Hope for your financial life and beyond

Is Gold a Good Investment for an Average Person?

There are many people who believe that investing in gold bars could be the best decision you would ever make. But, equally as many people have faced indecision between investing in gold bullion or stocks and bonds as a way of securing their future. Which is the best option to capitalize on?

The truth is you can capitalize on both of them. Both have upside potential.

So, is gold investing a venture the average person should entertain? For those who answer “Yes”, here are the four main reasons they site.

Why to Invest in Gold

1. The Unpredictability of the Dollar

Although the dollar is believed to be one of the world’s strongest currencies, it becomes hard to figure out when its value is likely to drop. An excellent example of such times was from 1998 and 2008 when gold prices hit $18,000 per ounce.

During this period, the dollar was relatively weak due to the trade deficit and increased money supply into the economy. Individuals who had stored their worth in currencies moved to the security of gold to redeem their portfolios. As a result, the value of gold nearly tripled. Investors who had a gold ira rollover made a large profit out of it.

This is why an average person looking for a long term investment strategy shouldn’t overlook the benefits of storing their savings in gold. You never know when fluctuation of the current currency would strike. Luckily, when such a time comes and you had saved your wealth wisely, you might end up opting for an early retirement because you have gained so much.

2. Supply Constraints

As a general rule of the demand and supply chain, when the demand for commodities goes up, the likelihood of their supply goes down. As a result, this leads to an increase in how much you would have to part with to get the same item. The less their is of an item, the more it is going to cost.

The same principle applies in the gold market. Between the year 2000 and 2007, annual new gold production fell from 2,573 to 2,444 metric tons, according to bullion vaults of the global central banks.

During times like this, those with precious stones are reluctant to sell them. For those who are willing, they end up asking for lots of money. As a result of the decline in the availability of gold, if you had made a move and bought your fair share of the metal, you would be making handsome profits from their sale.

3. Portfolio Diversification

You can never tell when one form of the securities would be outdone by the other. It may sound more lucrative to invest in bonds and stocks. But as an average person, it would come in handy if you diversified your portfolio with some precious metals.

Related Content: The Ultimate Beginner’s Guide to Investing Money the Right Way

4. Geopolitical Uncertainty

Trust in global trade unions keep on experiencing crises. This was most recently seen in the recent case of the European Union, where some countries wanted to walk out of the coalition. Similarly, when nations are against each other, the geopolitical tensions rise. This makes the currency in those particular countries deflate.

Business can become hard to conduct, resulting in global economic burden. The value of the currencies goes down and investors start hoarding cash. At those times, many see the safest place to invest is with precious metals.

Eventually, gold becomes hard to buy due to the shooting up of its demand. For individuals to have their investment in gold, it’s a great time to take profits.

Conclusion

Gold is one of the ways for an average person to diversify their portfolio. With the economic shifts becoming hard to predict, you never know when your money will lose some of its value. Similarly, precious metals are the right way of investing with less risk compared to stocks, which sometimes end up not yielding the much-anticipated returns. Ultimately, gold has been known to be a hedge against inflation, making it an investment strategy you might want to consider.

Questions for Discussion: Have you ever invested in gold? What was your experience like? Do you think their is more risk in investing in gold, stocks or bonds? 

What is a Line of Credit and How Does it Work?

From time to time, you might find yourself in need of additional money to fund a project, pay a medical bill or cover for an emergency. It can be hard determining where to get access to the cash you need. It may be that a line of credit is just the thing to get you by.

A line of credit (LOC) is an agreement between a bank and an individual that is geared towards establishing the maximum amount of money a customer can borrow. Once agreed upon, the customer is allowed to access the borrowed funds from the financial institution through their bank accounts. They are then required to make repayments on the loans per the terms established with the bank.

Here is how a line of credit works.

[Read more…]

Start a Side Hustle While Still Working Full-Time With These 4 Tips

Side hustles are quite common among Americans in today. You’ll find that many people will have an additional job that they do on top of their full-time job. They do these gigs for many reasons – out of passion, as a hobby, out of necessity or to make their budget work. Still others have hope that their side hustle it will one day become their new full-time job.

Side hustles offer many unique opportunities. However, not many can take one on and quit their day job at the same time. Quite often, the side job comes while the person is still working full-time.

Don’t let that shy you away from the challenge though. Holding down a side hustle can be done. Here is how.

Four Tips for Starting a Side Hustle

If you’re interested in a side hustle, we have four tips to help you out if you’re still working full-time.

[Read more…]

How to Manage Your Side Hustle and Family Life So You Don’t Go Insane

There may come a time in your life where you want to or need to create a side hustle to earn extra income. It can be many things depending on your skills and the depth of your need. Regardless of what you choose, it will be something you do on the side (apart from your day job) to bring in additional money to the family budget.

Side hustles can be a financial blessing. They can help you build up your savings account or pay off debt or meet any a number of financial goals you might have.

side hustle IIIHowever, while the additional income of a side hustle is welcome, there is a dark side that many are unprepared for. Side hustles, done improperly, can be a curse on family life.

It’s one thing to have a side hustle if you are single. I remember talking with a blogging friend who told me how he’d work his 9 to 5, take a 30-minute dinner (maybe) and then work till past midnight writing and networking. I’m not saying that’s necessarily an easy schedule but it’s not like you have anyone else to account for. It’s just you.

When a spouse and/or kids are in the picture side hustles take on a whole different dimension.

There is a tension that immediately surfaces the minute one member of the family begins a side hustle. What was a normal life is no longer normal.

You know the side hustle must be done to improve your financial life. But you also know family life matters. How can you manage it all and not go insane?

Here are a few strategies I’ve used over the years as I’ve managed a career, side hustles (my blogs) and family life.

[Read more…]

What is the Dow and Why is it Important?

The words Dow or Dow Jones may not be completely unfamiliar terms. You may know what they refer to, but you may not know exactly how it works. So, this article will help set the record straight and give you the basics about the Dow Jones Industrial Average.

What is the Dow Jones? For starters, it would be correct to say that it is the most quoted financial instrument in the world. That is why it sounds familiar. No doubt, you have heard financial market reports about this on the news every day.

The Dow Jones Industrial Average is a stock index. It was created in 1896 by two financial reporters, Charles Dow and Edward Jones. They were looking for a way to give the public a snapshot of how stocks generally preformed in any given day. To do so, they took the 12 largest companies at the time, added up their prices and divided by 12. That gave the average market price of that basket of companies.

Today, the Dow consists of 30 companies. The Dow Jones today represents the most significant areas of the U.S. economy, namely, financials, technology, utilities, industrials, and transportation. It includes companies like Apple, Caterpillar, Coca-Cola, Exxon Mobil, General Electric, Goldman Sachs, Home Depot, Microsoft, Nike, Proctor and Gamble and Walmart.

Because the Dow consists of only 30 companies, it may lead you into thinking that it does not carry much value. That is not the case. As you noticed, these companies are the heavyweights – the most influential companies in the U.S. As the Dow average goes, so usually goes the rest of the market.

Are there Limitations to the Dow Jones?

Just like most market indexes, Dow Jones has several limitations.

The first issue is that it does contain only 30 stocks. Today there are over 3,000 publicly traded companies which you could invest in. So the Dow may not give an accurate portrayal of what is going on in the rest of the stock market.

Secondly, the Dow’s calculation does tend to favor the more expensive stocks. The index is weighted based on price. So the more expensive a stock is, the more an up or down movement in that stock influences the overall index. The less expensive stocks will not have as much influence on the average.

What are the Benefits of the Dow?

1. The Dow serves as a historical marker

In order to predict or forecast the future of the markets, historical trends need to be observed. Analysts study the past stock market trends to help them reach conclusions about what the future may hold for stocks. This is where Dow Jones comes in.

By virtue of its long history, it offers a valuable information for the comparison of today’s markets and those throughout history.

2. The Dow helps investors make decisions

In the early days of stock trading, there was little information about stocks that was available to the general public. You invested in stocks with the phrase caveat emptor (“let the buyer beware”) in the back of your mind. You were at great risk due to lack of company transparency and information.

This is not so today. There are new rules set forth by the Securities and Exchange Commission (SEC) that guard investors from being defrauded by companies. Additionally, news about the Dow and the rest of the markets is widely available through media outlets. It is not difficult for an investor to find the information they need. Knowing the price movement of stocks (for which the Dow is the standard), will help investors know when to invest.

Related Content: The Ultimate Beginners Guide to Investing Money the Right Way

3. The Dow provides a broad view of the economy

As aforementioned, Dow Jones is an umbrella of U.S. most capitalized and influential companies. Because the 30 Dow stocks are spread over different industries, they help create a comprehensive view of the U.S. economy. As those companies perform well, they will contribute positively to economic growth within the U.S. And as the economy goes, so goes the stock market.

If the economy is doing well, the stocks in the Dow will rise. If the economy is doing poorly, the Dow will at best be stagnant but most likely decline.

The Dow Jones continues to be one of the most resilient indices in the world. It has stood the test of time and continues to be the standard for financial markets around the world.

Make a Comment: Do you monitor the Dow on a daily basis? On what do you base your investing decisions?   

Kids, Money and High School Graduation Day

In a few hours, my firstborn child will walk across a stage and receive her high school diploma. It’s been 18 years in the making and now we are here. One of the milestone days any parent looks forward to.

It seems like only yesterday.

You hear people say this phrase all the time, “It seems like only yesterday.” Well, it’s true. Mom and dad are really feeling that today. I was just talking with a friend this morning about how quickly time passes. And I can vividly remember the day my daughter Kelly came into this world.

What a joy it’s been to raise this child. She’s been obedient…kind to her siblings…dependable and reliable…driven…generous…sweet.

And I’ll tell you something else she has been…costly. (Hey, this is a personal finance blog…what did you expect me to talk about.)

[Read more…]

The 3 Main Advantages of a Debit Card

advantages of a debit card

Are there advantages of a debit card that makes them better than using a credit card?

Debate rages sometimes in the personal finance world over which one of these payment options is better. I see how both can be used responsibly to assist people with their money management. The key word in that last sentence though was “responsibly.” Of these two options, credit cards by far have the most potential for abuse.

Advantages of a Debit Card

Banks and other financial institutions issue debit cards as a way for customers to access their accounts to pay for goods and services. The card links to your checking account at the bank. When you swipe it at a business, the amount of the transaction is withdrawn from your account to pay the merchant.

[Read more…]

Secret Advice For Teenagers Who Love to Spend Money

You know who you are – teenager who loves to spend money like it’s going out of style. You spend money faster than it takes a Snapchat to disappear. Money comes into your hand one minute and flows out like water the next.

spend moneyAnd you like it that way!

If that’s you, I have some special advice today. It’s unusual, maybe even secret advice. I’m pretty sure you’ve never heard an adult say this to you before. In fact, your parents may hate me for saying this because it might go against how they have instructed you to handle money. So I’m actually running a big risk here.

But before I reveal this big secret about spending your money, you have to promise me something.

The promise I’m asking you to make is to read this entire post. You are going to love what I have to say about spending money but you can’t take it as stand alone advice without understanding the bigger picture. As they say, the devil is in the details. So I’m asking for five minutes of your time to help you avoid failure on this issue.

Ready for the big, secret advice? OK, here goes…

[Read more…]

8 Bible Verses About God’s Love You Should Never Forget

Ever wonder where our capacity to love actually comes from? It’s pretty clear that our ability to love is something that was given to us by God. In fact, the Bible verses about God’s love that I read tell me He is Himself the essence of love and has passed that on to us.

verses about God's loveGranted it’s not always easy loving others. Often times we choose to love others based on how they act towards us. But that’s not how it is with God.

God’s love towards us is unconditional. That means He loves us no matter what. We can’t do anything to reject, or bypass or disown His love. He can’t help it – love is part of His nature. He loves us – all of us – equally and without hesitation.

If you doubt that, just look at these verses about God’s love found in the Bible.

[Read more…]

The Secret Step to Contentment (Philippians 4:11-12)

On Contentment – “Not that I speak in regard to need, for I have learned in whatever state I am, to be content: I know how to be abased, and I know how to abound. Everywhere and in all things I have learned both to be full and to be hungry, both to abound and to suffer need.” Philippians 4:11-12

practicing contentment

Once upon a time (circa mid-2002), former NBA All-Star Allen Iverson produced a legendary press conference rant about the apparent need to show up for practice. After a first round playoff loss, his coach reprimanded him for missing one practice, maybe two, maybe three…we don’t really know how many.

Iverson argued to the reporters that a discussion about practice was irrelevant compared to his performance in the actual games – in what really mattered. He concluded his practice rant by exclaiming “How can I make my teammates better by practicing?”

There were days in high school when I hated basketball practice. It wasn’t very fun when you were tired or sore. Furthermore, I definitely wondered at times if I was helping my teammates get better. Isn’t that up to them?

But I pushed through all that because I came to realize one thing about practice – it produces greatness.

We aren’t born instantaneously great. Greatness comes slowly over time, as our mind, body and soul learns and adapts to whatever we are pursuing.

In the verse above, the missionary Paul shares with us in the Bible his secret step to contentment. He learned it. This makes me think it didn’t come naturally for him, just like it doesn’t come naturally for me. In other words, he had to practice it.

Contentment Doesn’t Come Easy

For Paul, contentment had to be achieved, through daily submission and practice. His statement is even more compelling considering the up and down circumstances he faced.

[Read more…]

What to Invest in When You are Scared to Invest

There are times when the stock market causes real fear for investors. It’s scary to see the markets and your portfolio value go down day after day. This is especially true for those closer to retirement. At times like that, it’s hard to know what to invest in or whether one should be investing at all.

what to invest in

You can’t discount the power of fear. Even the most seasoned investors get it from time to time. However, those who have been investing for a long time know something that perhaps a beginning investor doesn’t know – fear is not necessarily an excuse to stop investing.

But fear could be something that prompts you to reevaluate what to invest in. Market downturns are a great time to look again at your portfolio and analyze your strategy. Every time I’ve done that, it has actually served to calm me down. It reminds me that I am following sound investing practices that will serve me well in the long run.

There is good news if you are scared of the markets and don’t know what to invest in. There are a couple simple strategies to follow that can help you sleep easier at night. Here are several to consider that will help you put your fears to rest.

[Read more…]