Money Advice Guide

I know a woman in her sixties. She worked for a company for a little more than a decade as an administration and office assistant for a staff of one hundred sales people, who loved her dearly. She always made sure all the faxes got to their desks; the stationery stock was full and each staff member had what he needed.

Beyond her job description, she was like a mother to all of them: making sure the toilets got cleaned, old food was removed from the fridge and decorating the entire floor which the department occupied. She worked hard and never complained. She was always smiling, friendly and polite.

She felt good about being a ‘mother’ to all the people who entered and left that department. She was comfortable with her position. No-one else could do the things she did. And she did them better than anyone else in the building.

One day, she went to work as usual. After doing her morning chores, she was invited to the office, where she was told her services were no longer needed. The company was undergoing certain cost-cutting measures in every department and unfortunately, her role would have to be sacrificed. She was then asked to leave the building as soon as possible. She was assured, however, that before having made the decision, every attempt had been made to find a position for her somewhere within the company.

She has financial obligations to fulfil and she still hasn’t saved enough for her retirement. She still has credit to pay off and she was saving for a trip overseas, something she never got around to doing in her younger years. She wanted to save up to establish a book-selling business. Suddenly, she would have to re-evaluate her plans. Losing a job and nearing retirement age, she will have to relinquish some of the things she had dreamt for herself.

I am sure you have heard hundreds of similar stories like these. Just five months before writing this article, I had already read about companies cutting costs by laying off jobs. Their main reason is to remain competitive, so they would not have to raise the prices they charge to their customers. Companies are outsourcing jobs overseas because the labour costs in other countries are relatively cheap compared to the local currency and sometimes because of significant skills or technological advantages. Other businesses lessen staff when sales drop and they can no longer sustain to pay the same number of people they have on their payroll. No organisation - not even a big, established business - is immune from the need to become leaner in an ever-increasingly competitive market environment.

In the past, most people believed the companies or the governments - whom they work for - could guarantee them a job for life. Nowadays, I think more and more people are becoming increasingly aware that expecting to have a job-for-life is unrealistic. It is a dire predicament to be working everyday, taking care of someone else’s business and realising that at the end of one’s career, years of service do not guarantee one’s well-being. Because of this, I believe that people are now looking to improve their chances of having enough funds to meet their needs and wants after retirement.

I think there is a dawning awareness that the ultimate responsibility for one’s own well-being lies within each individual. People are beginning to understand that their boss or the company they work for does not have an obligation nor the ability to ensure that they are taken care of when they finish working for them.

According to an article written by John Roskam*, based on a forthcoming Institute of Public Affairs (IPA) Backgrounder on self-employment and the self-reliant society, the trend to self-employment will speed up in coming decades. Five reasons explain this change:

1. Our societies will continue to develop knowledge-intensive and service industries.
2. Jobs of the future need more education; however, better educated workers might opt to work for themselves instead.
3. Older workers are more comfortable with being self-employed than the younger workers, which might indicate individuals would prefer to work for themselves as they grow older.
4. Individuals want more control and flexibility over their working arrangements and self-employment allows for this.
5. Individuals are more willing to assume responsibility for the decisions that affect their lives and their families.

In addition to this trend, more and more people are now seeking to gain greater control over their financial assets.

What we can all learn from this article is the idea that we do not have to rely on our employers to be there for us when we desperately need them to pay us our periodic paycheques at the end of our working days. There are alternatives and, while we still can, I believe we owe it to ourselves and our families to have a back-up plan and look at every single opportunity available. The question for you is this: Do you have a back-up plan?

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Footnotes:

* “Self-Reliance and the Self-Employment Revolution” http://www.ipa.org.au/files/news_953.html (21st March 2005).

Marquez Comelab is the author of the book: The Part-Time Currency Trader. He believes that trading and investing are skills people should learn while they are still young so when they grow old, they do not have to rely too much on their pension. See: http://marquezcomelab.com.

Tags: currencies, forex, futures, invest, options, shares, stocks, trading, Wealthcurrencies, forex, futures, invest, options, shares, stocks, trading, Wealth

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Anyone contemplating entering the field of stock market investment should certainly be aware of the fact that there is the very real possibility of losing money in your dealings. Obviously, most enter this challenging arena with the intent to make profits and this, too, is quite possible. However, as with most things in life, ignorance can be dangerous so it is advisable to ensure that you have covered the groundwork necessary for success. The following tips are generally accepted practice and should form the basis for all your investing strategies.

Basic Economics

This really just boils down to common sense in that the stock market merely caters to the criteria of supply and demand. There are those wishing to sell stock and there are others who wish to buy. This buying and selling of stock forms the basis of all day to day trading and investors buy stock at a certain price and then hold it until the price (hopefully) rises when it is then sold for a profit. Prices of stock are in a continual state of movement which is directly related to the supply and demand prevalent at any one moment. Usually if there is high demand for a particular stock then the price will usually rise. Conversely, should there be more stocks for selling than there are buyers for that stock then the price may very well go down. Shrewd judgement is required to turn a profit and that comes with experience and time.

Company/ies Research

This is probably one of the most important fundamentals of all. After all, if you are going to invest in the stock of a company you will wish to do so with confidence. Check the company profile, how it has performed in the marketplace, what its products or services are like, and generally try to establish how well it has fared in business. Does it appear to be a stable, well-structured company that delivers on both its promises and profit targets.

Company Longevity

Trying to access the likelihood of a company being around in, say, ten years or so is rather a difficult thing to do. However, some long-term stable companies are usually those owned by governments, telecommunications and gasoline. Profits of these companies are good due to these products and services always being in high demand. Another fast growing sector of the market is in the field of IT with more springing up almost on a daily basis. Great care should be taken here and only those companies with a proven track record should be considered for investment. It can be all too easy to become excited if a company has seemed to perform exceptionally well but short term success does not mean stability for the future so caution and restraint should be the exercised in these instances.

Keep up to Date with the Latest News

The research of companies that are being considered for investment is an ongoing thing due to the fact that the market is always changing. You should continually monitor all the latest news via the newspapers, press releases and company publications so that you have the very latest up to date information on which to base your dealings. Global and national events can sometimes affect the industry in which the company operates and it is not unknown for companies to go bankrupt overnight as a result of some such happening.

Spread your Investments

The old saying of ‘not keeping your eggs all in one basket’ could certainly have been coined for the stock market. Do spread your investments between several companies (within your budget). If everything is invested in one company then you stand to lose everything if that company goes under. Also, with several profit streams your good performing stocks can compensate for those performing poorly thus giving a more stable return on your investment.

Use Brokers with Discretion

Many of those new to stock market trading are guided by recommendations from their broker and it is as well to treat these with caution. There are the odd few unscrupulous brokers around and it is your money that they are gambling with so make sure that you have done your own careful research before entertaining their suggestions.

Finally…

Do not be greedy. Sometimes you may be tempted to hold on to an investment longer than intended (especially if the price is rising fast) hoping for a much higher return than originally anticipated. In such circumstances as these greed can cloud your judgement causing you to abandon you preset strategy with disastrous results. The lesson here is to never deviate from your normal strategy no matter how inviting the reason may be. The stock market is very unforgiving with mistakes so do not let greed be a causative factor in this respect.

Copyright Brian Hunter 2006

Brian Hunter has been active on the internet since 2002. For up to date information on the stock market visit his site at http://www.stock-market-trading.co.uk

Tags: commodities, finance, forex, investment, market, online, options, securities, shares, Stock, tips, tradingcommodities, finance, forex, investment, market, online, options, securities, shares, Stock, tips, trading

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