Guest Contributor on Money Questions and Answers Blog

Trading or Investing: Where is the Money?

At first glance, it seems like a pretty innocuous question: Should you trade or invest your money? However, upon closer inspection, there are significant differences between trading and investing. In fact, these two financial activities are worlds apart and you’re about to understand why you need to have a clear focus on your personal financial profile. A quick distinction between trading and investing is important to differentiate the two.

Trading – is defined as exchanging funds (money) for a financial asset, typically stocks, commodities, currencies or indices. When you trade, you go all-in on the deal from the get go. Your objective in trading is to capitalize on an imminent change in market variables. In other words, if you expect interest rates to rise tomorrow, you would buy the USD ahead of the announcement. Or, you would sell gold ahead of the announcement. Trading has a short-term focus. You are not holding the underlying asset for the purposes of adding it to your financial portfolio over the long-term.

Investing – this is the opposite of trading. You’re not looking for short-term gains – you’re looking for long-term appreciation of the underlying financial asset. When you invest in something, you plough resources into it over a prolonged period of time, hoping for that asset’s appreciation. At the end of the investment period, you hope to accumulate gains in the form of profits. The perspective and the motive for investing are worlds apart from that of trading. As the world-famous billionaire investor/entrepreneur Warren Buffett puts it: ‘When we buy a stock we are buying a part of a tangible business and the future earnings it generates’. This is central to the concept of investing.

But at the end of the day – it’s all about money. How much of it you can make from putting your hard-earned resources into an underlying asset and hoping for it to generate returns. Buffet’s rule when it comes to investments is as follows: Acquire the asset at a sensible price, provided the management is able, honest and capable, with excellent economics and then monitor whether these qualities in the business are being preserved. It is quite an undertaking, but one that will pay dividends in the long term.

How a Business Mentor Can Improve the Financial Health of a Business

by Guest Contributor

Are you a business owner who is looking for a way to improve the financial health of your business? If so, hiring a business mentor has the potential to help you achieve this important financial goal. Below are some of the ways a business mentor can improve the financial health of a business. You Will Avoid Common Financial Mistakes Avoiding mistakes that are costly for your business is just as important as making good decisions that make money for your business. Once again, an accomplished business mentor like Tai Lopez will show you how to identify and avoid many of the common financial mistakes that are made by business owners who take their eye off the ball. A mentor like … Read more

Combine Vulnerability and Credibility for a Powerful Marketing Message

by Guest Contributor

The following is a guest post by Sage Lavine, author of “Women Rocking Business“. If you’d like to guest post on Money Q&A, check out our Guest Post Guidelines.

A Note from Hank: Sage’s experience coaching over 100,000 women entrepreneurs shows in her new book that explains why the ability to express vulnerability is a key strength for women in business. In particular, women seeking to build businesses can leverage this gift to win faithful followers, and attract loyal, paying clients.

Ladies, have you ever felt like you have to hide the very quality that makes you a caring, sensitive individual – your vulnerability – in order to succeed?

If so, you are not alone. Even the most powerful women often believe they can’t express certain emotions and aspects of their personality on the job for fear of being perceived as weak, ineffective or wishy-washy.

Not true. As a CEO and a coach of women entrepreneurs, I can firmly attest that the ability to express vulnerability is a key strength for women. In particular, women seeking to build businesses can leverage this gift to win faithful followers, and attract loyal, paying clients.

The world is hungry for more vulnerability, for leaders who’ve stopped claiming to be perfect, who don’t wear a mask and who own up to their own imperfect humanness. When you allow yourself to display your vulnerable side – especially as it relates to the product or service you are offering – people will tune in and pay attention because you’ve been there, too. You know how they feel.

Top 4 Money Saving Tips for Home Essentials

by Guest Contributor

There isn’t a single person in the world that would oppose cutting a few dollars from their monthly expenses. These are the best money saving tips for your home.

Monthly Expenses – Money Saving Tips for Essential Bills

Electricity

Those of you that live in an ever-changing climate know the struggle of expensive electric bills during the summer and winter months when you are blasting the A/C and cranking up the heat. During these months, your bill will increase significantly as these comforts require electricity to operate.

One of the best ways to cut these expenses is to use electric mattress pads in the winter and cooling mattress pads in the summer. These will keep your bed at a comfortable temperature and the costs will be negligible on your electric bill.

Monthly Groceries

When it’s time to reduce your monthly expenses one of the first things to go is eating at restaurants. These days even a cocktail will run you $10+ at a dive bar in populous areas. Eliminating this lavish spending will save you hundreds of dollars during the year. You will need to cook more at home, but you will find that no matter how much you cook there is always something that goes old.

Many people avoid buying fruit because it always goes old before you eat it. Investing in a food dehydrator will cut your food bill because you will be able to utilize all the food. There are dehydrated recipes for nearly all foods to get the most out of your groceries.

The Student Debt Relief Program Designed to Help Young Entrepreneurs

by Guest Contributor

Should You Take Out Private Student Loans for College?

Young Americans go to college to improve their odds of being successful and prosperous in an increasingly competitive society. Student loan debt, unfortunately, can inhibit the freedom that degrees are supposed to provide. Recent data shows that Americans bogged down with student debt are financially handicapped by it well beyond the years after immediately graduating.

Student Debt Relief Program to Help Young Entrepreneurs

Many now believe that borrowing money to pay tuition can create such financial hardship that it minimizes the advantages that should come from pursuing further education after high school. Senator Maggie Hassan of New Hampshire’s new bill leads a new effort to support recent college grads interested in starting their own businesses.

What is the Hassan bill?

The Hassan bill allows young entrepreneurs to defer college loan payments for up to three years, so they have more time and funds to launch companies. If these budding businesses are based in economically challenged communities, the recent grads launching them may have the option to cancel as much as $20,000 of their student loan debt after paying only a part of it.

Top 5 Early Retirement Killers That You Need to Know

by Guest Contributor

The following post is by ESI from ESI Money, a blog about achieving financial independence through earning, saving, and investing (ESI). Itís written by an early 50ís retiree who achieved financial independence, shares whatís worked for him, and details how others can implement those successes in their lives. He is also the author of a free ebook titled Three Steps to Financial Independence.

Early retirement is all the rage these days in personal finance circles.

And when I say “early”, I mean really early.

I retired at 52 and today’s crowd makes me feel like a slacker. People are retiring in their 30’s and 40’s these days with a handful even in their 20’s.

Of course the definition of “retire” is rather broad. Many still bring in income through side hustles or part-time work. But the common thread is that they are retired from full-time work.

If you would ever like to retire — and especially if you’d like to retire early — there are some landmines you need to avoid along the way.

Here’s my list of the top five killers of early retirement (and maybe retirement overall). I’ll also include some tips on what to do if you’re facing any of these challenges.

1. Having too much debt.

Debt is a killer in many ways.

First of all, interest costs add up, thus keeping you from saving enough to retire. Even with today’s low rates homeowners with 30-year mortgages are going to pay tens of thousands of dollars in interest.

And that’s if they actually pay off the house in 30 years. Many Americans have revolving mortgages due to moving, taking cash out of their home, and so forth that leaves them with one mortgage or another for well beyond three decades.

Second, debt’s mere presence will make it harder to reach a retirement number. For instance, if you have no or limited debt, the amount of income you’ll need to retire is going to be much lower (and thus easier to reach) than if you’re saddled with a ton of debt.

We got serious about our debt early in our marriage and paid off everything, including our house, within ten years. We then had 20+ years of hyper-savings to build up assets which allowed us to reach financial independence in our 40’s and eventually retire in our early 50’s.