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Tuesday, 18 November 2014

'Red warning lights' flashing for global economy

LONDON (AP) — The global economy's problems seem to be multiplying.

Hours after the leaders of the world's 20 most developed economies sought to boost confidence by promising to increase global output by $2 trillion over five years, Japan said it had fallen into recession.

That leaves the country — the world's third-largest economy — on a long and growing list of troubled economies. China is slowing as well, and Europe can't seem to take off.
Among major economies, only the United States and Britain are growing at decent rates, and how long that lasts depends on how much trouble their trading partners are in.

British Prime Minister David Cameron warned in an opinion piece in the Guardian newspaper on Monday that the "red warning lights are flashing" for the world economy.

Here's a look at the problems in some key economies.


This setback was not in the plan.

Prime Minister Shinzo Abe had pledged to end two decades of stagnation with a strategy dubbed "Abenomics" that included big economic reforms and stimulus. But the economy contracted at an annual pace of 1.6 percent in the third quarter after housing and business investment dropped following a sales tax increase.

The contraction came despite predictions the economy would rebound from a drop in the previous three months.

Consumer spending is faltering as the population shrinks and grows older. Household incomes peaked more than a decade ago, and workers are increasingly having trouble making ends meet with part-time or contract work.

Manufacturers, meanwhile, have lost their leading edge in innovation while shifting production to cheaper locations offshore.

Japan's weakness could hinder growth elsewhere if its companies cut investment and buy fewer imports such as machinery, electronics and raw materials. The island nation is one of the world's biggest importers of food and the third-biggest buyer of natural gas.


Growth in China, a manufacturing giant, is slowing — from 10.4 percent in 2010 to an estimated 7.5 percent this year. Explosive growth in China has been one of the primary drivers of the world economy for the past decade, so its slowdown is having ripple effects.

The question for Chinese leaders is how to let the country's economy slow to more sustainable growth rates without having a "crash landing." The government is trying to boost domestic spending while easing off its dependence on trade and state-sponsored investment.

Because China has strong trade links to the West, a slowdown would do some damage to the U.S. and Europe. Its massive manufacturing sector is a big consumer of raw materials, so weaker growth would particularly hurt commodity-producing countries like Australia and Brazil.


China's slowdown from high rates is echoed in many other emerging markets, such as India and Brazil.

Many of these countries have benefited for years from a steady flow of investment from developed economies. Because interest rates have been at record lows in the U.S. and Europe, many investors there have sought higher yields in emerging markets, where interest rates are higher.

That is changing, however. The U.S. Federal Reserve is considering raising interest rates, which will entice some investors to keep their money in the U.S. — or withdraw it from emerging markets.

That flow of money back to the U.S. can create huge turbulence in markets. It was behind sharp drops in emerging markets and currencies in February, for example.


The economy of the 18 euro countries has been struggling to grow since it emerged from recession last year. It expanded by a mere 0.2 percent in the third quarter from the previous three-month period.
Its problems are compounded by the threat of deflation — when prices fall. A sustained drop would hurt growth by encouraging people to delay purchases in hopes of better deals later on.

Government debt, meanwhile, remains high among large economies like France, Italy and Britain. That means they will have to limit spending for years, potentially stymieing growth.

"National debt levels are perhaps double what they were before the (2008) crisis," said John Whittaker, an economist at Lancaster University's Management School.

The conflict in Ukraine is also raising uncertainty, leading to sanctions between Russia and the U.S. and European Union. The impact has been visible in a drop in factory orders and business confidence in Germany.

The eurozone's combined $13 billion economy is the world's second-biggest, trailing only the United States, meaning its problems cast a pall over the global economy.
Associated Press writer Elaine Kurtenbach contributed to this report.

Wednesday, 20 August 2014

Stock market bubble warnings grow louder

Some of the brightest minds in finance are sounding the alarm about a stock market bubble.

They aren't warning of an imminent crash, but their comments should remind investors that the current bull market -- over five years long -- can't last forever.

1. Nobel Prize-winning economist Robert Shiller: Valuations at "worrisome" levels.
"The United States stock market looks very expensive right now," Robert Shiller wrote in a recent column for The New York Times.
Shiller, a Yale University professor who is often cited as one of the most influential people in economics and finance in the world, created a metric that compares stock prices with corporate profits. The metric recently climbed above 25. That level has only been surpassed three times since 1881: 1929, 1999 and 2007.

Steep market tumbles followed each instance, including the bursting of the dotcom bubble in the early 2000s. The Nasdaq still hasn't fully recovered from that meltdown.

The Yale professor sounds bewildered by the lofty valuations for the stock market, which has nearly tripled since the March 2009 bear market lows.

But none of this means it's time to sell everything. Shiller notes that his gauge is a "very imprecise timing indicator" and said the market could "remain at these valuations for years."

2. Hedge fund king Carl Icahn believes there's a bubble.
"We can no longer simply depend on the Federal Reserve to keep filling the bunch bowl," the hedge fund billionaire wrote on Tumblr last week, referring to the numerous measures the Fed has taken to stimulate the U.S. economy.

Icahn described a "dangerous financial situation" that includes challenges tied to monetary policy, unemployment and income inequality.

He also said recent comments from Fed chief Janet Yellen at the International Monetary Fund "suggest, and I agree, that we are in an asset bubble."

Still, Icahn isn't calling for an imminent crash by any means. He acknowledged a bubble might not burst for "the next one, five, ten or 20 years."

It's also important to recall that Icahn currently owns billions of dollars worth of stocks. During the second quarter he even raised his stake in eBay (EBAY, Tech30) and added a new investment in Gannett (GCI). He still thinks there's value out there.

3. Ex-Treasury secretary Robert Rubin: Low rates could spark another financial crisis.
"The risk of excesses and the consequent instability have increased substantially," Rubin and Harvard professor Martin Feldstein wrote in an Op-Ed in The Wall Street Journal last week.

These financial luminaries (Feldstein served as chief economic adviser to President Ronald Reagan) didn't explicitly say whether a bubble already exists or if the Fed needs to hike rates now to prevent one.

However, they did advise the central bank to consider the possibility that the "excesses" caused by extremely low interest rates could "create financial crises."

Rubin and Feldstein pointed to record high stock prices, "dramatically" lower spreads on low-quality junk bonds and surging volumes of high-risk leveraged loans as alarming signs.

If hedge funds are holding assets that suddenly pop in a bubble, there's a risk of "contagion and snowballing effect" when they all hit the exits at the same time, the duo wrote.

Rubin should know about this threat. He was in charge of Treasury in 1998 when collapsing hedge fund Long-Term Capital Management imperiled the whole system. Ultimately Wall Street was forced to come to the rescue with a $3.6 billion industry-funded bailout.

Friday, 15 August 2014

Smart investors ignore the news

Chuck Jaffe

You can read the headlines, just don’t trade on them

If the market is making your head swim, you may be able to solve the problem by turning off, tuning out and dropping out of the 24-hour news cycle. 

That’s an odd suggestion coming from someone who works in the media, but what makes it doubly strange is that it’s prompted in part by the website I trust like no other, Beyond simply being my employer, I trust the site because I know personally the quality people and journalists my fellow staffers are. 

But, last month, MarketWatch set a site record for the number of unique visitors to its news pages, which set me to wondering what kind of messages we were sending to both new and increasingly active visitors at a time when they were presumably drawn in looking for some measure of market guidance to calm their nerves or keep them on top of the financial news. 

In the old days of newspapers, I would have gone through a stack of front pages and looked at headlines. In the Internet world with its 24/7 action, that doesn’t work, because a busy news site will change its front page multiple times over the course of a day, and there’s not necessarily a record of what the site looked like with each of those changes. 

So I looked at “snapshots” of MarketWatch’s front page, one each day — just the top screen, always the first one available after 5 p.m. ET — just to see what titles would have captured the attention of an average investor seeking some guidance, perspective and outlook after the market had closed for the day. 

Here were some of the highlights, in chronological order, from July (I have removed the names of experts quoted; it’s unimportant if you actually recognize the name, but highly important that a news site wouldn’t use the name of a non-expert): 

•‘This is not an average, typical or normal bull market’ [expert] says
•Today’s bubbles aren’t like the famous bubbles of the past
•If ever the stock market flashed a ‘sell’ signal, it’s now
•‘Rotten rotation’ could signal bull market is living on borrowed time
•[Expert]: U.S. stocks will be ‘very disappointing’ for 10 years
•A stock correction is coming, then more years of gains; [expert]
•[Expert] There’s a big hole in the bull case for stocks
•We’re in the third biggest stock bubble in U.S. history
•Not much fallout from Gaza, Ukraine? Wait a year, says [expert]
•[Expert]: Great Crash of 2016, third $10 trillion loss this century
•Greenspan says bubbles can’t be stopped without ‘crunch’
•Buy-and-hold investing is impossible
•Stock bubble is ‘beyond 1929 and 2007’: economist
•Stock trader who called 3 crashes now sees a 20% collapse
•[Expert]: Wait to be uber-bearish until autumn 

That’s just 15 examples — one of them from my own column — less than half of the investing-oriented headlines that caught my eye. I would have included something from an expert suggesting a big gain ahead, but there weren’t any of those atop the pages I looked at (they could have been there at other times of day). 

It’s no wonder after a barrage of headlines like that that the first monthly measure of investor sentiment released for August — the Investors’ Business Daily Economic Optimism Index — was down sharply. 

But at a time when the round-the-clock news cycle and the ubiquity of social media makes it possible to not only read the stories but to feel like you can influence the news — or at least the thinking of others who have seen the same stories — it’s hard to believe there will ever be enough agreement between the bulls and bears to believe an overall sense of optimism. 

They’re no more likely to get together and see the situation in a remotely similar way than impassioned Republicans and Democrats would be to suddenly see key issues the same way, allowing for fast, easy progress. 

Meanwhile, if this stuff confuses the general public, it enriches the sharpies on Wall Street.
Malcolm Polley, president of Stewart Capital Advisors and co-manager of Stewart Capital Mid-Cap SCMFX +0.29% , could not have been more blunt about how the headlines are helpful to the industry, even if all they do is confuse the public. 

“To the extent that the news and information turns into crap — and that crap turns into volatility — that’s good for me,” he said. “For us, it’s information that creates a dramatic downward move in a price, where the information might be valid, or it might be misunderstood. … The knee-jerk reaction is ‘This looks bad, let’s get out,’ but that creates opportunities if you understand the situation, rather than just reacting to what you read or hear. 

“We like the information — and that there’s so much of it available — but most of it’s just noise.”
Moreover, the constant prognostications have made it so that everyone seems to think they can be a market weatherman, capable of spotting the next squall, shower or sunny day. Relying on that purported “expertise,” rather than trying to be prepared for all weather conditions is how someone finds themselves sitting inside on the sunny days or getting rained on without an umbrella during the showers. 

“The headlines and forecasts are interesting and funny, but they should teach investors to just give up on the short-term trends, because even if you are right there you’re not right for long,” said Ned Riley, president of Riley Asset Management in Boston. “I sometimes make short-term forecasts too, but I’d rather be right in the long-term.” 

In short, reading the analysis and looking at the headlines is fine; it makes you a more informed investor. 

Acting on it is where investors get themselves into trouble. 

If you’ve been changing your actions based on the news, the headlines or the websites you favor and it hasn’t been improving your investment results, it may be time to disconnect your portfolio from what you are reading and listening to. 

Said Riley: “If you get the long-term forecast wrong – if you miss out on the trend for the next few decades because you’re concerned about what could happen in the next few weeks or the few weeks after that – that’s how you wind up in real trouble. … It’s not about how many corrections or downturns you called right if all those moves don’t add up to making real money over a lifetime.”


The Recession's Over: Clean Your Financial House and Win

If you were an operations leader during the 2008 Financial Crisis and deep ensuing recession, you probably spent a lot of time on the phone like I did, literally begging vendors and business partners not to cancel credit lines or change payment terms vital to keeping a business afloat.

If that's the case, none of us were alone as total credit market debt held by American businesses peaked in 2008; contracting by $247.7 billion in 2009, the worst year of the downturn; not reaching 2008's levels again until 2011 or 2012.

So what happens when nearly a quarter of a trillion dollars in business credit is siphoned out of the economy in one year, customers pay you slowly for past business, banks stop lending, and customers stop buying new products?

Welcome to the world American COO's, CFO's, and CEO's faced just a few years ago: a period of intense struggle and fight or flight mode for many of us.

Thankfully, business lending regained traction, increasing from $11.66 trillion in 2008 to $13.60 trillion in 2013 and there's no longer scores of doom-and-gloom reports about small business owners who had their business credit cards cancelled with little notice from lenders.

Now that the "worst" seems to be over in this area, hopefully, business leaders are able to breathe again and get back to growing their companies after several tough years.

Here's some things to consider moving forward:

Clean Up Your Balance Sheet: If you still have unpaid balances with business partners, tally them up, formulate a realistic plan to retire your debt, and contact the vendors as soon as possible. Americans are a very forgiving lot, even in business, and professionals that you work with at one company can easily become new business partners in another organization someday.

Additionally, it's much easier to reinstate cancelled or dormant credit lines with vendors once you're paid up with them; providing you more resources that you can leverage as you go out to win more business and grow your company.

Shore Up Your Banking Relationships: Before the downturn, we worked with a fantastic business banker. He looked like a winner, was smart as a whip, and always had half a dozen ideas for helping us improve our business and maximize our relationship with his bank. Unfortunately for us, our banker received a promotion and we never "took" to his replacement; generally feeling that this individual had little sense of our business needs or our business in general.

However, in 2010, our business hit a rough patch and my weak relationship with our new banker became glaring; leading to us to briefly "audition" replacement banks, before being reassigned to work with a more proactive banker at our home bank.

Don't make the mistake I made several years ago. A growing business needs strong financial relationships and I didn't ask our new banker to lunch or bring them into our office to see if they had any genuine ability to help us. Instead, during a tough time, I worked with a stranger and that's exactly how our new banker treated us.

Now that the downturn's over and hopefully your overall business and balance sheet is in better shape; this is a great time to be scheduling lunch or a meeting with your business banker when you don't need them, so you can draw from a well filled with water instead of the dry well I dipped in four years ago.

Reward Your "Foxhole" Partners: Who stood by you through thick-and-thin when things got rough in 2009 and 2010? The business partners who didn't shut off your copiers or seize your computer equipment when you couldn't make regular payments and struggling to bring receivables in.

If you haven't done so, those business partners should be thanked and lionized by your organization. They stood by you during the worst of times; imagine what kind of partners they'll be now that things are improving.

Punish The Cowards: Who cut-and-ran when things got rough in 2009 and 2010? The business card issuer who cut your credit line by 70% or the vendor who put your account on cash-on-delivery (COD) status when you were trying to complete an important client assignment.

If you haven't done so, those business partners should be put under review by your organization. They didn't stand by you during the worst of times; why reward their cowardice and lack of faith in your business now that times are getting better.

Aren't you glad it's not 2009 or 2010 anymore?

Tuesday, 29 July 2014

3 Money Myths to Avoid at All Costs

Myths are very troublesome because they’re hard to dispel. What’s worse – if a myth crosses over from the realm of obscurity and becomes mainstream “belief,” that’s when the trouble starts.

The sad thing is that a lot of people end up getting hurt by accepting myths as truth – especially when it comes to financial myths that many wrongly assume are right.

So before you mistakenly set yourself on a course for financial disaster, read about the 3 money myths you should avoid at all costs!

#1 Your Cash Savings are Completely Safe Sitting In a Bank Account

One myth that most Singaporeans thankfully recognise is reality that their Central Provident Fund (CPF) account savings probably won’t be enough to retire comfortably on.

If you’ve read our article on what you can use your CPF for other than retirement, you already know that you’re pretty much limited to using it on housing, investing, education and insurance.

Of course, there are restrictions to how (and how much) you can use. Plus, you know that your money is effectively trapped until you reach the drawdown age (63 currently).

So where else can you put your cash savings, especially if you want to be able to access your money? For many, the only “safe” option is to place their savings in a savings account.

Yes, your cash will be safe in a Singapore bank. They are some of the most stable and safest in the world after all (although if something does happen, your account is only insured up to a maximum of $50,000 with the Deposit Insurance Scheme (DIS) – which is something to think about).

However, you’re forgetting one thing – the interest earned on your savings account is pathetically low, even on the best of savings accounts.

It’s simple arithmetic – if you’re making only 1%+ on your savings account deposit but the rate of inflation is 3% each year (or worse), your money isn’t safe at all. It’s actually being lost through inflation.
What can you do?

Learn about investing – because it’s the only way you can grow your money with an interest rate that’s sure to beat inflation. If you’re not very knowledgeable about investing, make sure to check out our Investing Learning Center to increase your knowledge.

#2 Your Expensive Home Renovations Will Greatly Increase Your Property’s Value

You already know that your home is the biggest purchase (and investment) you’ll ever make. It doesn’t matter whether you purchased a Housing Development Board (HDB) flat or a condominium, the possibility to see your property purchase soar in value exists.

Chances are you already know (hopefully) that a property’s value is really driven by a combination of nearby amenities (schools, public transport, malls, etc.), view and rental yields (no oversupply of flats/condos).
However, many homeowners mistakenly think that trendy renovations will greatly boost their property’s value.

That’s a huge and costly myth that has left many home owners in shock when a valuation comes back much lower than anticipated.

The reason why most renovations fall flat when it comes to boosting a property’s value is simple – not everyone has the same aesthetic taste and “trendy” renovations change with time. 

The reality is that expensive renovations won’t increase the value of your property as much as you expect it to.

If you’re going to renovate your home and want some increase in value – go with functional renovations such as walk-in wardrobes, kitchen islands, wet rooms and partitioning that combines two rooms (ex. a kitchen that doubles as a study/TV room).

#3 You Should Fully Be Invested in Bonds during Your Retirement Years

On myth #1, you learned that investing is pretty much the only way to ensure your money grows at a rate that beats inflation.

During your journey into investing, you’ll learn about portfolio diversification and the how you should adjust your investment portfolio periodically as you reach retirement age.

Basically, when you begin investing in your 20s and 30s, your portfolio will be more stock-heavy. Stocks are higher risk, but also provide higher returns – making it easier for you to reach your retirement goals.
However, as you age and hit your 40s and 50s, your “appetite” for risk and higher returns becomes less as you become more focussed on bringing in “steady” returns that are less risky. That usually means you’ll become more reliant on “safe” investment products such like bonds.

Once you hit retirement though, you shouldn’t just turn your invest your entire portfolio in bonds. That’s actually a dangerous move considering the life expectancy for Singaporeans is 82. That means if you retire at 65, you need to make sure your nest egg lasts for another 17 years at least. And if you put turn everything into bonds, you’ll run the risk of outliving your savings.

You should always keep anywhere from 20% to 50%+ of your investment portfolio in stocks, depending on your risk appetite.

That’s to ensure that your portfolio continues to generate returns so you can maintain your retirement lifestyle for as long as possible.

The 3 Biggest Financial Objectives You Should Aim For in Your 40s

Ah, the wonderful 40s – the years when you begin to experience the personal drama of dealing with teenage children, greying hair, weight gain and just about every symptom of “midlife crisis” known to science.

Yeah, there will be plenty of personal and professional distractions to deal with. But this isn’t the time to let your financial “guard” down so you could start cruising through life.

If you’re able to eliminate your credit card debt (or keep it to a very manageable level), build up a comfortable emergency fund (at least three, but preferably six months’ or more worth of your monthly salary) and pay great attention to the performance of your investment portfolio – you’re on the right track towards making the financial objectives in your 40s more achievable.

Here are the 3 biggest financial objectives you should aim for in your glorious 40s:

#1 Prioritising Your Nest Egg

Your 40s will be the “prime” period in your professional life. It’s the decade when you’re advancing to higher positions in your career, which equates to more income. In fact, your 40s will be the time when your (hopefully) increasing income will play a large role in accumulating wealth for the future.

I can’t stress this enough – this decade is extremely important when it comes to your career AND retirement future. If you’re stuck in a dead-end job or you’re not receiving the annual pay raise you deserve, it’s in your best interest to go to a company that will.

Remember – from this point on you only have a limited amount of working years left.

Seriously, your career (and growing income) is important because it will fuel your effort to put more cash into your retirement savings – and that should be your first financial priority!

If you have that squared away, you should then focus on freeing up as much cash as possible to put into savings.

So pay down any credit card/unsecured debts to free up more cash, build up additional revenue streams (ex. Freelance), downgrade certain aspects of your lifestyle and if you have the capacity – set aside some money for your kids’ future education expenses with an education savings account if you haven’t already.

#2 Ensuring Your Investment Portfolio Performs Well

If you jumped into the investment game during your 20s and took a more “hands off” approach to portfolio management in your 30s – you’ll definitely want to change that in your 40s! Well… unless you hire a highly competent fund manager with reasonable fees who can monitor, advise and adjust your portfolio for maximum returns.

If you haven’t been didn’t monitor your portfolio too closely during your 30s, it’s probably because it was performing reasonably well and there was no need to make any major adjustments (otherwise, you would have made them right?).

You’ll want to be more hands on with your investing during your 40s because these are your “high-income” years – that means you’ll have more money on the line as you pump more cash into growing your nest egg.
That also means you’ll need to re-evaluate your investment goals and appetite for risk.

For example, if your goal for retirement savings goal you set in your late 20s is less than half of the value of your portfolio in your 40s – you’re going to have to make a choice on whether you want to take more risk by having a stock-heavy portfolio that’ll hopefully generate more returns quicker.

#3 Maintaining Control Over Your Spending

Going into your 40s with fewer financial liabilities will leave you feeling like you’ve won the retirement “game” already. You might even begin to have thoughts of early retirement if you’re especially confident.

It’s great to be in a position where you have minimal or no credit card/unsecured debt to drag your finances down. However, keep in mind that celebrating “victory” too early by losing control of your spending in your 40s can really turn your retirement into a living hell.

The point is that you haven’t “won” the retirement game yet. Well… maybe if you’ve earned millions by your 40s because you invented some life changing product or got damn lucky with your investments – then you got me. But the reality for most of us is that we’ll still need to keep our ultimate retirement goal(s) in perspective.

It’s completely fine to want to take an expensive holiday in the Maldives, purchase a new car or renovate your home with a more modern look – as long as it doesn’t interfere with objectives #1 and #2 on this list.
So pamper yourself a bit. You certainly deserve it. But do it in moderation please?

The 3 Biggest Financial Objectives You Should Aim For in Your 30s

Ah, our industrious 30s – the years when we’re focussed on making cash, getting promotions and starting a family. To draw inspiration from Charles Dickens, these can be the best of years and the worst of years. But one thing is for sure – this is the decade of your life will be financially confusing!


Simply because the amount of financial responsibilities (and liabilities) you’ll have to deal with in your 30s usually dwarfs anything you had to deal with during your 20s. You have to provide for your family, service big loans (home, car, education) AND save for retirement.

While your salary is no doubt increasing, you’ll still possibly struggle with trying to take care of all of your financial responsibilities. Hopefully you already established your financial groundwork during your 20s by paying off your credit card debt, starting your retirement savings and creating an emergency fund.

If you’re still working on those in your 30s, that’s OK. Continue to work on them. If you’ve already taken care of those objectives, focus your energy on these 3 financial objectives you should focus on in your 30s:

#1 Continue the “Good Fight” Against Debt

Credit card debt can be about as tough to kill as one of those movie monsters you grew up watching. You know the movies that spawn numerous sequels that are progressively worse than the last one? Anyway, if you haven’t taken care of it by your 30s, continue to work on it is.

There are many strategies for taking care of credit card debt, but one of the easiest and quickest ways to knock it out is to do the following:
  1. Evaluate and list the balances on each of your credit cards (ideally, the debt-to-credit ratio of each as well, which is explained in the section below)
  1. Determine which credit card you want to pay off first (see section below)
  1. Pay the minimum plus an additional 2X-4X+ the minimum on that credit card to pay it off faster
  1. Once it’s paid off, apply the additional amount you paid on the first card plus the minimum of the first card towards your second credit card
  1. Rinse and repeat until you’ve destroyed your credit card debt
Also, keep in mind that choosing the right card to prioritise and pay off is extremely important too, so make sure you read our article on destroying credit card debt to make the right choice.

Remember, the more debt you pay off, the more you can use towards your other debt obligations so you can pay them off faster. That means your home, car and/or education loan.

#2 Start Saving Now For Your Kids’ Education

Your 30s is a time when children start to enter the picture. Needless to say, kids are a lifetime commitment that’ll bring you plenty of joy and sleepless nights. Not to mention your budget will get much tighter because your kids’ needs will come first – and boy do they have needs!

However, it isn’t just your kids’ basic life necessities you must save and budget for – you’ve got to save for their future too!

Thankfully, there are plenty of options available that’ll help you save towards your kids’ future education expenses. In fact, many banks and insurance companies in Singapore offer a variety plans ranging from 2-in-1 life insurance plans to education savings plans.

Of course, you don’t have to do this, especially if you feel that your kids should struggle with paying off an education loan the same way you did (hey, it’s a life lesson right?) But if you’re the generous sort that wants to prevent your kids from such a struggle, set aside some money in your 30s (and possibly 40s) for your kids’ education.

#3 Re-evaluate Your Insurance Policies

Hopefully during your 20s you picked up the three life insurance policies that you absolutely need – medical insurance, life insurance (term or whole life) and long-term disability insurance.

If you have those insurance policies, great! If you don’t *slap* get them! And if you have those policies but haven’t evaluated them *slap* evaluate them! I mean really, if you haven’t re-evaluated your policy in the last year or two – that’s still too long of a wait.

The reality is that your life can change drastically in as little as six months to a year – you could get married (or divorced), have a child, buy a home/car or change jobs. All of these activities can have a big impact on your insurance policy’s coverage and premium.

So make sure you speak to your Financial Advisor (FA) or insurer (if you’re handling your own insurance) about making adjustments to your policies that’ll reflect the most recent changes in your life. If you’re a DIY kind of guy or girl, make sure you check out our insurance page so that you can compare the insurance policies offered by Singapore’s major insurers quickly, easily and free of charge.

8 Slow, Difficult Steps To Become A Millionaire

Money of course isn't everything. Not by a long shot. Where your definition of success is concerned, money may rank far down the list. Everyone’s definition of “success” is different. Here's mine.
Success is making those that believed in you look brilliant.
For me, money doesn't matter all that much, but I'll confess, it did at one time (probably because I didn't have very much). So, let’s say money is on your list. And let’s say, like millions of other people, that you’d like to be a millionaire. What kinds of things should you do to increase your chances of joining the millionaire's club?

Here are the steps I'd suggest. They're neither fast nor easy. But, they're more likely to work than the quick and easy path.

1. Stop obsessing about money.

While it sounds counterintuitive, maintaining a laser-like focus on how much you make distracts you from doing the things that truly contribute to building and growing wealth. So shift your perspective.
See money not as the primary goal but as a by-product of doing the right things.
2. Start tracking how many people you help, even in a very small way.

The most successful people I know – both financially and in other ways – are shockingly helpful. They’re incredibly good at understanding other people and helping them achieve their goals. They know their success is ultimately based on the success of the people around them.

So they work hard to make other people successful: their employees, their customers, their vendors and suppliers… because they know, if they can do that, then their own success will surely follow.
And they will have built a business – or a career – they can be truly proud of.

3. Stop thinking about making a million dollars and start thinking about serving a million people. 

When you only have a few customers and your goal is to make a lot of money, you’re incented to find ways to wring every last dollar out of those customers. 

But when you find a way to serve a million people, many other benefits follow. The effect of word of mouth is greatly magnified. The feedback you receive is exponentially greater – and so are your opportunities to improve your products and services. You get to hire more employees and benefit from their experience, their skills, and their overall awesomeness. 

And, in time, your business becomes something you never dreamed of – because your customers and your employees have taken you to places you couldn’t even imagine. 

Serve a million people – and serve them incredibly well – and the money will follow.

4. See making money as a way to make more things.

Generally speaking there are two types of people. 

One makes things because they want to make money; the more things they make, the more money they make. What they make doesn’t really matter that much to them – they’ll make anything as long as it pays. 

The other wants to make money because it allows them to make more things. They want to improve their product. They want to extend their line. The want to create another book, another song, another movie. They love what they make and they see making money as a way to do even more of what they love. They dream of building a company that makes the best things possible … and making money is the way to fuel that dream and build that company they love.

While it is certainly possible to find that one product that everyone wants and grow rich by selling that product, most successful businesses evolve and grow and as they make money, reinvest that money in a relentless pursuit of excellence.
We don't make movies to make money, we make money to make more movies. ~Walt Disney
5. Do one thing better.

Pick one thing you're already better at than most people.Just. One. Thing. Become maniacally focused at doing that one thing. Work. Train. Learn. Practice. Evaluate. Refine. Be ruthlessly self-critical, not in a masochistic way but to ensure you continue to work to improve every aspect of that one thing.

Financially successful people do at least one thing better than just about everyone around them. (Of course it helps if you pick something to be great at that the world also values – and will pay for.)
Excellence is its own reward, but excellence also commands higher pay – and greater respect, greater feelings of self-worth, greater fulfillment, a greater sense of achievement… all of which make you rich in non-monetary terms.


6. Make a list of the world’s ten best people at that one thing. 

How did you pick those ten? How did you determine who was the “best”? How did you measure their “success”? 

Use those criteria to track your own progress towards becoming the best. 

If you're an author it could be Amazon rankings. If you’re a musician it could be iTunes downloads. If you’re a programmer, it could be the number of people that use your software. If you’re a leader it could be the number of people you train and develop who move on to bigger and better things. If you’re an online retailer it could be purchases per visitor, or on-time shipping, or conversion rate…
Don’t just admire successful people. Take a close look at what makes them successful. Then use those criteria to help create your own measures of success. And then…

7. Consistently track your progress. 

We tend to become what we measure, so track your progress at least once a week against your key measures. 

Maybe you’ll measure how many people you’ve helped. Maybe you’ll measure how many customers you’ve served. Maybe you’ll evaluate the key steps on your journey to becoming the world’s best at one thing.

Maybe it’s a combination of those things, and more.

8. Build routines that ensure progress.

Never forget that achieving a goal is based on creating routines. Say you want to write a 200-page book; that’s your goal. Your system to achieve that goal could be to write 4 pages a day; that’s your routine. Wishing and hoping won’t get you to a finished manuscript, but sticking faithfully to your routine ensures you reach your goal.

Or say you want to land 100 new customers through inbound marketing. That’s your goal; your routine is to create new content, new videos, new podcasts, new white papers, etc. on whatever schedule you set. Stick to that routine and meet your deadlines and if your content is great you will land those new customers. 

Wishing and hoping won’t get you there – sticking faithfully to your routine will.

Set goals, create routines that support those goals, and then ruthlessly track your progress. Fix what doesn’t work. Improve and repeat what does work. Refine and revise and adapt and work hard every day to be better than you were yesterday.

Soon you’ll be good. Then you’ll be great. And one day you’ll be world-class.

And then, probably without even noticing, you’ll also be a millionaire. You know, if you like that sort of thing.

Monday, 28 July 2014

What if you fail?

Share with me your fears.

Why Every Yuppie Should Have A Side Hustle In Addition To A 9-To-5 Job


 The idea of a side hustle is growing in popularity. It is estimated that 35 percent of Millennials in the United States are currently involved in a side business to earn a little extra money during their extra hours. However, many have not joined in on this trend due to a lack of confidence or fear of being seen as “distracted” or “unfocused.”

The idea of a side hustle is a simple one: It is “a tiny, independent venture you do during your free time when you’re not at your full-time job.” Side hustles come in many shapes and sizes. They could be anything: business venture, startup, app, part-time job or even tinkering with a blog.

Side hustles are a form of career insurance that provide supplemental income or serve as a useful fallback in case of a layoff. But, a side hustle can also serve as a career accelerator that allows a person to build skills, form important relationships and develop new business ideas. Here are the six main benefits from having a side hustle:

1. You become a time-management champion.

 With a full-time job and side hustle, you will begin to look at 24 hours strategically. You spend your time much more wisely and always carefully weigh whether or not something is or isn’t worth your time.

 2. You make many connections.

 Being a blogger has enabled me to network with people who own businesses in different industries, like prominent civil society activists, people in PR and other bloggers, too. It has been a truly remarkable, inspiring, humbling experience. If all you do is hang out at one job or in school, the number of people you know and experiences you have become very limited. So, step out of your comfort zone to access these wonderful opportunities that may change your life.

 3. You are only in your 20s once.

 As 20-somethings, many of us are single and without kids. With a flexible schedule and few commitments, it is the perfect decade to experiment with projects and find things we enjoy and are also good at doing. If your side hustle fails, move on and try another. The loss is small because even when you do lose, you win in terms of new skills and lessons. In a sense, this is an upgrade.

 4. Money!

 A side hustle can diversify your income stream. From it, you can save expenses, gain extra income, or with a bit of luck and lots of hard work, turn it into a ful- time career. Even if it doesn’t turn into a full-time career, an extra hundred dollars each month can go a long way. For some countries, like Singapore, homes can be really expensive and thus, having a side income helps a lot.

 5. Your side hustle will make you better at your real job.

 Contrary to what people assume, rather than compete for your attention at your full-time job, side hustles actually make you a better employee. You often own the means of production and reap the full reward of your side hustle. If you succeed, the money is all yours. This can be a huge motivating factor that will push you to do better in all modes of your work because you will feel less beaten down by day job monotony. Side hustles will invigorate your work ethic.

 Also, dabbling in the things you love can lift your mood, making you happier and more productive. According to Sandy Thompson of Y&R Advertising agency, “Multiple interests are how you create a happy life. Employers see how [multi-careerism] makes their employees more productive and happier. And happy employers in the long run benefit”

 Furthermore, the skills you pick up are transferable. In fact, all skills are transferable. If your side hustle requires you to serve demanding clients in a high stress environment without losing your temper, being able to do so will serve you well as an employee, and in every other aspect of life. I have learned a lot from being exposed to the real world while pursuing a challenging full-time undergraduate degree.

 You can also parlay your network contacts from your side hustle to benefit you at a current day job. One hand feeds the other and no time is wasted — even if your side hustle doesn’t pay well. 6. You will keep your mind active. When you spend time on a side hustle, your mind is so much more active. Very often, a full-time job (even one that requires 50 or 60 hours of work per week) doesn’t teach us everything. We’re more concerned about the company’s mission and bottom line than our own personal growth. A side hustle makes you more inquisitive and more capable.

The more you train your mind, the sharper it becomes. While you are getting started on your side hustle, remember these wise tips from Susan Gramm: Determine if your side hustle violates your employment contract or policies. If you need to gain approval or believe that what you’re doing will eventually become public, articulate the benefits to your employer or consider if it’s possible to eliminate the conflict of interest by providing services at no cost, at least in the early stages.

 Treat your side hustle like a business from the start with an eye toward eventually monetizing your services. You don’t want to be a few years down the road wishing that you had invested in branding and an Internet presence, for example. Prepare to run a “marathon and not a sprint” by investing two to three years working on both your day job and your side hustle. Working two jobs means long hours and a lot of sacrifices. One idea, says former attorney Laurie Gay, is to switch “to a less demanding job” as “a more regular schedule [will permit you] to do more to get the ball rolling” sooner.

4 Investment Tips For Millennials Who Want To Be Stock Market Savvy

In considering the wealthiest people who ever lived, you’re likely to find several common traits among them. One of those traits is that many created their wealth from owning and investing in companies.
In fact, I don’t know of one wealthy person who created his or her wealth from simply saving a monthly paycheck. It is simply not possible to create wealth solely from saving, especially when inflation is on the rise.
Despite being very rewarding, the world of investing seems complicated and challenging. As a result, too many Millennials tend to shy away from the place where the wealthy get wealthier.
Here are four tips for Millennials to to use and invest successfully:

1. Never Let Your Emotions Influence Your Decisions

The most successful investor of all time, Warren Buffet, says that successfully investing over a lifetime does not require stratospheric IQ, unusual business insight or inside information.
It only requires a sound intellectual framework for making decisions and the ability to keep emotions from corroding that framework.
My framework states that in order to diversify my risk, I should not put more than 25 percent of my net worth in any one sector. This mentality does not only apply to investing, but also to life.
When you make decisions based on your ever-changing emotions, you may end up doing something stupid. When you make decisions based on principles and standards, your decision-making process will no longer be arbitrary.

2. Invest In Yield-Producing Assets

The 2008 stock market crash wiped out several people, many of whom did not see any return on their investments. This is because they chose to invest in assets that only appreciated and had no yield.
When I invest, I don’t care about what is fashionable; I invest based on my framework.
Investing in yield-producing securities (securities that produce some form of regular income, such as dividends and interest) compensates the investor, while his or her capital appreciates.
Millennials can generate another stream of income if they invest in dividend-paying stocks and high-interest bonds.
What I love most about investing in dividend-paying stocks is that the managers of the company must constantly ask themselves where they are supposed to generate income to distribute to the shareholders.
This keeps them diligent and focused on increasing the company’s revenue.

3. Prudently Use External Capital

Another common practice among the wealthy is the use of other people’s money to create wealth. When Warren Buffet started his career, he created investment partnerships and had people put money into a fund that he managed.
He would then charge investors 20 percent of the profits he created for them. This is an example of how he used other people’s money to create an income stream for himself.
Jamaican billionaire Michael Lee-Chin is another example of how using external capital can create wealth. He borrowed $500,000 to invest in a financial services company that he thought would grow.
Seven years after that, $500,000 appreciated to $3,500,000.

4. When Investing, Think Long Term

Investing is all about taking calculated risks, not wild gambles. People who buy stock in a company they have not researched thoroughly do not invest, they speculate. The hallmark of investing is understanding what you own.
You will be much better off in the long run when you invest in a company because you think it is an excellent business that will steadily grow in the long run and while it grows, will pay a reasonable dividend.
Don’t invest in a company because you think the price of the stock will increase in a few minutes, weeks or months

What to do if you haven’t saved a dime for retirement

By Jonathan Clements

Here’s a grim statistic: Half of workers age 55 and older have less than $50,000 in savings, according to the Employee Benefit Research Institute’s 2014 Retirement Confidence Survey. 

Some of these folks have traditional defined-benefit pensions, so they’re in better shape than it seems. But most don’t. That means their retirement will be built on modest savings, Social Security and maybe some home equity. 

Does that describe someone you know — or perhaps your own financial situation? If so, how can you retire in at least moderate comfort? My advice: Try mightily to keep pulling in a paycheck until at least age 70, at which point you would claim delayed Social Security retirement benefits. 

Toughing it out in the workforce won’t be easy. Many people are forced to retire earlier than they had hoped to. According to the 2014 Retirement Confidence Survey, workers typically say they expect to retire at age 65 — but it turns out the median retirement age is actually 62. 

Anything that pays
What happens if you get forced out of your job earlier than you’d like? Try to find a job that will cover the bills, so you can put off claiming Social Security. That might mean taking work for which you’re overqualified and that pays less than the job you were forced out of. But collecting some sort of paycheck, so you can delay Social Security, could be the key to a modest retirement. 

Most retirees, of course, don’t delay Social Security. In fact, in 2012, 45% of men and 51% of women claiming Social Security retirement benefits were age 62, the youngest possible age. (These figures ignore those on Social Security disability benefits who were then swapped over to receive retirement benefits.) Claiming at 62 might be the right decision if you and, if married, your spouse are both in poor health. 

But for most folks, it’s likely a mistake, because taking benefits early means accepting a permanently shrunken monthly check. Let’s say your full Social Security retirement age is 66, at which point you could get $1,400 a month, equal to $16,800 a year. This is roughly the average amount that Social Security recipients are entitled to. 

If you claim at 62, you would take a 25% hit, leaving you with $1,050 a month, or $12,600 a year. By contrast, if you delayed benefits from 66 to 70, you would get 32% more. That would mean $1,848 a month, equal to $22,176 a year. This doesn’t reflect any increases because of inflation. 

A good deal
True, $22,176 at age 70 won’t pay for a lavish retirement. But unless you have a lot of other income, you shouldn’t have to pay taxes on your Social Security benefit. Indeed, Social Security is perhaps the best income stream available to retirees. It’s indexed to inflation, backed by the federal government, at least partially tax-free, and you know you’ll get it for as long as you live. Moreover, your spouse may receive your benefit as a survivor benefit, assuming you die first. 

Does waiting until 70 seem too long? If you are married and you were the main breadwinner, you might “file and suspend” once you reach your full Social Security retirement age of 66 or 67. That will allow your husband or wife to claim spousal benefits, so you have some extra money coming in, while you continue to delay your benefit until age 70. 

That spousal benefit can be worth as much as half your benefit as of your full retirement age. For instance, if your full retirement age benefit is $1,400 a month, your spouse could receive $700.
Even as you postpone Social Security, try to save what you can. Also look to slash your cost of living. That might mean trading down to a less-expensive home and making a big push to get all debts paid off before you retire. 

Don’t like the idea of postponing retirement until age 70? Keep in mind that, even at 70, median life expectancy is 15 years for men and 17 years for women, and you could live longer than average. 

A sense of purpose 
Moreover, continuing to work late in life isn’t all bad. We all need a sense of purpose to our lives — which is why many retirees volunteer, take up hobbies, help at local schools and take college courses.
Admittedly, these are things retirees choose to do, while your financial situation is forcing you to work. Still, working until age 70 could give you the social, intellectual and physical stimulation that we all need.

Sunday, 27 July 2014

13 Skills You Can Master In 10 Minutes Or Less

A simple Photoshop hack lets you remove tourists from your vacation photos.

Most useful skills, such as learning a new language or mastering the art of cooking, can't be conquered in a day.

However, there are several important life skills you can pick up almost instantly, and a recent Quora thread polled users on their favorite ones. 

Here are some of the best responses, with a few of our own thrown in.

After all, you never know when you'll need to turn your watch into a compass or Photoshop your vacation pictures. 

Learn to change a tire: "It's very straightforward, but it's worth thinking about before you need it. Here's a video." —Ben Mordecai 

Identify the freshest strawberries : "Smell them. If they smell like strawberries, buy them; they will taste divine. If they look gorgeous but have no smell, they will have no taste. Simple and foolproof." — Cyndi Perlman Fink  
...and oranges : "Pick up the orange or grapefruit. If it feels light, it's not juicy and will taste rather woody. Go through the bin picking the ones that feel heaviest compared to oranges or grapefruits of a similar size. They'll be the tastiest ones." —Karen Opas 

Remove tourists from vacation photos :  "Set your camera on a tripod.  Take a picture about every 10 seconds until you have about 15 shots.  Open all the images in Photoshop by going to File > Scripts > Statistics. Choose: 'median' and select the files you took. Photoshop finds what's different in the photos and simply removes it." — Vishal Gala

Learn how to speed read: "The first thing you need to do is eliminate the voice inside your head. Read with your eyes. ONLY. Whatever you do don't use the voice inside your head. As you learn to do this part go ahead and read word by word and go over the lines with your finger. Just work on eliminating the voice. Why? You cannot say words nearly as fast as you can comprehend them ... Since you're reading with your eyes, try reading two or three words at a time, and then move up once you get comfortable." —Raj Rai 

Comfortably fit everything in your suitcase: "You can learn the art of packing. Watch the demo." —Carlos Amezquita

...and pack a suit in your carry-on without wrinkling it : "Learn John Chow's clever technique to 'roll the suit' into a cabin-sized suitcase." —Abhiroop Medhekar

Calm nervousness : "Chew gum when you're approaching a situation that would make you nervous, like public speaking or bungee jumping. If we are eating, something in our brain reasons, 'I would not be eating if I were [in] danger. So I'm not in danger.'" — Abhishek A. Singh

Turn your watch into a compass : "Hold your watch horizontally and point it so that the hour hand is facing into the sun. At the center point between the 12 and the hour hand is your north/south line, with north facing away from the sun. So if the hour hand is pointing at 4, for example, the 2 would point towards the south, and the 8 would point towards the north.  Just remember, this only works in the Northern Hemisphere; and during Daylight Savings Time you would use the 1 instead of the 12 to determine the center line." — Amarnath Ganesh

Easily insert mathematical symbols and special characters into Word documents : "Insert all your required symbols just on an arbitrary line in the document, for easy access.  Open up the configuration for your word processor, and find the auto-correction/auto-replacement settings.  Add auto-correction rules for each of your symbols, assigning them a kind of 'command word' that can be easily typed. An example is "/pi" (no quotes), that would auto-correct to the actual Greek character." — Trey Brisbane  

Save time with computer shortcuts: When using Chrome on a Mac, ⌘+a selects all; ⌘+c copies; ⌘+x cuts; and ⌘+v pastes. You can also use ⌘+n to open a new window and ⌘+t to open a new tab. See a more comprehensive list of shortcuts here

Recover when you forget someone's name immediately after meeting them: Ask them to put their number in your phone. It's the best way to get their name without even asking for it. Typically, they will enter both their first and last names, along with their number. It's a great way to stay in touch with them in the future and also to assure you won't forget their name again. Find more techniques to remember names here

17 Things Successful People Never Say

You'll never catch a successful person saying, "It's not fair."

Over 2,500 years ago, philosopher and poet Lao Tzu taught that our words become actions, which eventually become our destiny.

In first century Greece, historian and essayist  Plutarch declared that a speaker's state of mind, character, and disposition are exposed through their words. And Napoleon Hill, the twentieth century father of personal success literature, asserts that words plant the seed of either success or failure in the mind of another.

"Across the planet, sages insist that words are potent and should be chosen and spoken with care, for they are 'the most powerful drug used by mankind,' as Rudyard Kipling warns,"  says Darlene Price, president of Well Said, Inc., and  author of "Well Said! Presentations and Conversations That Get Results."  "If they're right, it stands to reason that what we say to ourselves and others plays a critical role in helping us achieve success."

Regardless of how you may define success, words will help manifest that vision into reality.
"There are also words and phrases that can damage your self-image, mar your reputation, and jeopardize your success," Price  says. "To optimize your success, eliminate this language from your vocabulary and never speak it to yourself or another person."

Here are 17 phrases successful people never say:

"I have no choice," or, "I had no choice."
"Successful people always see the options, regardless of the circumstances," Price says. "To say we have no choice in the matter implies that we perceive ourselves as a victim; that we are less powerful than our environment." These weak words relieve the speaker of all responsibility.
Successful people say: "I have a choice," "Here are our options," or, "Let's imagine all the possibilities." They know that claiming and exercising the power to choose is the first step toward achieving their goals, she says.

"I should have," or, "I could have."
The words "should," "could," and "ought" imply regret, blame, finger-pointing, and fault, whether you say them to yourself or another person. "Successful people don't wallow in the past, and they rarely regret a decision or action," says Price. "Even if it's deemed a failure by others, they accept it as a learning experience that gets them one step closer to their goal."

Similarly, they avoid: "You should have," and, "You could have." "There's no quicker way to upset a boss, colleague, or customer than to suggest they're guilty of something (even if they are)." Instead, take a collaborative approach. Say, "Please help me understand why…" or,  "Next time may we adopt an alternative approach…"

"I can't do that," or, "That's impossible," or, "That can't be done."
Not only are these words self-limiting, others perceive them as pessimistic, unconstructive, even defeatist, Price explains. "Achievers know there are countless roadblocks on the road to success — barriers that may stall or stump, but never stop them." They either remove the barrier, or figure out a way to go over, under, or around it.

The words "can't" or "impossible" rarely enter the minds of successful people.  "Instead of throwing in the towel," Price says, "they speak in terms of alternative ways to get the work accomplished: 'What I can do is...' 'I'm sure there's a way to...' 'Instead of ___, let's try___.'"
As the great industrialist Henry Ford said, "Whether you think you can, or you think you can't — you're right."

"That's not my job," or, "I don't get paid enough for this," or, "That's not my problem."
Successful people help others succeed.

As billionaire Warren Buffett says, "Someone's sitting in the shade today because someone planted a tree a long time ago."

"Think of 'planting trees' as your job," Price says. "If you're asked to do something by your boss, coworker, or a customer, it's because it's important to them. Therefore, as a team player, goal No. 1 is to figure out how to help them get it accomplished."

Even if it's not in your job description, by saying so displays a career-limiting bad attitude. Even if your boss lays an unreasonable request on your desk, reply positively by saying, "Sure, I'll be glad to help you accomplish that. Given my current tasks of A, B, and C, which one of these would you like to place on back-burner while I work on this new assignment?"

"This response clearly communicates a prioritized workload, alongside a willing attitude to help," she says.

"But we've always done it that way," or, "That's not the way we do it here."
Successful people are passionate about innovation, finding a better way of doing something. In fact, Steve Jobs said, "Innovation distinguishes between a leader and a follower." For this reason, effective managers value employees who demonstrate creative thinking, flexibility, and problem-solving skill, Price explains.

"These phrases, in one fell swoop, reveal you are the opposite: stuck in the past, inflexible, and closed-minded," she says. "Even if you disagree with someone's idea, say instead, 'Wow, that's an interesting idea. How would that work?' Or, 'That's a different approach. Let's discuss the pros and cons.'"

"It's not fair."

She got a raise, you didn't. He was recognized, you weren't. That department is receiving funding, yours isn't. "Injustices happen on the job and in the world every day," she says. "Successful people are proactive about issues versus reactive. Instead of complaining or whining, take action: document the facts, build a case, and present an intelligent argument to the person or group that can help you."

"He's a jerk," or, "She's lazy," or, "My job stinks," or, "I hate this company."
Successful people avoid words of judgment, insult, and negativity, says Price.

"Regardless of your feelings or the circumstances, avoid making unconstructive or judgmental statements that convey a negative attitude toward people or your job." If a genuine complaint or issue needs to be brought to someone's attention, do so with well-documented facts, tact, consideration, and neutrality.

"Nothing tanks a career faster than name-calling or mudslinging," she says. "Not only does it reveal juvenile immaturity, it's language that may be libel and fire-able." Successful people choose words carefully to state observable facts and avoid disparaging language.

10 things rich people know that you don’t

People don’t become wealthy by accident, here’s how they do it

By Jocelyn Black Hodes

As a financial adviser, I have occasionally found myself feeling envious of certain clients. Not because of their wealth — but because they were disciplined and determined enough to do all the right things that enabled them to accumulate their wealth and, in many cases, retire early. Despite my expertise, I, like a lot of people, sometimes struggle not to do the wrong things that make being rich, let alone retiring at all, a pipe dream. 
Financially responsible and successful people don’t build their wealth by accident — or overnight. Becoming rich takes serious willpower and long-term vision. You have to be able to keep your eye on the prize of financial freedom, be willing to sacrifice your present wants for the sake of your future and develop good habits to win. Here are 10 habits you can start putting into practice now.
Start early
As the old saying goes: The early bird catches the worm…or, in this case, gets to retire in style. The sooner you put your money to work, the more time it has to grow. Earning a paycheck, whether you are self-employed or work for a company, means the opportunity to contribute to an IRA, which you should seize ASAP. If you’re fortunate enough to get a job with a company that offers a matching contribution to their retirement plan, you need to make it a priority to enroll in the plan as soon as you are eligible. It can be the difference between retiring early and never retiring.
Whatever your situation might be, saving and investing money today is better than waiting until tomorrow. Start now.Think about this: If you invested $10,000 and left it to grow for 40 years, assuming an average return per year of 8%, you would end up with over $217,000. But if you waited 10 years and invested $20,000 — twice as much — you would only end up with just over $200,000. 
You can be your own worst enemy when it comes to financial success. It’s all too easy to procrastinate and neglect what needs to be done and, meanwhile, give in to temptation and spend more than you should. It’s the perfect recipe for not becoming rich. 
The best way to protect yourself from yourself is to automate your savings. That means setting up recurring transfers on a regular basis from your checking account to your savings and investment accounts (or setting up auto deduction from your paycheck to your employer-sponsored retirement plan). This way, you force yourself to avoid bad money habits and save what you would likely otherwise spend. If you haven’t already, set aside 15 minutes on your calendar now to do it. Not later, now. Your rich future self will thank you. 
Maximize contributions
When it comes to retirement account contributions, you’ve probably been told to start small and then try to increase the amount by at least 1% every year until you max out. If you’ve been procrastinating, then yes, even a small starting contribution is better than none. The problem is that small efforts can lead to small results. If you want to be rich, you have to save like you mean it. And that means contributing the max amount allowed from the get-go (and at least as much as your employer will match in your 401(k) plan). 
This is especially true if you are starting to save later in life and need to play catch up. You might worry that maxing out your contributions will squeeze your cash flow too tightly, but it is easier to get in the habit of spending less if you don’t have that extra to money to spend in the first place. It’s much harder to increasingly scale back your budget year after year to accommodate for increasing contributions. 
Never carry credit card balances
Revolving, high-interest debt is one of the biggest threats to your financial freedom. It can seriously drag you down, costing you thousands in unnecessary fees and interest charges — and prevent you from saving more. If you ever want to be rich, you have to ditch the bad habit of carrying credit card balances, along with the minimum payment mentality. 
Instead, you need to learn how to use credit wisely, rather than as a crutch, and commit to paying off your balances in full each month. Smart credit card holders know and practice the tricks to maximize rewards, points, discounts and monthly cash flow without getting in over their head. Of course, living within your means is key to your success.
Live like you’re poor
Have you ever met someone who is unassuming and modest and then were surprised to later learn that they are actually rolling in dough? I had an older client who was stuck in 1983: he wore ugly brown suits and running shoes, drove a beat-up baby blue Volvo station wagon and lived in the same modest house he bought 40 years ago. Turns out, this man was an uber-successful entrepreneur and multimillionaire — and even richer because of his humble habits.
Millionaires are all around us, and many of them are probably not who you would think. This is because they smartly live below their means and save their money rather than showcase it. Of course, it’s easy to live below your means when you have millions, but even if you have far less, getting into the habit of spending minimally now will help you have a lot more later. The trick is adopting a “less is more” mentality and sticking with it, even when your income and net worth increase in the future.
Avoid temptation
The temptation to live large and beyond our means is all around us: TV, magazines, friends, family, colleagues, “the Joneses.” It is nearly impossible to escape the pressure to spend, spend and then spend some more. The problem is that overspending often leads to debt accumulation, undersaving and long-term financial insecurity. 
Force yourself to avoid negative financial influences as much as possible. That means going cold turkey: Avoid malls, unsubscribe from all those retail emails and don’t sign up for new ones and say “no” to invitations that you know will cost you. 
Then, replace these temptations with things that motivate you.
Be goal-orientedClick to PlayGoals inspire us, motivate us and give us purpose. Many of us have common goals, such as paying off debt, buying a house and retiring by a certain age. Maybe you have another goal of starting your own business or buying a second home. Unfortunately, goals are easily overshadowed by the daily stresses of life and all too often forgotten and neglected. When goals are just fleeting thoughts in your mind, they lose their meaning and influence over your behavior. This leads to bad financial habits, and your dream of becoming rich stays just that — a dream. 
To make it a reality, stay focused on your goals by committing the time to think about them, prioritize them and assign a target saving amount to each of them if possible. Then you should display your goals in places where you can be reminded on a regular basis, which will keep you accountable and help you stay on track. 
Get educated
Successful investors take the time to study key financial concepts, learn the dos and don’ts and stay abreast of current trends. They take advantage of opportunities to strengthen and expand their understanding and expose themselves to financial information on a daily basis. Take a cue from them and subscribe to The Wall Street Journal NWS -0.68%  , watch CNBC CMCSA -1.34%  , pick up Fortune TIME -1.64%  instead of a gossip magazine and follow financial experts on Twitter TWTR -1.42%  . Become a devoted student of money, and you can master the science of getting rich.
Be careful not to overwhelm yourself, and only follow advice from credible sources, so you don’t fall victim to progress paralysis or unsuitable and potentially dangerous investments.
Diversify your portfolio
Successful investors also know not to put all of their money eggs in one basket—or two baskets, for that matter. They spread their wealth across a variety of investments, from stocks, mutual funds, ETFs and bonds, to real estate, collectibles and startups. A diversified portfolio means that you can potentially take advantage of multiple sources of growth and protect yourself from financial ruin if one of your investments bombs.
An easy way to achieve diversification is to invest in an asset-allocation fund, such as a target-date fund or “life strategy” fund that is based on your risk tolerance. And if you don’t have the means to buy property outright, you can explore investing in real estate mutual funds, ETFs or investment trusts (REITs), which can even offer steady income in some cases. Learn more about crowdfunding, which now gives the average investor the ability to support startup companies. Just be careful not to concentrate your money too heavily in any one investment.
Spend money to make money
It’s true that there’s a price to pay for wealth, but unless you’re Warren Buffett, it is not gambling — and losing — on stock picking. Impulse, naiveté, and emotions, particularly greed and fear, can seriously hinder your chances of being rich if you let them. The best way to protect yourself and get a step up on your financial goals is to first invest in a team of financial professionals. This means hiring a qualified and experienced financial adviser, accountant and in complex cases, an estate planner. Yes, working with pros will cost you, and you can still do some DIY investing, but their objectivity, expertise, personalized guidance and ongoing monitoring can be well worth it (and relieve you of the huge burden of figuring it all out on your own). 
Make sure that you interview several candidates so you can find pros you trust, feel comfortable with and whose approach is a good fit for your situation. And even if you work with an adviser, make sure that you’re still involved and aware of where your money is going — and why.
Jocelyn Black Hodes is DailyWorth’s resident financial adviser.

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