YOU need to be RESILIENT, to survive!

Hello Everyone,

It’s amazing how resilient the human spirit is, we have survived the worst economic crisis since the great depression, and we still wake up everyday to go out there and eke out a living. I think this is one of the qualities of the human being that gives us the strength to get up, dust ourselves and keep moving forward towards our goal. Like the way the Americans were able to overcome the difficult and tragic event of 9/11, that’s the same resilience we need to overcome this financial crisis, and just like the Americans did to make sure that the events of that day do not happen ever again, they implemented measures to prevent such a catastrophe, that’s also what we need to do. Although I’d like to think that the same will be done about this crisis, I can’t help but wander whether man will ever be able to conquer the one quality that I can say is responsible for many of the worst calamities in the financial arena, and that is GREED. When the financial crisis was at its peak, Alan Greenspan was asked by a CNBC reporter whether there is anything the world has learned from this financial meltdown. His response sent a chill down my spine, he said we may come up with all the all the laws we can enact, but those can do so much, and that no matter what we do, we are going to have another financial crisis some time in the future! His reason was a simple answer, HUMAN GREED and there is no enacted law that can control this. My conclusion was that YOU are responsible for YOUR destiny, and therefore YOU should implement measures that will cushion YOU against any future financial calamity that is going to happen. TAKE CHARGE OF YOUR FINANCIAL AFFAIRS!

How wealthy do YOU think you are?

Hello Everyone,

A few weeks ago, Forbes magazine published its annual list of the wealthiest people on the planet. Some of those guys made billions, when the rest of us were busy trying to make a living, by hanging on to a job that was not guaranteed tomorrow. It kept me thinking, what is real wealth, I mean, is it only in terms of money and other physical assets, and I concluded that the real definition of wealth is ” the number of days, weeks, months and years that one can be able to sustain the lifestyle or standard of living that YOU are currently living (and without altering it) without YOUR job or employment.” Going by that definition, I think many of us, OK over 99% of the folks, would fall by the wayside. This is because, this financial crisis has just shown us how poor we are, I mean most of the citizens in the developed countries were living a life that was beyond their means and when the crisis hit home, it just showed us how incapable we are of sustaining the lifestyle we were living. Most people had accumulated all these unmanageable debt through debt, specifically credit card and mortgage debts. Don’t get me wrong here, there are debts that are good, especially if there are for assets that appreciate in value, but at the same time too much of it can be poisonous. By the look of things, a lot of people define wealth in terms of things, even though they are important, do YOU need them NOW, or can that new car wait for another year, or that overseas vacation can be done next year, the credit card should be used for paying important bills not paying other credit card bills. I think until we learn how to define true wealth, that is when we are going to experience financial freedom, and STOP BEING A WELL OFF, BUT A WELL TO DO PERSON.

Have YOU ever thought of Commodities?

Hello Everyone,

For the last few months, or rather from the beginning of this financial crisis, one class of asset that has given investors very good returns is what we call the commodities market. The commodities market is where investors trade in assets like gold, silver, other precious metals, Brent crude oil, including agricultural produce like soya beans, maize or corn etc. This market, especially gold, is viewed as a hedge against inflation, and as a safe heaven in time of political or any other type of uncertainty that exists in the market. Any financial expert will always advice YOU, that for you to have a balanced portfolio( a collection of investment),YOU will be required to invest in all classes of investment products so that YOU can maximise the return YOU get on YOUR money, but at the same time YOU are minimising the risk since the return of YOUR portfolio is now dependent on a variety of assets as opposed to a single class of asset. So for anyone who is thinking of investing, one class of investment that I would recommend is the commodities market, since the equity market, as per some financial experts, the prices are a bit over-valued, and the stock market is still on a recovery path. As I said a few days ago, DON’T put all YOUR eggs in one basket, diversify YOUR portfolio so that YOU can enjoy the return of the different classes of assets that are available in the market, and be on YOUR way to attaining financial freedom through prudent investing.

Never PUT all YOUR eggs in one basket

Hello everyone,

As millions of people stand on the employment line to get the government cheques, I can’t help but wander when people will learn from their mistakes. I mean, if things were to got back to where they were before the crisis began, we find that a lot of people depend on one source of income for the their livelihood. Well, YOU may ask what if this is the only source  that YOU find, one thing somebody can do is establish another source to make sure that if anything was to happen to your source of income, at least YOU will be left with another source that can help YOU push through the difficult times ahead. Establishing the second source is by making sure that YOU will be able to successfully manage it with causing major disruption to YOUR main source of income, for example becoming a writer, or starting an online business etc. So as YOU try to manoeuvre through the difficult economic times , just try to have as many sources of incomes as possible just to ensure that YOU cruz any economic that YOU are going to face.

We have become one ‘BIG HAPPY FAMILY’

Hello Everyone,

When most of us are fighting to stay in the race, and avoid becoming another statistic in the government unemployment line, I can’t help but wander how the world has become truly  intertwined. I mean one central bank official gives a comment and that gets the ball rolling, affecting another stock market across the atlantic, for example, the Down Jones was about to record another triple digit gain and boom! the European Central Bank president Mr Jean Trichet makes a comment and all that gain is lost. How? Well, lets look at it this way, the world has become a global village, and anything that happens half way across the world is going to affect us either directly or indirectly. The genesis of the current financial crisis started in the US housing market, and spread across the globe like a bush fire. Europe is still not out of the woods yet, and some of YOU may celebrate growth in GDP in the US, don’t be so quick to jump up and down because a large chunk of US exports are to the European Union, and therefore this will have an impact on growth in the US. Look at another example, Africa was spared from this meltdown, but it can still feel the heat from the bush fire that is out there, the continent generates a bigger percentage of their government revenue from tourism and exporting agricultural produce to Europe and the US, now when these consumers start spending less and cutting costs, this hurts the african economies and so they are not spared either. So, be careful what YOU are cooking in YOUR kitchen, the neighbors will know whats for dinner, and always remember this, that we have become one “big happy family”.

We’re on a ROLL here, BUT wait a minute!

Hello Everyone,

Today, lets talk about the financial news that has been happening in recent weeks, starting with the bull market. Wow! I mean the market is on a roll here (its blazing), and financial experts are saying that this is the time you should be in the market. My word of caution would be to watch out, just because the stock market is on a roll here, DOES NOT MEAN EVERY STOCK IS HOT. Do YOUR research first before taking a plunge, for example talk to friends who trade in the stock market, listen to a number of different financial experts, do research of YOUR own and most importantly have long-term view of the stock market because YOU never know when it’s going to ‘cool’ down. The second important event of the week was passing of the health bill, now this is where I get confused.  I mean every person I listen to says that the passing of this bill meant that the government was going to increase its expenditure a few years down the road. So my question is, if this is going to take money that should have been used to pay for other services of the government including development and expansion of the economy, then why in the world are we having a bull stock market. I thought the prices of stock was dependent on the future prospect of the company, and apart from the multinationals who may be shielded from the slow growth of the economy by their overseas companies, I don’t know about the rest of the folks. Also consider that Europe, which comprises a large portion of US exports, is still in deep waters, every day we see how they are failing in making an agreement on whether to save one of their own. So guys, just because the stock market is HOT, does not mean YOU should take a plunge blindly and live to regret later on. TRADE WISELY.

The Benefits of a Mutual Friend to YOU!

Hello Everyone,

Yesterday, we got into the topic concerning mutual funds, and gave a brief description of what a mutual fund is and how it operates. There are a number of advantages investing YOUR money through this method, for somebody who is new to the stock market. Let me just list a few of them, and YOU will see the benefits

1. The funds are professionally managed by highly qualified people.

2. The risk factor is significantly reduced since YOUR money is spread in a group of companies as opposed to one because of diversification.

3. It eliminates the hassle of researching stocks to buy, since this is done by the fund managers on YOUR behalf.

4. Since the fund managers are buying shares in bulk, they are able to negotiate for a reduced price as opposed to an individual.

5. Some companies offer mutual funds geared towards the foreign market, thus allowing YOU to enjoy higher rates of return.

Well, where there is an advantage there will always be a disadvantage (Of course depending on how YOU want to look at it)

1. YOU have no control over what managers decide to buy or sell.

2. The right to sell YOUR units may be denied in special circumstances.

3. There is a charge for the services rendered

When I take into consideration the ‘disadvantages’ of mutual funds and compare them with benefits derived, there is no question in my mind that a mutual fund is one investment YOU should have in the assets YOU own. Some of YOU may not agree with me, but consider if YOU had invested all YOUR money in one company or stock as opposed to a group of companies, where some stock prices are going up and others are going down. Anyway, the ball is in your court.

YOU will need a MUTUAL friend to SUCCEED!

Hello Everyone,

Yesterday, we talked about the different ways you can invest/save money on the stock market, and we touched a little bit on mutual funds.As I said, saving using this method is the best for a newbie in the stock market, and also for experienced traders who don’t have the time to follow-up on a daily basis the going on in the stock market. A mutual fund is where people pool they resources together to fulfill a certain common or shared goal or interest, the resources could be used to buy bonds, shares or a mixture of the two. A fund that deals exclusively with bonds is for people who are saving on a short-term basis, maybe 1 to 3 years, they probably don’t want to take risk because the resources may be the only source of income, for example, like a pension income (they are more comfortable with a stable income). On the other hand, a fund dealing exclusively with the stocks or equity is basically for members who are thinking more on the incredible return on their portfolio, and can therefore afford to take the risk, they will probably be thinking on a long-term basis, their horizon is on the side of 6 years and beyond. The third type of fund is basically a mixture of the above two funds, and is for those investors who are risk neutral and they are more of medium term investors, maybe between 3 to 5 years. That is basically a brief introduction on mutual funds, tomorrow we’ll look at the advantages and disadvantages of mutual funds.

DON’T YOU DARE ignore a second opinion!

Hello Everyone,

Today, I want to expand on one area I talked about last week, and that is saving YOUR money in the stock market. As I said earlier, this is for the risk takers and have a long-term view about saving. Now, there are different ways YOU can go about investing in the market, first is through a stock brokerage firm and second is through investing in a mutual fund or what is called a unit trust. The advantage of the first method is that YOU are in control, as in YOU are the one telling the firm which stocks YOU want to buy or sell, and this is usually for people who have experience in the stock market. The downside of course is that if YOU are new to the market YOU could lose YOUR money very fast, and therefore DO NOT follow this route if YOU are a newbie.The second option is by purchasing what we call units which is basically a portion the mutual fund, this method is the best for a person who is new to the stock market and any experienced trader who doesn’t have the time to follow the daily movements of stock prices. The downside is that YOU have no control or say over the decision of fund managers deciding which stocks to buy or sell that form part of the mutual fund. I know right YOU have very little faith in the experts, but if YOU are new to the stock market the second option would be the ideal option for YOU, and if YOU fell like going it alone it’s still advisable to get a second opinion before investing in a stock. Tomorrow, we’ll talk a little about mutual funds.

At the end of the day, YOU need to BEWARE!

Hello Everyone,

As I mentioned yesterday, there is nothing wrong with asking for help in areas that YOU know nothing about, for example taxation (I DO NOT understand why there cannot write in simple English), insurance (Don’t even go there), mutual and hedge funds etc. As I said, we need experts in every field, but since a lot of people are really ‘desperate’ to deal with their financial situation, a lot of fraudsters are coming up and stealing the little money that YOU are left with, making a situation that is already worse, even more worse to the point of driving YOU nuts. Even when I recommend that YOU get someone to help organise YOUR finances, be sure to do your research before trusting anybody. Go to the internet and do a research, join a forum where people are discussing what YOU are looking for, talk to friends and neighbors etc. Do whatever it takes to make sure that YOU are not conned the little money that is left. Even when a person seems to have all the qualifications pertaining to a certain sector, DO NOT follow blindly and always counter check, so that YOU may not end being given the wrong advice. As we try to find the right way in this maze of financial crisis we are in, make sure that the person leading out of this knows where they are going, because they may sink YOU deeper than YOU could imagine. Take care of yourself out there, we are living in a crazy and cruel world, where a person will not think twice before stabbing YOU in the back.