Month: September 2020

Finance

Investors ‘freaking’ over possible contested outcome of U.S. election: poll

Author ByCFI.co Blogger

A disputed result in November’s U.S. presidential election is now the number one concern for investors – even ahead of a second wave of Covid-19 – according to a new global survey.

The poll carried out by deVere Group, one of the world’s largest independent financial advisory and fintech organizations, asked more than 700 clients ‘What is your biggest investment worry for the rest of 2020?’

A contested U.S. election was the number one (72%); the impact of a Covid-19 second wave (18%) and U.S.-China trade war (5%). The remaining 5% was made up of other geopolitical issues, including Brexit.  

735 people resident in the UK, North America, Europe, Asia, Africa, Latin America and Australasia took part in the poll.

Of the poll’s findings, deVere Group CEO and founder, Nigel Green says: “Investors around the world are beginning to freak about the U.S. presidential election. 

“But not about whether Trump or Biden wins, rather over the looming possibility of a disputed outcome.

“President Trump is already questioning the legitimacy of the election, heightening the chances of a contested result and an ensuing constitutional crisis in the world’s largest economy.

“It’s getting ugly and investors are, rightly, concerned that this will generate massive waves of volatility in the markets, not only in the U.S., but around the world.”

He continues: “Investors are telling us this is their biggest investment worry for the rest of 2020.

“It is likely that any election-triggered volatility will be highly impactful for may be only two or three weeks.

“As always, investors should remain in the market during this time.”

Rational investors, Mr Green believes, should be capitalising on any election turbulence.
 
“There are two key reasons why investors should be building up their portfolios in volatile times.
 
“First, are long-term benefits. There are many unknowns, but what we do know is that over the longer-term the performance of stock markets is fairly predictable: they go up.
 
“Indeed, for this reason, over a longer time horizon, investing in equities is almost universally recognised as one of the best ways people can accumulate wealth.
 
“By not topping up and diversifying portfolios in volatile periods, investors are pushing back the longer-term benefits they could be starting to reap.  Why forsake the long-term gains that would be generated on money invested now?”
 
“Second, the buying opportunities.  The see-sawing markets are a chance for investors to put new money into markets at lower prices.  A slump in the market means that there are high-quality equities available at more attractive prices.”

The deVere CEO concludes: “A contested outcome of the U.S. presidential election will almost inevitably send the stock markets into a temporary tailspin – and this is weighing on investors’ minds.

“I would argue, they should try and use the volatility to their financial advantage where possible and appropriate.”

Finance

6 Practical Tips to Help You Reduce Debt

Author ByCFI.co

The American economy has millions of people working paycheck to paycheck. As if it’s not enough, 80% of Americans are walking around with some type of debt to keep their head over water as a way to afford bills or pay back tuition looking for ways to reduce debt.

Debt also happens to those who have a poor understanding of finances or those who desire to meet a certain lifestyle. It can be exhausting to try to pay back what you owe when it is a lot. If you need tips on how to reduce debt and get back on track, keep reading. 

1. Learn Where You Stand

There are two types of debt a person who owes money has: problem debt and managed debt. When you are riddled with debt uncertain of how to pay it back, you are dealing with problem debt. This is because you are in a position where you take out more than what you can afford. 

The goal is to turn problem debt into managed debt so you can work to pay it back to be debt-free. This cannot happen if you do not know where you stand. The best way to be clear about your financial situation is to pull out a pen, paper, and your credit report. 

Your report will provide you a list of credit cards and loans you have, how much you owe, and whether or not you are current on the payments or not. If there happen to be discrepancies on your report, now is the time to correct it. 

2. Budget and Start a Debt Plan 

Before you contact lenders, you should create a debt management plan and create a budget to see what you can afford to pay. You may be able to pay more than you think each month if you can cut out certain expenses you do not need such as shopping. 

If you are able, you could also increase your budget by working more hours or finding another job. You can do this by yourself or you can work with a financial consultant to help add structure to your plans and guide you. 

3. Pay off Debt With the Avalanche or Snowball Method

You are in better control of your personal finances when you can order how, how much, and when you repay money you owe. There are two types of debts you may have. The first, known as revolving debt, comes from credit cards that have a monthly balance each month when you do not pay it back (in full). 

There is also installment debt that is a chunk of money you owe at once — although you pay back in installments. This is the case with mortgages, personal loans. Both can affect your credit score. It’s helpful to use the avalanche or snowball method when you are paying your debt back. 

Avalanche Method

With this method, you pay off debt from the highest interest to the lowest. Overall, you want to make at least the minimum payment, but add more money to accounts with higher interest. You continue this process to the end and doing this method helps you decrease the total amount of money you owe by reducing the interest. 

Snowball Method

With the snowball method, you are doing the opposite. You are paying back from smallest to largest. This method also works to lower the amount of debt you owe, but by eliminating debt which stops interest. 

4. Negotiate to Settle 

If you do have some money on the side or can get it, you may be able to clear the debt you owe quicker by settling on the balance with a lender. With this method, you are paying less than what you owe on the balance that the lender accepts. 

This amount may be as little as 20% or as much as 80% to 90% off your balance. The only way to figure out how much you can get off is through negotiation. Upon receiving your payment, they will show your account as paid. 

5.  Consolidate Debt

Another option to address debt is to consolidate it. A major benefit is that it can help with your credit scores. When you consolidate debt, you are rolling all your debt, including the interest rates, into one single payment and interest.

The attractive thing about debt consolidation is that you save more by having a reduction in interest so you can pay back the money you owe faster. This method is also ideal for those who find it hard to keep up with multiple payments. 

6.Do Not Add On to Debt

The last thing you want to do as you are working to repay debt is to add on to it. You should never attempt to get another loan or card to pay an existing debt. More often than not, this will make matters worse and it will be more difficult. 

This also means you need to change old habits that caused you to get in debt in the first place if you have problems spending. A good tip to avoid getting in more debt is to stop using credit cards when shopping and switch to cash when you know you cannot pay the balance back in full. Relearning to use cash rather than depending on credit cards can make a huge difference. 

Reduce Debt to Get Back on Track With Your Finances 

When you first get a credit card or loan, it can be an exciting feeling. It feels nice to be able to get something you want or pay a bill you previously could not afford to pay back. Every time you use money from a lender, you should always keep in mind the money is not yours, and it comes with interest.

When you do not pay what you owe, you will find it hard to get future approvals and notice a plunge in your credit score. There is a way to reduce debt and get rid of it when you acknowledge you have it and use the tips to get ahead of your finances. 

If you want to find more ways to keep your money in check, take a look at more blogs on the finances section on our website. 

Finance

Take Control of Your Money With These 5 Budgeting Sites and Apps

Author ByCFI.co

Talking about money is a major taboo in countries and cultures around the world, and the UK is no exception. While discussing finances with friends and family can be nerve-wracking, staying quiet about how we earn, spend, and save contributes to poor financial literacy. As a result, many of us never learned how to budget when we were young. Once you start earning a real paycheque, though, learning how to manage personal finances is crucial. Thankfully, budgeting sites and apps can help even the most novice beginners get a handle on their spending habits.

Here are five of the most helpful free and paid money management sites you should go to for budgeting tips and UK banking advice.

1. Yolt

Yolt is one of the best-known budgeting apps in the UK. It’s an open banking platform that lets you see all your linked accounts on one dashboard and track your spending from each of these accounts. You can also use the app to set budgeting and savings goals, transfer money securely to friends, and track your finances based on your payday instead of a calendar month.

The most unique part of Yolt is its stealth mode, a feature that camouflages your real balances and account information from prying eyes. Activating stealth mode will alter your standard currency and randomise other info while still allowing you to show what the app’s interface looks like.

The downside of this app is that you can’t use it on the web, only on a mobile device. There’s also a delay before transactions register in your account, meaning you can’t quite view things in real-time.

2. Money Dashboard Neon

The original Money Dashboard was a pioneer in the world of budgeting sites, but they’ve since scrapped the old interface and come out with a brand new app—Money Dashboard Neon.

Like other budgeting apps, Neon lets you connect your bank accounts to track them all in one place. It also allows you to break your spending into different categories and build a custom budget. Users can even sync their pay cycles for more accurate budgeting and schedule automatic payments through the app.

The downside of Money Dashboard is that to keep their app free of charge, they sell user data to third parties. Even though they anonymise the data and promise not to release your identity, this could be a deal-breaker for more security-conscious folk.

3. Moneyhub

The Moneyhub personal finance app is a bit different than the others on this list because it requires a paid subscription. The organisation’s reasoning, though, is that they’ll never sell your information to third-party buyers—something that’s very important when we’re looking at banking. The subscription won’t set you back much, just 99p per month or £9.99 per year, and the security is well worth the cost.

Moneyhub’s other standout features include an overview of all your financial accounts, detailed analyses of your spending, and the ability to set spending goals for yourself. You can also use the “nudge” tool to avoid missing a payment and get notified of ways to save.

What sets Moneyhub apart from the rest is the “forecast” feature. With this tool, you can add in a theoretical change to your budget (such as getting your car repaired or going on holiday) and see how it will impact your future finances. This empowers you to spend wisely and never be caught off guard.

4. Cleo

Have you ever wished that your bank accounts came with a financial advisor who would tell you exactly when you can and can’t afford something? With Cleo, the AI budgeting app, your wish can come true.

Cleo uses a healthy dose of sass and millennial humour to give it to you straight. If you’re trying to decide whether going out for a pint is a good idea, ask Cleo. She’ll analyse your current account balances and upcoming expenses to tell you “absolutely not” or “yes, but then you can only spend £15/day for the rest of the week.”

If even that isn’t enough to keep you from opening your wallet, you can always ask Cleo to roast you. She’ll come back with a flurry of memes and drag you for your financial choices (or begrudgingly admit when you’ve done a good job).

5. Emma

Emma may not be a budget planning app, per se, but it does make saving and sticking to your budget a lot simpler. Emma is, as the founders say, a “fitness tracker” of sorts that watches your transactions instead of your heart rate.

This app links directly to your bank accounts, investments, and credit cards to provide a real-time view of your entire financial state. The main feed on the home screen includes easy-to-understand summaries of your account totals and upcoming reminders. Deeper inside you can find detailed analytics, information about all of your linked accounts, and a money-saving tool that helps you find better deals on recurring bills.

Emma is unique because it applies the concept of gamification to your money. The app prompts you to complete “quests” that will help you understand how to use all of its features to the fullest. If you need more robust features than the free version provides, you can upgrade to a “Pro” account at any time.

Give These Budgeting Sites a Try and Take Control of Your Finances

Curbing your extra spending and understanding where your money goes doesn’t have to be painful. These budgeting sites make money easier to understand and—dare we say—can even make budgeting fun. If you’ve ever had questions about how best to direct your dollars or just want to see your finances displayed in an intuitive format, give one of them a try today.

The way you budget and spend your money is important, but where and how you save it has just as much of an impact. Take a look at this article for help deciding whether a commercial or investment bank is more in line with your financial goals.

Investment Management

Investing in the Good: The Impressive Rise of Impact Investing

Author ByCFI.co

Societal issues continue to get the media’s attention as many people take the fight a notch higher for a better society. But it’s all for a good cause because society starts to see good changes taking place. 

As usual, investors want to be part of the change. They’re now focusing their efforts on opportunities geared towards supporting social goals. This is where social impact investing comes in. 

Business is no longer all about making financial gains. It now involves environmental and social impact with its actions. Yes, investing is growing financial returns but for more noble causes such as the betterment of society.

Read this article and understand everything you need to know about global network impact investing and why it’s growing so fast. Let’s get started.

Understanding Social Impact Investing

If you’re new to this concept, it can be quite complex. Any information on the subject only gives rise to more questions. You can blame this on insufficient data available on the subject matter. There is not much information concerning impact investing and its profitability to either the investor or society.

But then, what exactly is impact investing?

Impact investing simply means unleashing the power of capital for everyone’s good. The main goal of this kind of investment is to generate positive social and environmental impact as well as make some financial returns.

Don’t get it confused with charity donations and social foundations. While both are geared towards helping society, impact investing is more of a win-win situation.

Impact investment focuses on helping society make some capital through your business. The capital would then address some challenges in society. Both the investor and society benefit in equal measures.

The funds usually go to noble causes such as renewable energy, environmental conservation, sustainable agriculture, and accessibility of basic services like education, housing, and healthcare. Anything deemed helpful to the environment and society calls for impact investing.

The Growth of Impact

The idea of investing with intentions beyond financial returns isn’t a new concept. There are many faith-based organizations working in accordance with their values of a better society. Catholic and Islamic organizations started this kind of investing a long time ago, and it looks like it’s not going anywhere.

The only thing that makes this intentional investing look like a new concept is that it has been known for a very long time as corporate social responsibility, sustainable investing, or socially responsible investing.

Companies have measured their performance not only on financial lines but also on how they perform along the lines of social, environmental, and corporate impact. The performance is more focused on these dimensions and how the company aligns with its values and social goals.

The type of investing is often referred to as a ‘double bottom line.’ The organization focuses on financial goals as well as its environmental and social impact. All these are aligned with their sustainable development goals.

A Growing Focus for Investors

While this kind of investing is still at its infancy stages, many global investors are continuously getting involved. Companies are coming up with their own impacting investing funds. It seems like something very lucrative in the business world as well as a noble course in society.

The Global Impact Investors Network (GIIN) estimates up to $228 billion in assets associated with impact investing firms. The figures show that this sector of the economy has been seeing tremendous growth over the past years.

Impact Investment Returns

As usual, no one wants to buy a dying horse. So, is impact investing really profitable? This is a question that many financial consultants have had to deal with many times. Of course, any serious investor will ask this question before making any kind of investment regardless of how noble it looks.

Some business people have subscribed to a common misconception that any double-edged business is doomed to fail. By this, they mean that any business that focuses on social impact and financial return will yield low returns.

Some researchers have strongly disputed this belief. They have proven that anything that is good for the environment and society is good for business. Others have proven the existence of a good relationship between investing in social, environmental, and governance with corporate financial performance.

There is a lot of evidence proving that impact investing is profitable to both the society and the organization.

Impact Investing Challenges

Like any other business, impact investing has its own share of challenges. It’s crucial to understand the challenges that come with any kind of investing and prepare for the risks involved.

This kind of business is also subject to the rules of the marketplace. The first challenge with impact is the difficulty in finding companies that meet the stringent requirement and still stick to the market rate of return.

Many businesses fail to meet all these two goals. The few that manage have to go extra miles to use additional resources and deal with great risks. You should trust your financial advisor to give you a better explanation of the challenges and the risks associated with social impact investing.

The Growth If Yet to Come

From the look of things, impact investing will continue to grow, and in the years to come, it will be the trend in the business world. The kind of investment has gained traction in the eyes of investors, and that’s all it needs to see success.

However, the future of this kind of business depends on the understanding that people will have on it. Everyone must learn to differentiate it from the philanthropic way of charity giving. You must understand that charity is no longer the only way to make a difference in society.

Now you have some knowledge of impact investment even though the concept is still complicated. Do you want to learn more about issues regarding investment, running a business, and managing your finances? Feel free to view our website for more educational blogs like this one.