It’s quite unfortunate that emotions may cloud our financial judgment. Financial problems could wreack havoc on our overall portfolio. In reality, behavior is a significant risk factor that may affect investors, There are cognitive and emotional biases that may result in less than ideal decision making processes. Overconfidence is a prevalent emotional bias and it can affect everyone, not just investors. Many people think that they can beat the stock market by choosing a few very prospective stocks. It’s very possible for them to gain ideas from different sources. When we overestimate our own abilities, it’s likely that we underestimate risks. Investors should have sophisticated data and research capability to achieve their goals. They need to perform the necessary due diligence, so investment portfolio can be maintained. If we are being overconfident, it’s likely that we will leave our eggs only in one or two baskets. Each basket may dangerously be related to one another. So if one basket is affected, another could be affected as well. It’s likely that people simply overemphasize their overall personal contributions. People could also be affected by the familiarity bias. People tend to invest money on areas that they know best. It may be a good thing, but it’s important that we have diversified portfolio. A portfolio without enough diversification could result in higher risks.
Some investors may also have specific aversions. Due to loss aversion bias, investors may hold losing investment for too long. This could happen when investors make speculative trades based on inaccurate projections. Due to their high expectation, investors may hold an investment for too long. It is important for investors to know about sunk costs. In general sunk costs are any expense that has been incurred. It’s important for us to incorporate such factor in our future actions. Things could go awry if we have inability to come to terms with factors that are related to our investments. When we have investment failure, we will lose money and we simply hope to recoup our losses. Inaccurate projections may cause people to easily miss their opportunities. We should also know about anchoring, In general, anchoring bias could cause investors to feel reluctant to sell investment platforms that are at a loss. This could happen when investors have become very eager with specific investment platform that pulling their money out of it is considered as unacceptble. It is important for investors not to follow the herd. When the financial media is bullish, it is more likely for investors to put extra money in more promising stocks. They could do this even if the prices are soaring high. This could happen when the media appears to be pessimistic. Investors may be reluctant to purchase stocks although the market is showing signs of recovery. As a result, investors lose the opportunities of purchasing stocks at heavily discounted prices. In this case, it is important for investors to know more about their own intuition. They need to trust themselves, instead of trusting others. Intuition and experience can be shaped through mock purchases and simulations of stock investments.
We should know that it’s possible that we actually have unhealthy relationship with money. Money is more than just coins and pieces of colorful paper. It holds a specific amount of value that can be traded with goods and services. More than that money can also be represented by the total of balance in our investment account sheet, credit card statements, bank statements and also our own self esteem. Due to its significant intangible influence in our lives, money can be compared to power and energy. Successful people often say that they are in tune with the intangible value of money. The definition of money is so straightforward that children can learn it quickly. Unfortunately, it is also possible that we inherit bad concepts related to money from our parents. Poor people often have bad connection with the intangible value of money and things that we have won’t come to us. So, it’s important to have the positive beliefs ingrained into our mind. This may sound like a metaphysical topic, but it’s important to think about the way successful people do, despite our current financial condition. Having good impression on money can be quite challenging when our income is far from enough to cover expenses and we have debilitating bad debts that cause continuous financial bleeding.
We shouldn’t feel band when something breaks and need to be replaced or fixed. If we don’t have a few spare dollars to replace the item, we should maintain good frame of mind and we should look for ways to make do without the item. What we feel about money is dictated by what we learn when we grow up. If we struggle with money, it is more likely that we will have bad thought about it. Because no one instructed us on how to think about money when were younger and many parents seem to reinforce bad thoughts about money, it’s important for us to re-wire our thought. Our parents may fight over money and they spend more than what they have. If they did, it is important to look at our lives and consider whether we do the same. It’s important to see any similarity. We should consider whether it’s where our beliefs came from. It may take some time and energy to change our monetary habits, we it should well worth it. Good money habits are often based on common sense. Their concepts are simple, but can be difficult to implement continuously in our daily lives. If we have positive relationships with money, it is more likely that we will accumulate money in a proper way. Taming money as a form of energy requires enough persistence and this could be challenging, especially for those who actually have fear of money.
The most straightforward way to re-wire our thought about money is to think back how we thought about money when we were very small. Money is essentially a neutral tool that can be used to ensure the fulfillment of basic needs and comforts.
It is quite unfortunate that some people actually underestimate financial recession. They may think that it will only be a short recession. Unfortunately, the problem could be bad enough that the government needs to bail out the national banking system to restore confidence. In this situation, many banks may have gone bust, while a few remaining are struggling. It is also quite likely for some average consumers to go bust if they are poorly prepared. There are different reasons why it’s very difficult to survive the financial recession. One problem is that we have poor budgeting system. If we don’t have a reliable budget, then it’s time to sit down and evaluate our situation. A good budget is regularly updated. It will allow us to avoid waste of money. Many people are surprised to find that they run out of money before the next paycheck and it could happen because they don’t have a reliable budgeting system. Another reason why people could fail during a recession is because they don’t have enough savings. In general, savings account is a low-yield and highly secure investment platform, which can be used during emergency situations. Each country offers different level of compensation scheme, in case the bank fails.
In this case, we could spread our savings accounts in multiple banks, so our money can be completely covered during the financial recession. However, we should know that having two accounts on two banks under the same group may not be covered properly. Insurance protection is also essential during financial recession. Accident, sickness and unemployment protection are essential during financial crisis. During this period, we still have normal expenses, such as utility bills, credit cards, loans and mortgage. Even if we still have primary job, our household budget could still be stretched during this period, so we should seriously think about insurance protections. We may also look for benefit assistance during financial crisis to further improve our situations. One bad decision that could affect us during financial crisis is replacing our perfectly usable car with a new model that is very expensive and less efficient. The monthly repayment can be quite significant. Within the first three years, cars may lose up to 50 percent of its original value. In general, cars are usable for up to 20 years if we properly maintain them. It’s a bad thing to lose money through depreciation during financial crisis.
People could succumb into monetary problems if they have so much bad debts. In this situation, it is important that we are able to negotiate with lenders to find out whether it’s possible to escape from debt issues. Any kind of borrowing should be stopped if we want to survive the financial crisis. The cost of borrowing can be quite expensive, especially if it’s associated with credit card debts. Remortgaging may not be a good thing to do when the economic condition is bad. We may potentially lose our house, which is not a good situation at all.
Many families decide to live healthier by choosing organic produce and foodstuff. Unfortunately, it is commonly thought that organic and natural ingredients are more expensive. The primary concern is how to shop for organic and healthy ingredients each day without breaking the bank. In this case, we should focus on our food component in the budget. It may be quite challenging if we have tight food budget, because cheaper ingredients are mass produced in huge farms and plantations. Regardless of our financial limitations, it is important to include organic and healthy shopping in our lifestyle. We may need to juggle different preferences in the family.
Some people may prefer meat and potatoes, while others seek to have more vegetables. It is important for us to deal with specific cost-saving tricks, so we will always be able to stay within specific organic budget. When dealing with organic meals, we should start from scratch and do all the cooking ourselves. It may be necessary for us to make extra portions for lunch and dinner. If possible, we should buy fresh vegetables and fruits from local farmers, who are known for their organic farming methods. They may reuse leaves and other organic materials as compost. In many cases, organic foodstuff from local markets are more affordable than non-organic alternatives in grocery stores. However, due to problems related to prices, many people are not able to completely fulfill organic lifestyle. A good way to reduce costs is by asking local organic food eaters to know where they can get proper ingredients at acceptable prices. This should be easy to do if our area is not too far from local farms and plantations. A very inexpensive way to contribute to our organic lifestyle is by planting edible food at our home. This should be an easy thing to do and we may read books and watch videos on how to do that.
By doing things properly, we should get the biggest organic bang for our buck, especially if we can plant a large amount food on our own. Common foodstuff like cabbage, potato and tomato can be planted on our backyard if we have enough space. This a very affordable way to make sure that we are able to provide our family with very healthy organic food. We shouldn’t hesitate to do this in our home. Food that swells is usually more filling. So, it will be more economical if our primary sources of carbohydrate are rice and beans. If our budget is tight, we should still be able to allocate enough fund for getting vegetables and quality meat, of course they need to be completely organic. We should also use spices and other ethnic ingredients to make our food much more enjoyable. As an example, fresh ginger and avocado can be occasionally used in our meal to make it healthier, without spending too much extra money. We should be creative to find out new ways to spice up our meals.
Many small business have very tight marketing budget, but they need to get their name in the marketplace. Public relations effort can be very expensive and we can’t just spend a few dollars on them. Regardless of the cost needed, we need to have a comprehensive public relation project that’s able to persuade, explain, inform and educate consumers; while enhancing our credibility in the marketplace. In the end, such as project should be able to boost our sales. Instead of focusing on the quantity of our advertising messages, we should focus on the actual functions of our public relation project and try to make do with whatever resources that are available to us. By focusing on the core values of marketing programs, there’s a better chance that we are able to position ourselves better in the marketplace. It is also about making a priority of each core value of our project. So, despite our lack of financial resources, we could focus on a task that must be completed first.A marketing tool can be modified and reprinted to serve different marketing functions.
Despite our limited marketing budget, we should be able to gain better results by taking the necessary steps. At first, we need to establish a benchmark, so we would know what kind of result that we should get. We will know whether a task has been successful in delivering the right kind of result. It is also important that we commit to a specific task until it’s completed properly. We should know that it may take a lot of time to make proper connections with our consumers. Marketing is a continuous process and we should always be in motion to make sure that results can be achieved. We should know about the most appropriate goals that we need to achieve. If we have a limited budget, it is important that we focus on making our effort more effective. As an example, releases shouldn’t be one sided and look too much like sales pitch. For higher effectiveness, we shoujld refer to valid and trusted survery and research results to ensure consumers that we have proper products.
Despite our tight marketing budget, we should make sure that releases are produced neatly with wide margins and double-space. The message itself should be factual and brief. Each marketing material should be reviewed after it has been written. There should also be contact details in each of the marketing messages. If our marketing message is particularly long, it should be properly organized. Booklets should come with concise information that urge people to read more. This should be an excellent opportunity to approach people and convert them into loyal buyers. Longer advertisement can be used in an advanced stage and it can be an opportunity to establish ourselves as experts in the field. Our approaches in completing the PR project could vary depending on our financial resources. If budget is limited, we should choose the one that’s less expensive. Hiring a marketing consultant can be a good choice, so we will be able to maximize the overall effectiveness of our marketing campaign.
It is important for us to know how to save money and it is important for us to know about the latest money-saving tips. This also applies for people who just rent an apartment. For people who move to different cities more frequently, it isn’t acceptable for them to apply for a mortgage. It’s important for people to save every penny possible, by using follow-up actions, imagination and clear-headed thinking. Before buying anything for our apartment, we should think twice. We should consider ways to save money for every item in the list. Consider whether we are affected by impulse buying behavior and to prevent this, we should force ourselves to return later. This will give us enough time to think whether an item is necessary. After we sleep on it, we may often further postpone the purchase or cancel it completely. It is important to identify whether an item represents our needs, instead of our wants. We should have a partner who also have strong financial sense to help us reduce overall costs. We may also consider whether an item is a good, because it’s cheaper with good quality. When buying an item, we should never be in a hurry, because haste makes waste.
When we go to stores, it is important to choose the time when we have a lot of time. This will allow us to check for options and compare their features, as well as price. It is important to slowly read the description sheets, compare more and shop around. If we are relaxed, this shopping experience can be quite relaxing and wonderful. Stressful buying process will lead to bad, overpriced purchases. So, when we get home, we will be quite jazzed up on smart things that we do in store. We should also need to buy with enough cash, so we will be much more conscious about the amount of money that we spend. In general, paying cash is a lot better option, because paying with plastic is a quick way of over-spending. Credit cards should be used only for emergencies, not for normal purchases. We should avoid digging ourselves deeper into the money pit. We should think deeper before whipping our the card, unless we absolutely must do it. In order to reduce costs, we should think DIY and there are actually many things that we can do in our apartment. As an example, we may mount great paintings, change locks, adjust light fixtures, paint the wall, install wallpaper, arrange the furniture using elegant interior designs and others.
However, we may leave more serious tasks, such as floor and ceiling remodeling to experts. Average people may end up damaging the interior of the apartment. If we are on a budget, we may need to delay any plan for more serious interior works and some cosmetic changes may actually improve the visual appeal of our interior significantly. Whatever we do, we should always look for ways to reduce overall costs.