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HOW TO SET INVESTMENT GOALS

3 Factors which determine your investment strategy

You may be wondering what is the right investment strategy for you, but without knowing anything about you, any advice on which investments are right for you may in fact be the wrong ones. There are basically three factors that determine which are the right investments for you, they are:

  1. Your age
  2. Purpose for the money
  3. Your risk profile

Starting with your age. It would be rather silly of you to invest all your money in growth funds if you are aged 65 because if the market takes a dive such as was the case during the 1987 sharemarket crash and to a lesser extent, the GFC during the early 2000s you have less time to recover from these setbacks whereas the young ones have time on their side. 

The purpose for the money is the second factor.

Decide whether you require the money in the short term, medium term, or long term.

Short term would be up to a year.

Medium term is 1-5 years

Long term is longer than five years

Short term expenses would be, a bank account for emergencies, a holiday within a year, dental expenses, or t pay for the kids schooling for a year.

Medium term would be savings for a car.

Long term would be your retirement fund, saving for a house deposit, or saving for the trip of a lifetime.

Your risk profile is a determining factor in where you invest your money. If the thought of the sharemarket taking a dive will give you sleepless nights then investing growth stocks in the sharemarket is not for you. A better option would be managed funds where you will be given a choice between growth, balanced, and conservative funds.

It is important not to get into debt for there is a cost to debt and that is interest. Interest adds to the cost of goods bought with borrowed money, and this adds up to a fortune during a lifetime of borrowing for consumables. This is called bad debt because the value of the item declines over time.

There is such a thing as good debt though and this is your first home because the value of the property increases during the lifetime of the loan but even this is not always a good option for some people if you live a kind of transient lifestyle. 

“Everyone is to their own,” so only you know what makes you tick so your personal circumstances are the determining factors which govern where best to invest your savings.

You must do your homework before you invest in anything, whether that is the sharemarket, managed funds, or gold. There is so much information available on just about everything, and that includes finance. It is just a matter of learning the ropes and having a financial strategy which suits your personal circumstances.

If you think investing in gold is right for you then check out the site below:

https://affiliates.goldco.com/l/1VRW1MU2Q/

www.robertastewart.com

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THE BENEFITS OF DOMESTIC TOURISM

Advantages of Domestic Tourism

The Borders may have been slammed shut to tourists but domestic tourism offers advantages that overseas tourism does not.

For those who want to take a holiday in their own backyard there will not be such a hassle getting accommodation in tourism hotspots; it is a good opportunity for KIwis to see their own country before the borders open up and will be in 2022 at the earliest.

Certainly, we need tourism to return in order to pay off the covid debt.

But in the meantime businesses have no option but to turn to domestic tourism.

For tourist operators, domestic tourism offers repeat business. 

Someone coming from say China will pay one visit, return home, then save up for a holiday somewhere else, but Kiwis will often visit the same place several times over.

It will be the same in other countries too. It has been said 20% of your customers provide 80% of your revenue so it pays to take care of ALL your customers and they will repay you with repeat business.

People will happily fork out money to pursue their passion whether that be skiing, whitebaiting, duck shooting, sport, or whatever. A good example are the white baiters who travel to Haast every year providing accommodation providers and other businesses in the tiny West Coast township with much needed income during a quiet time.

What this means is repeat business for those serving the domestic tourist market and the local population.

It is therefore important to form a good relationship with your customers by keeping them up to date with goings on in the business and the local district.

An autoresponder can do this for you. 

What is an auto responder?

It is a system of sending emails to hundreds or thousands of people who have agreed to be on your email list.

Using an autoresponder helps build relationships with your customers and that is so whether you have a brick and mortar business or operate solely online.

Aweber is a popular email marketing autoresponder; you can join here for your FREE 30-day trial;

https://www.aweber.com/easy-email.htm?id=499027

www.robertastewart.com

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MISTAKES MADE BY INVESTORS

Mistakes made by investors

Mistakes can be costly, therefore, as an investor doing your due diligence will payoff in the long run. However, there is no guarantee that you will not make any mistakes during your lifetime. As the saying goes, “He who has never made a mistake never made anything.”

As an investor all you can do is minimize the chances that something will occur which could cause substantial financial hardship for there are no guarantees.

Mistake number one

Not doing your homework

“Ignorance is no excuse,” is a commonly used saying and that is applicable in finance as well. Many investors have had their fingers burned by blindly investing in something they know nothing about. With so much financial information in the newspapers and on the internet there is absolutely no excuse for being uninformed.

Mistake number two

Placing all your eggs in one basket

Diversification is a key strategy for a balanced portfolio. What this means is spreading your investment over different kinds of industries and having a balance between growth, balanced, and conseervative investments. How much you place in each investment depends on the purpose of the money, your age, and risk portfolio. 

During the Global Financial Crisis of 2007-2008 a lot of investors lost money in finance companies that went bust with a common complaint being the loss of an entire life savings. The mistake here was that some investors placed all of their finances in the one basket.

Mistake number three

Not taking responsibility

Taking responsibility for your own finances is important but some people by their very nature like to have someone to blame if their life or finances turn to custard so they will take the advice of someone. What sometimes happens is they will listen to a number of opinions and go with the one which aligns with their own. If things are going well they are smart or so they think they are and if things turn bad then it is someone else’s fault.

Mistake number four

Listening to the wrong people

The biggest downfall of unsuccessful people is they associate with bad company and take on board their opinions and bad money habits and attitudes. It has been said you are the average of the five people you spend most of your time with. If you do not have the opportunity to mix with successful money managers listen to them on youtube and register with their websites. It is all about developing the mindset of successful people.

Mistake number five

Keeping up with the Joneses

Trying to keep up with the Joneses will kill off your chances of any kind of financial success especially if you are on a lemonade budget and they have a champagne income. Everyone has their own personal circumstances and it is up to you to manage your life and finances according to your circumstances.

Mistake number six

Not living within your means

This is the most basic rule of finances, one which requires you to minimize your living standards to a level which allows you to live within whatever income you have. So many people increase their living standards to suit their income and never get ahead. Financially smart people invest any increase in income to increase their wealth while poor people just spend and windfall they receive.

Mistake number Seven

Not Having a Financial Plan

“If you fail to plan you plan to fail,” is a common saying, and it is no more true with your finances. Planning for the future will make things easier for you when the going gets tough. Job losses, car breakdowns, health issues, and retirement are all issues that can be financially challenging if you do not make allowances for these.

www.robertastewart.com

Gold has hit a record price, if you are interested in investing in gold check out the site below;

https://affiliates.goldco.com/l/1VRW1MU2Q/

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GETTING YOUR FINANCES IN ORDER

Saving for whatever…
Written by R. A. Stewart
Establish your savings goal. Are you saving for your retirement, a new car, a deposit for a home or whatever. This will be the determining factor when choosing where to invest your money. It is important to note that you can have several different savings/financial goals at the same time with a different type of investment with each goal.
For example, you may have a short term goal to pay off your TV set, a medium term goal to save for your car, and a long term goal to put away money for your retirement.
Your financial goals should be split up into three categorys; short term, medium term, and long term.
The category will determine where it is best to place your money.
1. SHORT TERM
Oncall-6 months
This is money on standby and used for general household bills such as power, car running expenses rent, and so forth.
Where to keep this money; Ordinary savings account or bonus bonds
2. MEDIUM TERM
6 months-3 years
This is money being saved for a car, appliance, overseas trip.
Where to keep your money; Bonus Bonds is a good option but mutual funds is an option but invest conservatively.
There are a number of managed funds which are cropping up and you do not have to have much to get started with them. A good one for the beginner is sharesies (in NZ). If you are from another country there will be companies similar to Sharesies you are able to invest with.
3. LONG TERM
3 years+
Saving for a house deposit and building a nestegg for your retirement are examples of long term goals.
Where to keep your money; kiwisaver is an ideal investment to drive you to your savings destination because the incentives will help your savings grow.
Some tips.
Pay off debt first because if you are able to pay off a debt where your are paying say 10% interest on the debt then the interest saved from the paid off debt is just as if you had been paid the 10%; as the saying goes, “A dollar saved is a dollar made.”
Stuff happens in life where circumstances change therefore you need to be prepared to be flexible.
Take a long term view of your investments. It is time and not timing which is the key to investing. As you gain more experience with investing, your risk profile will improve.
Read all you can about finance and the sharemarket. Knowledge will help you overcome your fears when investing.
PLEASE NOTE; The information in this article is the writer’s opinion basnk.ed on his experience. If you requiire financial advice see your bank.
www.robertastewart.com

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THE PYRAMID OF LIFE

Life is one big pyramid

Written by R. A. Stewart

Rugby is the national sport in New Zealand with about 50,000 Kiwis who play the game, possibly more so how many of them will be good enough to play for the All Blacks? 

There are fifteen players in a rugby team + five reserves I think it is. This is a very small percentage of the total number who play the game.

THe Next level down is the Super Rugby; there are five teams in the competition, this year the participating countries have their own competition due tp Covid-19 and border restrictions. The other countries involved were Australia, South Africa, Argentina, and Japan. 

The five teams in New Zealand each have a pool of thirty players which mean 150 rugby players are good enough to reach this level.

Next level down is the provincial competitions which has a lot more teams involved which mean a greater pool of players taking part.

Do you see what is happening here?

Life is like a pyramid with the elite at the point of the pyramid but with each level down you will find more participants.

Those at the top have exceptional talent but have worked their butts off to reach that level.

Talent can only take you so far but diligence and the right attitude will take you further.

The point of all of this is that to get yourself further up the pyramid in any sphere you have to do something which the majority are not. 

A lot of youngsters like to booze at the weekends but if your ambition is to be an international sportsman then you need to give up the booze. 

The same is for those who want financial success. There are sacrifices which have to be made in order to achieve your financial goals. 

I think it was J. Getty who once said, “If you divided the world’s wealth equally between its inhabitants people would after a period of time be in the same financial position as there were previously.”

What he was saying is the mindset of people will dictate what they would do with the money.

It is important therefore to network with like-minded individuals who have the same goals as you or have at least achieved what you are setting out.

www.robertastewart.com

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DANGERS OF GETTING IN DEBT

This article is of the opinion of the writer and does not represent financial advice. If you get advice from a professional, see your bank manager or other financial advisor.

Debt is a dirty word….

Written by R. A. Stewart

“The borrower is a slave to the lender.” Proverbs 22:7

Those who are regular followers of my posts will have noticed one thing; that is I have never written any articles on “How to get out of debt,” “How to get credit,” “How to borrow your way to a fortune,” and the like.

There is a reason for this; that is I have never borrowed money or bought anything on credit. I would rather write about something I know about not what others are going through.

For me, writing an article advising others How to get out of debt would be just like me writing an article advising smokers how to kick their nicotine addiction because I have never smoked.

However, having said that I can give you my thoughts on the subject of borrowing and debt.

The first thing you have to understand is this;

It all has to be paid back plus the interest which means that whatever you purchase with borrowed money will always cost more than if you purchased it with cash.

The bottom line is this; “The crunch comes the day you have to pay it all back.”

There are different types of credit but the worst type is consumer credit. The credit card is the usual culprit in consumer debt.

The use of credit cards is the result of greed and selfishness. In order to qualify for a credit card one has to have a large enough income and have sufficient discretionary income to satisfy the card issuer that you are a worthy risk.

One would have thought, therefore, that if your income is such that you qualify for a card, that you would not need one in the first place.

There are some kinds of debt which are considered good debt however, and one of these is a mortgage because you have acquired an asset which can increase in value over time. Your family home is considered the best asset for you however, you still have to have the income to support the mortgage repayments otherwise the bank will not loan you the money.

Interest rates are so low at the moment that we can expect a strong property market in the next year or two as youngsters take the opportunity to get on the property ladder. The sharemarket is going strongly and I believe this to be due to the pitiful interest rates offered to savers as money which was invested in fixed term interest investments are now being reinvested in the sharemarket.

It is a time for investors to tread caution because there will be ads from finance companies offering higher interest rates to temp them. Those who got their fingers burned during the Global Financial Crisis will be well aware of the kinds of traps which ensnare investors with greed being the main one.

There are plenty of other options for investing your money with gold being one of them. If you are interested in getting involved then the link below will provide plenty of information;

https://affiliates.goldco.com/l/1VRW1MU2Q/

www.robertastewart.com

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TALKING ABOUT GOLD

Talking about gold
Written by R. A. Stewart
Gold has hit a record price lately and one just wonders how long will this upward trend continue. It is a good idea to keep to the stick to the basic rules of investing. Here are the main ones:
1. When there is a chance for capital gain there is also a chance for capital loss and investing in gold is no exception.
2. Something is only worth what others are prepared to pay for therefore the price you will receive for something whether that be gold, property, or shares is reliant on someone wanting to purchase it at the price you are after.
3. Do not speculate with money you cannot afford to lose but rather use your discretionary spending for that.
4. Diversify your portfolio in order to reduce your risks. In other words do not place all your eggs in the one basket.
5. Have a short term, medium term, and long term strategy for your savings and finances
6. Do your homework before investing in any company or commodity.
Read all you can about the various types of investments in order to make an informed choice.
There are various ways to take advantage on the record gold prices; you can invest in gold mining companies on the sharemarket, purchase gold coins, or invest in gold bullions.
Goldco has lots of information on their site for those interested in investing in gold, check it out below:
https://affiliates.goldco.com/l/1VRW1MU2Q/
www.robertastewart.com

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GOLD PRICE HITS RECORD LEVELS

Gold hits a record high

Gold has hit a record high and one wonders how high it will go before it starts falling but with interest rates so low and coronavirus not going away anytime soon it could reach dazzling heights. It is important to take a step back and not get carried away because the fundamentals of investing still need to be observed.

Whenever there is an opportunity for capital gain there is an opportunity for capital loss therefore never make speculative investments with money you cannot afford to lose but rather, use your discretionary spending for this purpose whether it be money you would have otherwise used for nights out or holidaying.

You do not necessarily have to purchase gold bullions to take advantage of the rising gold price. Investing in gold companies on the sharemarket is one option. You need to do your homework on the company and only invest in one with a proven track record. 

In New Zealand small investors can drip feed money into the sharemarket through Sharesies. This is not the only share trading platform but with Sharesies investors are able to invest money into individual companies.

I think investing in companies which mine gold may not necessarily be a good long term strategy because gold is likely to start failing at some point but nobody knows when that day will come. What is likely to happen is investors will see their gold and invest the money elsewhere. 

Investing in gold coins is another option providing you have a safe place to store it.

You can easily purchase these from ebay or other auction sites.

The beauty of owning gold coins is they can easily be converted back to cash.

Something is only worth what others are prepared to pay for and that is applicable whether it is gold, silver, property, art, or whatever it is.

It pays to do your homework and not invest in something unless you know something about it. Goldco has some informative articles on it’s website, you can find out more here:

https://affiliates.goldco.com/l/1VRW1MU2Q/

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COLLECTING GOLD COINS

Collecting Gold Coins  

 

People choose to become involved in various hobbies for several different personal reasons.  Some do it for the pure pleasure and fulfillment they get from the hobby itself (whether collecting, drawing, painting, writing, or some other hobby), while others partake of a specific hobby more readily for profit.  This is the classic divide between people in all aspects of hobby work, including the collection of gold coins.  Why would any individual choose to collect gold coins as a hobby over something more exciting and active?  Again, some people choose their hobbies based on their own ideas of pleasurable activities, while others simply aim to make a solid profit.

 

The reason an individual consider investing in a collection of gold coins can be influenced in several ways from many different sources.  Perhaps someone in this individual’s family – a father or a grandmother or even a favored aunt – collected gold coins throughout this individual’s childhood and simply built interest in the youth or eventually passed on the collection to the young one.  It was simply a matter of deciding whether or not they wanted to add more gold coins to this collection and based their entire decision on sentimentality.

 

Another way a collection of gold coins may have started in reality is through the receipt of a single gift – for a birthday or other special occasion this person received a gold coin from a relative or close friend.  From that small gift, the entire collection of gold coins began as a hobby.  In these cases, the person enjoys the game of hunting down rare gold coins more than actually acquiring them, or maybe he or she simply likes to display an impressive collection.

 

Others may collect gold coins to make a profit.  Some of these gold coins can be worth a great deal of money, especially rare gold coins, and often, such materials actually appreciate over time.  Often, a good collection of gold coins, especially one containing several rare or limited edition gold coins, can be appraised at a high price.

 

Hundreds of thousands of individuals across the world invest billions of dollars and hundreds of thousands of hours in the collection of gold coins, building huge lots that can be worth a great deal of money in the future.

 

Whatever item you are collecting it pays to gain knowledge about it by reading all you can about it because in this way you will be able to see something listed online at below its true value.

 

If investing in gold interests you or it is something you may want to look into then check out the website below:

 

https://affiliates.goldco.com/l/1VRW1MU2Q/

 

www.robertastewart.com

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LESSON FOR SHAREMARKET INVESTORS

The article below is of the opinion of the writer, if you require advice from a qualified professional then see your financial advisor, bank manager, or budget advisor

Do your homework lesson for do-it-yourself investors

Written by R. A. Stewart

On the news recently was an article about sharemarket investors in New Zealand who got their fingers burned by investing in a company whose price dropped dramatically after the company was revalued. The previous valuation was an error and a lot more than its real worth. Its share price tumbled quite dramatically.

Some young investors who used the share trading platform Sharesies got their fingers burned with one losing $10,000 as the reporter stated.

The share price increased by 1000% in a short time so looking at the maths of all of this, for a share price to increase by 1000%, it would have to be worth ten times its listing value so if the investors who was said to have lost $10,000 would have invested $1,000 to begin with.

So that would have been his actual loss.

The company was one I had never even heard of and the lesson here is to do your homework first. Don’t invest in anything unless you know something about it.

A presenter said, “Shouldn’t Shareies have done more to warn investors?”

My view is this; Sharesies are not there to spoon feed their investors, it is up to everyone to do their due diligence. With Sharesies, investors have the choice between investing in individual companies or managed funds. 

With managed funds, your investments are chosen by the fund manager. They are experts in their field and know what they are doing.

Investing in individual companies requires investors to use their own judgement but is a great way to learn about the markets and those who lose money in this way should learn the lesson and grin and bear it. 

If you are from New Zealand and would like to have a go at online investing then I recommend Sharesies, I am with them myself, you can join here:

https://sharesies.nz/r/377DFM

www.robertastewart.com