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Showing posts from June, 2017

Leverage Explained

It is such a common confusion among FX traders to mix up between the leverage offered to them by their broker with the actual leverage they are using. So, I decided to dedicate a post focusing just on this topic.

Leverage - what is it all about?

As per Wikipedia leverage enables you to buy an expensive product with borrowed funds. A classical use case is the mortgage one pays on his house - assuming a house costs 1,000,000€ and a person has only 200,000€, the rest he will borrow from the bank and use it to buy the house. So actually, using his own funds, he is able to control much more value than he actually has. The risk associated is defaulting on the original mortgage, as a person who can't pay and sustain these leveraged funds will loss it all and the bank will posses his property.

Leverage works both directions, on one side it enables you to control more value and enhance your profits, on the other hand, it also magnifies your losses. That is the basic, the ground which we will …

Guest Post: Hack your retirement nest egg with this one simple trick

All financial planners talk about the importance of setting goals and planning for retirement. They’ll recommend automating your savings plan with a set and forget monthly deduction. And they’ll share how to supercharge your contributions by optimizing taxes and finding your ‘latte factor.’

I’m ok with all of this but it misses a huge point. The reason most people don’t plan properly and don’t save enough is because saving requires sacrifice. Saving requires forgoing something now in favor of having more of it in the future. That’s not a bad deal but it’s not natural behavior to want to go without and most of us hate it.
Want to improve the quality of your retirement? Improve the quality of your life now.
Saving is of course very important. The sooner you start to get compound interest working for you and build a capital base that is generating cash for you, the sooner and richer you can retire. That's a fact.

But there’s a better way to look at it than just carving out savings from w…

Guest Post: Why 46% of financial planners have no idea how much they will need to retire

How do you feel about working hard and going without your whole life only to miss the one thing you can’t buy? Time. My guess is your answer is: ‘not great.’

But lots of people work hard their whole lives, save their whole lives. They live an average life and they live an average retirement. Simply because they never bother to plan.
When it comes to retirement goals you want to focus on the lifestyle, not the number
It’s often said that the state your life is in is a reflection not of your achievements but of the quality of the goals you set for yourself. That’s the truth.

The real difference between you and the most successful person you can think of is that they did what they did and you did what you did.

Success is not inherited: Steve Jobs, Larry Ellison and Jeff Bezos were all adopted. And it’s not favor: Nelson Mandela changed the world from the inside of a prison cell. It’s a question of knowing what you want and focusing on that.

Granted, knowing what you want is a tough question fo…

3 financial planning mistakes that could cost you everything

Let me give you the best financial planning advice you will ever get in just two sentences. Start early. And invest in assets that generate an income.

There are scores of blogs with advice on personal financial planning and retirement planning. You can find excellent tips on strategies for saving more, optimizing asset allocation and rebalancing, and tax optimisation and succession planning. But it’s those two irrefutable laws that an eight year old can understand that could shortcut a whole industry.

Start saving early, ideally with your parents socking away money in a trust, and you’ll have time and compound interest on your side. Invest in income generating assets – blue chip stocks, bonds and real estate – and you’ll retire earlier and richer than you could dream of. These are simple facts.

But what if that’s not the way things have played out for you? For whatever reasons. What if you had a couple of setbacks or haven’t really gotten started yet? It’s still important to look after y…