Matthew Teifke On How Austin, Texas Became The Hottest Real Estate Market In The Country

Austin, Texas is in the middle of a real estate boom. Having been voted the highest growth market by Yahoo Finance in 2021, the city continues to draw tech professionals, artists, and everyone else that is looking for a better quality of life. Matthew Teifke from Teikfe Real Estate has been a market leader in the different Texan cities of Austin, Houston, San Antonio, and Corpus Christi.

Matthew Teifke - Austin Texas

Born and brought up in Texas, Matthew Teifke realized his passion for dealing in everything real estate from a very young age. The Round Rock native started early, gaining his real estate license at the tender age of 18. He was active in dealing with his family properties and was clear that this was all that he wanted to do for the rest of his life.

The principal reason for starting Teifke Real Estate was to bring financial freedom for everyone from buyers, and sellers to even agents and consultants. The company was formed in 2015-2016 by Matthew with the aim of catering to the Texan cities of Austin, San Antonio, Houston, and Corpus Christi.

With the belief that Texas was going to be the hottest real estate destination in the country in the coming years, Matthew brought in his friend, Alex Coffman. Alex was equally passionate about real estate and jumped on board to join Teifke Real Estate as Co-Founder. Together, they ventured into offering diverse real estate services for the Texan housing market.

The Growth of Austin, Texas as one of America’s Premier Real Estate Market

According to Matthew Teikfe, this was a long time coming. He states, “Texas has always been a great place to live, raise a family, explore employment opportunities and maintain an affordable standard of living.” He attributes that the interest of real estate investors in cities like Austin, San Antonio, and Houston is not something new.

“The potential was always there. People kept migrating to cities like Austin from different parts of the country. Look at the migration numbers that Austin sees every single day. People know that this can be a place that can help them live well on an income that would be difficult for them in places like San Francisco or New York City.”

Matthew is right. According to a report published by U-Haul, 145 individuals are moving to Texas every single day. The numbers match up and show that Texas has been attracting individuals from the West, Midwest, and other parts of the country. Fewer taxes (Texas does not have state personal income tax), sunshine, and larger living spaces are major factors.

There is no denying the fact that big tech companies are lining up to shift operations and offices to Texas. Look at Tesla’s Elon Musk who recently announced that they are investing more than $1.1 Billion in building a new headquarters in Austin. Oracle, Facebook, PayPal, AMD, and Texan native, Dell already are generating thousands of new jobs in the state.

As Matthew opines, “You have these young tech professionals that are moving in with their young families, children and pets and exploring great school districts in Austin. They work as software developers or game designers. They earn well, have always dreamt of having a house and want a far more relaxed living condition as compared to NYC or Silicon Valley.”

Teifke Real Estate: The Beginning of the Promise of Financial Freedom

There are tons of real estate companies in Texas. Matthew knows that. He still feels that what they are trying to do at Teikfe Real Estate is vastly different from what some of his peers are up to. More than just securing a commission here and there, Teifke Real Estate is geared toward achieving financial freedom for everyone that is involved in this ecosystem.

As Matthew puts it best, “Our goal is to help different real estate agents attain financial freedom. We want our sellers to get the best and most realistic prices for their properties. Likewise, we are also committed to helping all our buyers and investors get the best deals and prices on the market.” He truly believes that there can be a situation where everyone can be a winner!

This shows how Teifke Real Estate has been able to shape its various offerings. Let us shed some light on what they offer, as has been on the Teifke Real Estate website:

  • Coaching present and prospective real estate agents
  • Buying assistance with regard to residential, commercial, and investment properties
  • Selling assistance for residential, commercial, and investment properties
  • Assisting with construction, renovations, and remodeling work
  • Sourcing deals and arranging finances for prospective buying or selling
  • All-cash house purchases to help sellers that are looking for immediate help

Both Matthew and Alef run an excellent podcast on the real estate markets. Together they help enlighten and educate audiences on the ins and outs of buying, selling, and investing in the Texas real estate markets.

Matthew Teifke’s personal take on Austin’s Real Estate Situation

Every possible marker, news journal, or real estate magazine points to the growth in the Austin real estate markets. Matthew believes that this is the best time to get in on the action. You do not want to end up in a FOMO situation later on.

While the growth is there, it is still possible to get your hands on your dream house in Austin, Texas. “Look at the median house prices in Austin. It is still somewhere around $470,000 if I am not wrong. You give this another year or so and you are looking at a figure of $700,000. Just wait for Tesla to open and you will see 10,000 highly paid tech professionals in an all-out bidding war.”

Matthew is right. Prices are rising, but when you compare the house prices in Austin with somewhere like San Francisco, NYC, or even Washington, you see that the affordability factor is still there. Not for long though. Waiting is going to do no good since inventory is always in short supply as compared to the demand, which will always keep increasing.

Matthew suggests that if you have been an individual or family that was waiting for a high-growth real estate market, one where you will be able to double your investments in three to four years, Austin is the place to be right now.

We couldn’t agree more.

A Guide to Investing During High Inflation

When you invest, no matter the larger economic conditions, you always want to ensure you’re diversifying your portfolio.

investing

This is a concept that major corporations and wealthy people understand well. For example, corporations like UBS invest in blue-chip art. Many of these banks and global companies have full-time curators for their collections in order to diversify their investments.

While you may not be a multimillionaire or a global bank, the principles of diversification are critical to a good investment strategy. Your approach may also need some tweaking during periods of high inflation, like what we’re in now.

The following are things to know generally about inflation and how it might affect your investment strategy and approach to diversification.

An Overview of Diversification

A diversified portfolio is one with a broad mix of different types of investments. The longstanding wisdom was a 60/40 portfolio where you allocated 60% of your capital to invest in stocks, then 40% of your portfolio went to fixed-income investments, such as bonds.

There are opponents of this approach who feel there should be more stock exposure, particularly for younger people.

Overall, with a diversified portfolio, you might hold a wide variety of healthcare, energy, and tech stocks, as well as some from other industries. You don’t need exposure to every sector, but you should have a pretty varied portfolio made up of a healthy mix of quality companies.

You also want to have a combination of divided, large-cap, small-cap, growth, and value stocks.

Then, in addition to diversification in your stock portfolio, you want investments included in the mix that aren’t correlated. That means these investments don’t go up and down with the stock market.

Crypto, art, gold, bonds, bank CDs, and real estate are all examples of non-correlated investments.

What to Know About Inflation

Inflation is an increase in the overall price of goods and services. Inflation is measured as an annual percentage increase. The annual percentage increase is reported in the Consumer Price Index or CPI, which the U.S. Bureau of Labor Statistics prepares monthly. When inflation goes up, purchasing power goes down.

The rise of inflation affected fixed-asset values, and companies will raise their prices to compensate for their own rising costs.

As a consumer, you’re paying more across the board for goods and services. If you have certain assets, like a house, inflation can be a good thing. Your income may also rise, although maybe not enough to keep up with inflation.

Inflation increases the cost of living, and if it gets too high, it harms the economy.

The effects on the economy largely depend on the type of inflation. Walking inflation ranges from 3-10% a year while creeping inflation isn’t as dramatic. Running inflation indicates very aggressive pricing increases that might be leading to hyperinflation.

Rising prices might indicate the economy is growing very quickly. People then tend to stockpile and overbuy because they want to avoid future higher prices, and suppliers can’t keep up with demand, nor can wages. Everyday goods and services could be out of reach for many people in situations with severe inflation.

Inflation doesn’t always have to affect everything in the same ways. For example, during the financial crisis of 2008, home prices went down almost 20%, but gas prices doubled.

Mild inflation can be good for the economy because consumer spending is propelling economic growth.

The Federal Reserve sets an inflation target, with a healthy core inflation rate considered around 2%, taking out the impact of energy and food prices.

Other specific effects of inflation can include:

  • Inflation can have negative effects on retirement planning. The amount you target to save has to go up in order to pay for the same quality of life. Basically, your savings is going to buy you less over time. You have to start saving as soon as possible for retirement to utilize compounding interest, and you should use other strategies as well to hedge against inflation’s effects.
  • Treasury bonds are fixed-income assets that pay the same every year. If inflation goes up faster than the return on this asset, they’re less valuable. People will then try to sell them in response, bringing down their value further. The U.S. government has to issue higher Treasury yields to sell them, so mortgage interest rates often go up as a result. Higher rates lower the value of your investment, and the interest on national debt rises.
  • If you have a fixed-rate mortgage, inflation can be beneficial. The value of the monthly payments you make on your mortgage goes down over time.
  • If you have debt with a variable interest rate, you’re probably going to see that your minimum payments go up as inflation increases. This is most often the case with high interest credit cards but can apply to mortgages with a variable rate.
  • If you’re trying to buy a house, inflation has negative effects because their prices will typically rise along with inflation.

How Do You Invest to Protect Against Inflation?

When you’re an investor, you have to think about the best ways to hedge against inflation. You can plan for it by investing in asset classes that outperform the market during times of high inflation.

The following are particular investments to consider to protect against inflation:

Art

When you invest in art, it is a good hedge against inflation, and it also diversifies your portfolio and reduces volatility.

Many investors assume they’re not wealthy enough to get involved in the art marketplace. In reality, it can be accessible for anyone.

There are even new platforms that allow investors to own a piece of blue-chip art, much like an ETF.

Art is an asset class not correlated to other major asset classes, so this means if you have traditional assets like stocks or bonds that aren’t doing well, your art investments are more likely to hold their value.

Since art can be a physical asset, it tends to do well in inflationary periods.

Of course, any investment carries risks, but unlike equities which are sensitive to movements in the market, the art market as a whole has been growing steadily.

There are downsides you have to think about, like the lack of liquidity. Selling a piece of art can be time-consuming, which is why options that allow you to buy fractional shares are appealing, in addition to the lower point of entry.

Gold

Gold can serve as a hedge against inflation, and some describe it as an alternative currency, especially in places where the value of the native currency is declining.

Gold is a physical asset that largely tends to hold its value.

If you want to invest in gold to protect against inflation, you have three primary options. You can buy the physical asset, meaning you buy actual gold. You can buy shares of an ETF or mutual fund that follows the price of gold, or you can trade in the commodities market. Trading futures and options in the commodities market is usually left best to highly experienced investors.

While gold is an option, it’s not a perfect inflation hedge. For example, when inflation goes up, central banks will usually raise interest rates. If you have gold, it doesn’t pay a yield, so it’s not going to have as much value as an asset that does, especially when rates are higher.

Commodities

Commodities are a category including things like grain, electricity, oil, beef, orange juice, and natural gas. Commodities also include foreign currencies and financial instruments.

Commodities are an indicator of future inflation, so as their price goes up, so does the price of the products it’s used to produce.

You can invest in commodities through an ETF.

They’re very volatile and highly dependent on supply and demand, so it’s best suited to more sophisticated investors.

Real Estate Investment Trusts (REITs)

A REIT is a company that owns and also operates real estate-producing income. When inflation rises, property prices and rental rates tend to go up. When you invest in a REIT, it’s a pool of real estate. As an investor, you’re paid dividends.

REITs can be good to include in your portfolio, particularly during inflationary periods, but they can come with some downsides. For example, when interest rates go up, Treasury securities become more appealing, taking funds out of REITs. REITs also have to pay property taxes, which can be as much as 25% of operating expenses.

Real Estate

Finally, investing in real estate can, in some cases, be a hedge against inflation. You can earn income by renting out a property because, as we’ve touched on, when inflation goes up, typically so do property values. That means if you’re a landlord, you may be able to charge more for rent.

You can keep up with rising inflation.

Of course, this isn’t a guarantee, and real estate isn’t liquid. Plus, if you buy a property, it’s going to require maintenance, and the costs can add up fast.

The best thing you can do when it comes to investing during inflation is to think about your goals and the direction you’d like to take and make sure you have a good mix making up your portfolio.

8 Sure-Fire Stock Investment Strategies

The lure of investing in the stock market is interesting and even a little glamorous for most people. The idea that you can put your money someplace and have it grow is intriguing. So, you might be surprised to learn that only 12% of the UK population has invested in the stock market. Are you interested in joining others in investing in stocks? Does the idea of growing your money through the stock market sound alluring to you? While for many people, it sounds like a good idea, most don’t have any idea how to get started. If you’re looking for investment strategies to buy into stock and shares, read on for more information.

1. Informed Decision Making

If you want to make money in the stock market, you need to have some knowledge. Then you need to use the knowledge to make informed decisions. 

Many people approach investing using simple name recognition. Oh, I recognize the name of that company, it might be a good idea to buy their stock. Yet, they don’t really know anything about the business model of the company or their track record of making money. 

Before investing in the stock of a company, you need detailed information about the history of the company and its projections for making money. 

2. Following the Herd

Don’t make stock investment decisions just because someone you know did. Don’t follow the pack when it comes to making stock investments. 

If everyone chose to make stock investments based on what others were doing, they all should hope the first person who led the pack knew what they were doing. 

It might be easy to make stock purchases because your family member or neighbour made the same purchase. But the truth is, you need your investment choices to be more informed. Refer back to number one on this list and do your homework.

3. Avoid the ‘Time the Market’ Approach

You, nor any other expert, can predict the ebb and flow of the market. Some who try to make a quick stock market buck will want to time the market and get in during a tight window. 

This approach over the long term just doesn’t work. You want to be in the market for the long term, it’s ultimately how you’ll make money. You can’t really guess the highs or the lows. 

Instead, invest in and be prepared to invest in a way that’s for the long term. Ultimately, most experts agree it’s how you really make money in the market. 

4. Understand the Business

Most people will say they are investing in the stock market. This may be true but ultimately as an investor, you want to invest in a business versus a stock. 

You should understand the business you invest in. Don’t invest because you know the name, know the business they are in instead. 

When you understand the business, you’re likely to understand the factors that might impact the success, or lack of it, of a business. A business’ success can impact its stock prices, after all. 

5. Invest With Discipline

The simple fact is that the stock market can be more volatile than other types of investments. What makes it volatile can also be unexpected making it hard to plan for. 

If you invest in the stock market, you should approach your investment with great discipline. This means you make fact-based, educated investments and you don’t get skittish during the inevitable highs and lows of the market. 

You should invest and be patient for your money to grow over the long term

6. Avoid Emotional Investing

Most people would agree it can be challenging to not get emotional about their money, good or bad. You should not make emotional investment decisions.

You don’t want to make a decision to buy or sell based on an emotional decision. It’s a quick way to lose money. 

Many people have fallen into the panic trap while investing and made bad decisions that have cost them money. 

Go back to the idea that your investments should be based on informed and knowledgeable decisions, not emotional ones. Keep your expectations realistic and understand the market can be volatile and you need to be careful to avoid emotional decision making.

7. Think Diversification 

While it is important to be knowledgeable and informed in your decision making and you want to invest in companies you know. Another key to successful investing is diversification. 

Diversification means you create an investment portfolio that is varied enough to reduce your risk in the market. If one area of stocks struggles, you have enough diversity in your investments to handle the ups and downs that naturally occur with stock investing. 

One important consideration when investing is your personal threshold for risk. All investing involves risk.  Often the greater the risk, the greater the opportunity for making money, or losing it. You shouldn’t invest with a level of risk that will make an emotional investor. 

8. A Financial House In Order

Investing for the future through the stock market, or other means is a great idea. Yet, it doesn’t make sense to begin investing money if you don’t have your own financial house in order. 

Let’s say you have significant debt from credit cards. It doesn’t make sense to use your assets to invest only to make a smaller percentage than you are paying in interest.  Instead, before you start investing, pay down debt and make sure you have the assets in place to make the investments, especially over the long term.

Investment Strategies for the Stock Market

Use smart and calculated investment strategies to grow your money in the stock market. Don’t make emotional decisions and be prepared to invest over the long term. 

For more financial information and help with your wealth management, we can help. Visit our blog for more opportunities to learn and plan your financial future. 

5 Easy Ways to Save On Your Car Insurance

Photo Courtesy of Pixabay.com

If you own a vehicle, paying for car insurance is an unavoidable expense, but that doesn’t mean that you have to spend more money than necessary. If your premiums have gone up or you are looking for insurance for a new car, there are ways to get a lower price and cut back on your budget.

With the proper research and communication with your broker, you can save a bundle on your car insurance. Not all insurance companies are created equally, so if you are tired of overpaying with your current company, it may be time to start shopping around.

Reputable companies like My Choice Financial can help you find the coverage you need for an affordable price. Let’s take a closer look at a few easy ways to save on your auto insurance.

Shop Around

You may have been dealing with the same insurance company for many years but that doesn’t mean that you are getting the best price. If you are unhappy with your current premiums or are shopping for a new policy, it’s best to do your research. Take some time to do an internet search to compare prices and policies. Keep in mind that the lowest price isn’t always the best option; you need to consider what you are getting for the price. Get at least three quotes before you make your choice.

Bundle

One of the easiest ways to reduce your insurance costs is to bundle your policies. If you are dealing with multiple companies for your personal policies, you could be wasting money. Finding one company to which you can entrust your home, life, and auto insurance can save you money.

Discounts

Insurance companies often have multiple discounts that they don’t necessarily advertise. In most cases, if you want to find discounts on your insurance, you will have to ask your broker directly. Most insurance companies have typical discounts, including:

  • Seniors discount
  • Military or veteran discount
  • Safe driving discount
  • Loyalty discount
  • Multiple vehicle discount
  • Annual payment discount
  • Low mileage discount

Increase Your Deductible

When you have to claim your insurance, you will be required to pay a deductible amount. Most people prefer to keep their deductible costs at the lowest rate, which is generally $500. If you want to save money on your premiums, you can bump up your deductible amount. This means that you will need to have money set aside to pay for your claim, but your premiums will be reduced throughout the year.

Pay Annually

Insurance companies reward their clients that choose to pay their premiums all at once on an annual basis. You can save more than 10% on your overall insurance costs if you pay annually on your policy.

Car insurance is an unavoidable expense if you own a car. Every state has made it a law that you must have a minimum policy on your vehicle. If you want to save some money on your insurance costs, try some of these tips to help you save.

Money in the USA

Money in the USA

Taxes

Nearly all working U.S. citizens are required to file their income tax returns with the Internal Revenue Service (IRS) each year. Everyone in the U.S. has a Social Security card, which helps record wages and income for tax purposes.

The main types of taxes are FICA and income tax (not to be confused with Payroll Tax). If you are in business, you need to be well versed in this, information to learn about the types of taxes available on this blog post.

FICA includes a Social Security tax and a Medicare tax on the health insurance program for the elderly and disabled. The Social Security tax is 6.2% and is paid only on income up to $132,900 a year; Medicare is 1.45% and is charged on all annual income.

As for the income tax, the tax rate rises with income and ranges from 10 to 37%. The federal income tax system in the states is progressive. The amount of tax differs depending on whether you are single, married, or head of household.

Medicine

There are both public and private medical clinics. The public clinic will ask about your income level when you fill out the form. If your income is less than $1,000 per month, each visit to the doctor will cost $35, to be paid immediately at the time of the visit. Tests can be paid in installments.

At a private clinic, the standard cost of a doctor’s visit in the absence of health insurance is $150. Things are more complicated with dentistry: it is much more expensive. It costs $200 to $500 to $500 to $500 to $1,000 to fix a tooth and $500 to $1,000 to put a crown on.

Loans

In our country it is very important to have a good credit history, otherwise, they will not rent a house and may not even be hired for a prestigious job.

It is interesting that most average American families live “in debt” and take out loans even for small purchases.

Credit histories are being scrutinized now, especially after the 2008 crisis, but if there are no problems with that, getting long-term loans with minimal interest and a fixed rate is relatively easy.

Housing

Approximately one-third of one’s income is spent on rent or mortgages, utilities, and home improvements.

The approximate cost of renting a 2-bedroom apartment in Florida is $1,200 to $3,000 a month, depending on the city and the area. Lodging most often rents without furniture.

The cost of buying a property is from 200,000 and up, depending on location and size.

Nutrition

Food is the third most expensive item in most Americans’ budgets. This spending varies by social and marital status and state of residence. For example, in California, Florida, and New York State, people spend about the same on meals “outside the home” and “at home,” while people in the central states prefer to eat at home.

Transportation

A bus ride costs $1.30 to $2.25 depending on the route; a subway ride costs $2.25. There are special prices for low-income people. It is also possible to save a little money and buy a bus pass.

Florida, like most states, has an underdeveloped public transportation system, so the main way to get around is by car.

Conclusion

·         Being law-abiding is very important. Paying taxes on time is sacred.

·         Every second invests in the U.S., preferring safer and more traditional investment instruments.

·         Medicine is expensive here, but you can always buy insurance or pay for medical services in installments.

·         Housing and transportation costs consume a large part of the budget.

·         Many Americans traditionally take out loans for housing, cars, starting businesses, and other needs.

Otaviano Canuto on Commodity Price Cycles

Otaviano Canuto, Policy Center for the New South

Commodity prices go through extended periods during which prices are well above or below their long-term price trend. The upswing phase in super cycles results from a lag between unexpected, persistent, and upward trends in commodity demand, matched with a typically slow-moving supply. Eventually, as adequate supply becomes available and demand growth slows, the cycle enters a downswing phase.

The latest super-cycle of commodity prices, starting in the mid-90s, reaching a peak by the time of the global financial crisis, and getting to the bottom by 2015, can be seen as associated to the developments of globalization that we have already dealt with in this series. More recently, some analysts have spoken that we might be on the verge of a new cycle, super-cycle or not.

Make Smart Investing Choices With These UK Stock Market Tips

It’s been a tumultuous year for the UK stock market to say the least. Between Brexit and the Covid-19 pandemic, March led to some record-breaking highs and lows in the FTSE 100 due to global uncertainty. While some stock exchanges have recovered significantly, the UK stock exchange remains burdened. But it’s not all doom and gloom. There are still many ways to make smart and safe investments on the London stock exchange in 2021. We’ve put together our best stock market tips to help you know how to invest with confidence.

Knowledge is Power

We’ll start with a note for newcomers, although it could also serve as a reminder for the veterans of the exchange. Due to all the hype and chaos around the potential GME short squeeze, many new investors entered the market this year. 

This is great news that more people feel empowered to invest, but it’s so important that investors have the knowledge they need to invest well.

By this, we don’t mean knowing everything there is to know about each stock and where it will go. Nobody knows this and anyone who says they do is kidding themselves. What we mean is you need to understand the terminology and mechanics of the UK stock market. 

Know your terminology and particularly synonyms for all the different buzzwords. Know which companies pay dividends. Know your different market indices.

One of the most important things to understand and accept is that past performance does not guide future returns. While analysing previous share performance and market performance can give us great insight, that’s all. They don’t guarantee the future of the market or a certain stock.

The LSE Is Unique

The London Stock Exchange (LSE) is one of the largest stock exchanges in the world, with a market value of more than £2 trillion. It’s one of the oldest exchanges in the world and comes with unique benefits and risks.

We’ll start with the good news. Because of its age and stature, the LSE is a financial hub. It’s an advanced financial market.

This makes the securities market both very liquid and stable for investors. For those looking to exchange outside the New York Stock Exchange, the LSE is one of the best options.

It’s also home to some of the largest blue chip companies such as GlaxoSmithKline, Unilever and AstraZeneca. This comes with security, so investing in the LSE comes with less risk than other financial markets worldwide. 

It’s not all good news though. The political risks of Britain are unique. While the entire world has been affected by the Covid-19 pandemic, only the UK has the additional risk of Brexit.

Though we’ve left and absorbed the initial hit and consequences, economic uncertainty remains. Not least, as Scotland and N.I polls both continue to show voters wish to leave the UK and rejoin the EU. 

Politics aside, the UK economy is a service economy. This is common for developed countries and in good times can mean more stability. But in more volatile times, commodity prices and consumer credit changes can cause problems fast. 

Much like our first point, understanding the unique risks and benefits of the LSE allows you to make safer and smarter investments long-term. 

UK Stock Market Tips

This uncertainty sounds like bad news, but it isn’t that simple. For those who already invested and faced the market crash of 2020, it seems that for now, the storm is over. For those looking to invest, it’s a bargain.

Though the market has recovered a lot throughout 2020 and into the first quarter of 2021, share prices are low. Barring another global catastrophe, they’re unlikely to be this low again for a while. It’s an excellent opportunity to invest.

This is particularly true for industries worst hit by the pandemic. Share prices in the hospitality sector remain low despite government support. With the end in sight thanks to the vaccine rollout, as well as substantial support to get to the finish line, this could be a great investment as normality returns to the UK.

Stocks that have risen throughout the pandemic may also remain a good long-term investment as consumer habits change. Online businesses such as Ocado have enjoyed strong growth for obvious reasons throughout 2020.

But research suggests the new norm will remain in some aspects. 40% of UK consumers surveyed said they would continue to spend online post-pandemic.

While this is good news for online businesses, it adds additional uncertainty to an already suffering high street. This means staple stocks that were once a safe investment remain troubled into 2021.

The best investing tips we can offer are the ones that could apply to investing on any stock exchange: plan, diversify and remain calm.

Plan

Planning for the unknown can seem impossible because it is. By plan, we mean understand the risks and rewards and plan for uncertainty. 

You cannot control how your investments perform, it’s the nature of the game. But you can control how you prepare your investment portfolio to prepare for market changes.

Planning can help you understand how long you’re prepared to invest for, what your objectives are and how your assets are spread. In a volatile market, this can help keep you sane and know when to sell.

Diversify Your Portfolio

In other words, don’t put all your eggs in one basket.

It can be tempting when you read analysis after analysis about some definite market changes. But it’s never definite and as Reddit has proven, experts come in all shapes and sizes.

This isn’t to say don’t invest when the opportunity arises but spread your investments. Over the long-term, variety and patience almost always pays far more than short-term gains. 

Diversifying your portfolio should be part of your planning. Researching company operations, competition and the wider industry will help you create a smart portfolio that will perform well throughout market changes. 

Keep Calm and Carry On

If the last year has taught investors anything, it’s that nobody can predict the market. So remain calm.

The best investors know not to react rashly to emotion. If you spend your day keeping an eye on scoreboards it will lead to overreactions to short-term changes.

The ups and downs are all normal, so ride them out and focus on your own plans. Planning and diversification can help you avoid panic selling as you know your strategies and long-term goals.

More Financial Information

The best UK stock market tips are the age-old advice applicable for any stock market. Understand your market, plan well and diversify your portfolio. For further research, our blog offers great insight into the UK stock exchange, as well as global exchanges, so make sure to check it out.

7 Common Financial Planning Mistakes That You’re Probably Making

The average household in Britain has over £15,000 in debt. You may think to yourself, well I’m not out £15,000. There’s no way I’d ever accumulate that much debt. 

Debt is often connected to large purchases like homes, automobiles, or student loans. We know about that debt. We are prepared for it. 

But the debt that creeps up over time is the trickiest. A little bit here, a little bit there seems fine. Before you know it, though, you’ve matched that £15,000 and then some. 

Don’t let small mistakes in your financial planning lead to big debt. Check your habits against the following seven mistakes that we see most often. Read through for tips on how to avoid them and what habits to adopt instead.

1. Putting Your Emergency Fund on Hold 

One of the most common financial planning mistakes is not having an emergency fund. This is enough money to cover your basic expenses for at least three to six months. 

Maybe you’re in school or working your minimum-wage first job out of university. Saving what you can, even if it’s £20 a month, makes a difference.

But over the course of a four-year degree, that £20 a month grows to nearly £1,000. And that doesn’t include interest earned from your bank!

You may be out of school and established in your career. If you do not have an emergency fund, you need to start one as soon as possible. 

Begin by sorting out how much money would cover six months of expenses (Netflix or Amazon do not count). Divide that number by how many months you can take saving up for it.

Once you have a plan, get your first payment into a bank account with a decent APY.

2. Paying Down Debt Without Saving

You may not have an emergency fund because you’re paying off student loans. You aren’t alone! In fact, in England, 1.3 million students receive financial aid each year.

But it’s imperative to keep saving even as you pay off your debt.

Loans often come with steeper interest rates. So your best course of action is to make larger payments against your debt upfront. In tandem, make smaller payments toward your savings. 

Once you’re debt-free, you can save faster. Consider saving the same amount you were using to pay off your debt each month. After all, you’ve already practised not using that money for other things.

3. Not Saving for Taxes 

Smart financial planning accounts for every expense, and that includes taxes! You try to think of everything: the mortgage, the kids’ education, daycare, pet care, investments, retirement. It’s easier to forget about taxes while planning your finances because they come up only once a year. 

When you do get your tax return, you don’t want to find yourself pulling from your savings account. Average the taxes you paid over the last five years and divide that by 12. That’s the minimum amount you should be putting away each month for your taxes.

4. Not Budgeting for One-Time Expenses 

Alright, so you’ve made an emergency fund, you’ve paid off your debt and you’ve budgeted for taxes. Well done, you! Next, we’re going to consider the other annual, one-time expenses you may not be considering. 

For example, one annual event, in particular, comes around the same time every year in December. You may recall a lot of expenses associated with it: ribbon, wrapping, gifts and cards. We’re talking, of course, about Christmas. 

It could be Christmas, Hanukkah or your child’s birthday party. Either way, make sure you add these one-off expenses to your budget. Think of it this way: a budget is also a great way to keep from overspending during the next holiday season.

5. Living Beyond Your Means

Speaking of overspending, that’s one of the easiest financial planning mistakes to make. Here’s where your consumer debt can creep up on you over time.

It starts with one handbag that’s just a little over your price range. Or a fantastic deal on that new teapot online even though you really don’t need a new teapot. It could even be buying your morning coffee at the cafe instead of making it at home. 

These £5, £10, £15 splurges here and there may not seem like much, and they aren’t if they’re one-time-only purchases. But over days, weeks and months, you’re subtracting hundreds of pounds from your budget. 

If you want to be able to splurge now and then, add it to your budget. Put away a few pounds a week and treat yourself to a fancy cafe treat once a month. Save up for that nice handbag or decide whether you can live with the teapot you already have.

6. Not Diversifying Your Investments

If you’re not investing (and you don’t have heaps of debt to pay down), you should start. It’s the best way to see your money grow over the long run.  

But one mistake we see with new investors is not diversifying their investments. What this means is putting all your money into one kind of industry. For example, investing everything you can into real estate investments. 

This isn’t a wise way to invest because it leaves you at a higher risk. If the real estate market drops, you’ll suffer a greater loss than if you’d diversified. If you’d invested in real estate as well as lumber, technology and food, for instance.

If you’re not sure whether you’ve diversified your accounts, speak with your bank or an advisor. They’ll be able to offer suggestions on ways to improve your profile.

7. Ignoring Your Company’s Retirement Plans 

And while we’re on investments, let’s talk about saving for retirement. Even if you’re in your twenties or thirties, you should be contributing to a retirement plan. 

And while we’re on investments, let’s talk about saving for retirement. Even if you’re in your twenties or thirties, you should be contributing to a retirement plan. 

Thankfully, many companies offer retirement savings plans to their employees. These plans usually take a portion of your paycheck and put it into your retirement account. Sometimes, companies will even match your contributions up to a certain number. 

Either way, it’s worth looking into! It saves you from spending that extra money and gives you an added incentive to save.

Strategies for Financial Planning

Organizing your finances may not be the most glamorous undertaking, but it is a critical one. Use these financial planning tips to help you navigate your finances with confidence.

And if you’re curious about getting started with a financial advisor, check out this article.

8 Essential Money Management Tips for 2021

Money: it makes the world go ’round. Not only do we need it to pay bills and buy groceries but to send our kids to college and eventually retire. 

The trouble with money, however, is that it’s difficult to manage. We spend it so frequently and on so many different things that we can have issues maximising its usefulness. 

This is why it’s important for you to brush up on your money management skills. Need a little help with the matter? Then read on because here are eight essential money management tips for 2021. 

1. Establish a Budget

The first thing you should do is establish a budget. This will help you see where your money is going and how much money is left over after you’ve paid all of your necessary expenses. Necessary expenses include rent, utilities, taxes, insurance premiums, groceries, gas, and the like (things that you have to pay for in order to survive). 

To create your budget, we advise you to use either a phone app or an online spreadsheet. There are all sorts of budgeting apps out there, including Mint and Personal Capital, to name just two.

Use these apps to write down the name of each expense as well as the amount of money that you need to allocate to each of them. This will show you how much spare money you’re working with each month, helping you to realise new ways of spending your disposable income. 

2. Track All Spending

In addition to creating a budget, you should also track all of your expenses. This includes non-necessary expenses as well as necessary expenses. Non-necessary expenses include but aren’t limited to money spent on hobbies, money spent eating out, money put in savings accounts, and the like. 

Only by tracking these expenses can you know whether or not you’re over or underspending in a particular area. For instance, you might find that you’re spending too much on fast food and too little on your retirement contributions. 

If you don’t track your spending, you become susceptible to making an excess of frivolous purchases. These purchases will provide you with a feeling of quick gratification but will hurt your financial standing in the long-run. 

3. Save for Emergencies

Life is unpredictable. Rarely do things go to plan. Whether it’s a perfectly good furnace that stops working in the dead of winter or an automobile that gets sideswiped by an aggressive driver, emergencies do occur. 

What’s important is that we have the money saved up to help us get through these emergencies. If we don’t have this money, we’re forced to turn to credit cards, and once we turn to credit cards, we start sinking further and further into debt. 

This is why, every month or so, you should be putting some of your money into an emergency fund savings account. Generally speaking, it’s wise for your emergency fund to equal 3 to 6 months of your average monthly expenses.

4. Contribute to a Retirement Fund

You don’t want to have to work for the rest of your life. In fact, if you’re like many people living on this planet, health issues will eventually prevent you from doing so. This is why you need to contribute to a retirement fund. 

Generally speaking, it’s wise to contribute 10% to 20% of your income to retirement, year in and year out. 

5. Take Advantage of Multiple Accounts

One of the reasons that some individuals have trouble managing money is that all of their money exists within the same bank account. As a result, they end up spending money that they would have used for other purposes. For instance, instead of using the money for future healthcare expenses, they end up spending it on fast food. 

How do you get past this problem? The answer is to take advantage of multiple bank accounts. This way, you can separate everyday spending money, emergency savings money, healthcare savings money, and otherwise. 

6. Set Goals

You should always have financial goals that you’re working towards. Whether this is buying real estate, purchasing a car, stashing money away for retirement, or otherwise, setting goals can help to keep you on the straight and narrow. 

If you don’t set goals for yourself, you’re likely to spend money on hollow purchases. For instance, you might overindulge in food or alcohol or musical performances, or athletic events. 

7. Pay Off Debt Strategically

If you’re like many people on this planet, you have debt to pay off. This could be credit card debt, student loan debt, a mortgage, an auto loan, or otherwise. In any case, you should pay it off as strategically as possible. 

First, see if you can get any of your interest rates reduced. You might be able to refinance with a different lender or you might be able to talk down one of your current lenders. It’s possible and certainly worth a try. 

Next, establish a debt payoff plan. We recommend attacking the high-interest debt first. While doing so, just be sure to pay the minimums on your other loans. 

The reason for doing this is to eliminate some of your interest burdens. The quicker you pay off the principal, the less interest you’ll have levied against you. 

8. Set Some Money Aside for Fun

While you don’t want to spend all of your disposable income on non-necessary expenses, you should still spend some of it on them. After all, if you’re not having fun in life, you’re barely living in the first place. 

It’s often recommended that you set aside 30% of your income for fun money. However, this isn’t manageable for everyone. Meet your savings goals first, and then budget for fun. 

Need More Help With Money Management? 

Money management isn’t an easy matter. It can take a lot of research and a lot of practice. If you need assistance with it, our website can help. 

We have articles on everything from business to economics to hedge funds to insurance and more. If you’re looking to brush up on your financial expertise, this is the place to be. 

Browse more of our money management strategies now! 

South Africa as a HNWI Aestination

New World Wealth in collaboration with Steyn City recently reviewed the top factors that attract HNWIs to South Africa.

Notably, South Africa is home to over twice as many millionaires (HNWIs) as any other African country. The country ranks 30th in the world by this measure, ahead of major economies such as Greece, Portugal and Turkey. Currently, there are just over 35,000 HNWIs living in SA (as at Sept 2020).

Things that attract HNWIs to SA include:

  • Lifestyle aspects: weather, beaches and scenery.
  • A large free media which helps disseminate reliable information to investors. This sets South Africa apart from most other emerging markets worldwide.
  • One of the 20 biggest stock exchanges in the world (by market cap).
  • A well-developed banking system and large fund management sector.
  • Hub for doing business in the rest of Africa.
  • Luxury food stores such as Woolworths, which appeal to wealthy consumers.
  • Exclusive areas such as Umhlanga Rocks and the Atlantic Seaboard in Cape Town.
  • Top-end estates and apartments. SA is a global pioneer in estate living and is home to many of the world’s best lifestyle estates. New World Wealth estimates that over 45% of SA HNWIs either live or have homes on estates. An additional 30% have homes in luxury apartment blocks (which have been the fastest growing residential segment in SA over the past 20 years in terms of price growth).
  • Good transport infrastructure.
  • World-class shopping centres such as: Gateway, Sandton City and the V&A Waterfront.

SA wealth stats (for Sept 2020)

  • There are approximately 680,000 mass affluent individuals living in SA, each with net assets of US$100,000 or more.
  • There are approximately 35,000 millionaires (HNWIs) living in SA, each with net assets of US$1 million or more. Most of these HNWIs are based in Johannesburg (Sandton especially), Cape Town, Umhlanga and Pretoria.
  • There are approximately 1,800 multi-millionaires living in SA, each with net assets of US$10 million or more.
  • There are 86 centi-millionaires living in SA, each with net assets of US$100 million or more.
  • There are 5 billionaires living in SA, each with net assets of US$1 billion or more.

Note: “Wealth” refers to the net assets of a person. It includes all their assets (property, cash, equities, business interests) less any liabilities.

About Steyn City

Steyn City is a luxury residential parkland residence situated north of Fourways in Johannesburg. The lifestyle resort features over 2,000 acres of indigenous parkland, ensuring that every resident has a sprawling back garden to explore.

Steyn City residents have access to a wide array of amenities and world-class facilities, which include kilometers of running and cycling track, outdoor yoga centres, a fully equipped gym, resort pools, aquatic centre, several restaurants, a world class equestrian centre and Jack Nicklaus championship golf course with award-winning clubhouse. Added to this, the development offers a forward-thinking educational campus and outstanding office premises.

All of this makes Steyn City an obvious choice for people relocating to South Africa. The development offers all that a family or even executive could possibly need, from excellent infrastructure to a highly esteemed school – all within a safe and secure setting.

At a time when many people are reconsidering their location, now that remote working means they are no longer bound to an address close to their workplace, Steyn City stands out as a destination that makes it possible for residents to enjoy vacation-style tranquility, just minutes from the city.