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Warren Buffett keys to investing

Written by R.A. Stewart

Warren Buffett is a legendary investor who has valuable rules for investing your money; some of these are:

Do your homework

Be Consistent

Limit your borrowing

Keep things into perspective

Diversify your investments

Have an emergency fund

Stay disciplined.

I have written my thoughts about all of this, and as usual, it may not be applicable to your personal circumstances.

1 Do your homework

You need to understand everything that you invest your money in. Doing otherwise is simply inviting financial loss. Just investing in something because others are doing it or it is another bandwagon to jump on is a bad reason for investing in a particular stock. Keep in mind that when a particular company’s stock is rising, a lot of investors will jump aboard for the ride and inflate its true value.

2 Be consistent

Keep investing, that applies to putting money away for your retirement, building an investment portfolio, or saving for a rainy day. Learn to make sacrifices in order to make your dreams come true. 

3 Limit your borrowing

Borrowing can kill off your chances of financial success if you let it. The worst kind of borrowing is consumer debt, often referred to as dumb debt. When one borrows for consumer goods, they are paying for something which if they sold, would be worthless than the money owing on it. With borrowing, the crunch always comes when you have to pay it back.

4 Keep things into perspective

Success means different things to different people. Supporting your favourite charities is a way of giving back to society, even if you are just starting out and don’t have a lot to give. You can still give your time. Be faithful with what you have today. 

5 Diversify your investments

Placing all of your money in one company is called, “Putting all of your eggs in the one basket,” it could also be called “Stupidity,” It is inviting financial disaster. A common theme through many of the finance company collapses in New Zealand during the Global Financial Crisis is that many of the investors had their entire life savings invested in just one company. Many were left with destroyed retirement dreams as a result.

6 Have an emergency fund

It is sensible that one has an emergency fund to fall back on during times when cash is needed. This applies to everyone, whether one is a householder balancing the budget or in business.

7 Stay disciplined.

Keeping a disciplined frame of mind will help you stay on track. That includes staying in the habit of investing your money instead of frittering it away on things which do not add value to your life.

About this article

This article is of the writer’s own personal experience and opinion and may not be applicable to your personal circumstances therefore, discretion is advised. You may use this as content for your blog or website.

www.robertastewart.com

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How to Thrive During a Cost of Living Crisis

As inflation rises and wages struggle to keep pace, many find themselves facing the harsh reality of a cost-of-living crisis. However, even in these challenging times, it is possible to not only survive but thrive. Here are some practical strategies to help you navigate and flourish during a cost-of-living crisis.

1. Assess and Adjust Your Budget

The first step towards thriving in a cost-of-living crisis is to gain a clear understanding of your financial situation. Review your income, expenses, and savings. Categorize your spending to identify areas where you can cut back. Essentials such as housing, utilities, and food should be prioritized, while discretionary expenses like dining out, subscriptions, and entertainment can often be reduced or eliminated.

Creating a realistic budget and sticking to it is crucial. Use budgeting tools and apps to track your spending and ensure you remain within your limits. Regularly revisiting and adjusting your budget will help you stay on track and make necessary changes as your financial situation evolves.

2. Increase Your Income

While cutting costs is important, finding ways to boost your income can provide additional financial relief. Consider side hustles or freelance work that can be done in your spare time. Online platforms offer numerous opportunities for part-time gigs, from tutoring and writing to graphic design and virtual assistance.

Additionally, explore opportunities for advancement within your current job. This might involve asking for a raise, seeking a promotion, or acquiring new skills that make you more valuable to your employer. Investing in education and training can enhance your earning potential and open doors to higher-paying roles.

3. Embrace a Frugal Lifestyle

Adopting a frugal mindset can significantly reduce your expenses without compromising your quality of life. Start by being more mindful of your consumption habits. For instance, cook at home instead of eating out, use public transportation or carpool instead of driving, and shop for clothes and household items at thrift stores or during sales.

Saving on utilities is another area where small changes can lead to significant savings. Simple actions like turning off lights when not in use, unplugging devices, and using energy-efficient appliances can lower your electricity bills. Additionally, consider implementing water-saving techniques, such as shorter showers and fixing leaks promptly.

4. Grow Your Own Food

One way to reduce your grocery bill and ensure a steady supply of fresh produce is by growing your own food. Even if you have limited space, you can start a small garden on your balcony or windowsill. Herbs, tomatoes, and lettuce are easy to grow and can provide a continuous harvest. Community gardens are also a great option for those with limited space, offering plots for a small fee and a sense of community.

5. Utilize Community Resources

During a cost-of-living crisis, community resources can be invaluable. Many organizations offer assistance with food, clothing, and utilities. Local food banks, community centers, and religious organizations often provide free or low-cost resources to those in need. Don’t hesitate to seek help; these resources exist to support you.

Additionally, consider participating in community swap events where you can exchange items you no longer need for those you do. This can be a cost-effective way to acquire necessities without spending money.

6. Invest in Financial Literacy

Knowledge is power, especially when it comes to managing your finances. Take the time to educate yourself about personal finance, budgeting, and investing. Numerous free resources, including online courses, webinars, and podcasts, are available to help you build your financial literacy.

Understanding how to manage debt, save effectively, and invest wisely can improve your financial stability and resilience. Financial literacy empowers you to make informed decisions and develop strategies that align with your long-term goals.

7. Stay Positive and Adaptable

Lastly, maintaining a positive attitude and being adaptable is essential. A cost-of-living crisis can be stressful, but focusing on what you can control and being open to change can make a significant difference. Embrace creativity and resourcefulness in finding solutions to financial challenges. Surround yourself with a supportive network of friends and family who can offer encouragement and practical assistance.

In conclusion, while a cost-of-living crisis presents significant challenges, it also offers an opportunity to reassess and realign your financial habits. By budgeting wisely, increasing your income, embracing frugality, and leveraging community resources, you can navigate these difficult times and emerge stronger and more resilient.

www.robertastewart.com

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Leaving a financial legacy

Written by R. A. Stewart

“Whoever can be trusted with very little can also be trusted with much, and whoever is dishonest with very little will also be dishonest with much.”-Luke 10:16

Should you leave your money to your kids or grandkids?

I think the answer to that question can be a “Yes” or a “No”.

New Zealand financial advisor Mary Holm wrote, “Don’t leave all of your money to your grandkids for them to spend, spend it yourself.”

I disagree with Mary but not entirely, because it all depends on how responsible the recipients of your generosity are with money.

If they are just going to fritter the money away on booze, cigarettes, drugs, and whatever then I would not leave them a cent or if you are in the UK, a penny.

But, if they are responsible with their own money then it is a good idea to help them out.

That does not necessarily mean just leaving them a sum of money and allowing them to decide what to do with it.

In New Zealand, the retirement savings scheme is called “Kiwisaver”, which cannot be accessed until you reach the retirement age of 65, but there are circumstances when one can access this money and one of these is to use some of the money to go for a deposit for your first home.

If someone is responsible and mature enough to be able to save for a mortgage then they deserve all of the help which they can get, but you just have to let go of those who have no interest in gaining financial literacy because if you do not spend your money then someone else will.

The alternative is to leave it to charity, but if you are going to do that then it may be a good idea to donate to a charitable cause while you are still alive; well if you are living in New Zealand because you will receive one third of your donations back from the tax man, provided of course that the recipient of your generosity is registered as a charity..

Young people do not give much thought about what happens to their property after they go and as a result do not bother to make a will. This can leave problems for their loved ones if the unexpected arises.

There was a case several years ago when a 20-year-old lady died unexpectedly and had money in her kiwisaver account, but her family did not receive any of it, the lawyers did because she did not have a will.

Problems will arise when one dies without a will and making a will is one less worry for the family to deal with.

About this article

The contents in this article are of the opinion and experience of the writer, therefore discretion is advised. You may use this article as content for your blog or website.

Read my other articles on www.robertastewart.com

 

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10 Money Wasters

10 Things to stop spending your money on to have more money

Written by R. A. Stewart

  1. New Cars

Is this a necessary expense? If a $5,000 car will be sufficient to meet your needs and you purchase a car for $15,000, that is ten grand that you are throwing away. That 10 grand could be invested somewhere and grow to a sizeable amount. It could have gone toward your retirement fund or some other investment.  And for those who have no savings whatsoever, and borrow to purchase a new car, I say, unless you change your money habits you are headed for a life of financial strife. The cost of running a car is expensive so that needs to be considered.

  1. Holiday Souvenirs

Next time you go away on holiday, forget about the souvenirs; they can be expensive. There is no point in just bringing something back home which is just going to be sitting on a shelf gathering dust. Some souvenirs such as a t-shirt or a t towel serve a useful purpose, but you can find cheaper items in a charity shop in your home town.

  1. Lottery Tickets

Don’t be taken in by the flashy advertising of the lottery company trying to lure you in to spending money. The odds of winning are so slim that they are basically next to nothing. Do the mathematics and work out how much each lotto player is spending per annum. That all adds up to a fortune during a lifetime. The large jackpots only mean thousands are contributing to the pool but only a few are taking out.

  1. Constantly updating your Smartphone

Updating your smartphone just to keep up with your peers is another money waster. Smart people hold on to what works and retain it for several years. You do not need the latest version of whatever you are using. Be content with what you have and not be lured into buying something which you do not need.

  1. Going overboard on Christmas Presents

It is no secret that a lot of people spend way more on Christmas presents than they should. It is reported that some New Zealanders spend over $1,500 on Christmas presents for people who don’t need them. The New Zealand auction site trade me reports an increase in listings on Boxing Day with people wanting to sell their Christmas gifts. There is even a section on the website for unwanted Christmas gifts.

  1. Eating out regularly

This can really bleed you dry if you make a habit of it. Add in a few drinks and you could be looking at over $50-$100 a night depending on where you dine out, Do the mathematics and you will soon discover where your money is going.

  1. Extended Warranties

Retailers will try to upsell you on extended warranties. This is something you most probably do not need. In New Zealand, consumers are protected by the Consumer Guarantees Act and are covered in any case, so it is not necessary to purchase an extended warranty.

  1. Unused subscriptions

Paying for something which you do not use or only use sparingly is tipping money down the drain and should be used for some goal which you have set for yourself.

  1. 9. Dating the wrong person

A person who has no sense of responsibility and lacks any financial literacy skills will bleed you dry financially. When both partners can never find themselves on the same page when it comes to financial matters then tensions will arise. It you are the saver/investor, and your partner is the spender then it will pay to let him or her go before you become too involved in their financial mess.

  1. 10. Keeping up with the Joneses

This is surefire way to waste your money. Just because your neighbour owns a whatever it is, doses do not mean you have to follow suit. Just focus on your own personal financial circumstances and goals. Some folk buy stuff with borrowed money and this sets them back financially. Live within your means and prioritise you’re spending to make the most of your money.

About the Article

The contents in this article are of the opinion of the writer and may not be applicable to your personal circumstances, therefore discretion is advised. You are welcome to use this article as content for your blog/website or ebook.

Check out my other articles on www.robertastewart.com

 

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Setting Goals is an Art

Setting goals do not have to involve money on its own. If you set goals based on money then your life is out of balance. It is important to decide what is important to you and is the vehicle to helping you to achieve those aims. In short, money should not be your number one aim.

If you accept a job with a higher pay then you had better weight up everything that the job involves such as the hours of work, the commute to the job, and responsibilities that come with the job and then decide whether it is worth all of the hassle.

It all depends on your personal circumstances and preferences. There is no size that fits everyone when it comes to goal setting. There is no such thing as “should” even though there are people who think others should do this or do that.

Personal goals are something which are personal to you. Here are some examples of personal goals:

Learning to swim

Learning a new language (specify)

Learning to drive

Learning to use the coffee machine

Learning to salsa dance

Reading the Bible from cover to cover

Meeting your favourite sports player

joining a sports club (specify)

The most important factor in determining your personal goals is your passions. The other factor is your talents. These two are often linked. Whatever most interests you is often where your talents lie but that does not mean that you cannot learn anything new. Most skills and talents are transferable.

We often see international sports people using the skills which enabled them to reach the elite level in their chosen sport to help them succeed in their chosen career after they have retired. Many have prepared themselves for life after sport by studying to gain a degree during their playing days.

It pays to have a number of strings to your bow as a backup.

You have to specify what your goal is otherwise it just becomes a wish and anyone can make a wish but it is taking action which will turn a dream into reality.

If you went to your travel agent and asked for a plane ticket they are unable to help you unless you were specific and told them your proposed destination.

Examples of vague goals which are non-specific are:

To lose weight

To get fit

To be happy

To save money

The problem with vague goals is that there is no way of knowing when you have achieved your goal. Goals need to be specific and timed. A goal of “To deposit at least a grand into my retirement fund by June 30th, 2023 is a specific and timed goal. You have either achieved your goal or not.

A get fit goal may be “To be able to run a 5k fun run by 31 December 2023.” This is another example of a specific goal which has been timed.

Giving your goals a timeline will give you more motivation. Just telling yourself that one day or someday I will do such and such is not a goal; it is a wish and there is a big difference between wishing for something and being serious about achieving it.

Life needs to be in balance and it is important to consider your personal talents and preferences. Many people have achieved extraordinary success in their chosen field and despite not setting out to make money have accumulated a great sum of money doing something they enjoyed.

The key here is to not make money your number one goal in life.

www.robertastewart.com

 

 

 

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What would you do with 50 Million Dollars?

What will I do with the 50 Million lottery Windfall…

Written by R. A. Stewart

That is if I win the thing and I am more likely to get struck by lightning on a fine day than win that thing, especially since I don’t buy a ticket; well, since the pool reached over 50 million dollars for the first time and this particular draw was terminating, which by law, it had to be once it reached 50 million, guess what I did? I bought a ticket for the first time in years., just to give me an interest. 

What would I do if I had won the jackpot?

First of all I would put 50 grand into my nephews and nieces who belong to the kiwisaver retirement scheme. When one is purchasing their first home they are able to access part of their kiwisaver for a deposit on a home. 

They can also access their kiwisaver for a bond if renting but this is only applicable to under thirty year olds.

My nephews and nieces are Toni, Nicholas, Shanae, David, Nick, Kyle, Simon, Hannah, Adam, Cori, Daniel, and Maria.

I would extend this to the next generation down.

Those who are not in kiwisaver would be setup in kiwisaver and receive $10,000 a year for five years to make sure they received the government tax credits each year. After five years they should have enough sense to realise that they need to contribute at least $1040 to receive the full government money.

Anyone who refuses to join kiwisaver under these circumstances don’t deserve to be the recipient of such generosity and sadly there are some who are so thick they will not even bother.

For every one I would buy Frances Cook and Mary Holm’s books on personal finance. I own a copy of their books and highly recommend them. I would also pay for some family members to get financial advice from a financial advisor.

I would also purchase houses and cars for family members who need them.

The rest of the money will be invested and the returns on that investment will be used to do whatever I want to do with the money.

There are plenty of charitable organisations near where I live which could do with the money so I would turn my attention to them and give some of it away.

The Miner’s Hall restoration project needs a million or so to complete the project which they are undertaking.

I have not even given any thought to any overseas travel yet. This would be well down on my priorities, well until I have taken care of family members.

Which kind of reminds me; you had better not fall out with family members because they might be the ones who win the next big power ball draw.

About this article: You may use this article as content for your blog/website, or ebook. 

Check out my other articles on www.robertastewart.com

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Don’t let a cashless payment be an inconvenience

Written by R. A. Stewart

It’s a sign of the times when more and more businesses do not accept cash. This means that if you are on holiday it is important to be able to pay for things with a card and that does not mean signing up with a credit card. In fact I am going credit card spending because not only do you have a debt to pay but you have interest to pay on top of that.

Most bank ATM cards will work in other countries but each withdrawal will be costly and if you are using this form of payment for small purchases at the checkout in another country, your bank fees will quickly add up as you will discover once you return home on your overseas trip.

Using a debit card is a handy option. These work in much the same way as a credit card but with one difference; you are using your own money. Once your balance is used up, that’s it, you cannot spend any more than what you have in that account. It is just a matter of topping it up. 

The Wise debit card is one which I have recently joined. This is a travel card which can be a useful addition to your payment options where cash is not accepted.

When you sign up you require an ID such as a passport or driver’s license. You also need to verify your address. This is done using a utility or a rates bill.

Ordering your card is simple. Just log into your wise account and order it from there. It costs $14.50 ($NZ). You will receive your card within two weeks. 

While the  wise debit card offers numerous benefits, it’s not without its limitations. Availability may be restricted in some regions, limiting its accessibility to a global audience. Additionally, ATM withdrawal limits and fees may vary depending on the user’s location and the currency being withdrawn. However, these limitations are relatively minor compared to the overall value proposition offered by the Wise Debit Card.

Note Wise was previously called Transferwise.

Join Wise Here

Wise may not be for everyone due to different personal circumstances, therefore discretion is advised. I may receive a small commission if you sign up for wise.

Www.robertastewart.com

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Book Review: Rich Enough by Mary Holm

Written by R. A. Stewart

Mary Holm is a New Zealand financial adviser who has written books on the subject of a personal finance nature for years and her book “Rich Enough? Is certainly a very good book with lots of down to earth information written in simple easy to understand terms.

There are several important points which she highlights and the first one is the importance of starting early. In fact the earlier you start the more money you will accumulate in the long term.

Starting early develops good savings habits which will in turn serve you well during your lifetime. 

The second point is to get rid of any debt you have as soon as possible and staying out of debt. If you are paying 10% interest on your debt then paying off that debt is just like being paid 10% interest on your money. It makes no sense to have money invested at 5% interest when you are paying 10% interest on your own debt. That money is better off in your pocket.

Falling into the Christmas trap can be costly as Mary points out. 15% of New Zealanders have more than 11 people on their Christmas shopping list to shop for and about 27% of them are women who plan to spend over $200 per person on presents. About 17% of people expect to spend over $1,000 on Christmas. Some suggestions on how to reduce your Christmas spending are given by Mary.

A section on New Zealand’s retirement scheme Kiwisaver tells of the excuses people provide for not joining and one of those excuses is “I have not got around to it.” 

This is stupidity according to the author, Mary Holm.

Another reason given is, “My grandma lost it all during the Global Financial Crisis.”

As Mary points out, these finance companies which went under during the GFC lent money to people who the banks considered too risky to lend to so they borrowed off the finance companies and paid higher interest rates. As a result, investors who lent money to these companies received high interest rates.

As the saying goes, higher return often means higher risk.

The importance of diversification is discussed as are the value of different types of investments. 

My rating: I rate this book a 10 out of 10 based on the fact that the information presented is applicable to everyone irrespective of their means. 

To find a copy, go online. Trademe, Ebay, and Amazon may have a copy for sale.

www.robertastewart.com

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6 Benefits of Saving Money

The value of saving money

Written by R. A. Stewart

If there is one habit which will make your life easier it is the habit of saving money from each payday. As a responsible adult this is the mature thing to do. People who just spend all of their money leaving them broke before the next pay day arrives are irresponsible. 

Saving money without an end goal may seem pointless to some people and that is why it is important to have goals so that your money has a purpose. This gives you motivation to save otherwise you will become just like most people and just fritter your money away and when that rainy day comes there will be nothing to fall back on.

Here are reasons why you must save:

  1. Saving helps you to avoid borrowing

People who have no savings often borrow for stuff they need, such as some appliance breaking down or a medical emergency. Borrowing adds to the cost of whatever it is a debtor is paying for. This cost is called interest. Another word for interest is dead money because it gives you nothing tangible for your money. If you have debt then getting rid of it must be your first priority.

  1. Saving helps you to avoid future inconvenience

Imagine having no savings and the car, washing machine, or internet modem, or something else needs fixing and you have no savings. These are items which we take for granted but having no money to repair or replace something which needs replacing will cause you a great deal of inconvenience. Having a rainy day account for emergencies is a good idea.

Having

  1. Saving enables you to build your wealth

Saving money will help you to build your wealth portfolio and you do not need to have a fortune to begin investing but you do need to invest in order to create a fortune. Share market platforms such as Sharesies and Hatch enables anyone to invest on a shoestring. Investing with these platforms helps build your financial literacy.

  1. Saving provides more opportunities 

Saving money creates more future opportunities. It provides opportunities to study, to travel, and to move locations for work. Your future you will thank you for what you have saved today. Will anyone reach the age of 65 and regret having made consistent contributions to kiwisaver? I think not.

  1. Saving provides more peace of mind.

Saving provides a certain amount of peace of mind. When you have something up your sleeve to pay for emergencies when you need it life becomes much less stressful. That is something which should be part of your financial plan.

  1. Saving helps prepare for retirement

Having money behind you helps make your retirement years more comfortable. Whichever country you belong to it is important to join your country’s retirement scheme and take advantage of any tax incentives if any.

About this article: The contents are of the opinion of the writer and may not be applicable to your own personal circumstances. You are advised to seek professional budget advice if necessary. Feel free to print this off for easier reading. You may use this as content for your blog, website, or ebook.

Www.robertastewart.com

 

Disclaimer: I may receive a small commission if you sign up with sharesies. (see below)

 Investing with Sharesies is an accessible and straightforward way to invest in the stock market. By following these steps, you can get started on your investment journey and start building your wealth. However, before making any investment decisions, it is essential to do your research and seek professional advice if necessary.

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Have you joined KIwisaver yet?

Now is a good time to join kiwisaver if you have not already

Written by R. A. Stewart

It is a good time to join kiwisaver if you are young and just starting out in the world. If you are over 30 and have not already joined kiwisaver then why not? Kiwisaver is the New Zealand retirement scheme. If you are in work you will get the equivalent of 3% of your gross wages from your employer deposited into your kiwisaver account. 2%, 4%, or 8% (you choose) of your gross wages will be deposited into kiwisaver and deducted from your pay. You can also make voluntary contributions to your kiwisaver account. This is an option used by those who are self employed or not in work.

The government’s contribution to your kiwisaver is what makes this a no-brainer. You will receive $520 of government money into your kiwisaver account but you need to invest at least $1040 to receive the full $520 otherwise the government contribution is 50% of your contribution. This is per annum; in other words you need to invest at least $1040 into your kiwisaver account per annum to receive $520 of government money every year.

The Kiwisaver year begins on July 1 and ends June 30 the following year. If you are on part time work and it looks as though your kiwisaver contributions are going to be less than $1040, you can make voluntary contributions to ensure your own contributions reach $1040.

In order to take advantage of the falling share prices you need to be in a growth fund or have some portion of your portfolio in a growth fund, otherwise called a balanced fund. If you are in a conservative fund then you are going to miss out on the market rebound. Financial experts will tell you that if you are in a growth fund then you need to leave it invested for at least five years. That way, if the market falls during this time there will be time for it to recover and recoup any losses which it has to be said are only paper losses.

Money which is needed for the short term such as a holiday abroad next year is considered short to medium term money. If you had this money invested in a growth fund you may find that your spending money for your trip has been depleted therefore, to reduce this from happening investing in something less risky is an option taken by a lot of holiday makers even though the return on this money is less than the inflation rate.

If you are prepared to take the risk then you might consider investing your short term money in growth funds in the hope of increasing your capital but it is important to understand that whenever there is an opportunity for capital gain then there is a chance for capital loss.

It cannot be stressed enough that it takes a cool head to live through the ups and downs of the share market and be relaxed about it. One thing you can always bank on is that the share market will go up and down. It is important to have a strategy in place to take this into account.

Diversification minimizes your risk. Diversification is when you spread your investment among several companies. One company might fall over but not the whole lot.

Some may argue that if you plunge all your money in one stock then you will make a killing; that is true, but you never hear of those who tried that and lost. If you are going to do that then it should be done independently of your main investments rather than risk your retirement savings going down the drain.

ABOUT THIS ARTICLE

The information in this article is of the writer’s own opinion and may not necessarily apply to your personal circumstances. You are advised to seek professional financial advice if you require assistance. You may use this article as content for your ebook or website. Check out my other articles on www.robertastewart.com