Archive for Money Talk

A Beginner’s Guide to Forex

moneyThe foreign exchange market, known as Forex, is the worldwide market for trading, buying and selling the world’s many currencies. Simply explained, Forex trading is the buying of one currency and selling of another, allowing you to take advantage of fluctuations across a wide range of currencies. To someone not familiar with trading it can seem quite confusing, but as one of the most widely traded markets in the world, it’s worth understanding, so let’s look at it in detail.

Why trade forex?

Forex is the most popular and frequently used market in the world today, making it very attractive for anyone starting out in trading. As a rough estimate over $4 trillion dollars worth of trades take place daily in the forex market around the world – an astonishing amount! Due to the high volume of traders and high quantities of currency being thrown back and forth this gives the forex market an essentially high liquidity, meaning it’s extremely easy for anyone to gain access to it and start trading. Aside from this, many traders prefer to use the forex market as you’re able to start trading with a minimal investment, as well being free from both commission and tax systems. Be sensible and research whether any (well established) brokers are offering a free trial, so that you’re able to try your hand at it for it before investing any money into it. Regardless of your motivation to start trading, it’s crucial that you posses the right understanding in order to succeed and build on your income or savings. Starting out before you have a complete understanding could result in making a loss and diminishing your finances, rather than enriching them.

How does a forex trade work?

In forex, you speculate on whether the currency of one country will rise or fall against another – for example the USD and GBP. This way of trading is called ‘pairs’, with the first currency called the ‘base currency’ (sometimes called the ‘primary currency’) and the second the ‘counter currency’. Forex currencies are always traded in pairs as you’re selling one currency whilst simultaneously buying another. A forex price will then show you how much a unit of the first currency will buy of the second currency. So for example, if you see GPD/USD = 1.63472 then this means, in simple terms, that one pound is worth 1.63472 USD. To buy one unit you would need to use 1.63472 dollars and to buy 1.63472 dollars you would need to use one pound.

An example of forex

If you trade within the forex market then it’s essential that you’re keeping up with the news, headlines and reports all of the time, and it’s worth asking yourself if this is something you have a genuine interest in before starting out. For example, if a story leads you to believe that the GBP will increase next to the Australian dollar then that would be the time to go ahead and do a trade. Let’s say for example you decide to buy 10,000 pounds worth of sterling at 1.41702. It will cost you 14, 710 Australian dollars. A few weeks later you may find that the price stands at 1.5702 which means when you convert back you are making a profit of around $1000. You can do several trades at once and hold different currency pairs in your account so you can choose when and where to trade them with ease. Keeping yourself well informed on current affairs, finance news and politics – basically anything that could influence a currency – is crucial to succeeding in forex, so that you’re able to make an educated speculation as to whether a currency will rise or fall.

And finally – is forex right for you?

Hopefully by now you have a better understanding of what forex is and how it works, allowing you to make an informed decision as to whether it’s something you want to try. Perhaps for someone who doesn’t have an invested interest in finance and current affairs, forex might not be right for you. It is however more than possible to succeed in forex, even with no prior experience in trading, as long as you have an understanding of how it works and the knowledge to make an informed speculation. One of the risks of trading in forex is that you can stand to lose more than your initial deposit, and so it’s absolutely crucial that you trade only using your risk capital – in other words, never trade more than you can afford to lose.

Done well, it can be hugely profitable, but as with any investment it’s imperative that you seek independent advice and have an in depth understanding before starting out to minimise your chances of making a loss.

Picture by Pinksoo

How Much Are You Worth To A Thief?

Are you a walking ATM? Do you ever think about how many valuables you carry on a daily basis, and how valuable you may be to a thief?

I’ve tried to carry a smaller bag to cut down on some of the junk that I carry on a daily basis, but it doesn’t seem to work, because I catch myself carrying things in my hand that cannot fit in my small purse. I mean seriously, what’s the point of me carrying a small purse. It really doesn’t make much sense at all. I might as well go back to carrying my larger purse.

In any case, it got me thinking about how valuable I might be to a thief. How many times have you put your purse in a grocery cart, and turned your back to pick up some fruits. Or have you ever gone to a restaurant and left your purse on the ground or on the back of your chair and went to the washroom?

Or what about leaving your purse in the empty seat in between you and the other person at a movie theatre?

I have done all of these many times, and thankfully no one has stolen my purse. A friend or a family member would always catch me leaving my purse somewhere, which is a part of the reason why I decided to get a smaller purse that I can strap around my body, versus just having it on my shoulder. I hate when my purse is on my shoulder because it always falls off.

Oh, and don’t get me started with the clutches. I can’t tell you how many times I have put those down and walked away. So I barely use them anymore.

Here are some common items that I carry in my purse on a daily basis that a thief could use, or sell:

Ipad 2 $799

Ipad case $30

Ipad charger $55

Headphones $35

Blackberry Curve $199

Cash $50

Total $1168

That’s a lot of merchandise that I would have to replace if my purse ever got stolen, not to mention how happy a thief would be. Now I am sure he wouldn’t get those prices for my items if he did steal them, but still, it shows how valuable I am to a thief. Even if I take 50% off of the total price because they are used, that’s still a nice chunk of change.

How much is in your purse? How valuable are you to a thief?

What Do You Tell Your Kids About Money

Photo by Slayyou

Having the money talk with your kids is a delicate matter that every parent needs to handle, no matter how hard they wish they didn’t have to. Many families are still recovering from the negative impact of the recession, which served as a hard lesson on dealing with finances. The way you tell kids about money may protect them against financial mistakes in the long run.

Telling your kids about money is not an option. If you don’t have the talk, someone else will, and if that is the case you may not be happy with the message conveyed. Therefore, it is vital that you decide what and when you should tell your kids about money.

Financial Problems

Children need all sorts of things and you can’t always afford them. One of the most frustrating situations is when you need to explain to your child your financial troubles. What you tell your kids in this particular situation depends very much on the age of the child.

For children that are under the age of 12, experts suggest not to tell them about the financial problems that you are going through. They will not only feel overwhelmed by a feeling of insecurity, but they will also feel frustrated and guilty for wanting or needing things.

Older children need to be aware that the family is going through financial issues. They also need to know that parents are taking the necessary steps to fix the situation. Children that are older will feel excluded if you simply “avoid” sharing some of the issues them. They may even offer to help by cutting down costs. The reaction is different with every child.

Too Much Money

Just like with all other things in life, too much of anything is not good. The same applies for money. If your family thrives, you should not encourage your children to spend more than they actually need to. As parents, you have a duty to cultivate a sense of money values in your children. They must understand that money doesn`t grow on trees, as my mom always use to say, and that it is important to save money, and that the situation may not always be as good as it is now.

For many families, the recession had a dramatic effect. Their financial situation changed radically and they went from being well off to having financial hardships. Many children couldn’t understand why the family didn’t drive the same expensive car or why they couldn’t go to the mall every other day. Things had changed. That is why children with families that are doing well financially need to be informed about the value of money.

Teens and Money

What do you tell your teen children about money? The best way that you can handle the money talk with your teen children is to go over the numbers with them. Explaining the budget is one great way for teen children to understand why they can only spend a certain amount for clothes every month. Explain to them on paper, in black and white, where the income goes. What they do with the amount that is allocated to them is a different story.

What If Children Ask About Salary

Sometimes children do ask parents about their salary. The reason they ask is different from child to child.  What do you say when you are faced with such a question? I don`t think you should give your children details about how much you earn, like cents and dollars, simply because they could tell their friends and their friends could tell their parents. So unless you want your neighborhood knowing how much you make, it`s probably best to leave out the details. You should simply explain that your salary can comfortably cover your family`s expenses. If you are experiencing financial issues and you`re on a tight budget, you need to adapt your answers to the child’s age. Younger children need to be offered a sense of security so that they don’t feel the strain of financial difficulties.

What do you tell your kids about money?

 

Ten Things We Can Learn From The Richest People In The World

The richest people understand that there is nothing wrong with the creation of wealth. They are admired for their ability to make money by the millions. Money helps people to pursue the projects that they are most passionate about and have a positive impact on the world.  Many people dream of being rich, but only very few achieve it. What do they do differently?

1. Want To Be Rich, Not Financially Comfortable

You need to want to be rich and focus on your efforts to be rich and not just financially comfortable. If you want financial comfort, aim for financial comfort, but don’t hope to get rich.

2. Take The Right Opportunities

We often hear about the richest people that they got rich because they took advantage of the real estate boom or some other phenomenon. In fact, they got rich because they saw an opportunity where others saw a risk.

3. Respect Other People

Instead of a feeling of envy, rich people admire those who have managed to accumulate a substantial wealth. That happens because they understand the mechanism and sacrifices that come with being the architects of their own wealth.

4. Promote Your Values

Without feeling boastful, rich people are fully aware of their strengths and they promote their own value. In this way, they become masters of marketing, and they end up promoting their products and services with enthusiasm and conviction.

5. Surpass All Obstacles

Although we may tend to believe that rich people have no problems in their lives, the truth is that things don’t always come out the way we want, no matter how rich we are. What we can learn from rich people is the way they don’t allow problems to become obstacles. They look for solutions instead of putting their head down and giving up.

6. Get Paid For Results

One attribute of rich people is that they choose to receive money on the value of their results. That motivates them to work harder and improve their results all the time. That is why commission based arrangements are so stimulating and allows people to earn more money.

7. Think Net Worth

The richest people in the world don’t associate wealth with income alone. In fact, they focus on four important aspects: income, savings, costs, and investments. Optimizing these four elements leads to substantial wealth.

8. Money Management Is Crucial

It is very important that you manage your money well. Rich people are very careful on how they spend money. Money management is vital for accumulating and maintaining wealth.

9. Invest Your Money

The richest people in the world have their money generating more money for them. In financial terms that means investments. It is incredible that passive income, money coming from investing money, is one of the wealth-generating avenues most appreciated in the world of the richest people.

10. Learn Constantly

The process of learning never ends with the richest people in the world. Knowledge and information is what keeps them at the forefront of their field. They never stop acquiring new knowledge.

Getting rich is in fact a complex process where people are the architects of their own wealth, using and promoting their own values, and taking the right opportunities at the right time. The life of rich people is about overcoming your fears and taking calculated risks.

Rich people create their own lives and this is the belief they defend and cherish. They don’t leave their life at the hands of faith. They are neither the smartest nor the luckiest people on earth. What makes them different is their mindset.

This is a guest post

What have you learned about rich people?

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