Invest money

There’s nothing more we want than to be able to efficiently manage our money. After all, the money that we want to manage is money that is oftentimes, hard earned. This is where a budget comes in. A budget executed properly, should help you see where your money is going, get more utility out of every buck, and help you save some extra for future use. Here are smart ways about budgeting:

1. Set a goal. What do you want to achieve? By having a goal, you will be able to shape your budget to best serve your interests.
2. Take note of where your money usually goes. This includes bills, major but regular purchases (like grocery costs, healthcare costs, and the like), and everyday miscellaneous purchases. Only when you list down where you know your money usually goes will you be able to identify which expenses you can do without. Once you’ve identified these regular expenditures, take into consideration what you can cut back on. You will be surprised at how much you’re saving out of your older budget.
3. Being indebted is a vicious cycle on its own.The best way to deal with this is to pay the minimum on all of your debts in order to avoid paying extraneous late fees. Whatever cash excesses you may have, you can opt to add on to the payments you make in your biggest debt. This way, you are concentrated on getting the biggest debts first that cost you the greatest interest rates. Doing this progressively, you’ll be amazed at how much you’ll get off your huge debts.
4. Calculate the amount you earn the sum you spend. You can make use of computer cash management programs, or make database sheets of your own. Make a system that works for you and will help you keep track of your monthly budgeting progress.

A lot of teens nowadays do not understand the value of earning and spending money. They were not oriented that investing is necessary even if they are still students. As parents, you play a crucial role in this area. It’s your responsibility to show them the right path. You should be able to teach your kids on how to save money. They should be able to understand the concept of money and investment as early as childhood. This will prepare them to learn money management, as they grow old.

Here are some tips on how you can teach your children how to save money:

1. Your children should be educated of the meaning of money. Once your children have learned how to count, that is the perfect time for you teach them the real meaning of money. You should be consistent and explain to them in simple ways and do this frequently so that they may be able to remember what you taught them.
2. Always explain to them the value of saving money. Make them understand its importance and how it will impact their life. It is important that you entertain questions from them about money and you should be able to answer them right away.
3. You need to give them their allowances in denominations. Then you can encourage them that they should keep a certain bill for the future. You can motivate them to do this by telling them that the money can be saved and they can buy new pair of shoes or the toys they want once they are able to save.
4. You can also teach them to work for money. You can start this at your own home. You can pay them fifty cents to one dollar every time they clean their rooms, do the dishes or feed their pets. This concept of earning little money will make them think that money is something they have worked for and should be spent wisely.
5. You can teach them to save money by giving them piggy banks where they can put coins and wait until they get full. You can also open bank accounts for them and let them deposit money from their allowance. You should always show them how much they have earned to keep them motivated.

One of the most important is out life is education. With education, we hope to have a better salary, better life. Education is just like a major investment. You invest time and money, hoping that you will gain in the future. But some of us may not have the money to have education. Thanks to some schools and institutions out there that financing your education through loan can now be made. There are some lending companies or persons you know who will support you where you can borrow even just the minimum amount necessary to fulfill your education aims.

Before you take a loan, you need to prepare yourself.  First you need to understand the terms and conditions of the loans. This will help you get out from any problem during the repayment period. Things you should know before you take a loan:

1. How much should you borrow? This is the most crucial question.  Usually, the amount will greatly depend on the cost of attendance as established by your school, loan limits established by the federal government and other student loan lenders, your savings accounts, and the debt you can afford to repay once you leave school.
2. From where will you get money to pay the loan? If you need to work,  you need to know how much you will your future income.  You can perform some research on the current job market and start salaries in the area you plan to pursue.
3. Are there eligibility requirements for the loan?
4. How to apply for loan and what applications are needed?
5. Will my parents be expected to provide any of their financial information or contribute to the cost of my education?
6. Is there any move that I can take to lessen the amount I have to borrow, yet still attend the school of my choice?

To answer those questions, you can find help with the financial aid administrators at the schools you are considering.  There are also some consult publications from funding organizations out there where you can seek for answers.  You can also find information in the internet, like what you are looking right now. Other information is also valuable, like the importance of good credit, how to manage your student loans while in school, and even repaying your student loans.  There are also some interactive calculators online these days to help you plan your in-school and out-school budgets.  These calculators are even useful when it comes to projecting the cost of your student loans.

Student loans can be a valuable investment, but they are also an important obligation that needs to be considered.  In order for you to ensure a successful student loan repayment, you must make sure that you approach borrowing carefully and thoughtfully.

If you want to get rich from the stock market, how do you do it? What strategy will you use? Is it value investing that warren buffet use? Technical analysis, or penny stock trading? All have different characteristic. What I know is value investing / fundamental analysis has lower risk and lower return. While technical analysis, and penny stock trading tend to be more risky but have higher return if you guess it all right. With value investing you can enter the market within a long period, like weeks. But in technical analysis, and penny stock trading timing is very crucial. You have to enter quick and exit quick.

What we can learn from this is, if you have lots of money like buffet had use fundamental or value investing. But if you just have small money, trade with technical analysis, buy penny stock, or swing trading. Once you have more money, that your movement will affect the price, change your strategy with fundamental analysis or value investing.

Peter Lynch was born on January 19, 1944. He is currently a research consultant at Fidelity Investments. Lynch graduated from Boston College and studied finance at the Wharton School of the University of Pennsylvania. Lynch was first hired as an intern with Fidelity Investments in 1966 partly because he had been caddying for Fidelity’s president. He initially covered the paper, chemical, and publishing industries. Peter Lynch was famous for it’s Magellan Fund which had $18 million in assets. By the time Lynch resigned as a fund manager in 1990, the fund had grown to more than $14 billion in assets. Lynch reportedly beat the S&P 500 Index benchmark in 11 of those 13 years, achieving an annual average return of 29%. He writes books like “One Up On Wall Street” (1989) and “Beating The Street” (1993), which are widely considered to be mandatory reading for any investor.

He simply pick the right company: Fannie Mae, Ford, Philip Morris, MCI, Volvo, General Electric, General Public Utilities, Student Loan Marketing, Kemper, and Lowes. He created the investment process commonly referred to as “Buy What You Know”, and popularizing the economic concept of “local knowledge”. Since most people tend to become expert in certain fields, applying this basic “invest in what you know” principle helps individual investors find good undervalued stocks. Write a list of sectors and industries you understand, and choose a company from the list. It is unwise to invest in something you don’t understand.

According to an article by Kaushal Majmudar, a CFA at The Ridgewood Group, Lynch shares his checklist with the audience at an investment conference in New York in 2005:

• Know what you own.
• It’s futile to predict the economy and interest rates.
• You have plenty of time to identify and recognize exceptional companies.
• Avoid long shots.
• Good management is very important – buy good businesses.
• Be flexible and humble, and learn from mistakes.
• Before you make a purchase, you should be able to explain why you’re buying.
• There’s always something to worry about.

November 2008 – Billionaire Warren Buffett’s Berkshire Hathaway Inc. posted a fourth straight profit drop, the longest streak of quarterly declines in more than a decade, as hurricanes hurt returns at insurance operations and investments lost value. Hurricanes Ike and Gustav cost insurers a combined $10 billion when they struck the Gulf Coast in September, according to preliminary data from Insurance Services Office Inc. Although losses has been significant, Buffett committed at least $28 billion this year to acquire companies, finance buyouts and purchase securities. In the past two months, he agreed to spend $5 billion of Berkshire’s cash for a stake in Goldman Sachs Group Inc., and another $5 billion in preferred shares of General Electric Co.

He also agreed in July to lend $3 billion to Dow Chemical Co. to help fund that firm’s takeover of Rohm & Haas Co., and committed $6.5 billion in April to help Mars Inc. buy chewing gum maker Wm. Wrigley Jr. Co. Berkshire’s MidAmerican Energy Holdings Co. struck a deal in September to pay $4.7 billion for Constellation Energy Group Inc.

Sheldon Adelson’s casino company, fell the most in New York trading since going public after saying it may default on debt and face bankruptcy. He said that it probably won’t meet the requirements of loans unless it cuts spending on developments, boosts earnings at its Las Vegas Strip casinos and raises more capital.

The shares dropped $3.81, or 33 percent, to $7.85 at 4:04 p.m. in New York Stock Exchange composite trading, the biggest decline since its initial share sale in December 2004. Las Vegas Sands had tumbled 91 percent before November 2008 as investors dumped the stock, worried that falling casino winnings and the global financial meltdown would leave the company without enough cash.

There are hypothesized stock market trend based on the calendar, such as rises and falls associated with particular days of the week or months of the year. These are called calender effect. According to Haugen, R. and J. Lakonishok, the incredible January Effect, certain kinds of securities have been producing unaccountably high returns during the first month of the year.

Incredible January Effect, The: The Stock Market’s Unsolved Mystery

An increase of stock prices during the month of January is called January effect. This rally is due to an increase in buying, which follows the drop in price that typically happens in December when investors wants to create tax losses to offset capital gains. The January effect is said to affect small caps more than mid/large caps. However this historical trend, has been less pronounced in recent years because the markets have anticipated it. Another reason the January effect is now considered less important is that more people are using tax-sheltered retirement plans and therefore have no reason to sell at the end of the year for a tax loss.

The October effect says that some of the greatest crashes in stock market history, including 1929′s Black Tuesday and Thursday and the 1987 stock market crash, occurred in October.

Paul R. La Monica at CNN money talks about the effect of Obama and McCain on stocks. It was based from a research firm International Strategy and Investment (ISI). Andy Laperriere, a managing director of ISI’s policy research team in Washington, has put together a portfolio of 20 stocks for an Obama portfolio and 20 more for a McCain portfolio.

Here are the summary:

• Alternative energy companies could do well under Obama, since it is likely that an Obama administration would push for more subsidies for alternative energy. So he pick Covanta Holding (CVA), solar energy leader First Solar (FSLR) and Vestas Wind Systems (VWSYF). Other stocks which will do good under Obama: Vulcan Materials (VMC), Granite Construction (GVA), URS (URS), GM (GM).
• As for McCain, companies with exposure to nuclear energy could do well since McCain has consistently advocated nuclear as a viable alternative energy source. Shaw Group (SGR, Fortune 500), and Exelon (EXC), could both benefit from a McCain victory. Other stocks which will do good under McCain: Pfizer (PFE), Novartis (NVS), Unitedhealth (UNH), WellPoint (WLP), Aetna (AET), General Dynamics (GD), Northrop Grumman (NOC), KBR (KBR).