When we think of investments, many of us think in terms of what we are doing with our money. However, money isn’t the only resource available to you. You also have your time and your abilities, and you can decide how to use those resources to improve your financial situation — even though you aren’t directly investing money.
Here are some ways that non-financial investments can help your financial situation:
Invest in Relationships
Who do you know? If you need help with something, or if you want a little help getting a job later, do you have someone you can turn to?
Investing in relationships can bring you a number of benefits, including some that are financial. When you take the time to network, you have the chance to build business and career relationships that can bring you more money down the road. Whether you work to develop a good professional relationship with your boss, or you look for a mentor outside your “regular” job, the right relationships can help you improve your financial situation in the long run.
You never know when someone you meet through your charity work, or through a book club will provide you with a tip on a new job opening. Plus, networking can connect you with those who can give you good advice about building your business more effectively, or even tips on better managing your money. Pay attention to the relationships you are developing, and recognize that a little time well spent can pay big dividends.
Invest in Developing Marketable Skills
Think about how you could make yourself more marketable. Consider the skills that could make you more attractive to bosses, clients, or investors. Whether you are looking for a promotion, a raise, or funding for a business startup, you need to show that you have the skills to make things happen.
Once you know what skills you need to develop, work on those things. This can include developing better speaking or writing skills so that you are able to get your ideas across more effectively, or persuade others to provide you with funding. You can develop a knowledge and a knack for marketing and apply that to whatever you are working on.
When you invest in yourself, developing new skills, knowledge, and expertise, you put yourself in a position to earn more money. Plus, developing the right skills can help you better manage that money as well.
Invest in Self-Improvement
Often, we buy things to fulfill some sort of need that we have. However, in some cases, you can save money when you focus on self-improvement instead. Look for ways to invest your time and abilities in doing the things you enjoy, and finding contentment. If you are happy spending time with your family, there is no need to buy a lot of fancy gadgets. If you enjoy spending time outdoors, you can go for bike rides, jobs, hikes, or engage in other activities that prevent the need to spend money on a gym membership.
When you are satisfied with the progress you are making as a person, there is less temptation to buy things to supply a lack. That can save you money over time, and improve your overall financial situation.
What are some of the non-financial ways you invest your time and effort?
One of the trickiest aspects of investing is know which assets to choose. This can be a daunting task, since if you pick wrong, you end up losing money.
There’s always a risk that you will lose money when you decide to invest. However, you can reduce your likelihood of loss by carefully choosing solid investments. Whether you want to put investments into your TFSA, or whether you are just looking for a way to grow your wealth, the right assets can be a great help to your portfolio.
If you want help picking assets most likely to offer decent returns over time, you can use fundamental analysis.
What is Fundamental Analysis?
Basically, fundamental analysis is a method of looking at the basic underpinnings of an investment. It takes a look at the factors that are most likely to influence the “big picture” of an asset. Often, fundamental analysis involves paying attention to factors like:
- P/E ratio (particularly in terms of stock)
- The way management runs the company
- Profit margins
- Where the company fits in relation to competition
- Supply and demand (especially in terms of commodities)
- Political issues that can affect an asset
- Economic factors influencing an asset (especially in terms of currencies)
Consider the “bottom line” issues that are most likely to influence an asset. Fundamental analysis can be used whether you are trading currencies, investing in individual stocks, trading commodity futures, or investing in funds.
How Fundamental Analysis Can Help
Unlike technical analysis, which deals strictly with price action, fundamental analysis takes a look at qualitative factors that offer insights into an asset’s potential. Technical analysis looks for trends in prices, tries to identify patterns, and then predict which investments will do well based solely on the patterns seen in past price action. Fundamental analysis is about identifying the items that give an asset staying power over time.
If a stock has an attractive P/E ratio, competent management, and reasonable profit margins, as well as potential for growth in its industry, chances are that it is a fundamentally sound investment. If conditions in a country are such that there is stability, and a potential for modest and sustained economic growth, a currency might be expected to perform well.
Assets with strong fundamentals are more likely to do well than their counterparts with shaky fundamentals. If an investment is supported by a solid base, it makes sense to think that it will do well in the future. Choosing investments with good fundamentals can be a way to help your portfolio perform well over time. You might not see amazing returns, but you are likely to see modest and consistent gains over time. This can be especially true with dividend stocks.
There’s no way to guarantee that your investment choices will be winners all the time. An element of risk always exists, and you could lose money no matter how careful you are. However, fundamental analysis gives you something to go on, and you can use it to help you find assets that are likely to be good long-term bets.
When it comes to making financial decisions, many of us like to feel as though we are doing the right thing. This includes deciding where our investing dollars should go.
One of the ways that many of us direct our investments is through green investing. While green investing can be one way for you to invest according to your values and priorities, it’s not the only way to get involved in socially responsible investing. In fact, many future investors are double majoring with a finance major and a human services degree to be more socially acceptable.
What is Socially Responsible Investing?
The idea behind socially responsible investing (SRI) is that your investing aligns with your morals. So, you invest in companies, funds, and ventures that reflect your personal values. It also involves reviewing your current holdings (including what you might be holding in a fund) and getting rid of the investments that don’t align with the social values that you adhere to.
Green/sustainable investing is just one aspect of SRI. Other values come into play as well, including:
- Human rights: In many cases, we prefer to support companies that have relatively good practices in terms of fair employment. This includes staying away from companies that operate sweatshops, or companies whose practices might be driving people from their homes, or in some way depriving them of rights that we think they should have access to.
- Avoiding “sin” stocks: There are those who view tobacco, alcohol, pornography and gambling as damaging to society. From this viewpoint, the idea is to avoid investing in companies that manufacture and sell these items, or that profit from these items.
- Stem cell research: For some investors, the idea of investing in companies that are using stem cells from fertilized eggs is anathema. Companies that profit from such research, or that fund such research, are avoided.
- Religion: Many investors like to invest according to their religious values. There are “kosher” and “halal” funds, meant to reflect the values of Jewish and Muslim investors, respectively. There are also a number of Christian funds designed to reflect various Christian views of what is socially responsible.
Essentially, SRI is about directing your money in a way that you believe will make the world a better place.
What about Direct Investment?
In the past, it has been pointed out in comments on this site that perhaps investing through the stock market is the best way to really effect change. After all, you buy your shares from another investor, and you might not really be directly investing in the company. Instead, you might be able to have more of an impact if you use direct investment to put your money to work.
In the United States, the new rules for crowd funding could make this a little bit easier to accomplish.
With any investment, direct or not, it’s important that you do your research, and assess the risk. Also, decide whether or not the investment will help you reach your overall financial goals. The right investment, when it reflects your social values, can be a great way to improve your financial situation while feeling good about where you put your money.
Trading in the foreign exchange market has quickly become one of the most enticing and exciting forms of investment available in the world today. For those individuals who are sick of the returns that they’re able to generate in the stock market, the Forex market brings in some pretty nice alternatives. If you’re unfamiliar with how to trade this market, here are a few things to take into consideration.
The Basics of Trading
When you are interested in trading Forex, you need to have a basic understanding of what you’ll be doing. In order to make money in Forex, you’ll be trading one currency against another. While you hold one currency, you hope that the price of that currency goes up in relation to the other one. If that happens, you make money. If it goes in the other direction, you lose money.
In order to trade the market, you need a good broker and a strategy that you can count on. There are an infinite number of trading strategies that you can learn online. Check out some of the currency broker sites out there to tap into some great free resources and learn strategies. It is also in your best interest to try out any strategies that you come across on a demo account. A demo account is a type of account that brokers offer, which will allow you to trade fake money. You can practice your strategies out and see if they actually work before risking anything.
If you come across something that seems like a great strategy on one of the many currency broker sites, make sure that you don’t put all of your eggs into that single basket right away. It’s usually in your best interest to try out several strategies and create a diversified Forex portfolio. This way, you’ll be able to protect yourself from sudden changes in the market or other unexpected situations. Otherwise, you might be in for a rude awakening. If you’ll do your homework and stick with it over the long-term, Forex trading can be a profitable way to earn better returns.