Spend or Save?

When one closes a document without saving the computer offers a reminder: Would you like to save your work?" If only we had this pop up every time we were about to spend money....

The saying goes, "Don't spend all your money in the same place". This cannot be more true because portfolio diversity is indeed necessary in order that all your eggs won't be in the same basket. However, perhaps we should slightly twist the aforementioned saying for an even more basic lesson: "Don't spend all your money in the first place!" Saving is the necessary perquisite for investing. Even the massive corporations of the world have amassed wealth in their hoards. Let us review a few of the reasons why saving is so important:

1. Emergency Fund. You just never know when you will not only need liquid cash on hand. Sudden medical expenses, a job layoff, imminent house repairs, and accidents are just some of the infinite number of occurrences which may demand immediate attention and spending. 

2. Retirement. Some of us think we are too young to think about it and others don't think they have the time to think about it. However, the only way that ones retirement goals and aspirations could be met is if one starts planning and saving in advance. This is important to bear in mind now more than ever with the average life expectancy increasing as well as the benefits of social security decreasing. 

3. Children. We cannot see the future (and those who claim they could have never won the lottery). We must save for future generations - children and grandchildren so that no matter what the economy may bring we could help regarding education, health, and basic needs. 

Note: There are two types of savings: (a) keeping cash on hand (b) investing in low-risk investments. Each has its pros and cons. Each has its place in preparing for some of the above challenges. 

Guidelines and Perspectives

I would like to share with you an excerpt from Eric Tyson's 7th Edition of Investing for Dummies book:

20 Rules for Successful Investing

1. Saving is a prerequisite to investing. Unless you have wealthy, benevolent relatives, living within your means and saving money are prerequisites to investing and building wealth.
2. Know the three best wealth-building investments. People of all economic means make their money grow in ownership assets — stocks, real estate, and small business — where you share in the success and profitability of the asset.
3. Be realistic about expected returns. Over the long term, 9 to 10 percent per year is about right for ownership investments (such as stocks and real estate). If you run a small business, you can earn higher returns and even become a multimillionaire, but years of hard work and insight are required.
4. Think long term. Because ownership investments are riskier (more volatile), you must keep a long-term perspective when investing in them. Don’t invest money in such investments unless you plan to hold them for a minimum of five years, and preferably a decade or longer.
5. Match the time frame to the investment. Selecting good investments for yourself involves matching the time frame you have to the riskiness of the investment. For example, for money that you expect to use within the next year, focus on safe investments, such as money market funds. Invest your longer-term money mostly in wealth-building investments.
6. Diversify. Diversification is a powerful investment concept that helps you to reduce the risk of holding more aggressive investments. Diversifying simply means that you should hold a variety of investments that don’t move in tandem in different market environments. For example, if you invest in stocks, invest worldwide, not just in the U.S. market. You can further diversify by investing in real estate.
7. Look at the big picture first. Understand your overall financial situation and how wise investments fit within it. Before you invest, examine your debt obligations, tax situation, ability to fund retirement accounts, and insurance coverage.
8. Ignore the minutiae. Don’t feel mystified by or feel the need to follow the short-term gyrations of the financial markets. Ultimately, the prices of stocks, bonds, and other financial instruments are determined by supply and demand, which are influenced by thousands of external issues and millions of investors’ expectations and fears.
9. Allocate your assets. How you divvy up or allocate your money among major investments greatly determines your returns. The younger you are and the more money you earmark for the long term, the greater the percentage you should devote to ownership investments.
10. Do your homework before you invest. You work hard for your money, and buying and selling investments costs you money. Investing isn’t a field where acting first and asking questions later works well. Never buy an investment based on an advertisement or a salesperson’s solicitation of you.
11. Keep an eye on taxes. Take advantage of tax-deductible retirement accounts and understand the impact of your tax bracket when investing outside tax-sheltered retirement accounts.
12. Consider the value of your time and your investing skills and desires. Investing in stocks and other securities via the best mutual funds and exchange-traded funds is both time-efficient and profitable. Real estate investing and running a small business are the most time-intensive investments.
13. Where possible, minimize fees. The more you pay in commissions and management fees on your investments, the greater the drag on your returns. And don’t fall prey to the thinking that “you get what you pay for.”
14. Don’t expect to beat the market. If you have the right skills and interest, your ability to do better than the investing averages is greater with real estate and small business than with stock market investing. The large number of full-time, experienced stock market professionals makes it next to impossible for you to choose individual stocks that will consistently beat a relevant market average over an extended time period.
15. Don’t bail when things look bleak. The hardest time, psychologically, to hold on to your investments is when they’re down. Even the best investments go through depressed periods, which is the worst possible time to sell. Don’t sell when there’s a sale going on; if anything, consider buying more.
16. Ignore soothsayers and prognosticators. Predicting the future is nearly impossible. Select and hold good investments for the long term. Don’t try to time when to be in or out of a particular investment.
17. Minimize your trading. The more you trade, the more likely you are to make mistakes. You also get hit with increased transaction costs and higher taxes (for non-retirement account investments).
18. Hire advisors carefully. Before you hire investing help, first educate yourself so you can better evaluate the competence of those you may hire. Beware of conflicts of interest when you consider advisors to hire.
19. You are what you read and listen to. Don’t pollute your mind with bad investing strategies and philosophies. The quality of what you read and listen to is far more important than the quantity. Find out how to evaluate the quality of what you read and hear.
20. Your personal life and health are the highest-return, lowest-risk investments. They’re far more important than the size of your financial portfolio.

(Source: http://www.dummies.com/how-to/content/investing-for-dummies-cheat-sheet.html)

Notice the bookends of this list - they are the two most important ones. Number one is that saving money is itself a sort of investment. Think about: Making tons of  money but throwing it around and wasting it just means that you are your own worst enemy. If with your added wealth you begin to just view more things as "affordable" and "disposable", then that extra money may make you FEEL richer, but you will not be any richer. You will just be playing "catch up" with your new stupidities. Holding yourself back from say a $100 unnecessary thing is equivalent to being paid $100 not to buy it.  Saving is a must. Not only with saving will you not be losing, but you will also be gaining because you will have more funds available for investing. 

However perhaps even more important than saving money is to remember the last of the listed points which is that Money is not an end, it is a means. When you die, you will not take it with you! (Don't believe me? Ask the mummies). Our task as people is to utilize our money as a means for a productive end. Whether it be persoanl health, safety and security, education, family, or charity, we must keep those in mind not only as motivators but as guidelines as to when we are going too far with the means and giving up on the end. Sacrificing family for money when the reason you are amassing money is for family, just does not make sense. Destroying your health to work harder just to pay for extra therapists and doctors later, is just not logical. 

Have other points to add? Agree / Disagree? Leave a comment on the blog or G+ page or email: glocalinvestingation@gmail.com

And the Rich Get Richer....

...It is so true, you do no't even realize how true it is.

Wealthy individuals....

1. ...get presented with more opportunities.
2. ...have a higher purchasing power.
3. ...have greater ease networking.
4. ...have more to diversify. 
5. ...have the ability to become better educated. 

However, the real truth is that none of these are true. There are ways to pave through life building wealth and finding out and taking advantage of incredible opportunities without having millions in your bank account. Purchasing powers could be achieved, networking could be just as successful,diversification could indeed be met, and god help the person who thinks that the only way to have a good education is to correlate it with a lot money. 

Stay tuned to future posts giving you our own tips as well as from expert guests. No sign ups, no fees, no surveys, just blogging for all you out there - whether millionaire, average person, living pay check to pay check, investors, entrepreneurs, clueless bank account owners, and small business founders/owners. Our purpose is to share helpful content with you so you don't have to waste your time searching the web for it (and just "never getting around to it"). 

A few more introductory type posts will be posted before going full throttle. Stay tuned!

Intro to Investing

Investing. To some the word brings fear, to others excitement; to some thrill, and others worry. However all must agree it is necessary.

Some are slaves to their money. They empty their piggy bank and count their money over and over again. Attached to what they have, they are afraid to spend or take risks and as a result are defined and confined by what their salary.. However, the person who instead of becoming a slave to his money, makes his money into his slaves to carry out his or her wishes and investments, will have much more productive use of his money. 

The opportunities which exist for investing are limitless. Anything you could imagine involving money, has in it an opportunity to get involved and find something in it which is invest-able. Real estate, stocks, loans, currency, commodities, and start up businesses are only some of the areas people find their passion to lay and take them far. 

The opportunities are there but people remain hesitant. Why? 

1. Ignorance. The world of investing and finance has its own lingo and expressions which seem scary until you get to know them. 

2. Fear of Loss. When most people hear the word "risk" they automatically process it to mean "loss". However, this is far from the truth. First of all, there is a huge spectrum of investments - some are not risky in the least and some are extremely risky. However, to write off every investment opportunity because you view it as a potential to lose will make you lose the most. The money that just collects dust instead of interest or returns on investment, just sits not only causing a big opportunity cost for no reason, but also depreciates in value as inflation gets worse. 

3. Don't know where to start. Many people don't fee a particular passion, so instead they are slammed with too many options that in the end, none get picked. 

4. Don't have the time. Many people think they do not have the time to look into and manage their money and investments. However they fail to recognize the opportunity cost. Would you pay $3,000 a month not to have to worry about managing your money? Well guess what, by not investing and making an extra $3,000 a month, you are essentially paying that to not have to manage your investment!

These are some of the many factors we have heard and witnessed which tend to prevent people from investing properly. These are not only true of the layman or average working individual, even wealthy and successful investors are themselves hesitant to investing in new types of opportunities because their lack of knowledge in a niche area, not knowing the right places to look, or not having the time to research properly. 

Therefore, we would like to bring you a new blog with a purpose of conquering these (and other) items. We hope to create a platform which will not only be educational and beneficial to newbies and novices, but intriguing and challenging to the pros out there as well. 

This is what we hope to provide:

1. Curated articles of interest along with summaries and arguments.

2. Informative and educational blog posts.

3. Database of investment opportunities available through investingation.blogspot.com

4. Provide guest articles from experts sharing advice and ideas.

5. Allow users to connect to each other and join on in on investment opportunities.

6. Special: Have an idea you would like to bring to shark tank? Hook up with those who went through the process - whether successful or not to hear their experience and what they would have done differently knowing what they know now. 

So please join us as we begin this new adventure. Looking forward to educating the masses, creating jobs, and expanding wealth for all we can!

All are welcome. Ideas and suggestions are embraced. This is a site for YOU so let us know what you would like to see, learn about, etc. Looking forward!