Managing your financial life is not a “set it and forget it” exercise. You must educate yourself and stay engaged. As you become more conversant with concepts, many simple financial truths are worth remembering: The importance of time: Compounding is powerful. The importance of risk and return: There are many types of risk. The importance of discipline and conviction: Stay true to your plan. The importance of patience: Study your investment decisions and don’t rush. The importance of value: Value is not what you paid for something. It is what someone else is willing to pay for it. The importance of supply and demand: Both have an impact on value. The importance of expectations: They also drive value. The importance of liquidity: How easily something can be converted to cash is key. The importance of total return: Look at both appreciation and income. The importance of taxes: Timing and keeping…
Investment Truths
Managing your financial life is not a “set it and forget it” exercise. You must take a comprehensive view and stay engaged. As you work through the process and become more conversant with concepts, many financial truths are worth remembering: The importance of time: Compounding is powerful. The importance of risk and return: There are many types of risk. The importance of discipline and conviction: Stay true to your plan. The importance of patience: Study your investment decisions and don’t rush. The importance of value: Value is not what you paid for something. It is what someone else is willing to pay for it. The importance of supply and demand: Both have an impact on value. The importance of expectations: They also drive value. The importance of liquidity: How easily something can be converted to cash is key. The importance of total return: Look at both appreciation and income. The…
Volatility
The Chicago Board Options Exchange, or CBOE, created the VIX® to measure expected volatility for the US stock market. It is calculated on a real-time basis based on the prices of put and call options for the S&P 500® index over a rolling 30-day period. The VIX® is the global standard for measuring volatility. It is also called the Fear Index because it spikes when markets are turbulent.
Financial Credentials Matter: Which Are Most Important
In recent years, the number of financial credentials has risen dramatically. It is important to note that the quality and usefulness vary. If you are choosing to work with a financial professional, you should understand what these credentials mean. The prestige of certifications and designations and their usefulness to clients varies considerably. The Financial Industry Regulatory Authority, or FINRA, has a designation lookup feature on its website, https://www.finra.org/investors/professional-designations. The tool is very helpful, especially because you can compare different designations side by side. FINRA does not endorse or recommend any of these designations. The list of designations on the FINRA website is extensive. Currently, there are more than 200 listed. How do you determine which are the most meaningful? Look up what is required to achieve and maintain the various designations. If you need help with retirement planning, what are the prerequisites for becoming a Certified Retirement Financial Advisor (CRFA),…
Take Advantage of Retirement Plan Matches
When it comes to planning and saving for retirement, you must be consistent and save and invest every year. You also must be disciplined. Once you invest the money for retirement you cannot touch it. Because of the power of compounding investment returns, contributing to your retirement every year and allowing it to grow are the keys to building your nest egg. It is easier to put money away when you are young than when you have a mortgage or a family to take care of. Many of those that are just starting out in the work force, however, face substantial headwinds: hefty student loan payments and high—and in some cases sky-high—housing costs. Even with a tight budget, saving for the future must be a priority. Start saving for retirement through your employer as soon as possible and take advantage of corporate matches. Corporate matches are free money that help…
Alphabet Soup: What Do Financial Credentials Mean
Financial professionals may possess a variety of certifications and designations. These credentials instill a sense of competency. In recent years, however. the number of financial credentials has expanded significantly. If you are choosing to work with a financial professional, you should understand what these credentials mean. The prestige of certifications and designations and their usefulness to clients varies considerably. The Financial Industry Regulatory Authority, or FINRA, has a designation lookup feature on its website, https://www.finra.org/investors/professional-designations. The tool is very helpful, especially because you can compare different designations side by side. FINRA does not endorse or recommend any of these designations. The list of designations on the FINRA website is extensive. Currently, there are more than 200 listed. How do you determine which are the most meaningful? Look up what is required to achieve and maintain the various designations. If you need help with retirement planning, what are the prerequisites for…
Financial Truths
Managing your financial life is not a “set it and forget it” exercise. You must take a comprehensive view and stay engaged. As you work through the process and become more conversant with concepts, many financial truths are worth remembering: The importance of time: Compounding is powerful. The importance of risk and return: There are many types of risk. The importance of discipline and conviction: Stay true to your plan. The importance of patience: Study your investment decisions and don’t rush. The importance of value: Value is not what you paid for something. It is what someone else is willing to pay for it. The importance of supply and demand: Both have an impact on value. The importance of expectations: They also drive value. The importance of liquidity: How easily something can be converted to cash is key. The importance of total return: Look at both appreciation and income. The…
Focus on Your Net Worth
Managing your financial life involves making a lot of decisions. When the dollars involved are material, you should always think about the repercussions for your net worth. This practice will have a profound impact on your long-term financial well-being. In Accounting 101, you learn about a balance sheet. A balance sheet is a financial statement that lists your assets, your debts, and your net worth. Your assets are anything you have of value, such as your home, bank account, investments, 401(k), and car. Debts include any outstanding liabilities or obligations such as a mortgage, student loans, car loans or leases, and credit card debts. Your net worth is the difference between your assets and your debts. In other words, your net worth is an outcome, and you can think of the formula: Assets – Debts = Net Worth If the total value of your assets is higher than the total…
Financial Jargon – You Asked…
Question: What is the VIX that I keeping hearing about in the financial news? Answer: The Chicago Board Options Exchange, or CBOE, created the VIX® to measure expected volatility for the US stock market. It is calculated based on the prices of put and call options for the S&P 500® index over a rolling 30-day period and is the global standard for measuring volatility. The VIX® is also known as the Fear Index. It spikes when markets are turbulent, as has been the case in the past two weeks.
Advice For Women to Keep Money Secure
Very helpful money advice for women from women. Thanks to Karen Doyle @KarenDoyleScit @GOBankingRates for featuring me along with @bobbirebell and @NicoleMiddendor. Women must be engaged in their personal finances. Advice for Women to Keep Money Secure