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A Minimalist Approach to Personal Finance

 

Just as with any other form of loan every aspect of it needs to be carefully weighed up before going ahead. Things to consider are: 1. How much will the overall cost of the loan work out at? 2. How much will be saved each and every month over what is currently being paid? 3. Is there a cheaper option? If you are what is called "risk averse" you will probably be a nervous wreck if you put all your money into high risk shares. By learning to manage your risk levels you can ensure that you only select positions you will feel comfortable with over the medium to long term life of your portfolio. Ordinary men and women who knew very little of the ways that stock markets operated began to buy stock to join in this speculative boom. Many people even borrowed money to allow them to buy even greater amounts in the belief that the good times were bound to continue. They ignored all the warnings and speculation drove prices ever upwards regardless of common sense. Without this you are not investing but gambling. Let's take an example of the silver markets about 30 years ago. Two brothers Nelson Bunker Hunt and William Herbert Hunt decided to corner the silver market along with some of their business associates. They succeeded in driving the price up to around $54 an ounce before the authorities changed the rules on margin trading. With monthly savings they could consider looking at mutual funds as these will allow them to get a taste for the stock market while sharing the risks and rewards with others. They can begin their portfolio with as little as $25 per month to find out if it's something that suits them. For those who have decided that they would like to go for the full blooded approach of buying stocks and shares directly they need to have between $3,000 and $5,000 if they want to use a full service stock broker. One of the first things that you have to remember is that the bank where you have your regular account is not necessarily the bank with the best saving accounts too. With a saving account, the stakes are higher because banks have to pay you interest on the deposits that you make. Naturally, the bank that can provide you the best rate of interest will be the best saving account bank for you. 

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