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Investment Tips for 20 year olds.

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The 20’s
These are the early years when many people are relatively new to the workforce and are still renters. While some have formed a permanent relationship, many don’t have children. Home ownership and family are still in the future.

For this group the main financial focus is usually on saving a deposit for a home, an investment that has particular appeal due to its lifestyle benefits and capital gains tax-free status.youngpro.jpg

The first step for many will be to get their credit card debt under control and then eliminate it. Only then will they be in a position to start building wealth rather than simply paying for past consumption.

With interest rates having stabilised at relatively low levels and property prices still slipping, this age group stands to gain by saving for a deposit for a home so as to be able to buy when the market is weak.

Their main challenge will be to decide whether or not to try to supercharge their savings growth by diverting funds into a regular savings plan that invests in equity funds.

Callinan says building a deposit through investing in equity funds is a good strategy, but only if you can accept the risk that there could be a few years of flat returns.

“You also have to have a time horizon of at least five years, to give the investments time to perform,” she adds.

The best 100 money tips ever!

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Take these tips to heart and you’ll have a solid foundation for future financial well-being.

1. Save 10 cents from every R1 you earn. If you put away at least 10 percent of your income as part of a long-term savings plan, there is a good chance that you will have a financially secure future and be able to attain your financial goals.

2. Put 10 percent of every pay increase towards savings, particularly long-term savings such as a retirement plan. If you are employed and belong to a retirement fund, your contributions will increase automatically in proportion to your pay rises. This will help ensure that you stay well ahead of inflation.

3. Use the “Can I sleep?” judgment when making investments. An investment is too risky if you are going to lie awake at night worrying about it.

4. Diversify your investments. Never invest more than five percent of your assets in a narrow investment (for example, a specialist unit trust fund such as an emerging company one) or in an unregulated investment. Diversifying your investments will ensure you don’t lose everything if one investment bombs out. Many people who invested all their assets in major scams such as Masterbond lost everything, and the same thing can happen in the regulated market if you put all your money into one sector … just consider how the information technology bubble burst in 2000.

5. Be extremely cautious if the returns promised on an investment exceed what is generally available. If they sound too good to be true, they probably are. It usually means the investment is too ambitious in its claims, too risky, or simply a scam.

6. Know the difference between effective and nominal interest rates. Normally, banks will quote you a nominal interest rate when lending you money, but a higher, effective interest rate when you invest money. The nominal interest rate is the simple rate. The effective rate is calculated by compounding the interest earned or charged.

7. Check whether the interest you are being paid is credited monthly, quarterly or annually. Say you invest R10 000 for 10 years. If you receive interest at 10 percent credited annually, you will get a total return of R25 937. If it is credited monthly, you will receive R27 070.

8. How do you decide whether you should invest directly in shares? Simple. If you haven’t got the time to learn about stock markets, to follow the progress of companies or to track your portfolio, rather invest in unit trust funds and/or life assurance endowment policies that have shares as their underlying investments.

9. If you do invest directly in shares, your two most important considerations should be ensuring that you have a properly diversified selection of shares across the stock market sectors to reduce risk, and regularly rebalancing your portfolio. When a share rises in price, you should consider selling some, but not all, of these shares, so that you make a profit, but your overall portfolio remains proportionally the same as it was when you started. By doing this, you’ll be able to reap further profits if the share price continues to rise.

10. If an investment product is too complicated to understand, avoid it. It does not mean you are stupid. It simply means that the product provider and/or financial adviser are trying to baffle you.

For more tips please visit: http://www.persfin.co.za/index.php?fArticleId=360377&fSectionId=596&fSetId=300

The convenience to have more cash than you actually have has allowed many of us to fulfill our important needs via credit cards. There are two kinds of credit card, secured and unsecured credit card. We don’t have to pledge any money to get the later. You need to pay credit card fee annually to have your credit card stay with you. There many brands of credit cards around. Your citi visa card will come in different flavors and different features than a discover card. These day most fall into the pitfall of spending too much resulting in fines and more interest on payments. If you are not doing well with payments of one credit card try getting refinancing quotes from other credit card brands.

Investment Tips for 40 year olds.

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The 40’s
Your financial comfort in your 40s largely depends on how much spending restraint you showed during the previous decade. If you were reasonably disciplined, there is a good chance you will be able to upgrade to a bigger home or, alternatively, carry out the renovations you deferred in order to finance investments.

However, the 40s is sometimes a financially difficult time for people who have children since they are now costing more than ever, especially if they are at private schools. This group needs to budget carefully. In contrast, those with relatively high incomes, or with few or no family responsibilities, should have the capacity to continue to use gearing to expand their investment portfolio.

The alternative will be to divert more money into superannuation. Unfortunately, while very tax-effective, money invested in super is locked up until you satisfy the various preservation rules.

These mean you can’t get your super before you are at least 55 and also retired. Super savings really only equate to financial freedom for people who are already in their early 50s.

It is very useful to have preemptive advantage over disasters of any kind via insurance. Google for “business life insurance” that comes up with loads of entities offering various kinds of insurance polices including low cost life insurance. Usually there is not a fixed rate for every kind of insurance. A commercial insurance costs more than home insurance. It depends on the risk factors associated with the entity that is being insured. Avoid notorious insurance companies lest you want to file a home insurance claim. Consider insuring your loan just in case it turns out as a bad credit loan.

Investment Tips for 30 year olds.

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The 30’s
By their 30s, most people are in a permanent relationship, many have children and most have bought a home. The focus is usually on reducing their mortgage, possibly renovating and, where possible, attempting to upgrade to a better property.

Nash of Tynan Mackenzie says people in this situation should consider taking out income insurance, especially given the increased tendency of companies to respond to setbacks by downsizing.

At the very least they should be careful not to over-extend themselves financially, instead keeping money available for emergencies.

youngpro2.jpg This may well involve delaying renovations. Alternatively, they should ensure their mortgage facility allows them to draw down more money quickly if they need funds in a hurry.

Of course, some people in their 30s will still be both mortgage and family free. This group may decide to try to catch up for lost time by aggressive investing, such as using geared share funds or by taking out a margin loan to finance a portfolio of direct share investments.

A small group will go so far as to use even more aggressive investments such as futures contracts, trading warrants and contracts for difference.

Nash stresses, however, that these should be approached with a great deal of care since, if handled badly, they can generate heavy losses.

How to avoid Investment Scams

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