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How to Reduce the Risks Involved in Investing

For those seeking to increase their income or provide for their future, investing is an obvious choice, and once you have little ones to think of, creating a comfortable nest egg for them to inherit is often at the forefront of your mind.

The trouble is that investing can be high-risk. Although some erroneously believe that it is little more than a gamble, it is closer to a game of skill, and this means that there are always ways to reduce the danger and tip the scales of fortune in your favor.

If that devil-may-care attitude you once possessed has been replaced by a newfound maternal responsibility, then here’s how to trade with the future of your children at stake…

#1: Choose a Good Broker

One of the first things that you’ll need to do when you decide to start trading is choose a broker, and the decision you make will impact everything that you do going forwards.

The company you settle on will act as the foundation of your strategy, and this means that they ought to provide all of the tools, data, and information that you could possibly need. What’s more, they should possess a reputation without taint, and customer service par excellence.

This means that renowned names should be your first choice.

#2: Don’t Spend What You Don’t Have

Our second top tip sounds obvious, but you’d be surprised by how many people take a gamble when they shouldn’t.

The aim of investing is simply to make a profit. Although there may be times when fortunes can be made if you’ll only take the gamble of losing, it’s never worth destroying what you’ve already built, so if you can’t afford the potential losses, don’t make the trade.

Limit everything you do to moves that will be recoverable if they go wrong and you should be just fine.

#3: Use Stop Losses

Thirdly and finally, take full advantage of stop losses. These work by automatically selling a security when it reaches a certain price, thus limiting your losses on any position that starts to go sour.

They’re known as ‘the trader’s best friend’ for a reason, and if you want to ensure that ruin is never an option when you trade, implement one every time that you make a move.

If you want to safeguard the future of your little ones, protect yourself on the markets, and reduce your trading risks today with these three top tips.

Keeping Your Startup Sustainable When Newly Entering the Market

lean organizations
If your exposure is anything like mine, it’s filled with inspirational stories of small start-up business that made it big.

Maybe you’ve heard of Nick D’Aloisio, who sold his app Summly to Yahoo for $30 Million. Or Brian Acton, who came up with the idea for Whatsapp while on holiday with his friend and co-founder, Jan Koum.

However, for every outrageous success story, there are at least another 9 that fail and disappear.

Surprisingly, fewer than half of those companies failed because there was no market need for their product.

Most fail for other reasons, such as having the wrong team, or poor management.

To avoid a similar fate, here are a few things you can do to give yourself the best chance of success.

Running Lean

29% of failed startups indicate running out of cash as a major factor in their demise. For example, while it is tempting to splurge on fancy new digs to feel like you’re working for Google, there are plenty more economical options that can save you thousands. Utilizing virtual offices is a prime illustration.

Smart businesses can maintain an impressive national/regional/global presence on a shoestring and pump the money that they save back into product development and marketing.

Go Team!

Surrounding yourself with the right people is an absolutely critical part of any startup’s success.
While it is attempting to bring in friends and family to create the kind of culture and atmosphere that you want, there can be no substitute for talent, vision and drive.

Steve jobs was notoriously difficult to work for and with but who is going to question his genius and role in making Apple the juggernaut that it is?

Modelling Success

We’re not talking about the catwalk or toy planes here. So many ventures start out with amazing ideas that they could not bring to fruition because the just didn’t get the business model right.

Every Mark Zuckerberg needs his Eduardo Saverin – the guy who shares the passion and vision but knows how to make it happen on the practical and financial side.
Make sure to include someone who can chart your course and create the structure while the creative people do what they do best.

This Little Piggy Went To Market

It should really go without saying that there is absolutely no point in having a killer idea and developing it into a sensational product if nobody knows about it.
Unfortunately, too many organizations fail this critical task and end up on the scrap heap.

Business is all about communicating value in a way that gets people to buy into your vision. If you can’t make yourself heard, you will never have the opportunity to convince others that they should be joining you for the ride.

Work the Network

Networking can be a pain and sometimes seem like a waste of time, but you just never know how close you are to connecting with that one person who will make the difference between success and failure.
Maybe it’s a potential investor, collaborator, new team member or just someone who can introduce you to someone that knows a guy that can solve your problem.

Whatever the case, meet with as many people as you possible, share your dream and see what they say. All it takes is 15 minutes and a cappuccino.

The business world can make or break you, but if you follow these simple tips, you will certainly have a better chance of making it to the big time.

Are Your Weaknesses Holding Your Business Back? How to Identify and Fix Them

weakness and strength It’s the question that most of us dread the most in job interviews: “What are your weaknesses?”

Most of us try to come up with an answer that makes a positive sound like a negative (i.e., “I’m a perfectionist”) and hope that the issue never comes up again. After all, thinking about your weaknesses usually isn’t a very pleasant exercise.

That is often even more true for entrepreneurs. The very concept of entrepreneurship is to focus on your strengths and turn them into a business. Any weaknesses you might have, you can hire other people to manage. Yet it’s not always that simple.

While not having skills in, say, accounting probably aren’t going to affect your business, since you can hire a qualified accountant to handle the books, there are some weaknesses that can be detrimental to your business’s growth and success in the long run.

For example, if you aren’t skilled in motivating your employees, you may find it difficult to build loyalty and enthusiasm over time, which can lead to lower productivity and turnover.

Even if you are a sole proprietor, not understanding and working on your weaknesses can have a negative effect on your business.

It’s not always enjoyable to focus on the things that you don’t do well, but it’s necessary if you want to improve and grow your business. If you aren’t reaching your goals, or feel like you’ve hit a plateau in terms of growth, it might be time for some introspection.
How to Find Your Weaknesses

The tricky thing about weaknesses is that while some are obvious (the aforementioned accounting) others are more insidious and less obvious at first glance. It’s these weaknesses that are often the most devastating, as you don’t even know they are there – or, you might even think that they are strengths.

To help uncover these weaknesses, spend some time thinking about your career thus far, and the path your business has taken. Ask yourself some important questions:

What have I/the business failed at? Looking honestly at failures, or even less-than-stellar results, and honestly assessing what went wrong, can provide insight into areas where you can improve.
What do you avoid doing? We can be “good” at things that we don’t like doing. Sometimes, these things are unavoidable.

But take an honest look at how you approach your business and spend your time, and identify the things that you tend to avoid or put off. Consider why you don’t tackle these tasks.

Usually, if you can’t find a compelling reason, beyond “it’s tedious,” then that can be an indication that you don’t have the skills and knowledge you need to do it well.
What feedback have you received? Whether it comes from your clients, your co-workers, or your mother, feedback is valuable and can help you identify areas where you need improvement.

Look for patterns in how people respond to you or evaluate you. They might say things differently, but if the general theme is the same (for instance, you might receive a lot of feedback related to how you communicate) then you need to re-evaluate and work on your skills.

Remember, weaknesses are not simply what you don’t enjoy doing, nor are they a sign that you are a failure. They are simply areas in which you may not have the tools you need to make an impact.
Fixing the Issues

turning weakness into strength Identifying your weaknesses is important, but perhaps even more important is how you handle them.

While you can improve your own skills by using online MBA programs to learn and improve where you don’t stack up, seeking training, or making changes to your habits, there may also be times when acknowledging your weaknesses is enough.

Knowing and focusing on your own strengths – and building on them – allows you to create opportunities for others. Avoid wasting your time and talents on areas where you can’t really make a difference, and keep the motivation and morale high within your company.

You may not always be able to avoid doing anything that you aren’t great at, but you will have a better understanding of what you are capable of and where you need to get help or accept “good enough.”

The most important part of this process is being honest with yourself.

Much like interviewers aren’t fooled by your “I work too hard” spiel when you’re applying for a job, avoiding your real weaknesses won’t help you improve at all. It might be painful, but taking a good, hard look at yourself can be exactly what your business needs to move to the next level.

Investments

You probably have never considered having an investment program. However, if you put together even a small amount of money for investment purposes, you'll be set on creating a rosier financial picture for the years to come.

Investments

You probably have never considered having an investment program. However, if you put together even a small amount of money for investment purposes, you'll be set on creating a rosier financial picture for the years to come.

Tips on Investment

Work on your life goals and be committed to investing in those goals.
Have a financial plan that addresses how you expect to achieve your goals and have contingency plans.
Know where your money goes by putting together a spending plan for your income/allowance.
Build an emergency fund by having at least 3 to 6 months' worth of living expenses in an investment fund.
Develop a disciplined investment process by having a set amount of money transferred into an investment account from your bank or paycheck.
Consider investing in professionally managed mutual funds/unit trusts to get best returns.
Make sure you understand the fund you choose to invest in.
Ensure whatever you choose to invest in fits your overall goals and risk profile. So, if you are investing for retirement and have 25 years to go, you can afford to opt for riskier stocks and shares with greater long-term growth potential.
Spread your investments. For a balanced portfolio, it's a good idea to invest in more than one asset class.
Types of investments you can choose from in Kenya are bonds/debt securities; equities i.e. stocks and shares; mutual funds/unit trusts; fixed deposit instruments; real estate; business ventures.

Personal Finance Rules You Need To Live By

Looking for some tried and true ways to manage your finances?

These personal finance rules are simple but effective and will have a profound impact on your finances.
When it comes to personal finances there are so many opinions that it can be hard to decide who to listen to.

However, even with these varying levels of opinions there are also some personal finance rules that are non-negotiable.

Remember, when it comes to your money, it's just simple math. I'm a big believer in the basic personal finance equation: Income – Expenses = Savings. That's it. There's nothing else to it.

If you don't have any money left over each month, it's either because you spend too much or don't earn enough.

With that being said, here are very key personal finance rules that everyone should live by.

Rule #1: Keep Your Finances Organized

This is rule number one because we can't even have a discussion about your money if you don't know the basics of how much is coming in, and how much is going out.

While you don’t have to have a full blown, down to the last detail budget you do need to be aware of your personal finance habits. In almost every scenario of people getting themselves into debt, most have no idea how much they are spending or where their money is going.

By getting organized, you can start to change things. When you start to watch how you’re spending your money, you can start to make sure you’re hitting your savings goals each and every time

So how do you get financially organized?

Track where each and shilling comes from, how you spend it. plan on what you want to do with your money even before getting it to avoid finding yourself in trouble.. consider seeking services of a finacial advisor.

Rule #2: Spend Less Than You Earn

If you want to be financially successful, then you must spend less than you earn.

As obvious as this sounds, it’s something that many people struggle with.

How many people do you know who have to live on credit cards? Probably too many.

But here's the catch – a lot of people get caught up on “spending less”. They seem to forget the part about “earn”.

You can always earn more and the equation above still works. And don't dismiss this key aspect.

The amount of money you can cut out from your budget will always have a lower limit. You can't avoid food costs and rent.

They will always exist. However, there is no upper limit on the amount you can earn. It just takes time and effort.

You need to engrain the habit of living below your means from a young age

If you can’t tackle this then there’s no hope for your finances at all.

Rule #3: Save And Invest For The Future

Look, at some point in time, you will no longer be able to earn income.

It will happen. You can't avoid it.

For some, it will be a matter of age. You will get too old and frail to work.

For others, they might encounter an illness or disability that could prevent them from working.

And for anyone, there could be unexpected events throughout life that will prevent you from earning an income (e.g. lose your job, get in an accident, etc.).

While there are many different views on how you should invest your money and what type of returns you’re going to get, it’s common advice to start saving and investing for retirement as soon as you can.

Everyone needs to have an emergency fund, and everyone needs to save and invest for the future.

You can get student loans for college, but there are no loans to get you through retirement.

The earlier you start investing, the less money you need to save, thanks to compound interest. That’s a pretty powerful reason to get started.

Rule #4: Eliminate Debt

I hate the discussion around good debt and bad debt.

Debt is simply debt – and it means you owe someone money in exchange for something (usually interest and collateral).

In the big picture, you need to eliminate it, and the faster you do it, the more financially successful you'll be.

Debt is a drain to your monthly cash flow and is an unnecessary source of stress for most people.

Going back to that personal finance equation, debt is an expense. And for most people, it is a much higher expense that it needs to be (ideally it should be $0).

Start by eliminating high interest debt like credit cards, personal loans, and car loans. After you get rid of that you concentrate on whittling away your must accomplish obligations. Once you have this debt gone you’ll have the freedom of redirecting this money to your savings goals.

GETTING STARTED INVESTING IN YOUR 30S: TIPS FOR 30 – 39 YEAR OLD'S
Investing In Your 30s
Hey late starter! I'm glad you're here! While you might be kicking yourself for not starting to invest sooner, you're definitely not alone. In fact, 28% of most people with the potential to invest; don't start investing until their 30s. That's over 1 in 4 people.

The fact is, getting started; investing in your 30s isn't a bad thing. Yes, it would have been great to start earlier. But on the flip side, it's better than starting later!

At 30, things in your life start to dramatically change, especially when looking back at your college years. As such, it means there is a different mindset when starting to invest in your 30s. We're going to cover the main challenges facing investors starting in their 30s, as well as the key things to focus on for the future.

How Did We Get Here?
Here we are, in our 30s, and we're just getting started investing. Honestly, it's been a long path here for most - so congrats on making it. Too many people get bogged down in life that they don't even start investing until it's too late.

Luckily, getting started in your 30s still leaves you plenty of time to save for retirement and the future.

But how did we get here? For most, it was a combination of life events:

You didn't know what you wanted to do after high school and put off college
You didn't find a career after college and bounced around various low wage jobs
You had unexpected life events that set you back and prevented you from earning more
You had positive life events, such as a child, that prevented savings
Honestly, the list of reasons is infinite, but the story is the same: you simply never had the means to save and invest until now.

So, now that you're ready to go, let's get started!

Balancing Investing With Life Events In Your 30s
The tough part about getting started investing in your 30s is that your 30s is typically filled with major (and expensive) life events.

Some big events include marriage. The median age for men to get married is 29, and women is 27. That means a good portion of millennials are getting married in their 30s.​ And with the average cost of a wedding at 500,000 and above , that's a big expense to stomach.

Also, many people are waiting to have children as well. The average age at which women are having their first child continues to rise. According to the CDC, in 2014, over 30% of women were in their 30s before having their first child - the highest it's ever been.​ With the average delivery cost reaching $10,000, and the estimate that it costs over $245,000 to raise a child to age 18, it's no wonder people are delaying these expenses until later.

Finally, all of these events are typically coming at a time when people are just starting to earn a little more money at work, and have gotten their student loan payments a bit more manageable. ​

So, how do you overcome these major life events while still investing for the future? The goal is financial balance. You can do both - save for the present and save for the future. But it requires a little more thought and effort.

In your 20s, you could basically stash as much money away as you could afford without giving any real thought to other priorities. However, in your 30s, you have to play the game of financial balance.​

Understanding Your Goals & Being Real With Yourself
So, the real question becomes - how do you figure out your goals, and how can you be honest with yourself in achieving them?

For most people, you goals should be:

Take care of your immediate needs for yourself first
Ensure you're taking care of your family
Save for your future
Plan for big events
Let's start with taking care of your immediate needs first. This means ensuring that you have at least a 6 month emergency fund already saved. If you don't, this needs to be your primary goal.

You also need to ensure that you're financially organized. The only way you're going to be successful in saving for your future is if you keep accurate records and know where all of your money is. If you don't already have a good system in place, look at using a free tool like Personal Capital to keep track of all your bank accounts.

Once you've taken care of yourself, it's important to ensure that you're taking care of your family. This is very important, because nothing you do to build wealth matters if you're just going to leave them screwed if you die. When I'm talking about taking care of your family, you need to have the following completed:

Will - This document tells people what happens to your kids if you die
Trust - This document helps keep the money straight when you die
Life Insurance - This can replace your income if you die so your family doesn't become homeless
Disability Insurance - Most people forget about this, but what happens if you get in a bad car accident and can't work?
Disability insurance can replace your income so your family can live.
Once you have these essential tools in order to protect your family, you can finally start looking at saving for your future.

For most people, the main goal of your 30s should be to contribute the maximum contributions allowed for both a 401k or 403b, and an IRA. If possible, see if you can save more than that. The trouble is, you do have a little bit of catch-up to do since you didn't start in your 20s.

And finally, once you've taken care of the above items, you can look at balancing in life events. Only use the money left over after saving for retirement to plan for things like weddings and vacations. These "fun" things have a lot of flexibility when it comes to budget - but your future doesn't.​

Do You Need A Financial Advisor?
When you're in your 20s, it doesn't make a lot of sense to meet with a financial advisor. There simply isn't enough they can do for you to make it worth it. However, in your 30s, it can make sense to meet with a financial planner to discuss creating a plan if you don't feel comfortable doing it yourself.

We recommend using a fee-only financial planner to put together a financial plan for you.
The bottom line is you want to pay for a service, and not be concerned about any potential conflicts of interest.

We recommend talking to a financial planner around life events. The reason? The same financial plan should work during the same period of the life event. For example, if you create a financial plan as a newlywed, the same plan should work for you until you have children.

Here are some good life events to think about meeting a financial planner:

Getting Married
Changing Careers (with significant compensation changes)
Having Children​
Paying For College
Approaching Retirement
In Retirement

The best order to save for retirement is:

Contribute to your 401k up to the company match
Max out your IRA to the annual contribution limit
Go back and max out your 401k to the annual contribution limit
If you qualify for an Health Savings Account (HSA), contribute to the max and treat it like an IRA
If you earn a side income, take advantage of a SEP IRA or Solo 401k
Save any excess in a standard brokerage account
How Much Should You Invest?
So, how much do you need to be saving and investing in your 30s to achieve your goals? Well... it all depends on your goals.

The trouble with starting to invest in your 30s is that it will always take more money to achieve the same goal than in your 20s. Remember, if your goal was to have $1 million at at 62, you'd need to save $3,600 per year starting at age 22.

In you 30s, assuming an 8% annual average return, you're going to need to save and invest the following amounts each year to hae $1 million at age 62:
​
Just look at what a difference a decade makes! If you just start investing $6,900 per month at age 30, you can achieve the same goal it takes you $15,300 at age 39!

This is just a guideline. I recommend that you save until it hurts - and for most, that means saving well above and beyond just $1 million. In fact, for many people, having a $1 million retirement portfolio probably won't be enough to live at the same standard they are today. So you might even want to consider raising your goal.

The bottom line here is that you need to save and invest as much as you possibly can. If you're not achieving this goal right now, figure out a way to get there quickly.​

Investment Allocations In Your 30s​
What you invest in is all about your personal goals and risk tolerance. In your 30s, the biggest way you're going to build wealth is still through saving. While you want your portfolio to earn you a "good" return, you need to select a portfolio allocation that matches the risk you're willing to have as well.

That's why we believe that you should maintain a diversified portfolio of low cost ETFs.

Don't Forget To Rebalance Your Portfolio

As you invest your portfolio, remember that prices will always be changing. You don't have to be perfect on these percentages - aim for within 5% of each one. However, you do need to make sure that you're monitoring these investments and rebalancing them at least once a year.

Rebalancing is when you get your allocations back on track. Let's say international stocks skyrocket. That's great, but you could be well above the percentage you'd want to hold. In that case, you sell a little, and buy other ETFs to balance it out and get your percentages back on track.

And your allocation can be fluid. What you create now in your 20s might not be the same portfolio you'd want in your 30s or later. However, once you create a plan, you should stick with it for a few years.

Final Thoughts
Getting started investing in your 30s is harder than getting started in your 20s. There's more of "life" to deal with, you have to save more money to achieve the same goals, and honestly you're continuing to battle uphill in work, income, and more.

However, it's essential that you start. Don't kick yourself because you didn't start 10 years earlier - realize that today is better than in 10 more years. One of my favorite quotes is:​

The best time to plant a tree was 20 years ago. The second best time is today.

why should women need to stay involved in marital finances?

WHY COUPLING UP IS NOT THE TIME TO OPT OUT OF YOUR FINANCES

If you're a women in a serious relationship now is not the time to hand over full control of the finances. Here's what to do instead.At a time when young women are making greater educational gains than their male counterparts and closing the gender pay gap, a 2015 survey finds that millennial women are no less likely to rely on their partner than previous generations when it comes to financial decision making.

Specifically, just 11% of millennial women in couples are fully engaged in financial decision making.

Which means that 89% of millennial women in couples are NOT fully engaged in their financial lives.

Despite impressive educational and career gains, when it comes to their financial futures, millennial women still seem to be subscribing (consciously or subconsciously) to the troubling notion that a ‘man is a financial plan’.

Women Need To Be Involved In Their Finances
Single, married or somewhere in between, there is almost no scenario in which it makes sense for a woman not to be fully engaged with her finances. According to the National Center for Women and Retirement Research, 9 out of 10 women will be solely responsible for their finances at some point in their lives.

If women opt out of financial decision making when they couple up, not only do they relinquish the freedom to craft their futures on their terms, they put their long-term financial well-being at risk by leaving it in someone else’s hands.

By disengaging and letting someone else take over – be it a parent, a partner or anyone else – women are more likely to feel that can’t take care of themselves if and when they someday must.

Which might explain why women suffer more financially than men after a divorce. And why women over age 65 are 80% more likely than men to be impoverished.

Let's Talk About Confidence
This isn’t so much a problem of competence as much as it is a problem of confidence.

A 2015 study found that women are 14% more likely to participate in their workplace savings plan than men. And that once enrolled, they save at higher rates than men at all income levels.

But when it comes to confidence in their financial future, just 42% of women seem to have it, compared to 71% of men.

And while women may be better than men at making contributions to their 401ks, nearly half report that they are not actively involved in investing otherwise. (And women have been outperforming male investors for a while now).

For women, who live longer and typically serve as primary caretakers, the stakes are too high to let a lack of confidence or an attitude of ‘my man is my financial plan’ stand in the way of full financial engagement.

While the financial services industry traditionally hasn’t been very female friendly, there are a number of services and communities that embrace the unique financial needs of female savers and investors. From new robo-adviser platforms like Ellevest, created for women, by women, to smaller, more intimate communities built around personal blogs, giving women the opportunity to connect to specific people and stories that resonate with them. But at the core of all of them, full financial engagement still boils down to a few universal fundamentals…

It's Always About The Fundamentals
Budgets that need to be balanced, debts that need to be repaid, savings that need to be set aside, and investments that need to be diversified. There is no part of this process that women, with a little bit of support from Google, a financial tool or two, and maybe even a financial advisor, are not equipped to do.

And let’s not overlook the value of a simple, honest and open financial dialogue either. When it comes to talking about money with someone they’re close to, 4 in 5 women say they avoid it. But couples who talk about money more frequently, report higher levels of happiness with their significant other.

Ultimately, money is a tool for building a lifestyle around your values and priorities. If anything, having those kinds of discussions with your partner can bring you closer together.

Monthly money dates for example, offer a regular opportunity to discuss goals, values and evolving circumstances, and determine how they fit into your financial plan as a couple. Annual events like the holidays or even the upcoming tax season can serve as milestones to engage in additional financial check-ins and track progress from year to year.

Fostering a regular dialogue around money can foster the confidence that can in turn foster the engagement that women, single or coupled, need to succeed in their financial futures.

At the end of the day, it’s not about the money anyway. It’s about the freedom and choices that money affords you. And when you give up your financial independence in a romantic relationship, it leaves you with less freedom and fewer choices – which isn’t good, no matter what your marital status.

After all, we’re better positioned to love our lives and everyone in them when we can fully take care of ourselves.
do not hesitate to give your feedback or enquire more.