via the CLOUD. According to an interview Gordon Dee Smith, manager of the private intelligence agency Strategic Insight, there are more cellphones in the world than toothbrushes and that is pretty concerning. As opposed to being structured vertically, individuals can now organize around an idea vertically across the world. This may be great for finding something in common with a number of people across the world, but it also means that the authority of legitimate “vertical” leaders is undermined. As Smith puts it: “You can’t tell who’s who and what’s what anymore.”

For the full blog, go to NicholasFainlight.net

How Presidents Affect Stocks: From the Whole to the Particular

Over this past election season, the press has been riddled with headlines proclaiming “6 Stocks to Buy If Donald Trump Is Elected“, “Trump-friendly stocks fall as candidate comes unshackled“, “Best Stocks for a Hillary Clinton Presidency“. When it comes to the stock market, candidates have an ostensible sway over how the chips will fall. But the nuances of particular candidates set aside, it’s an observable pattern that election cycles have an effect on the stock market.

General Trends

Looking toward the Stock Trader’s Almanac, Kiplinger reports that the first two years of a new president’s term are often marked by bearish markets and recession, whereas the last two years of a presidents term are marked by bullish markets and general prosperity. Along those same lines, it seems that the Down Jones Industrial has a history of increasing around 10% points in the year before a presidential election and 6% the year of an election.

For the full blog, go to NicholasFainlight.net. 

Nicholas Fainlight Presents: The Holy Trinity Of Stock Trading Apps

Today, anyone with a smart phone and an internet connection can be a trader. All it takes is the right selection of apps and proper knowhow. Here's a video presentation that takes a look at several apps that any mobile trader shouldn't be without.

 

For the full blog, go to NicholasFainlight.net.

The Holy Trinity of Stock Trading Apps

Ten years ago, no one would have imagined that it would be possible to manage you stocks from nearly anywhere with the help of your phone. Today, mobile trading is a very convenient way to constantly keep an eye on market prices, and even buy and trade. Although there are a lot of great apps out there, I've yet to encounter one app the encompasses everything it takes to be a successful mobile trader. However there are several apps that when combined together make for a mobile trading force of Megazord proportions. And all of them are 100% free.

Robinhood

Robinhood removes the barriers of entry that would make young traders like myself unable to participate. It's the Venmo of the trading world...

For the full blog, go to NicholasFainlight.net.

How to Save Money as a College Student: Food

As a college student, it’s dawned on me that as much as I knew about finance before coming to school, there were so much about managing finances in school that I learned along the way. This column is devised to help college students like myself get an edge on the financial challenges of school.

Another one of the biggest costs in college life is food. The other side of the coin is that this is also one of the easiest ways that you can cut back on expenses.

If You Go for a Meal Plan, Go for the Block

Different colleges offer different sorts of meal plans. More and more schools are giving students the option to purchase a block (lump sum) of meals, a certain amount of meals per a week, or an unlimited amount of meals (either for a week or a semester). Unless you plan on eating 95% of your caloric energy from dining halls, I highly recommend picking up a block plan. It gives you the restraints of a finite number of meals, while also giving you the flexibility you need to make meals work around you. Both restraints and flexibility are important, especially when it comes to…

For the full blog, go to NicholasFainlight.net

Also, if you’re looking for a simple cheap recipe, check out this simple mashed sweet potato recipe by 3375.

3 Ways to Capitalize on Fitness Opportunities in College While You Still Can

 

If you’re a student like myself, you are extremely lucky. Not only do you have access to amazing higher education opportunities, but you also have access to out of this world fitness facilities, equipment and classes. If you find yourself stalling or not getting the amount of activity you want (and trust me, you’re not alone in either of those), here’s a list of resources at your disposal to help you to get the most fitness bang for your college buck.

The Student Recreation Center/Gym/Exercise Place

Alright, so these gym facilities have a lot of funky different names depending on which school you go to, but the bottom line is that these are facilities where you can go work out…

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How to Save Money as a College Student: Books

Once you look back on your college expenditures, one of the greatest costs you will find will be books. Books are expensive. Nearly every course you take will require you to buy books in some sort of capacity, and left unchecked, you will find these expenses eating into your savings/food/beer money real quick. Here’s a look at several ways on how to cut back on the cost of books.

Use Your Library

Your campus library is an amazing resource. Make the most of it. Although it might be tough to find a required course reading at the library, you might have some luck. There are a number of times where a professor has recommended extra reading and I’ve been able to find just that book in the library….

For the full post, go to NicholasFainlight.net.

Gold Prices Rise as “Brexit” Debate Nears to a Close

The UK is voting whether to exit or not from the European Union, which will almost certainly have an effect on the global economy. The impending vote, also known as “Brexit” – for British Exit – has markets on edge, and even more so if “Brexit” successfully passes. One commodity that is predicted to change dramatically is gold. From what markets are already predicting, if “Brexit” passes, gold could be pushed to $1400!

Gold as the Winner

Gold could in fact be the big winner of this referendum. According to the Wall Street Journal, if the referendum to end the country’s membership in the European Union passes, gold could rally as much as 10%. Why ?

For the full article, go to NicholasFainlight.net.