Tag Archives: financial education

How to invest: 5 basic tips for beginner investors in stocks

Investments for beginners

The development of technology has increasingly paved the way for ordinary people to global financial markets. But easy access for individual investors to international markets comes with the need to be educated about them and to understand the risks they take.

1. Do your homework

Once you have decided on which platform you want to invest, you have to do your homework. Investing means more than choosing a few random shares, with the hope that everything will go well on its own. A familiar example would be that when you buy a house you do not choose one at random from advertisements, but you will go to visit it. And to determine if it has a fair price, you look at the neighborhood, the real estate market in general and then you make a decision.

Similarly, before you start investing in stocks or any other asset class, you need to research the market to understand what you are investing in. Read about each asset and invest only when you feel comfortable that you can make a well-informed decision.

Thanks to the internet, nowadays it is easy to access information about listed companies. You can see what their income and history are, you can read their news and recommendations for investors. Sector or market information or even political news is also important – for example, we can now see how airlines, even the best performing ones, are affected by Covid-19 travel restrictions or how incentive packages economically affects markets. Being up to date with things that happen in the media helps you better understand the evolutions of stocks and trends in the markets.

2. Define your financial goals

Before you invest your money, you need to have a clear idea of what you want to achieve and how you will do it. You need to understand your personal goals as an investor. Do you plan to invest in the long term (10 years for example) or in the short term? What types of investments will help you achieve your goals? What are you ready to risk?

Investors should be encouraged to define an investment strategy that suits their needs, including their risk attitude. To mitigate risk, they should diversify their portfolio, adopt a long-term attitude and invest only in financial instruments with which they are familiar and for which they understand the risks they take.

3. Invest the money you don’t need in the next five years

Risk appetite should always be linked to investment objectives. Evaluate your current financial situation to understand if you can take the risk and always invest with money you will not need in the next five years. Never invest more than you can afford to lose!
You need to have a long enough time horizon for the investments you make to avoid market fluctuations. If you have an amount at your disposal, but you know that you will need this capital in the next 12 months, then the recommendation is to invest in a less volatile asset class, such as bonds.

Over time, stock markets have provided excellent returns to long-term investors. For example, since the establishment of the S&P 500 index (stock index composed of the top 500 American companies) in 1926, it has increased by an average of 10% annually. This is a much higher return than those generated by other assets, such as government bonds. You can also start investing in shares with a relatively small amount of money using a commission-free platform, as commissions can affect your profit margins.

One of the factors that discourages people from investing online is cost. The idea is still widespread that you need a lot of money to start investing. Moreover, equity investments are often perceived as an extremely complex process, involving technical knowledge and attracting expensive commissions. This is no longer the case. A number of online investment platforms, conduct transactions with shares without commissions, as well as fractional shares – you can actually buy a part of a share, a percentage of it, expressed in dollars. This offers the opportunity to invest $ 50 in high-value stocks, such as those of Amazon (which trades at about $ 3,000 per share), Tesla (over $ 700) or Alphabet (Google) – whose shares would cost about $ 2,000 a piece.

4. Practice before you start investing

Start with small amounts of money or practice with a virtual demo account, while learning the markets and defining your strategy.
Demo accounts of several online platforms allow you to practice without risk. Every user who registers receives access to a demo account, credited with virtual money, so that they can practice their strategies, learning to work with the platform before investing with real money.

5. Diversify your portfolio

Diversification is a risk management strategy and the proverb “don’t put all your eggs in one basket” explains the concept very well. In other words, invest in different assets or market shares to limit your exposure to a certain class of assets or financial instruments.
The purpose of diversification is not to achieve very high returns, but to manage risks. Think about what it would have been like if you had invested all your savings in the shares of an airline company just before the pandemic, which made travel difficult. You don’t want to be completely dependent on the performance of a single company or a single sector, maybe even the economy of a single country or continent.

6 tips for improving your family budget

Family budget

In order to be able to draw up a budget of incomes and expenses as accurately as possible, it is best to keep our daily records of spendings so we don’t omit anything. That’s why we can use more tools, either to write daily spending on an agenda at the end of each day, or to use an app on your mobile phone that you have at your fingertips at any time, and we can write down the expenses as we perform them, either use an excel file, so we can personalize it to fit our needs better.

  •  A great deal of daily spendings goes on various occasions, such as snacks during the day or city walks to a coffee. Do not omit to keep track of these costs because at the end of the month you will realize that they will weigh heavily in the budget and you will wonder where the difference is.
  •  For a better financial discipline, it is a good idea first to achieve a forecasted revenue and expenditure budget and then to draw up the budget actually made to figure out what is the difference between estimates and reality, and so you can improve your financial behavior. The forecasted budget can also be considered a target for your budget and try to fit into it.
  • Every month, the first expenses we have to make are the ones for our future, this are the sums allocated to savings and investments. After making sure that we first saved the amounts proposed, we can only then make the fixed costs that if we omit them in a month they will attract interest and penalties. Finally, we can allocate the difference for variable expenses.
  • As with fixed costs, to ensure that we do not postpone savings by the end of the month to see if we still have resources available for them, we can set automatic payments to our savings or investment accounts and so we will have better and better financial results.
  • To ensure that unforeseen expenses do not affect your monthly budget, it is advisable to have an emergency fund of at least 3-6 salaries that you can use only in emergency situations. This way, you will surely know that no matter if your car breaks down or you have an urgent medical problem, you will be able to resolve it without borrowing or delaying until you have the financial resources to solve the problem.
  • To improve spendings, try to divide them into expenditures that represent needs and expenses that are wishes. Start budgeting all the time by analyzing your wishes and see which ones can be eliminated for better long-term results.

Ultimately, the purpose of our revenue and expenditure budget is to manage our financial resources more efficiently. It is important, after realizing the family budget over a period of several months, to analyze its evolution in order to improve our financial behavior in terms of cost reduction in order to save more and ultimately invest in order to reach our established financial goals more quickly.

4 useful strategies to teach children about money

Many parents do not know the right age to start teaching children about money.
Financial education may seem an abstract concept, which surpasses the children if they are very young, especially when they have to learn so much more practical things.
In addition, once they reach a certain age, anything you try to tell them comes into one ear and comes out to the other.
Is there a perfect age at which children are able to understand financial concepts and are receptive to what family members have to say?
Or do you just have to leave the kids on their on and wait for them to make the same financial mistakes?
In fact, it is possible to start financial education for children at a surprisingly young age, and they are able to be receptive to what you are learning indefinitely, as long as everyone attending sees these lessons as fun.

Pink piggy bank

Here are 4 helpful strategies to teach children about money and personal finances:

1. Teach them by the power of the example

Parents have the power to invoke parental authority when it comes to money, but even children can figure out whether you are credible or not. If it is clear to you that you are not making proper decisions about your own money, how can you expect to teach them how to spend their money correctly?
In essence, transparency and sincerity are the best solutions: call the children to look at when you pay your bills, when making other bank payments or directing some money to your investments.
This works especially for younger children who still have the impression that everything their parents do is very interesting.

2. Give them an age-appropriate allowance

No matter how smart some children are, until they do not have money in hand and will not use them to buy things, money will remain for them an abstract notion.
That’s why it’s important to start giving your children a small allowance, age-appropriate, as soon as you’re sure they can learn the money concept.
You can even make the allowance in a shared account with your child. As cash is being used less and less, young people will have to learn the concept of debit card and virtual wallets anyway.
You can also condition the receipt of the entire allowance to perform certain tasks in the house.

3. Eliminate the wrong spending decisions

It is useful to let the children make their own financial mistakes, but to a certain point.
If you start to feel that they really do not know what they are doing or do they make misleading purchases just to defy you, stop them by invoking the abovementioned parental authority.
Explain this by understanding why it is very important to reasonably think about every financial decision you make.
You can help them by providing them with an age-appropriate educational game, such as Monopoly, for example.

4. If in doubt, let them work

Sure, this is not an option for those children who are small or very small. For teenagers, however, a part-time summer job can have a very positive influence and can significantly increase their financial intelligence.
Moving from zero income (or a modest allowance) to a real salary, even if small, earned at a job in the local supermarket, for example, is extremely important.
Just make sure you provide them with the necessary job search support. They will thank you later.

5 pitfalls for your prosperity: here’s how to avoid them

No one knows what tomorrow can bring. So it is possible that some of the decisions you make today have positive outcomes and others do not. We have all made mistakes with our money at some point and have fallen into different traps.
If we go back to that moment, we realize that there were indications that things might not work well, but we ignored them.
So the next time you make a decision about your money, think about whether you’re about to make a mistake and fall into one of the big traps of personal finances.

Here are 5 big pitfalls that you have to avoid in order to have a more prosperous future:

1. You get influenced by someone who does not know what is all about:

Often people do not make the wrong decisions just “on their own”. They are influenced by someone close: husband / wife, parent, friend or colleague. It may happen to ask for an opinion and get a total misconception. Or get the advice without asking for one. It’s one of the big traps where you can fall even if you do not realize it.

Just because someone close to you is making a certain investment does not necessarily mean it’s a good decision. Or, more than that, it does not mean that you should do exactly the same thing. Sure, it does not even mean that the advice of those around you is totally wrong only because they are not finance specialists. But it is important to think about who is the one who tells you what to do with your money and what confidence you can have in his opinion.

2. You are not informing yourself

If you do not take into consideration what can happen if things DO NOT go the way you think, then you are about to fall into one of the big pitfalls.

People would have much to gain by improving their financial education. A study conducted in the US in 2014 shows that 41% of those surveyed believe the correct score for their knowledge of personal finances is the maximum mark of 7. Moreover, 69% of Americans aged 18-34 have never done a course or seminar on money management.

In other words, many people have major deficiencies in knowing about money and how they “work”. “Some spend more time looking for a new barbecue than informing about what type of mortgage they should do for the home they want to buy,” says Randy Kurtz, the manager of a Chicago financial advisory firm.

3. Buy things without practical justification

You have to realize the great difference that exists between what you “want” and what you really need. Regardless of the nature of the object we are talking about, whether it’s a refrigerator, a CD player, a mobile phone or a car, the temptations you’re undergoing are big traps and it’s not always easy to resist them.

However, you must keep in mind the reason why you need that object, that is its practical utility. Do you really need all the features and facilities that it offers you, or do you just like it because it’s the hottest? Because, if so, you are about to fall into one of the great pitfalls for your prosperity.

4. Get into panic and do something under pressure

You’re never compelled to react for the moment. You can be stressed and still make good decisions. But if you feel that your heart is crazy and your mind can not focus on anything, you should probably delay the decision you need to take and remember that “the night is a good counselor.”

Whether there is a negative or a positive event (both can put tremendous pressure on you), try not to make a financial decision on the spot. It is good to distance yourself a little bit, see things in perspective, and find out what people you trust are thinking. Emotions can distort your perception, and it’s easy to fall into traps you could otherwise have avoided.

5. The instinct tells you “no”

Just think a little: why does your instinct tell you that spending money in this way is a mistake? Is not that one of those traps you should avoid? It might be so … So do not ignore it and think again if what you are going to do is really a good idea.

5 helpful tips on how to get rid of debt

There are no more stressful things than debts, worries about monthly spending and insistence of creditors. Did you think maybe you just do not know how to get rid of these debts? Well, you’re not the only one! Fortunately, there are experts who can show you some practical ways that can help you pay your debts in time.

First, there are periods when debt is inevitable. For example, you can buy a house, a car, pay for medical fees or school for your child. If you do not have the money to make a full purchase, then taking a loan can often be a move even indicated.

However, there are situations where you borrow more money than you can afford and you are unable to repay them. This is the time when problems arise. However, it is important not to panic. You can always find solutions to help you get rid of debt.

Here are some practical tips that will help you better manage your debt:

1. Perform a financial reassessment

It begins by always looking at both the mistakes and the financial successes of the previous year. What can you learn from this? What did you do well? What could you do better? Draw up a budget for the next year, using what you learned from the previous year and use it to guide your spending in the future.

2. Plan and buy smartly

Make a list of the items you need to buy before shopping. Knowing just in advance what you need and limiting only to purchasing these items will allow you to fit into the budget. Try to establish with your family and friends and buy together what you need in larger quantities. This can help save you in the long run.

If, for example, you tend to exaggerate with Christmas gifts, and this is important for you, prepare yourself early. Consider budgeting and buying gifts throughout the year to avoid last-minute spending and debt.

3. Take a part-time job

One of the best ways to get rid of debt is choosing a part-time job. The extra money you will earn is an excellent way to pay your bills. Normally, if the time permits you and your current job is not very demanding.

4. Sell what is no longer useful

Another recommended way to get some extra money to pay your debts is by selling items that you no longer need or you no longer use.

5. Consider the advice of a specialist

If you realize that you simply can not manage your own budget and personal expenses, then you can call on a financial specialist. It does not have to be a professional you need to pay. Instead, he can be a friend with money management experience that can provide you with financial education, guidance and counseling.

Why is it important to have a financial education?

Financial education refers to having a set of knowledge to help you effectively manage not just your spendings but also your investments. Few of us take into account practices that make you more thoughtful with your monthly budget and so forget to allocate certain capital and resources to areas of their life that require more attention. However, the general public tends to be reticent to complex financial terms and overlooks the fact that a preventive attitude is more effective than solving problems. Read about how this attitude can help you in the next lines.

Make a balance sheet and solve urgent issues

First of all, you need to figure out what your current situation is: give yourself an hour or two and identify your sources of incomes and spendings this month. You would be surprised to find out how much money you’re spending in things you do not really need. The next step is to figure out the urgent issues to which more capital must be allocated. For example, if your home has problems with the water installation and you do not have money for the moment, we recommend you take a microcredit. Especially when you have a stable income and your problems have to be solved, the smartest one prevents even greater damage by dealing with it as quickly as you can.

Smartly avoid future spendings

Once you’ve made the balance to see your immediate incomes and expenses, you have to focus on spending on what you can actively optimize. Specifically, this means replacing objects or habits that consume money with some more economical one’s. Imagine that you have a plot of 100 hectars planted with corn and must be harvested in the next 2 weeks. Instead of using a modified tractor that you already have and consuming 30 liters of diesel per hectare, you better buy a new machine.

More opportunities for your development

One of the most common and inefficient practices is not to invest money in your own person. Especially if you set up, for example, certain professional goals based on learning a new set of abilities, you should take advantage of this opportunity as soon as possible. The ability to weld various metals and alloys of different compositions under the water is one of the most lucrative jobs, but to get it you need an expensive intensive course. All you have to do is invest in yourself to get the accreditation of a professional welder and that will help you in the long run.

6 Things To Know Before You Invest In Real Estate

When we think about starting a business or making a financial investment, the ultimate goal is usually the same: getting enough money to allow us to live the lifestyle we want.

And when you think about the amount of money you have to raise to allow yourself to do that, do not forget to consider inflation + taxes that have to be paid and that will automatically have to be deducted from the total amount of money you have.

And when it comes to investments, having a property or several real estate is always a good idea; even in periods of financial crisis.

Think so: land is a finite resource. People will always need spaces specially designed to live, work and have fun. So, just like in other areas of business, so is in the real estate: everything is just a game between demand and supply.

What is good to understand is that: real estate properties will continue to experience an increase in their value as time passes, despite slowing down periodically as a result of more subtle or larger economic crises.

Real estate is the field that brought most people from simple people to millionaires. And in spite of what you might think … no, you do not have to be a genius to succeed!

So, if you’re thinking about investing in real estate, to gain your financial independence, here’s what you need to know:

1. Set your financial goals

What are your goals from a financial point of view?
What are you expecting from buying a real estate?
What you achieve by acquiring that property will bring you closer to achieving your financial goals?
As you well know, developing a business requires time and money. Investing in real estate is no exception to this rule.
So, if you have an already tight amount of money that you want to invest in this direction, make sure you take all the time to identify a property that matches your budget and not just so … a property which, once purchased, will serve your interests better and will make it easier and faster for you to accomplish your goals.

2. Do not spend a fortune on books and courses

You do not have to misunderstand. You need to have some knowledge about real estate because, from this adventure you start, you get to be a winner. But what you must know is that all the information you need should get maximum a shelf on your library as a volume.
So bend over the books and study carefully. Search on Google and make a habit of reading real estate sites.
But do not overwhelm yourself with the existing information around you. When you notice that you read, read, and the things you already know continue to repeat, with 1-2 relatively new elements in addition, it means you have learned about everything you need to know.
It is very easy to let go of the thought that you still have not found the trick you need to quickly get rich out of real estate and continue to document, collect books and courses in the hope that you will find that secret information that will open the gate of wealth in real estate for you.

So, when you notice that the information you read is still repeating, it means that it is the perfect time to stop reading and return to real life. It’s time to move to point 3.

3. Visit several real estate properties

Life beats the movie. And what else can make you feel the pulse of real estate in your area, than … some direct visits on the field.
But great attention! Do not buy the first property you see.
Here are two mistakes that many real estate investors do:
Buy a property for the simple fact that they like what it looks like

Buy the property because they are not willing to make the effort to inspect other properties existing on the market at that time
Remember: you must look at that property from the perspective of return on investment. You will not live there. You do not have to like it. Instead, it must be profitable when you decide to sell or rent it.
Once you’ve visited enough real estates, take a moment to think and put on paper the most tempting real estates you’ve visited. Write along with them your financial goals. Then try to reduce the number of listed properties from the perspective of the goals you want to achieve.
This exercise will help you make the most beneficial choice for you.

4. Do not expect the miracle offer

By viewing real estates again and again, you can fall into the other side: to postpone the decision to purchase. And as you may well guess … this action will have negative repercussions.
Not buying a real estate under the pretext that you have not found the “winning offer”, you might lose more than if you found an offer not as tempting as you would like, but you have bought it to put it to work, to produce money for you.
To conclude: as soon as you find the real estate offer that meets most of your criteria, stop thinking and buy it. Continuing to wait for the “irresistible offer” you dream of is a dangerous game … this offer may never be, and the offers that pass next to you may not come any more soon.

5. Make a thorough financial analysis

Let the figures speak. Look at all like a game of numbers. Just so, the conclusion you get will be realistic.
If you think about the whole transaction from the financial perspective and leave your feelings aside, it will be easier for you to refuse a property when the terms and conditions of the transaction do not meet your profitability criteria.
In this sense, take the time to make a complete analysis of the property based on its history. Also, inform yourself about the distance to the city’s main points of interest.
See how much you can rent or sell the property according to the potential of the area.
Take into account the taxes that must be paid and the interest you have to pay to the bank, if you make a loan to that effect.
And finally, draw the line, and see how profitable your real estate investment will be.

6. Find sellers anxious to close the deal

How can you do that? When you find a real estate that you like, be interested in it’s history. Since when is it put up for sale? How has it’s price changed since it’s on sale to date?
If the price of the apartment or house in question is unchanged although the property in question is on sale for more than a year, you can see that its owner has it’s price and is not willing to give it less than what he ask for; in other words: negotiating with him will not end with far greater benefits for you.
But if you find a property whose price has continued to decline over the last year, it means that its owner is anxious to get rid of it. As a result, that person will be more flexible in negotiating with you, and you are likely to have the chance to win and get the price and conditions you want.


Owning one or more real estate properties can provide you with the financial stability you want. It can also be packed with those passive income that everybody wants, if you rent it.

It’s all about staying calm, not making hasty decisions, and logically judging, based on figures. Real estate businesses are long-term businesses. Also, it’s important to realize that buying the desired property is just the first step you take to reach your financial goals and not the end of the road. Success!

From savings to investments

Many people confuse the terms saving and investing. To save is to create a reserve of money that is kept at a risk as low as possible, even close to zero, while investing means putting the money saved to work in your favor to increase their value and to help you reach your financial goals more easily.

Savings to be affordable and to conserve their value are usually kept in financial instruments with increased liquidity and low risks, such as bank deposits or treasury bonds, these instruments being characterized by low returns. Earnings of savings are in the form of interest and the aim is to cover at least the inflation rate.

The qim of investments, on the other side, is the achieving of high returns by increasing the value of the invested capital and making profit, assuming an acceptable risk. Thus, the financial instruments used are from the least risky ones, such as bonds with a relatively low risk, medium risk (shares and peer-to-peer lending), and derivatives that have a high degree of risk and which are especially addressed to professional investors.

In short, the purpose of savings is to preserve capital at low risk and low returns, while the purpose of the investments are to increase the value of the capital invested in variable risk and return conditions depending on the financial instruments chosen.

The capital market is a dynamic way to invest the saved money. If you do not have the necessary knowledge to start investing on your own, you can contact a specialist. Before you start investing, you need to go through some essential steps:

– First of all you need to start your financial education. You can not start investing before understanding how the financial markets work and what are the characteristics of the financial instruments you want to invest in;

– You need to know what your risk appetite or maximum risk level is, according to which you will choose the right investments for your risk profile;

– You need to set your investment goals, including the time frame for which you want to invest, in order to create a diversified portfolio that meets your needs;

And last but not least, you need to determine what liquidity you want, so you can have access to your money when you want it.

Choosing the right investments may seem like a difficult process due to the multitude and variety of available tools, but having a trustworthy partner with you, as it wants to be for you my-passive-income.eu, investments can become accessible to anyone who wants to become an investor .

The simplest and most effective 11 truths about money

About money, personal finances and how you can have a more prosperous life has been written a lot.
But if it were to make it as simple as possible, you would see that everything is reduced to just a few extremely effective ideas, because the Pareto’s principle applies to personal finances too: 80% of the positive results are obtained with only 20% of the efforts made.
So before complicating yourself with too many details, maybe it would be a good idea to consider those simple and effective things that will produce the best results.

Here are the simplest and most effective 11 truths about money that can bring you a more prosperous life:

1. Financial education is more important than money.
Be constantly preoccupied with learning about money: how to manage, how to invest and how to keep them. Day by day, you MUST be the “master” of the money and not the other way round. Once you understand how money “works”, improving your personal finances becomes just a challenge and not a stress.

2. Spend less money than you earn and save the rest.
You can get everything you want. Just adjust your earnings and expenses accordingly.

3. Do not try to impress with the things you have.
Only superficial people will judge you for the things you have. True friends and important people in your life, however, will judge you by your character.

4. You must start investing as early as possible – the younger you start, the more time you have to build your well-being.
If you start investing earlier, you will have more time to learn, gain experience, and recover your mistakes or unprofitable investments.

5. There are “good” debts and “bad” debts, be careful not to confuse them.
If you use a credit to buy properties or goods that bring you income and whose value increases over time, then this is a “good” debt, because it will help increase your prosperity.
But if you make credits for consumption, they will make you lose money because of the interest you pay and the depreciation of things bought, so they are bad debts. Although the two types of loans seem quite similar at first glance, they are actually very different and have opposite effects: one brings you money and the other takes them out of your pocket.

6. Live simply and surround yourself with positive people, not things.
The more you fill your life with things, the more they will consume more time and energy. The more “toys” you have, the more you have to pay and maintain, and in the end you will be less free. Instead of being the owner of these things, they will come to rule you. Just live simply and makes wise decisions.

7. Be always prepared for unforeseen situations, both financially, physically and mentally.
Make a plan, organize yourself and put aside some money for such situations.

8. Nobody takes more care of your money than you.
You do not have to have 100% confidence in someone else’s opinion about the value, profitability or safety of a particular investment (or business) than after you have studied the subject yourself and made the calculations.

9. Think long term and plan your future.
Learn to postpone the rewards you are tempted to give you right away. Weigh carefully all the important financial decisions you have to take. The future will arrive sooner than you think and you are the one who will bear the consequences of the decisions you will take.

10. Do not treat the money superficially and do not waste them.
You have to treat the money as you treat a good friend: with respect and gratitude, because once you have maked them, you must take great care to keep them.

11. Trust yourself!
Learn to listen to the “whispers” of your self and give them more attention than to the “cries” of your ego. You have the opportunity to create the life you want. You are never a victim of circumstances. You have the power to control your thoughts, actions and perspective on life.

Be optimistic and always look at the good side of things!


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