Financial Acumen During Recession
With all the string of crises happening in the world at the present – persistent unrest in the
Middle East, euro debt crisis and catastrophic weather and natural events such as Japan’s
earthquake capable enough to change the course of global market. Major currency decline,
stock price drop will continually happen due to fluctuating global economy.
But these unfortunate events can be counter attacked by financially literate minds giving a
chance for the money to flourish in times of recession. As what Ed Butowsky, a famed
wealth manager and a managing partner of Chapwood Capital Investment Management,
LLC had said that hope is at hand for those who have the right attitude and considers taking
The Winning Habit
The book, Rich Dad, Poor Dad the author revealed that developing personal wealth can
be a achieved if one if armed with can-do attitude and being a risk-taker. Money has an
innate quality to multiply if one is determined enough to know the key elements. People
might be too occupied with what is currently happening in the world yet clueless when it
comes to taxation and accounting.
Guarding yourself Against Inflation
Cash savings are good as we can pay our bills and can be used hassle-free whenever the
occasion asks for it. But holding large amount of money can actually prevent you from
financial growth. Generally banks offer one to three percent interest rate on savings and
five to seven percent on time deposits. One has to bear in mind that inflation will have a
huge impact to your money’s value.
In the long run, your hard-earned money will steadily lose its purchasing power as the time
wore in. During inflation, money value drops while credit rates sharply increases. This leads
us empty-handed and buried in debt.
Ed Butowsky advices that neophyte investor should be
keen in analyzing market conditions and fully understand
the risks involve before finally giving in to gamble. Ideally,
it is recommended to capitalize the 10% of your total
assets on a single investment. It merits uncertainly but
mutual shares and stock bonds can be sold or turned into
cash in case of emergency situations.
Our financial goals differ from one another. Sometime we envision profit in a shorter time
and thus came a short-term investment strategy. Within a span of three years, investor can
benefit and get profit out of his investments. It is advisable to choose an investment that is
easy to liquidate. One of the pitfalls that investors should be aware of is that short-term
investments tend to be high-risk and low yield said Ed Butowsky.
Go for treasury bills, certificates of deposits and money market funds which are safer
choices. T-bills and CDs may have maturity dates and fixed interests. Just make sure to use
it after its maturity. Money market mutual funds offer a low yield but allow investors to uses