Monday, March 21, 2016

How To Become A Prudent, Long Term Investor

investors information
So many of the problems that we see in the financial system come from the fact that there are a lot of players looking to make a quick buck. It means that short-term price swings can be great, and the panics even greater. In fact, now that computers have taken over much of the second-by-second trading, common sense has gone out of the window.

That's why more and more people are turning their attention to long-term investments. They want to make decisions based on fundamentals, not on whether a computer algorithm says buy or sell.

The movement into long term investment as a strategy is motivated by the fact that most people don't actually want to play the stock market. It's just that, thanks to low-interest rates, they have to. So, with that said, what are the best long-term investors doing?

Keeping An Open Mind

Though it may seem like the safe option to always invest in the S&P 500, it might not be. The problem facing long term investors right now are the systemic risks to the global economy. There is the depressed Chinese growth rate, the low price of oil and the never ending debt mountain in Western countries. That means that the risks aren't isolated to individual sectors but apply across the board.

If the economy does start to sink, it will take all of the big companies down with it, at least temporarily. That's why long-term investors are always on the bleeding edge of research. They want to find hidden trends in the data. They want to know what consumer will demand in the future. And they want to infer what that will mean for the price of stocks and shares.

Thanks to the drive and ambition of smaller companies their stocks tend to outperform those of the larger firms over the long term. Larger firms are often at the edge of what they can achieve using legacy business models. But smaller companies can only compete by disrupting industries dominated by larger firms and moving to a new paradigm. In the process, they tend to make greater strides in earnings and productivity.

Change Your Perspective

Investors face the constant temptation of short-term profits at the expense of long-term gain. They will shirk land package investment opportunities, for example, and short stocks instead.

But that tradeoff should be avoided for those who aren't professional traders. Short term trading requires skills that most people do not have. Nor do they have time to spend on developing those skills.

Yes, the rewards of short-term trading seem to be great. But, like any financial incentive, there is a mixture of risk and reward.

Ignore The Fluctuations

Markets are inherently volatile. Day-to-day the price of your equities and assets will go up and down. Ignore it. What you care about as a long term investor, is what those assets will cost to buy when you eventually come to sell. If you see house prices dipping next year, but only want to sell your assets in ten years, don't sweat it.

Friday, March 11, 2016

Financial Dos & Don'ts Of The Bail Process

financial bail process
With any luck, not many of you will experience the worry and concern of having a loved one arrested and put on bail. But, if it does ever happen, you should make yourself aware of the situation. In today’s guide, we’re going to go through all the things you should be thinking about before you enter into any agreement.

The basics

First of all, let’s take a closer look at what happens when someone you love is arrested. For severe cases, the legal authorities may decide to keep your loved one in jail until they go through the trial process. It can be for a few reasons. For example, the police may consider their suspect has a high chance of reoffending or fleeing the country. In most cases, defendants will be given the opportunity to post bail.

Bail can come in many forms. The best outcome is that the bail hearing decides the defendant is released on their ‘recognizance.' There is no fee for this result. There could also be an unsecured bond, which means that a price is set, but the defendant doesn’t have to pay - unless they fail to show up at their trial. Then, there is cash bail and bail bonds - which is where things might start affecting you as a loved one.

There are two choices that a defendant can make in this outcome. The first is to pay the bail themselves, either with their money or by borrowing off a friend or family member. The second is to use a bail bonds agency - who will charge you around 10% of the total bail amount.

The amount of bail due is also determined by the hearing. In some cases, it might be an affordable amount, but in more severe cases, it can be drastically expensive. If the defendant can’t pay, they will remain in jail until their trial.

Of course, this gives you, as a loved one, a difficult decision to make. And, while all cases are different, there are certain rules you should follow. Let’s take a look at those with our list of financial dos and don’ts of the bail process.

DO: Take the bail hearing seriously

The initial bail hearing is a vital part of the process for the defendant. Try and do everything you can to give them an opportunity of coming away with a good result. The judge will look at a few factors. These will include hearing evidence from friends, coworkers, employers, and doctors. Try and involve as many people as you can. If you can help prove that your loved one is usually of good character, there is more likelihood of leniency.

DON’T: Bail out anyone you don’t know

Avoid anybody asking for bail that you don’t have a strong connection with. It could be a relative that you haven’t seen for a while or a friend from your school days. However, unless you can say that you know them as well as you ever have, it is unwise to give them financial backing. It’s vital that you are aware of their character well before using your money to bail them out. You will be taking on responsibility for their finances, and if they skip town - you will lose everything. It’s important to know who they are, where they live, and to have had regular contact with them. Unless you know about their lives and current situation, you just can’t afford to represent them with your money.

DO: Understand the terms

After the bail hearing, make sure you understand the terms of the agreement. Many people suffer from a shock to the system when they realize they pay a non-refundable premium to a bail bond agent, for example. It’s the price of admission, if you like - not a refundable cost. It’s also important that you understand the defendant’s responsibilities. If they decide to commit another crime or run away, you are going to be left holding a financial hot potato. And, it goes without saying, that will be an expensive mistake.

DON’T: Hire the first bail bond agent you meet

Just as you would screen a lawyer before working with them, you should also do the same with a bail bond agent. Visit them, and give them an interview - you need a firm that understands you and has a good reputation. Check the Better Business Bureau for references, and ask to speak to past clients. And, if you get a sense that they don’t care or respect you, walk away and find someone else. Bail bond agreements can be expensive, and choosing the wrong team to work with can be a painful experience. And, they can also lead to serious levels of debt on your behalf.

DO: Keep up to date with the case

Let’s not mess around here; you could have a lot of money tied up in this case. And, as a bail backer, you have a right to know that the defendant is doing their bit. Make sure that you stay in touch with them and remind them of their court dates. Make yourself aware of the court orders surrounding the case and ensure the defendant is following them. Bailing someone out can be an investment, of course - but only if the accused makes it to trial. If they don’t, it could be a severe financial mistake on your behalf.

DON’T: Assume you’ll get your collateral back straight away

As soon as the case is over, you might have to push to get back your collateral. Good, reputable bond agents will give you your money back straight away, and keep you informed of the situation. However, depending on who you use, some agents may focus their attentions elsewhere, and will need a push. It’s also vital that you remove your name from the bond as soon as the case is over. If the defendant fails to meet their legal obligations, that may come back to haunt you.

OK, so there you have it. As we mentioned before, all legal cases will be different. But, by following these tips, you should be able to give yourself as much protection as possible.

Wednesday, March 2, 2016

What To Do If You Can't Work Because Of A Medical Injury

medical injury claims
As you can imagine, getting injured can deal a big financial blow. If you're unable to work because of your injuries, money will be an issue. That's because you'll either be earning little or no income while you're off work.

You might also be wondering what options you have if you got injured through no fault of your own.

Many people are often confused or just don't know what they can do. If that paints a familiar picture, this blog post is for you. Today I'll talk you through some practical steps you can take. Here is what you need to know:

Where did your injury occur?

The first thing you need to think about is whether you can make a personal injury claim. If your injury got caused by a third party, they might be liable for compensation.

At work, you can claim compensation from your employer. If the injury occurred on public transport, you could claim from the provider. And if the accident happened in someone's building, they could be liable too. Of course, it's not always possible to make a claim due to the circumstances.

It's worth talking to a personal injury lawyer for clarification. If you have a case, the compensation can help you out financially while you're off work.

Do what it takes to get better sooner

Your doctor may suggest that you have physical therapy. He or she may even tell you to carry out certain exercises to build up strength. Other times, all you can do is sit down and rest while your body heals itself.

It's important to get the facts about your injuries and learn how you can get better. Don't assume anything; ask for the facts to make the right treatment choices.

Keep your costs down

If it's possible to return to work when you're better, your financial situation isn't as dire. Still, that doesn't mean you can survive until then without paying for anything!

As you can imagine, you'll have little to no income while you're recovering. That's why it is important to take steps to keep your costs down. Cancel any unnecessary expenses like TV and entertainment subscriptions, gym memberships and so forth.

You will also need to cut down on luxuries, especially when it comes to grocery shopping. In short, cut out anything you can do without. All you need are the bare essentials to survive:
  • Gas, electricity, water
  • Heating; and
  • Food.
Use your savings

If you've got money saved up, it's time to start using that emergency fund. There will be some things you cannot cut down on such as mortgage payments and utility bills.

You will need to find a way to make up your income shortfall. Drawing on your savings isn't something you'd be happy to do, of course. But, it means that you can still lead a comfortable lifestyle until you are ready to get back to work.

Thank you for reading today’s article. I hope you have found it useful!