Posted on

The Benefits of getting into the habit of Investment

 

Written by R. A. Stewart

“A dollar saved is better than a dollar made because you don’t pay tax on a dollar saved”-Anonymous

Saving money from your wages is easily done for most people. It is a habit which can reap dividends in the long term. No pun intended.

A lot of people are good at saving money but have not got into the habit of investing.

In order to build up your wealth, it is imperative that you develop an investor mindset. These days in the internet age it is not necessary to be rich to invest, but you certainly need to invest to become rich.

Investing increases your financial literacy. The only way to become a good investor is to become one and with that experience will come knowledge. Reading books about personal finance is one thing but in order to turn the information you read into knowledge it is necessary to put into practice what is taught in those books.

I am keen to point out that not everything in personal finance type books will be applicable to your personal circumstances, but if you know where you are going then you will have the common-sense to discern which advice is applicable to your situation.

Becoming a good investor requires practice, practice, and more practice. To become a good investor requires an investor mindset. If you can handle the highs and lows of the markets and not panic when the market goes down. 

During market slumps we hear stories about people who changed from growth or balanced funds to conservative funds. A week or so later the market rallies and these people miss out on the rises which would have seen their retirement funds rise. It is a lose-lose situation for them. 

If you have chosen investments which are compatible with your risk-profile then the market volatility should not concern you.

“Inflation is the enemy of the conservative investor.”

In order to build your wealth it is necessary to take calculated risks. This is applicable in every aspect of life. Taking risks is not the same as being reckless or gambling. The key is to spread your money in different places. Taking a risk on making a killing by investing your whole life savings in one company is just stupidity, yet this is exactly what some people did prior to the Global Financial Crisis and the company went belly up. 

These people blamed others for their loss. 

“If it is going to be then it is up to me” is a rule to live by. This does not mean rejecting sound advice, but rather having the common sense to know whether the advice is good or bad.

At the end of the day, it is up to each individual to set up their own system for their finances, one that fits in with their goals and personal circumstances.

About this article

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

Read my other articles on www.robertastewart.com

Explore Freely, Spend Wisely: The Ultimate Travel Companion

 

For the ultimate freedom to explore these incredible routes, get a Wise Travel Card. One card holds multiple currencies, letting you pay effortlessly in NZD for fuel, snacks, and accommodation. It automatically converts your money at the mid-market rate, saving you from costly bank fees. Top up and manage your funds instantly via the app, making it the smart, secure, and simple way to travel. Spend like a local and focus on the scenery, not the small print. Get yours and travel with ease.

https://wise.com/invite/dic/roberts10486

Posted on

It takes Vision to make Provision

Written by R. A. Stewart

“Where there is no vision, the people perish.”-Proverbs 29:18

Financial planning takes vision. It also takes a bit of maturity and responsibility.

The choices you make today will affect the choices you have available to you tomorrow.

It is all about making provision for unforeseen circumstances and not all circumstances which you may find yourself in are unforeseen. 

If you have plans to get married and have children then that is not an unforeseen expense, therefore, if you are smart, you will make provision for such life changing events.

An unforeseen event is one where you have been injured in an automobile accident or were to have an accident at work.

For this reason it is important to set your finances up in such a way as to have some kind of cushion against financial shocks.

There is a scripture in Matthew 25:1-13 about ten girls. Half of them were wise and half of them were foolish. They were all invited to a wedding. The wise ones brought enough oil for their lamps, but the foolish ones did not. The foolish ones had to go back and get some more oil for their lamps and by the time they arrived at the wedding the door was closed on them. 

That was the consequence of not making provision for their journey. 

The wise girls made provision for their journey but the foolish ones did not.

There are consequences to living for today with no thought to the future. If you spend all of your wages within a week and are broke by the time the next pay day comes around you will always be at the mercy of lady luck. If an unexpected expense occurs it will be a great inconvenience to the broke person. A dental emergency, illness, accident, or a household appliance which we all take for granted breaking down can all occur.

Having some kind of emergency fund to take care of these is the responsible thing to do.

An emergency fund is considered short-term funds; that is, money you may require in the short term, therefore keeping this money in a low risk account is the best option for this type of fund. Investing in high risk funds, also known as growth funds, is not a sensible option. The last thing that you need is for the value of the fund to drop just when you need the money.

Your timeline is the key to finding suitable investments for your money.

Long-term money is funds which are needed after 5 years.

Medium-term money is funds which are needed from 1-5 years.

Short-term money is money which is needed within 12 months.

Discretionary spending money is what is used to feed these three categories. People who have debt do not have any discretionary spending money until that debt is paid off. As the proverb says, “The borrower is a slave to the lender.”

The bottom line is that it is essential that you control your money and not let money control you.

Certainly, the benefits of saving and investing your money cannot be underestimated. Building up your financial portfolio will give you more options in the future, but spending everything limits them. Investing will increase your financial literacy which in turn will help you to make better choices for your money.

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

Read my other articles on www.robertastewart.com

Posted on

What should you do with an unexpected windfall

Written by R. A. Stewart

If you have suddenly come into a lot of money such as from an inheritance or a lottery win then the first thing you need to do is to get financial advice. This is certainly applicable to those who have no experience at investing. A financial advisor will also advise you of the taxation issues.

There are some basic rules to making the most of your windfall which I am going to share with you.

Rule number one: Know where you are going

If you have no clue as to what your plans are for the future then you are likely to fritter away your windfall with the result that you have nothing to show for it. I have seen it happen! Financial planning requires vision. Making provision for the future is the sensible and the responsible thing to do. It will make life easier knowing that you have the funds available when some unexpected bill crops up. 

A financial advisor needs to know what your intentions are with your windfall before they can help you. It is advisable to sit down with a pen and paper and write out your plans for the future. 

Rule number two: Get financially educated

Lack of financial literacy is the most common reason for poor financial outcomes. With so much information on personal finance available there is no excuse for financial ignorance. Books written by New Zealand financial advisors such as Frances Cook, Mary Holm, and Martin Hawes are worth reading. Your local library may have one of their books available.

Improving your financial literacy will enable you to make more informed choices when it comes to investing your money.

Rule number three: Know the risks

When there is an opportunity to make a capital gain there is also the chance that you may make a capital loss, but calculated risks must be taken with your money in order to put it to work. The key is to take risks which are compatible with your time frame. The longer your time frame the more risk you can take on. Having said that, it does not mean retired people should not invest aggressively in growth funds if they understand that a market meltdown will result in their portfolio taking a hit.

Rule number four: Take responsibility

It is up to you to take responsibility for your choices. This also means not blaming others when your investments are not performing up to expectations. It is also up to you to take responsibility for your own mistakes and learn from them. 

Rule number five: Don’t Leave your money in one place.

Diversify your investments according to your risk profile. This minimizes the chance of losing your money in one hit. This advice is more applicable in the internet age when millions of dollars are lost in banking scams. Don’t leave all of your money in an account which can be easily accessible online. It pays to have an account which is not connected to internet banking. This can be used for depositing large sums of money.

Rule number six: Invest your money

Inflation is the enemy of the conservative investor. Don’t just leave your money in an ordinary savings account; put it to work so that it is making you money. This does not necessarily mean you are taking unnecessary risks with your money. If you have a lot of money to invest there may be a temptation to invest in something offering interest rates at a much higher rate than the banks are offering. Do your due diligence with such offers. The higher interest rates on offer do not always reflect the higher risk which investors are accepting. This was the advice of some financial advisors prior to the Global Financial Crisis of the early 2000s. It fell on death ears as so many got their fingers burned with the collapse of several finance companies in New Zealand.

About this article

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

Check out my other articles on www.robertastewart.com

Posted on

Over caution can be costly when investin

Written by R. A. Stewart

“Never invest in the share market which you cannot afford to lose” is a saying that you may have heard a few times but is it good advice?

It all depends on what you are going to use the money for and how soon you need the money.

If the money is in your retirement fund and you are in your twenties or thirties then you will not need the money for another thirty or forty years and even then you may live another thirty or so years so the money won’t be needed for decades. A share market tumble will not make any difference to your current lifestyle. 

You have time on your side to recover from the lows of the markets.

If however, you are saving for a house deposit and require the money in less than five years then being a little more conservative with your money may be the way to go.

The worst thing which can happen is for you to withdraw your money for a house deposit just when  the markets are down and then a month or two later the share markets have rebounded.

It is all about taking a balanced approach.

There is no doubt that many investors are afraid to lose their money so they invest their retirement funds conservatively. The end result will be that they are left short-changed when they reach 65. 

Worst still, they react emotionally when the markets take a dive and shift their funds from balanced to conservative, then when the markets rebound they miss out on the rises which would have seen their retirement fund recover.

It is time not timing which is the key to creating wealth in the share market. Young people have an abundance of time on their side and the young astute investor can use this to their advantage to create their wealth.

Inflation reduces the spending power of your money and just leaving your money in the bank will erode the value of whatever is sitting in that account. If money sitting in the bank is for everyday expenses or an emergency fund then that is fine, but to get ahead one needs to become a long-term investor.

Your risk-profile is the factor which should determine how much risk you should take. Your age is one factor. New Zealand financial advisor, Frances Cook, says, “Subtract your age from 100, and the answer is the percentage of your money which should be in shares.”

I do know of people who have a much larger percentage of shares than Frances Cook’s formula suggests they should have. One elderly couple I know invests in the share market for the dividends which they use to pay for their health insurance.

It is for investors to decide what level of risk they are willing to take and to take responsibility for decisions they make. 

Investors must get over their fear of loss in order in order to make the most of the investment opportunities available. Playing it safe in the matter of finances and life in general will leave you feeling short-changed, when with a few more risks you would have achieved more with your money.

About this article

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

Read my other articles on www.robertastewart.com

Posted on

Stealth Wealth-What it is

Written by R. A. Stewart

“Some People look rich but are actually poor while others look poor, but are rich.”-Proverbs 13:7

Stealth Wealth is a term which I had come across for the first time recently. I had never even heard of it previously so did a bit of research into what it actually meant.

Stealth Wealth is when people who are rich are living low key lives that no one knows they are rich. They may drive a modest car and live in a modest house. These people are likely to have their money in the financial markets and other investments.

At the other extreme, there are people who display their possessions in a way which gives others the impression that they are doing well for themselves. They drive fancy cars, wear expensive clothes, and attend all of the right parties, but they have nothing to show for all of their labours. 

Those in the “Look rich” category often find that their wages are not enough to pay for their flashy lifestyle so they use their credit card. There is a cost to this and that is called interest.

The people who live in such a way as to give others the impression that they are not rich will invest their money in the share market and other income generating investments.

Notice something?

People in the first category are investing money in something which increases in value and this grows their wealth.

Those in the second category spend their money on stuff which loses value and so never get anywhere financially; they are spenders.

Years ago I was working in the hospitality industry and the head chef had bought a car for 20 grand so a colleague told me. I replied, “If that was me, I would have bought the cheapest car and invested the rest of the money.”

Possessions such as an auto-mobile often go beyond the stage when they are for going from A to B, but serve as status symbols to impress others.

People who display their wealth in order to impress others are insecure. The need to appear wealthy steals the joy from their experiences. 

There are lots of rich people but they got there by being a good steward of their resources. Those who are spenders are never satisfied with what they have so they spend more and more on luxuries in order to satisfy their lust for stuff. In order to build up your assets it is necessary to live within your means and invest your savings. 

If there are just two habits which will enable you to prosper it is the habit of saving and the habit of investing.

About this article

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

Read my other articles on www.robertastewart.com

Posted on

Dividend Reinvestment Plan-what it is

Dividend Reinvestment Plan-what it is

Written by R. A. Stewart

Some companies give their investors the option of accepting a dividend or have the dividend paid out in shares. This is called a DIVIDEND REINVESTMENT PLAN (DRP or DRIP).

This can be cheaper than accepting the dividend and reinvesting the money elsewhere. This kind of arrangement makes it easier for an investor to grow their investment and saves money because investing your dividends elsewhere will attract fees for the new investment

A DRP at work

You have opted into a company’s DRP and it issues a dividend. What happens next?

Those who have opted into the companies DRP receive their dividends in the form of extra shares, while those investors who have not opted into the DRP receive their dividends in the form of cash.

The way a company calculates its share price will determine how many shares you will receive. Its method of calculation is sometimes called the “Strike Price”.

The shares are distributed within the company which means that you as the shareholder saves money on transaction fees. This process occurs each time the company declares a dividend. Sometimes the company will stop the Dividend Reinvestment Plan for one reason or another and when this happens, its shareholders will be informed of this,

Is Dividend Reinvestment Plan Right for you

Only you can answer this question, because it all depends on your personal circumstances and your goals. If you are using the income you receive from shares, in this case dividends to pay for some of your expenses, health insurance, for example, then you will want to receive the dividends into your bank account. If you are a long term investor and do not need your dividends then you may choose to opt in to the Dividend Reinvestment Plan. If you are unsure, then speak to a financial advisor.

The downfall of DRP is that it could reduce your diversification. Your strategy could be to spread your portfolio over a range of shares. Reinvesting your dividends in certain companies can mean your investment becomes unbalanced and weighted toward certain industries.

Always keep in mind that whenever there is the opportunity for a capital gain there is also the opportunity for a capital loss, therefore, it is best to invest according to your risk profile. 

About this article

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

Read my other articles on www.robertastewart.com

Posted on

Active Investor V Passive Investor 

Written by R. A. Stewart

What is the difference?

I was watching a man from Fisher Funds explaining this to a breakfast TV presenter in New Zealand and this is how he explained it.

An active investor is one who picks and chooses stocks which he thinks will out perform the market. 

A passive investor invests in a range of companies; in other words diversifies in order to minimize risk.

He made the point that the tech sector is a growing industry which has taken a greater share of the market which means that diversification is less of a benefit if you want your portfolio in traditional stocks.

There are drawbacks to being an active investor, and they are as I see them:

  1. An active investor makes more transactions and because of this they pay more in transaction fees. That may be an obvious statement, but a factor which is overlooked.
  2. The active investor has to do their research, whereas the passive investor leaves that to their fund manager.
  3. Being an active investors requires constant monitoring of stocks and this all takes time out of your day. Not everyone has that kind of time available to do this.
  4. An active investor must use their own judgement as to what is the right time to sell and this is where some people trip up because emotion often gets in the way of a person’s better judgement. Some people panic when shares drop and sell at a lower price than what they paid for them or hang on to the share for too long in the hope that it will keep rising and the share price starts sliding.

A passive investor buys and holds on to a diversified portfolio, often in ETFs or index funds. These are also called Managed Funds.

These rely on long term growth and usually mirror the market depending on how well the fund is performing.

Passive investing is a lower risk approach to investing because funds are invested in a wide range of industries.

An investor can be both an active investor or a passive investor. He can have a diversified portfolio in his retirement fund which makes him a passive investor and at the same time invest in certain companies on an online investing platform such as Sharesies, Hatch, Robinhood, or Kernel Wealth.

But just because you are investing in individual companies on Sharesies, it does not necessarily mean that you are an active investor. You may have no intention of selling your shares in the foreseeable future so that will make you more of a passive investor than an active one.

About this article

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

Read my other articles on www.robertastewart.com

Posted on

Build your Wealth with Diversification

The Art of Diversification

Written by R. A. Stewart

“Invest your money in many places because you never know what kind of bad luck you are going to have in this world.”-Ecclesiastes 11:1-2

Diversification means that you invest your money in several companies in order to manage your risk. We all know that from time to time a company will collapse, leaving those who invested in them out of pocket. We sometimes hear of cases where one or two investors had their entire life savings invested in such companies and got severely hurt by their loss.

The big mistake these people made was that they placed all of their eggs in one basket. They have only themselves to blame and no one else.

It is important to ask the question of “How will the loss of this money affect my lifestyle? And invest accordingly.

If you are investing for the long term, ten years+ for example then the share market drops should not worry you. These dips are only temporary and you should not view it as a loss but rather treat share market volatility as a fact of life and just get used to it.

Life has its own concerns without being overly concerned with how your portfolio is doing. If you have invested according to your risk profile then there is nothing to be concerned about.

No investment is entirely risk free but in order to increase your wealth then it is necessary to take risks but that does not mean gambling with your money which is speculating on a certain outcome. Investing means taking calculated and sensible risks. 

What is a sensible risk?

Investing in cryptocurrency for your retirement fund is not a sensible risk, it is a reckless one. However, investing in cryptocurrency as a side interest and with only discretionary spending money is fine as long as you understand the risks involved and the loss of your capital in this way is not going to affect your lifestyle.

The same can be said to investing in individual shares as an interest. I have a sharesies account where I drip feed money into individual shares in the share market. I choose one company to invest in per year and drip feed money into this company throughout the year. The share price will go up and down throughout the year and I will get shares at the lower price when they are down.

Investing your retirement fund in this way is considered to be “Placing all of your eggs in the one basket,” and is not recommended, but investing speculatively with your discretionary spending money can provide an added interest and an extra string to your financial bow.

About this article

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

Read my other articles on www.robertastewart.com

Posted on

The Benefits of the Wise Travel Card: A Smart Choice for Global Travellers

The Benefits of the Wise Travel Card: A Smart Choice for Global Travellers

In an increasingly globalized world, managing money while travelling can be a challenge. Traditional bank cards often come with hidden fees, poor exchange rates, and limited flexibility when used abroad. That’s where the Wise Travel Card—formerly known as the TransferWise card—steps in to offer a smarter, more cost-effective solution for international travellers. With over 16 million users worldwide, Wise is revolutionizing how people spend, send, and receive money across borders.

Here are the key benefits of the Wise Travel Card and why it could be an essential companion for your next trip.

1. Real Exchange Rates with No Hidden Markups

One of the standout features of the Wise Travel Card is its use of the real mid-market exchange rate—the same rate you see on Google. Most banks and currency exchange services offer a marked-up rate to increase their profits, which can cost you extra every time you spend. Wise, however, charges only a small, transparent fee and passes on the actual exchange rate, ensuring you get more value for your money.

Whether you’re buying tapas in Spain or souvenirs in Japan, you can be confident you’re getting the fairest deal.

2. Hold and Spend in Multiple Currencies

The Wise Travel Card supports over 40 currencies, allowing you to hold balances and spend in the local currency without conversion fees. You can convert money ahead of your trip when the rates are favourable and spend like a local once you arrive.

For instance, if you’re travelling to the United States, you can convert British pounds to U.S. dollars before your trip and lock in the best rate. When you use your Wise card in the U.S., it deducts directly from your dollar balance—no surprise fees.

JOIN WISE HERE

3. Low ATM Withdrawal Fees

Wise gives you free ATM withdrawals of up to £200 (or equivalent) per month. After that, there’s a small fee, but it’s often lower than what traditional banks charge for foreign withdrawals. This makes it easy to access local cash without paying a premium.

Plus, because Wise uses the Visa or Mastercard network, your card is accepted in millions of locations worldwide.

4. No Monthly Fees or Minimum Balances

Unlike many travel cards and bank-issued alternatives, the Wise card doesn’t come with monthly maintenance fees or minimum balance requirements. You only pay for what you use, and all fees are clearly outlined upfront.

This makes it ideal not just for frequent flyers but also for occasional travellers who want a flexible, low-cost option for spending abroad.

JOIN WISE HERE

5. Secure and Easy to Manage

The Wise app allows you to freeze or unfreeze your card, view your spending in real time, and instantly convert currencies at the tap of a button. You can also receive push notifications every time your card is used, giving you full control and security on the go.

Additionally, you can get local bank details in multiple countries (e.g., UK, US, Eurozone, Australia), making it easier to receive payments from clients or employers abroad.

6. Perfect for Digital Nomads and Freelancers

For those who live or work remotely across countries, the Wise Travel Card offers unparalleled flexibility. Freelancers can get paid in multiple currencies without having to open foreign bank accounts. Digital nomads can manage their income and expenses from anywhere in the world with minimal hassle.

Final Thoughts

Whether you’re a casual holidaymaker, a frequent business traveller, or a global freelancer, the Wise Travel Card is a powerful tool to help you save money, manage currencies, and stay in control of your finances abroad. Its transparent pricing, real exchange rates, and multi-currency capabilities make it one of the best travel cards on the market today.

Before your next trip, consider signing up for a Wise account and ordering your travel card—it could save you more than just money; it could save you from financial stress.

JOIN WISE HERE

Posted on

Mistakes People make with their Money

Mistakes with Money 

Written by R. A. Stewart

Poverty does not just happen, it is the result of poor choices. That is barring unforeseen life events which can happen. I understand that others are forced into poverty for one reason or another. This article is aimed at those who have the means to make the most of the money they earn but choose to squander it. Here are their main mistakes.

1 They make poor life choices

The difference between the rich and the poor is because their choices in life are different. There is a stark difference between what a rich person and a poor person does with their discretionary spending money. All of those satellite dishes on council estates tell a tale. A rich person will find ways to invest their discretionary dollar so that it multiplies while a poor person will spend all that they have and more when you consider the consumer debt that they take on. It is also a fact that the poor tend to have more children and having kids does not come cheap, so this further compounds their vulnerable financial position.

2 They do not save 

People in a poor financial state do not save money. They fritter away their money with no thought for the future. Their financial situation is made worse because of their poor lifestyle choices. They borrow for stuff which is not essential to everyday living and spend money on things of no lasting value and this leaves them with nothing to show for their labors.

3 They do not invest

Wealth does not increase when money is not invested. Instead it loses its value due to the effects of inflation. Investing gives you a financial education and this leads to better decision making when it comes to money matters. This in turn leads to better financial outcomes for the future.

4 They do not take risks with their money

Investing involves taking some risks with your money but this does not mean speculating which is really just  gambling on some favourable outcome going in your favour. It is having a strategy of investing which enables you to make the most of what you have

5 They do not get financially literate

Lack of financial literacy is the number one reason why so many people are broke. Lack of ambition to rise above mediocrity is the main reason and there is little hope for the individual who lacks the will to improve their financial situation. I know that you are not one of those people otherwise you would not be reading this.

6 They hang out with the wrong people

People who are financially illiterate tend to spend too much time with like-minded people; those who have the same money mindset. “You are the average of the five people you spend most of your time with”. If you intend to be financially successful then spend more time with financially successful people. Read their books and pick their brains. Ask yourself, “What have I got to lose?”

7 They have a poor attitude

An attitude is something which every one has control over. No one can force you to adopt a certain way of thinking, you choose it and your circumstances have nothing to do with it. Having a good attitude will take you further than a bad one so you had better take responsibility for your own thinking and adopt a good attitude to financial affairs. I have heard all kinds of excuses why people have not joined a retirement scheme or have saved money. The real reason why they come up with excuses is that these people are unwilling to give up whatever it is which they are frittering their money away on. 

If your financial affairs are in a poor state then it is likely that you will have to make some changes. A budget advisor may be needed, but not necessary for if you just paid a visit to your local library then you will find some good books on personal finance which will help you.

About this article

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

Read my other articles on www.robertastewart.com