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Investing

Investing

What is The Rule of 70?

There are all kinds of interesting things you can learn about investing and economics.  The Rule of 70 is one such fascinating tidbit that might be of interest to you.

What is the rule of 70?If you want to be able to estimate approximately how long it will take for your money to double in an investment with a set interest rate or a fixed rate of return, you can get a fairly good idea by dividing the number 70 by your fixed interest rate.

For example, if you are currently earning 1% in your savings account, that means it would take 70 years for your money to double.  If you are earning 2%, it would take 35 years to double your money, and if you are earning 3%, it would take 23 years.

Although the Rule of 70 isn’t perfect, it does provide a good indication of how long it will take for your money to double.  Note that the interest rate must be fixed in order to do this calculation.  So, if you have any investments with an annual compound interest rate, do this calculation to see how long it would take for your money to double.

September 30, 2009
Investing

Check out Bloomberg.com For Current Market Info

If you are interested in finding up to date information on how the economy is doing, Bloomberg.com is a great resource to start with.  It’s a reputable financial website that includes loads of information on the current market situation, and much more.  If you are just beginning to learn about investing and finance, you will appreciate the glossary containing explanations for confusing acronyms and other financial lingo.

The site contains information on stocks and bonds, and has well-written articles describing unemployment, the growth or decline of retail sales, and other interesting tidbits that will give you an idea of how the economy is doing.

One of its great features is  a wide variety of financial calculators for savings, loan payments, retirement, mortgages, currencies, and more.  There is also “breaking news” on subjects such as Politics, Law, Arts and Culture, Sports, Science, etc. in addition to the current financial news.

The site is not limited to just one location either.  It contains information on the Americas, Asia, as well as Europe.  I find it very informative and I like the layout of the site a lot.

Bloomberg.com is worth checking out to keep on top of things.  Whether you are a novice or an experienced investor, you will be able to appreciate the information and tools available to you.

August 31, 2009
Wealth

Pay Yourself First

What does it mean to pay yourself first?  Rather than taking care of your bills and expenses each month andpay yourself firstthen seeing if you have any money left over to invest and save, paying yourself first means you put aside some money for saving/investing as soon as you get paid!  If you do that, then you know you will be able to tuck some money away for retirement as well as build up an emergency fund.

An easy way to pay yourself first is to set up an automatic withdrawal from your checking account on the same day you get paid.  That way you won’t even miss the money because it will be like you never had it in the first place.

Even if you are on a tight budget it is important to pay yourself first.  It may seem impossible on paper, but you need to do it.  In Rich Dad Poor Dad, Robert Kiyosaki talks about a time when he and his wife had almost no money but they still insisted on paying themselves before paying their bills.  Their bookkeeper at the time thought they were nuts.  But look at them now!  They have successfully learned what habits contribute to building wealth.

If you’re not already paying yourself first, I recommend that you take some time to look at your budget and set up an automatic withdrawal each month to start saving and investing for the future, even if all you can do is put aside $25 per month.  It’s better than nothing, and as you progress you can increase the amount you invest.

August 21, 2009
Investing

Some Fast Facts About RRSPs

An RRSP (Registered Retirement Savings Plan) can be a great way for Canadians to save money for retirement.  They have various advantages and disadvantages and some of them are discussed below.

First of all, the advantages:

  • Your contributions to an RRSP are tax-deductible.  You don’t pay tax until you withdraw from it.  Hopefully you won’t have to withdraw any of the funds until you retire.  Presumably you will be in a lower tax bracket by the time you retire and as a result you will pay less tax.
  • Any income or capital gains earned from RRSPs is also tax deferred.
  • You can split your retirement income by contributing to a spousal RRSP and as a result your household will pay less tax.
  • RRSPs can be transferred from one financial institution to another and you can have more than one.

Continue Reading

August 19, 2009
Investing

5 Quick Investment Tips

Below are some quick investment tips to keep in mind before pursuing any type of investment.  While investing your money is definitely a good idea, it’s important to make sure you are doing your due diligence prior to making any decisions.

1.  Before making any hasty investment decisions, be sure to get professional advice from someone you trust that is completely independent of the investment opportunity.

2.   Make sure to check the credentials of the investment company before dealing with them.

3.  Understand that investments involve an element of risk and cannot guarantee a return.  If the companies tell you otherwise, be very wary.

4.  Don’t sign up for anything immediately and don’t let anyone pressure you to make quick decisions. If the investment is legitimate they will have no problem letting you do your due diligence before committing to anything.

5.  Check out the past performance of the investments and if it is unavailable find out why.

June 15, 2009