Category: Debt & Credit Free

stock market investment tips 2 Jun

Beginner’s Stock Market Investment Tips

There is no shortcut to happiness and riches even when investing in the stock market. In your quest to making money through stocks, you must learn about the most essential tips that will help you avoid unnecessary financial risk, but will make your money work for the long-term. So if you’re a beginner in stock market investment, read the following.

Set realistic, long-term goals for stock market investment

Know the reasons you’re investing in the stock market and determine if you need your cash back within a period of time.  Ask yourself and find out if you’re saving for future college expenses or retirement or you’re planning to buy a home.

In short, know your purpose for investing and time you will need those funds back. If you need it sooner, say two years, then you may want to use another investment tool.  Remember, the stock market, for its volatile nature, cannot guarantee that you’d get your capital back by the time you need it.

Manage your emotions

The inability to control emotions is one of the biggest problems of people who invest in the stock market. If you’d take a look at the market, you can notice that the overall prices of companies directly affect and reflect the investment community’s emotions. So when investors are worried, the prices seem to decline; the opposite when they’re feeling positive about the future of the company, and in that case, the prices increase.

When buying stocks, you must determine your reason for it as well as your expectation of the price. You should also know the time to liquidate your holdings during times when reason is invalid or when you did not meet your expectations. Thus, you must have an exit strategy in place and do it unemotionally.

What’s your risk tolerance?

This is the next thing to consider before investing in stocks. Understand your risk tolerance, which is your psychological trait based on genetics but positively influenced by income, education and wealth. For example, risk tolerance seems to increase slightly as those factors increase.

You can determine your risk tolerance by checking on your feelings about risk and level of anxiety you’re feeling in times when risk is tested.

In short, it is the degree of extent to which you choose to risk experiencing a negative outcome because of your pursuit of a positive result. By knowing your tolerance, you can avoid making investments that can lead to anxiety. Do not own assets that will keep you awake at night, for instance.

Learn how to diversify your portfolio

Identify potential risk that will put your position in danger and learn to liquidate your investment before losing money.  One of the best strategies is learning how to diversify your portfolio. For example, you may want to buy stocks of several companies across industries and countries.

At the same time, you can expect that a particular bad event will not affect your entire holdings. Investment diversification can help you recover fast from your total loss with your gains from other companies.

Summing Up

If you’re a beginner in the stock market, follow these tips, including learning how to diversify your portfolio, determining your risk tolerance and managing your emotions, to name some.  For more help, you may contact DSC Consolidation today!

What Is A Debt Settlement Plan?

A debt settlement plan is another solution if you’re looking for an alternative to help you manage your debts and pay them back with less stress. It is chosen by people who do not want to declare bankruptcy and want to pay back a portion of debt.  The DSP may also be for those who cannot afford the payment as stated in a debt management plan and have stopped paying unsecured loans.  For more about a DSP, check out the following:

What’s a debt settlement plan?

Using this strategy, you’re making a monthly payment to a   deposit account.  The amount is predetermined as to how much you can afford paying. Under it, you’re not making the monthly payment straight to your creditors.

You’re also going to use a credit counselor service, which will be the one to negotiate with the creditors.  You do not make monthly payments to the credit card companies and the service provider negotiates with creditors for a lower repayment.

So how it works? The company will negotiate and reach a settlement with the creditors; the settlement payment will be paid using a separate deposit account.

debt settlement plan

However, you must weigh the upsides and downsides of using the debt settlement before signing any agreement with the settlement company.

Check out the following for the main benefits as well as a few factors to help you decide on knowledge and find out if it is the right service to use.

DSP Benefits

  • It may help in reducing your total debt.
  • A debt settlement plan may be a suitable alternative for bankruptcy.
  • A longer repayment period of up to five years may be negotiated and settled.
  • It lets you track your finances, plan ahead, and save the amount for the settlement.
  • It offers you flexible payment arrangements, although changes can be made if you need it. You just contact the DSP service and tell them about it.

Potential Risks

  • A DSP may affect your credit profile or score.
  • The creditors have the right not to accept such settlement proposals.
  • The collection activity, including calls, will drastically escalate.
  • You may be taxed on the debt’s portion that you failed to pay back.
  • The debt balance can increase due to interests and late fees, while the settlement negotiation is ongoing.
  • Usually, it takes at least six months before the first settlement happens..

Upon knowing all these things, you must also remember that agreeing to pay creditors less than the amount you owed must be avoided because it could hit your credit standing.   Additionally, the taxes and fees you’re paying under the settlement program may offset what you’ve saved through paring down the debt.

That’s why you need to seek counseling for advice if it will solve your problem or not, or if a debt management may be a better option for you, especially if you have a low income to keep up with debt or when you can notice that you’re borrowing from another creditor in order to pay for another.

But then if debt settlement is the right option for you, then you should know if the creditors are willing to negotiate because they’re not required to agree to a settlement proposal. For the best results, you must study your options well and figure out if DSP is the most suitable route to take in paying off debts. Consult an expert for sound advice today!

Do You Qualify For Debt Consolidation Loan?

If you need it to pay off your debt, you must know that providers of debt consolidation loans have their qualification requirements as to whether you’ll be approved or not just like bank and other financial institutions. The following is a quick guide on what the companies are using in reviewing your loan application.

Will You Qualify for the Debt Consolidation Loan?

There are many companies that make use of a scoring system for ranking your credit, while others use analysts to determine if you qualify for the debt consolidation loan or not. But whether or not they’re using these systems, the following are the basic requirements:

Income

The loan company wants to ensure if you’re capable of paying the loan back. Many of them will ask for proof of income in order to determine if you have a steady and stable job to pay them back. They also want to make sure that you’re making enough money to cover the monthly payments. Additionally, they may require “debt to income ratio” and 10-15% disposable income monthly.

Credit Worthiness

Many of them may even look for a high credit score when reviewing an application.  However, it does not mean you should have a perfect credit score or standing before applying for a debt consolidation loan. Still, many of them will determine if you qualify within their required credit threshold, which ranges between scores that determine your credit worthiness. They use it to evaluate potential risk of a borrower. The lower is the risk for them if they’d approve borrowers with a high credit standing.

debt consolidation loan

Stability

More likely than not, the loan company wants to determine if you’re always relocating or you’re staying in one place of residency for at least two years.  They will also ask the length of time you’ve been working in your current company.

Home equity

Collateral is another important requirement of loan companies that are reluctant to give large amounts of money to someone without it.  So without even saying, the loan company would want enough home equity in order that you qualify for a debt consolidation loan. Now if you don’t have enough collateral, such as home equity, it would be impossible to get a huge sum of debt consolidation loan.

That said owning a home is almost always a sure way of qualifying for just any types of loan. It plays a significant role regarding your chances of being approved for the application.

As with home collateral, the loan company will just foreclose the property and then sell it to use the proceeds to settle your loan.

Payment history

This is one of the basics that the loan company looks for when reviewing an application, looking into your history in terms of paying back your creditors.  Do you settle monthly payments on time?  Do you have a good payment history in paying off debts and bills?

Choosing a Debt Consolidation Loan

So no matter your situation, you must do your homework to compare different lending companies before submitting an application. Also, take note that a loan company may have additional requirements. Nevertheless, research and compare the available debt consolidation loans and figure out which among them is suitable based on your current situation (and on interest rate, period of repayment, etc).

Secured Loans – The Pitfalls

Taking out a loan for a small amount to pay for a purchase that is just outside your usual spending power should be quite a manageable situation. If you take the loan out at a reasonable rate of interest over a decent term then you should be able to make the repayments even if you find yourself out of work for a period. However it is a different story if you take out a mortgage to pay for a house, or a car loan. These forms of credit are often “secured” on your purchase, which means that, should you default on the loan, the lender will be able to reclaim the property from you as a way of making their money back.

Secured credit has such pitfalls because, without the possibility of reclaiming their money in this way, banks would need to charge higher rates of interest and keep the term of the loan much shorter than they currently are. This would put the purchase of a house or a new car far outside the range of most people. It is, however, vitally important to be sure that you have a contingency plan should you suddenly lose your job. In such cases, becoming unemployed can also mean becoming homeless.

Further to this, a default on a mortgage can stay on your credit file for some time, meaning that another mortgage any time soon will be an impossibility for you. Take into account all the perils of taking a mortgage before you sign any documents, because the drawbacks to secured credit could be prohibitive.

Is a Loan the Way To Go?

In the society in which we live, we all see from day to day people who have possessions which we would like to own for ourselves. Unfortunately, budgetary concerns make this impossible, in some cases. To overcome this situation, more and more people are looking at taking out personal loans as a way of raising the money to fund their purchases. Of course, there are other reasons for taking out loans. Some people take them for business purposes – in order to raise the capital for an acquisition. Others, indeed, will take out loans to consolidate their debts into one big debt with more favorable repayment terms.

Whatever the reason for taking out a loan, it is important to bear in mind that repayments will stay at the same level for the duration of the account. It is important, then, to be completely sure that the amount you pay to a loan will be covered for the life of the loan. Many loans have attached insurance policies (the cost of which is attached to the balance) and if you are unable to work through ill health these can cover the monthly payment. However, you should read the small print on the terms of the insurance policy, because many insurance companies will try everything they can to avoid paying out.

If you are unsure that you will be able to keep up payments, it is essential that you look for other ways to raise the capital you need. As well as seriously infringing upon your daily solvency, poor credit history will affect your ability to get credit in the future.

Is Life Fantastic With Plastic?

We in society have become used to using plastic cards to pay for our purchases, because it promises convenience, speed and reassurance about our situation. While today we may not have the money to pay for that stereo or that holiday, a quick call to a bank can be all it takes to allow you to make the purchase one day and worry about paying it off in the future. When used correctly, credit cards can be beneficial for the user, as they allow a situation where you can control the cost of living. They are, it should be said, best used as a kind of progressive weapon against delays. The problem comes when one is used as a shield against debt. The thing they simply fail to offer is thinking time.

With a credit card, you can make a purchase and not have to worry about the money not being there. It is there, it just isn’t yours. As long as you can replenish that money within a suitable time period, no-one will get angry. However, there is no way of the vendor knowing that you will be in a bad position to actually pay for the purchase, and indeed they have no reason to care. It is the bank who will have something to say about it when you fail to make payments that they were expecting you to make. And the thing about that is that banks have a way of making their displeasure very clear indeed.

Where The Banks Have Gone Wrong

It would be very simplistic to place the blame for the global financial crisis at the door of one financial sector, or at the feet of any organisation operating within that sector. The reason why the finances of so many major countries are now unstable cannot be pinned down to one thing, but part of it is certainly attributable to unwise lending by banks and other financial institutions. While it could not securely be argued that this was what caused the financial crashes we have seen, there is no doubt that it hasn’t helped.

Quite apart from anything else, there is a sense that risky lending looked like a good idea for the banks and risky borrowing looked like a great idea for the customers up until very recently. For the banks, the idea was that the risks would bear greater rewards as money made more money and for the customers it seemed to be a case of all their Christmases coming at once. As it turned out, there were big warning signs that everyone ignored – leading to the banks having tons of bad debt on their books and the customers being hamstrung in a place where they suddenly had greatly reduced means and a raft of payments to meet.

There are other reasons for this crash, of course, and no-one would try to deny this. But the upshot for most of us is that banks will not be so free with their money, so borrowing from now on has to be extra diligent.

Irresponsible Lending, Spending and Borrowing

One of the major criticisms of banks which emerged as the extent of the global credit crisis became clear to everyone was that they lent money irresponsibly to too many people. Most of us, if offered the chance to have a spending pot of more money than we earn in a month, would be sorely tempted. And maybe that is the problem. There are those who argue that credit should only be given to those who can show they don’t need it. While this is a tad harsh (short term borrowing can be a responsible solution in some cases), it might at least be argued that credit should only ever be given to those who have never abused it in the past.

Part of the problem is that banks saw fit to speculate on the continuing boom in the global economy and felt that by lending to people who were looking to become upwardly socially mobile they could cash in on those people being successful. However, for some potential borrowers it became clear that banks were taking risks and lending to people who had little hope of comfortably repaying the debt. Knowing that some contingency has to exist for these eventualities, people took advantage of this profligacy to take out big loans and enjoy a short-lived period of financial windfall – knowing that even when the money ran out they would simply be back to living the life they led before. Banks seem to be learning the lesson – but look at what it took for that to happen.

Can You Get Credit?

One thing that has been made very clear to people over the last few years is that taking out credit comes with some risks attached. If you are borrowing either on a credit card or a loan, it really is not advisable to borrow “as much as you can”, when the amount that you can borrow tends to be dictated by the bank or institution from which you borrow it. There is some link between your monthly income and your credit rating, and the amount that the banks will lend to you. However it does not seem to apply in the same way with all banks.

Most people who have worked in credit control will tell you of an account they saw which showed a customer defaulting on a credit card where their credit limit was pretty huge and their monthly salary was comparatively small. Due to the limitations of the process used to judge some bank’s credit limit provisions sometimes there will be excessive money lent to people who give in to the temptation to spend it even knowing that they cannot afford to pay it back.

Alternatively if you have not shown a good history of paying back credit when you get it, you run the risk of either not getting credit or getting it in woefully short amounts. Depending on your reasons for needing the credit in the first place this may not matter so much – indeed it may be good news – but it is still something to be aware of.

How Times And Views Have Changed

There was a time when to talk of having debts was like openly admitting that you liked to pull the wings off flies. People simply would not confess to having debt, even if it turned out that they did have debts, and quite substantial ones at that. Now, it really doesn’t seem that way. Debt is seen as an accepted hazard and a fact of life by many people – and there have been some good outcomes to that, with many responsible people on lower incomes able to spread the cost of necessary outlays. The problem comes when the debt cannot be managed.

It might be more beneficial for everyone if we started to differentiate more between kinds of debt. Rather than assuming that all debt was bad, if we could all tell the difference between unmanageable and manageable debt, necessary and unnecessary debt, then we would be able to judge when debt was an acceptable step, when it was the best option, and put together some ideas on how to stop people getting into damaging, excessive debts of the kind which can blight a life.

It would not be true to say that the present-day prevailing view on debt was the right one. Nor would it be right to say that the old-fashioned attitude was strictly fair or correct. What we can hopefully all agree on is that debt awareness is more important than anything, and that we should all learn to apply the common sense that none of us are shy of handing out to everyone else.