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Personal and Corporate Finance

Updated on February 2, 2013

 

The economic downturn of 2008 affected the entire world market. Nearly every country, if not all countries felt the credit crunch, the decline in spending, and slipping consumer confidence. Yes, this has been reported as the worst economy in 70 years, since the Great Stock Market Crash of 1929, but there are still bright spots. Dwelling on the worst is not what helps anyone. Instead a good honest evaluation of where you are and where you want to be is the best place to start for both personal and corporate finance.

Personal Finance

 

The first step to getting personal finances in order is to understand the value of a dollar. Someone should consider if moving to a less expensive house would be a good idea. Autos are also capital expenses. It might be best to repair the current vehicle instead of purchasing a new one. In the event that a new one is needed, not just wanted, purchasing a slightly used car instead of a brand new one saves a lot of money. Depreciation on an auto sets in very heavily as soon as it is driven off the lot. So choosing one that has already lost some of the initial depreciation but still has some warrantees left is a good choice. On a less expensive note, but still important, all of the utility bills and bank statements should be examined for places to reduce costs. One bank may be charging a $12 fee per month. That translates into $144 per year that you could be using for something else. For just the time it takes to go to the bank and close one account and open a free one, those assets can be saved. Some banks will simply convert your account to a less expensive one or a free one if asked.

On the side of utilities one area that might be consuming more cash than it needs to might be satellite or cable bills. With access to streaming videos online and also the improvement of some of the free broadcast stations, satellite access might be able to be reduced to a lower package or eliminated all together.

Invest In Stocks A Little At A Time

Best Charting Software for Trading Stocks

As money is saved out of regular expenses it should be banked, not just spent on other things. Spending is easy, but being disciplined is the first step to investing. Even though trading stocks might be scary or uninteresting to you, it is very important to read some books, research online and begin educating your self. Terms like blue chip stocks, calls, puts, NASDAQ, SP500s, and mutual funds should all be things that you at least converse about.

A wise investment for some might be stock exchange software. Software and even some free websites give detailed information about the company background, market cap, and price range over different time frames. Stock trading software would include research tools such as Telechart 2000, among others.

Trade Forex and You

A safe way to combine owning blue chip stocks and a limited amount of options is to write covered calls. To do this someone purchases the stock. Then they sell the call option for the next strike price up. Then if the stock climbs they are called out at the end of the month by whoever purchased the call. If the stock rolls down below the strike price then the option owner most likely will not exercise their right and call you out of the stock. It would then be better for them to purchase the stock directly then to call you out. Covered calls help to generate some cash flow and income from investments instead of just holding them for the long term. It is hard to make money in a flat market. When stocks are not moving then it is not easy. When the whole market is moving up then it is easy to make money. Down markets are hard on everyone. Put calls can be sold, but some companies have heavily limited the ability of private investors to sell puts if the market is severely oversold.

Another avenue is to invest in Forex. Forex is the foreign exchange market involves trading currencies of different countries. World currencies are involved in a system of floating exchange rates where the various currencies can be traded against each other in a free market.

Learning about investing strategies, money management, and having long term investment goals are all important to receiving the most out of a portfolio. Having the advice of a broker can be helpful, but some can be overbearing. Don’t let yourself stay totally unknowledgeable about the subject. Instead take some time and effort to learn the basic terminology, plans for investing, and making a put your own ideas into practice. Being wise about personal finances helps both the personal and corporate finance. As more consumers are better educated about Forex investing history and current market trends, it helps everyone in general.


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