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4 mins read

14 Ways to Increase Your Financial IQ

Building a strong financial IQ is critical, yet a significant portion of the global population faces challenges in this area.

This lack of knowledge can lead to missed investment opportunities, difficulty managing debt, and struggles in achieving financial goals.

To navigate the complex world of finance effectively, individuals must strive to increase their financial IQ. Here are some practical ways to enhance your understanding of financial concepts and make informed decisions about money matters:

1. Master the Finance Matrix

Understand the fundamental workings of the banking system and the flow of money through the economy. Concepts such as interest rates, inflation, and credit are essential pillars to grasp for crafting a strategic approach to saving, investing, and managing risk.

2. Utilize the Rule of 72

The rule of 72 is a handy trick to estimate how long it might take for your investment to double. Just divide 72 by the expected growth rate (the interest you expect to earn each year) and you’ll get a rough estimate of how many years it’ll take to see your money grow by 100%.

3. Study Behavioral Finance

Behavioral finance unlocks the surprising truth: our financial choices aren’t always logical. Emotions, mental quirks, and even how our brains handle information can cloud our judgment about investments, spending, risk, and debt. But by understanding these biases, we can make smarter financial decisions and avoid costly mistakes.

4. Implement the 72-Hour Rule

Before making non-essential purchases or investment decisions, wait 72 hours to mitigate impulsive behavior and assess the necessity of the expenditure.

5. Practice Zero-Based Budgeting

Track all income sources and expenses, allocating residual funds into savings. This method fosters disciplined money management and ensures every dollar has a purpose.

6. Analyze Case Studies

Examine real-world examples of financial successes and failures to glean insights into effective strategies and common pitfalls.

7. Critically Assess Financial News

Scrutinize the credibility and biases of financial news sources to make informed decisions based on reliable information.

8. Challenge Yourself with Financial Experiments

Engage in experiments such as budgeting challenges or investing in new asset classes to gain firsthand experience and refine financial habits.

9. Analyze Company Financials

Dive into the financial statements of companies to understand their business operations, revenue sources, and growth potential.

10. Follow (credible) Financial Podcasts

Listen to podcasts featuring experts who offer valuable insights and practical advice on personal finance and investment strategies.

11. Read Personal Finance Books

Explore books written by financial experts to deepen your understanding of financial principles and gain actionable advice.

12. Create a Financial Vision Board

Visualize your financial goals to stay motivated and focused on achieving them.

13. Practice Dollar-Cost Averaging

Invest regularly over time to mitigate the impact of market volatility and benefit from long-term growth opportunities.

14. Automate Your Finances

Set up automatic transfers for savings, investments, and bill payments to streamline financial management and avoid missed opportunities.

By incorporating these strategies into your financial routine, you can build a solid foundation of knowledge and make informed decisions that pave the way to financial success.

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5 mins read

The Beginners Guide to Retirement Planning

Are you considering retiring in a few years? If so, you will need to create and follow a solid retirement plan.

Getting ready for retirement usually requires you to have consistent savings and fruitful investments. A retirement plan can help you gather and maintain your finances that you can bank on after you leave the workforce.

If you don’t know where to start with retirement planning or what to expect going forward, keep reading. This article highlights the essentials of retirement planning and how you can efficiently build and manage your retirement money.

When to Start Retirement Planning?

Whether you plan to retire a few years or a few decades from now, the earlier you start planning, the more time your money has to grow. From the beginning of your career, you can try and set aside a portion of your paycheck for your retirement fund.

In the years leading up to retirement, regularly contribute to that fund so that when you finally retire, you have a financial cushion to fall back on. If your employer provides a 401(k) plan, save at least enough to get the maximum possible 401(k) match.

If you don’t start retirement planning right away, don’t worry. It’s never too late to start. Any amount of money you can manage to save from now until retirement is beneficial in the long run.

How Much Should You Save?

This question can be best answered by considering your current financial situation. Take stock of your annual income and expenses and deduce how much you’d need to save to maintain your present lifestyle after retirement. Also, consider the ways in which your current expenses can change around the time of retirement.

For example, if you’re a young parent in their 20s, you will have to save a portion of your income to cater to your child’s educational, medical, and emotional needs. So, you cannot set aside too much money for your future plans.

However, when your children become adults, and you get closer to retirement, you no longer have to worry about saving money for their needs. You can invest more of your income in your retirement then.

Ideally, saving 70% to 90% of your annual pre-retirement income can help you live comfortably during retirement.

Select your retirement investments

Retirement accounts provide access to a range of investments, including stocks, bonds, and mutual funds. Determining the right mix of investments depends on how long you have until you need the money and how comfortable you are with risk.

  • Generally, the idea is to invest aggressively when you’re young, and then slowly dial back to a more conservative mix of investments as you approach retirement age. That’s because early on you have a lot of time for your money to weather market fluctuations — a few bad years won’t ruin you, and your nest egg should benefit greatly from the stock market’s history of long-term growth. Investing for retirement evolves alongside you as you change jobs, add to your family tree, endure stock market ups and downs and get closer to your retirement due date.

  • Your investments don’t necessarily require constant babysitting. If you want to manage your retirement savings on your own, you can do it with just a handful of low-cost mutual funds. Those who prefer professional guidance can hire a financial advisor.

Follow a feasible retirement plan that works best for you to ensure a comfortable retirement for yourself and/or your dependents.

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5 mins read

8 Ways to Intelligently Invest $500

To ensure future financial stability, the best thing for you to do right now is to intelligently invest your money into profitable avenues.

Contrary to popular belief, you do not need to have thousands of dollars at your disposal to begin investing. With just $500, you can start investing and accumulating real, long-term wealth.

Keep reading to know how you can effectively invest your $500.

1.   Purchase a Certificate of Deposit

If you want to save for a short-term goal, certificates of deposit are a great way to invest your money. They’re safe to invest in as you get a guaranteed return on your investment, irrespective of the economy’s status. Interest paid on your certificate of deposit will be based on the initial deposit agreement you made and not market conditions.

2.   Start a Side Business

If your day job isn’t too demanding or you’d like to do something productive on the weekends, you could start a side business. Doing so will not only give you extra income but can also help you hone any other skills you have. You can buy items for cheap and flip them for profit, freelance as a content writer or graphic designer, sell second-hand goods on eBay or Craigslist, or open an e-commerce store.

3.   Pay Down Your Debt

With $500, you can pay down your debt and save thousands of dollars in interest. Getting rid of your debt as quickly as possible means that you won’t have to pay exorbitant interests to your creditors.

4.   Equity Crowdfunding

Crowdfunding refers to raising money from the public to finance a new business venture. In equity crowdfunding, public investors get a proportionate slice of equity in the business in exchange for their investment. Do some research and invest your $500 in a business that you think will provide lucrative returns.

5.   Set Up a Dividend Reinvestment Plan (DRIP)

Purchase dividend-paying stocks and invest them into buying more stocks. Over time, you will begin to accumulate more money through these reinvestments. Your stock can also increase in value over time and boost your overall net worth.

6.   Use Robo-Advisors

Robo-advisors are automated investing platforms that manage your investments. Many financial institutions let you invest through Robo-advisors. When you sign up for one, you will have to answer questions regarding your finances. Based on your answers, the platform creates an investment portfolio tailored to your needs. When you don’t have too much money, Robo-advisors are a great way to get started on investing.

7.   Contribute to a 401(k) or IRA

Contribute your $500 to an employer-sponsored retirement plan, like a 401(k). Make it your goal to maximize your employer’s match to accumulate more money. Talk to the HR personnel in your company to see if you can make a one-time deposit of $500.

You can also invest your money by opening a Roth IRA (Individual Retirement Account), a retirement savings plan that allows you to contribute after-tax money to your investment account.

8.   Buy Savings Bonds

If you’re a prudent investor, purchasing savings bonds is a great way to invest your $500. Bonds are low-risk investments, which means that the return on investment you receive from them will be lesser than your returns on stocks. Usually, you purchase a bond at face value and receive the principal amount plus interest at the time of its redemption.

Investing isn’t as confusing or overwhelming as it seems on the outside. It doesn’t always take too much time, effort, and money. If you still have misgivings about investing your money, talk to a financial expert and ask them for professional guidance.


***Important: Please do as much research as you can beforehand before making any investments.***


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5 mins read

5 Money Myths That Could Be Preventing You From Building Wealth

They say money can’t buy you happiness—and to a certain extent, that’s true. But poverty doesn’t bring happiness either, does it?

Let’s face it, there are a ton of money myths out there parading around as truth. But the real truth is that most of these myths are keeping hardworking people broke!

The Internet can be filled with financial “tips” that are more myth than fact. You must validate financial tips you find on YouTube, TikTok, Instagram, Reddit, or Facebook by doing your own research and speaking to a professional.

But don’t worry, to get you started, we’ve compiled a list below to call out “truths” as myths.

1) I can start saving later.

Savings is only for the rich, right? Well, not if you want to stop living paycheck to paycheck. Nearly one-quarter of Americans fail to save money every month.

However, the key to saving is to save the right thing. The rate of inflation reduces the purchasing power of your money but also increases the value of your assets, such as real estate or stocks. Rather than saving for the sake of saving, invest your hard-earned cash in assets that will pay you and keep pace with inflation.

2) All debt is bad debt.

This is one of the biggest myths of all. Having an outstanding balance on your credit card or a high-interest loan can cost significantly more than the sum you originally borrowed. However, not all debt is the same.

It is possible to acquire “good debt”—debt with a low-interest rate that builds wealth over time. Good debt will provide future value, like a mortgage or student loans.

But you must avoid overextending yourself, even with good debt: It can become a problem if you cannot afford the payments. The amount of debt you have will play a significant role in determining your credit score, which is used by lenders to assess your credit risk. The higher the score, the better the terms, which saves you money on interest.

3) You’re throwing away money by renting.

A house can be a good investment as equity will be built over time. However, becoming a homeowner is not always financially feasible because it requires you to pay the mortgage, property taxes, homeowners insurance, maintenance, and repairs—not to mention the upfront costs of buying a home.

If you are only planning on living in an area for a few years, renting could make more sense financially. It can also be a great way to save a lot of cash if you live below your means.

4) Credit cards should be avoided.

Credit cards are convenient, but they can easily become a burden if you’re not careful. However, that doesn’t mean you shouldn’t have one.

As long as you pay off your card balance in full each month to avoid interest, making purchases with credit can be worthwhile. In addition to being a great way to redeem points for cash, travel, electronics, or investing, it can also help increase your credit score, making it easier to buy a car or house in the future, with a lower interest rate.

5) You’ll spend less money during retirement.

Many people make the mistake of assuming they have plenty of time to save for retirement. In reality, it approaches faster than you think. And for some, their retirement lifestyle could be even more expensive than their working years.

Retirement looks different for everyone. For some, it may be a time for leisure and traveling. For others, it offers the chance to pursue a second career they’ve always dreamed of. Maybe you just want to leave a legacy for future generations of your family. No matter what it is, you can do it!


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3 mins read

5 Signs That You’re Smart With Money

Since you most likely work hard for your money, it’s important that you are also smart with money in order to hold on to it and put it to work so that it helps you achieve your financial goals.

Here are some signs that you are smart with money.

You Have a Budget

If you are smart with money, you have a plan written down to decide how you will spend your money each month. You know that without a plan, you might run out of money before your next paycheck or before your next invoice is paid.

Over the long term, those who budget effectively will have manageable debt, room to indulge occasionally, and savings to pay irregular or unexpected expenses and retire comfortably.

You Keep Your Financial Goals in Mind

People who are smart with money have short-term, midterm, and long-term financial goals. These goals may range from paying off a credit card to retire by a certain age or saving enough to start a business. Whatever your goals are, if you’ve always got them in mind, it’s easier to ignore unnecessary expenses like impulse purchases that may take you off your path.

You Leverage Credit Wisely

There are many ways to leverage credit to create wealth. However, wealth creation via credit only occurs when the item purchased is an asset that puts money in your account on a regular basis, and continues to gain value that exceeds the interest you are paying on it.

You Avoid Unnecessary Fees

Although fees related to banking and financial services are almost impossible to avoid, there are some that you should never have to pay. Being smart with your money means understanding the financial products you are using.

With your bank, you avoid being charged unnecessary monthly fees and fees for insufficient funds or bounced payments. With your credit card, you avoid paying late fees. Even with services such as PayPal, you use the free “family and friends” option to avoid their transaction fee.

You Shop for Necessities with a Plan

Raise your hand if you have ever walked into a store for a few items and walked out with three times as much as you originally planned to get. I’ve been there too. Failing to plan means planning to fail. That’s why I now create a list beforehand and stick to it (most of the time).  Whether you are shopping for your home or your business,  it’s smart to do so with a list that has your budget in mind.


Tony O. Lawson

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