Announcements

When you receive a lump sum, it’s very tempting to splash out on your dream holiday or a new car, but that isn’t the best way to get the most out of your money. The general rule is to not do anything too hasty (such as buying a luxury car or a bigger house) because more often than not, the money will run out must faster if you don’t do anything useful with it.

Just because you have it doesn’t mean you must use it. And after splurging, there’s a good chance that you’ll end up more in debt than before you started. 

It is tempting to squander a large sum of money, but becoming wealthy doesn’t have to lead to disaster. Here are a few tips on suddenly becoming wealthy.

How Do You Handle Suddenly Becoming Wealthy?

Pay off your bad debts, starting with the high-interest ones. Generally, the first thing to go for is credit cards or payday loans. You’ll want to avoid the temptation to pay off a chunk of your mortgage because the interest rate is generally quite low and you can make better use of your money through investing.

Next, think about topping up your emergency fund. It’s generally a good idea to try and have six months of living expenses in an account in which you have easy access. After this, you can think about your long-term saving goals, your retirement plan in particular.

Sudden wealth will also generally mean that you should seek out financial assistance. Consult a professional, either a financial advisor or an attorney, to ensure that you comply with any conditions your windfall may have as well as how best to approach them.

Read more

Traders are always seeking to bolster their financial portfolios. The whole point of dabbling in the markets in the first place is to increase your net worth over time. For many of us, this appears to be an insurmountable challenge, given the complexity of reading financial indicators and acting with purpose. 

5 Ways to Protect Your Financial Portfolio

A novice entering the trading scene may quickly be overwhelmed by the charts, numbers, signals, and regulations. Fortunately, there are many ways to shore up your trading activity and stabilize your portfolio.

1. Diversify your portfolio

‘Don’t put all your eggs in one basket’ is an age-old aphorism that holds true to this very day. Concentrated investments in 1 or a handful of options are dangerous. This is especially true in the case of individual stocks, currencies, commodities, or indices. To guard against losses, financial experts recommend that traders and investors dabble in multiple underlying assets. Individual stocks such as MCD, AAPL, GOOG, and others can move in any direction at any time. 

However mutual funds are an aggregate of a sector or an industry, and they average out the performance accordingly. Mutual funds are an effective way of protecting your financial portfolio from the potential hazards of individual stock price movements. To this end, it’s important not to invest more than 5% of your holdings in any individual stock.

Read more