February 2017

Is There a Best Way to Tackle Your Debts?

Moves to Make With Your Finances When Consolidating Debts

The best way to tackle debts might initially seem obvious – pay off as much as you can, as early as you can – but it’s often not as easy as it seems. If every person in debt did that then no-one would ever have any problems, but our financial, occupational and family situations often make it a struggle.

Is there a ‘best’ way to tackle your debts?

However, there are various strategies to tackle your debts. Some of which are better than others. Here is a run down of tactics that you might consider, alone or together, in order:

Know your debt

If you don’t understand the problem, then how can you tackle it? The first stage of taking back control is to find out more about your debts. Ask your creditor for the latest statement showing how much you owe and your current agreement. Then look at your bank statements and work out what you are paying and when. It’s sometimes easier when in debt to shy away from statements but to address the problem, you need to know the extent of it.

Prioritize payments

If you’re struggling with debts and you can’t make your money stretch as far as it needs to, you need to order your debts and look at priorities. For example, not paying your rent could leave you homeless but paying your phone bill late may leave to your service being cut off.

It is not recommended you miss any payments but some payments have more drastic consequences if not kept up to date. You should look through your statements and work out what’s the most important and how you can make sure those bills are paid. A debt snowball can help you prioritize your debt repayments.

How to Invest in Poker Players and Earn Larger than the Stock Market

by Hank Coleman

If you’ve been a reader of Money Q&A for any length of time, it’ll come to no surprise to you that I’m always looking for cool and exciting ways to earn a greater rate of return on my investments. I want to find ways to squeeze out 10% or more ROI. And, I’m always looking for new and different investments and opportunities to do just that.

That’s why I was intrigued with an old Wall Street Journal article that talked about professional poker players investing in each other to hedge their bets, find entrance fee money, and limit their risk. As a fan of poker for over ten years now, I was intrigued and wondered if average or intermediate investors could take advantage of this phenomenon.

Professional Poker Players Often Stake Each Other

Professional poker players hedge their bets by investing in each other or what is otherwise commonly known as staking a player. Getting staked or staking a player is to financially back a player’s entrance fee into tournaments, typically by former and current players.

According to reporting by the Wall Street Journal, almost half of the estimated 6,600 contestants in last summer’s World Series of Poker Main Event championship in Las Vegas received financial support from past and current players, family members, or other poker investors. A lot of people seem to want to invest in poker players these days.

How To Truly Earn Passive Income From Lending Club

by Hank Coleman

I thoroughly like investing in Lending Club and peer-to-peer lending where I can earn a higher rate of return than many other investment options and definitely higher than a savings account or money market fund. I have been investing with Lending Club for almost four years now, and it has truly been a great experience that I would highly recommend to others who are looking for a greater rate of return on their investments than others. Lending Club is a great way to earn a passive income that will supplement and diversify your investments. And, it’s easy to earn passive income from Lending Club and earn a great rate of return on your investments. Lending Club Makes A Great Diversified … Read more

Is the Stock Market Gambling? Why Trading in Stocks Isn’t Gambling

by Hank Coleman

Is the stock market gambling? Should people consider trading in the stock market to be a form of gambling? The answers to these questions are unequivocal – No! Investing in the stock market is not gambling, and novice investors should not think of it in that way. Equating the stock market to gambling is a myth that people on the internet and television pundits have perpetuated for years. And, it’s simply not true. While investing and gambling have a few similar characteristics, they are very much different. And, if an investor does not take trading stocks or buying shares of mutual funds seriously and equates it to gambling, they are in serious jeopardy of losing money or missing out on … Read more

Could Your Personal Finances Affect Your Job?

by Hank Coleman

Bad credit can affect you getting a job – can your bad credit and personal finances affect your job search? The answer may surprise you when applying for a job.

A recent survey of 35-54 year olds published by the National Financial Education Council found that over 25% of respondents were subjected to a financial background check (or credit check) as a condition for their eligibility to get hired or promoted. Additionally, almost 30% of respondents in the survey were reportedly unsure if their employer performed a financial check beforehand, and 5% of respondents said that they were turned down for a job or promotion as a result of one of these checks (18% were unsure).

With these survey findings in mind, it’s important to understand the implications of your financial situation in regards to either your favorability as a potential employee or your chances at scoring that big promotion. If you’re trying to

Bad Credit and Getting a Job

If you’re trying to compete in the current job market, consider these ways that your personal finances might affect your employability:

Money-Related Stress Affecting Job Performance

Empirical studies have found that money-related stress can distract employees from their jobs and make them late or absent more often than employees who aren’t struggling financially. Understandably, it’s incredibly difficult to ignore thoughts of impending bill due dates, skyrocketing credit card debt, debt collectors harassing you, and even the possibility foreclosure or bankruptcy lingering in the back of your mind while you try to go about your daily professional life.

You’re not alone, however. A large survey conducted by the American Psychological Association in 2014 found that money was the #1 stressor among adults, with 72% of Americans reportedly feeling stressed about money just in the last month, and 22% of Americans feeling extreme levels of stress when it comes to money. Stress is inherent to almost any job, but when your personal stress follows you into the workplace, it can negatively impact your job performance if left unchecked.

According to the NFEC, over 25% of job applicants are subjected to a financial background check.Click To Tweet

Geopolitical Risk In Your Investment Portfolio – Investing in a President Trump World

by Guest Contributor

The Estimated Future Risk of US Equities

The following is a guest post by Lars Kroijer, who used to run a hedge fund in London and wrote the book, “Investing Demystified: How to Invest Without Speculation and Sleepless Nights“. If you’d like to guest post on Money Q&A, check out the site’s guest posting guidelines.

With President Donald Trump making headlines on an hourly basis and our social media accounts going crazy with comments on his presidency, we are left asking ourselves: Should we perhaps change our investment strategy as a result?

In short, the answer is yes but perhaps not how you think.

In earlier blogs, I have outlined how I consider it highly unlikely for the vast majority of investors that they can beat the markets themselves through active stock selection, market timing, or via picking the one out of ten actively investment funds that may do so over a ten-year period.

And, for your equity exposure, you should pick as broad and cheap an index tracking exposure as you can get your hands on, namely a world equity index tracker. Just because Donald Trump is now President of the United States, that is no less true. You most likely couldn’t beat the markets before November and still can’t.

Editor’s Note – You may also like to see five things you can learn about personal finance from President Trump!

What you perhaps can expect is to make 4-5% above inflation. This is based on over 200 years of history of equity returns in many states of the world. And, you can expect that return to range from lottery type winnings to desperate failures – can also reasonably expect to be compensated in higher risk periods with commensurate higher expected returns, but there are no guarantees obviously.

Editor’s Note – I think you can squeeze out a 10% return on your investments. Be sure to check out how.

So, even in a President Trump world, we haven’t found a crystal ball. So, what can we do?

In my view, there are two main things we main things we should focus on.

Evaluate if the risk of the markets has changed enough that we should re-evaluate the risk levels of our portfolio.
We should consider if the sudden change in the political landscape has changed our overall economic life enough that our risk profile should change as a result.

Market Risk

Below is a graph of the expected future risk of the US stock market. Without being too technical, it measures the expected standard deviation six months into the future. Since the index value is based on the implied volatility of equity options, it is a market price.

If you think you know the future volatility of the market better than this chart, you can get rich trading it (many try!). There are many issues with this kind of chart, including that the value itself is very volatile. So, the risk changes a lot.

The volatility doesn’t capture “fat tails”, the fact that unlikely events happen far more than predicted by the normal distribution assumption of the standard deviation. And, that it is only six months into the future. That all said, the chart gives a good idea of future expected risk. You can also find it on cboe.com.