Everyone knows the market goes up and down.

A common adage is to “buy low and sell high.” Trouble is, it’s next to
impossible to know exactly what the market will do in the near future.
What’s more, most individuals don’t have the discipline or courage to
try to time the market, says John Markese, president of the American
Association of Individual Investors.

“People who watch the market tend to put money in when it goes up and
never put it in when it goes down. Or if the market’s gone up, they’re
afraid they’ve missed it and they don’t do anything,” says Markese.

That’s where dollar-cost averaging comes in.
“It’s a discipline that reduces risk, not something to get rich quick.”

It’s a technique whereby you invest a set amount of money on a
systematic schedule over the long haul regardless of how the market is
performing. Because you’ve put your investing on autopilot, you’ll end
up with more shares for your money when the market is down. But if
stock prices rise, you wind up with fewer shares.

“It’s a discipline that reduces risk, not something to get rich
quick,” says Markese. “And that’s the whole point. It gets you
started. Don’t worry about where the market is. Start and put money in
on a regular basis, let’s say every month. It’s easy to do.”

In fact, if you’re enrolled in a workplace retirement plan where
earnings are automatically taken from your paycheck, then you’re
already dollar-cost averaging. But you can adopt this strategy outside
your employer’s plan by arranging for funds to be invested in other
types of retirement accounts on a regular basis.

Congratulations! You have managed to save, and quite a bit too!

Now, do you have plans for your savings? Perhaps you intend to buy a
Playstation or that expensive tennis Wilson racquet once you have
accumulated enough. It’s good to have a goal when you embark on a
savings programme because the goal encourages you to save – rather
like dangling a carrot in front of the donkey, although you are far
from being a donkey if you are clever enough to give yourself a
motivation to save.

So if you don’t have a goal, think of one. You don’t have to confine
yourself to one goal – have several goals if they help you save more,
as long as they are realistic and worthwhile objectives.

Meantime, while you save furiously towards your goal or goals, where
do you keep your savings? Stashed away in your drawer? That’s not a
wise thing to do, because there is this terrible thing called
Inflation which, figuratively speaking, is just waiting to gnaw at
idle savings. It sees your money just lying there in your drawer and
wham! it’s got your money in its jaws!

Inflation & Purchasing Power

What is Inflation? No, it’s not an insect or animal. It’s abstract.
Inflation is the economic term for rising prices, or rising cost of
living. Inflation is when the prices of things you buy are rising.
Let me give you an example. Let’s say your family takes grandmother
out to dinner at your favourite Nyonya restaurant. It’s your
grandmother’ s first visit to Kuala Lumpur or to a city for that
matter – she lives in a small town and she hardly ever ventures
beyond her garden gate.

Of course, you have to order your favourite dessert – ice kacang! You
can’t resist that pile of crushed ice rainbow-coloured by syrups and
milk, sitting on top of various beans, corn, bits of jelly, longan
and what-else-have- you, and topped with ice-cream. When your father
fishes out RM4.50 to pay for your ice kacang – watch out for grandma!
She might fall off her chair in shock! Why? Because during the time
she was a kid, ice kacang probably only cost 10 sen. TEN SEN??!! Now
it is your turn to fall off the chair!

That’s what we mean by inflation. Rising prices. Sixty years ago, an
ice kacang cost 10 sen. Today it costs RM4.50 at a proper restaurant
and RM1.50 from a hawker stall. Its price has shot skyward. Put in
another way, inflation has reduced the purchasing power of money
through time. Your granny’s 10 sen cannot buy a bowl of ice kacang
today, maybe only that bit of crushed ice. The 10 sen has lost a lot
of its buying power; it buys less than what it did 60 years ago. In
fact, today’s hawker price of ice kacang won’t stay RM1.50 forever.
It will go up and you don’t have to wait till you are a
grandmother/ grandfather to see this. By the time you are a
mother/father, we’ll bet an ice kacang would probably cost nearer to
RM2 at the stalls.

That’s inflation for you. And the sad news is that inflation does not
only attack foods. It is pervasive, sinking its claws in all things
and services that are part of living – clothes, furniture, bicycle,
house, cinema tickets, taxi fares, park rides etc. etc. That’s why it
is called the rising cost of living.

So what does this mean for your savings? Simply that if you just
stash away your savings – let’s assume that you have saved RM100 – in
a drawer, your RM100 just remains RM100 until you want to use it.
Meanwhile inflation is nibbling away at the value of your RM100 so
that when you actually use it much, much later, your RM100 is not
going to be able to buy you as much as when you started to save it.
This is because – depending on how long you keep your money – prices
of things would have risen in the meantime. Of course, if you
immediately use your savings, inflation probably won’t have a chance
to work yet. But then, we are talking about a savings programme here,
and that means a long enough time frame for your savings to grow -
and for inflation to kick in.

So what must you do? To fight inflation, you must make your savings
grow in value, faster than the inflation rate. If you just let the
RM100 of your savings stay the same, you know that through time the
purchasing power of your RM100 will not be RM100, but less – because
the prices of things are continuously rising. However, if your RM100
savings could grow to, say, RM150; then in future you can not only
buy the same things that your RM100 could at the start of your
savings, you can also buy more things.

Investing is the way to go

To make your money grow, you certainly do not leave your cash in your
drawer or stuff it under the mattress or anywhere else where it just
stays put, and forget about it until you want to use it. To make your
money grow, you must do a second smart thing – your first smart move
was to save – you must invest it.

Investing is defined as using your money (in this case, your savings)
to make more money. Grown-ups, the wise ones, do that. They invest to
make money with their money and when this has grown, they re-invest
the bigger sum and in the process of re-investing again and again,
their money is doubled, tripled or multiplied many times more. That’s
how people get rich – not through winning the lottery (you have one
chance in 7 million or something like that) but through saving and
investing. You can do the same with your small sum of savings and
watch it grow.

There are different ways to invest your money so as to earn a return.
A return is the amount of earnings or income that you get from your
investment. The easiest and most common way is to put your savings
into a bank savings account or fixed deposit. Your savings will grow
because the bank pays you a certain sum of money (your return) called
interest, as long as your money stays with the bank. This way your
savings grows until you want to use it and when you withdraw it from
your bank account, the amount of money that you have now will be your
original savings plus the interest it has accumulated. It is no
longer just your RM100 but a bigger sum.

So bank accounts are one type of investment. Another is investing in
the stock market by buying shares of companies. Many adults do this.
We shall explain more about shares in another article. For now, know
that people invest in shares, hoping to earn a return in two ways.
One is from receiving dividends, which is simply the monetary reward
that companies pay out to shareholders when the companies perform
well. The second is from realising a profit when they sell off their
shares. Profit is the gain in money between what you paid for the
shares and what you get when you sell the shares. Simple Maths will
explain profit. For instance, if you had a savings of RM600 and
bought 200 shares for RM3 a share, and three months later, you sold
your 200 shares at RM4 a share, you would make a profit of RM200.

Here’s how:

Cost of buying 200 shares at RM3 a share = 200 x RM3= RM600.
Amount of money received from selling 200 shares at RM4 a share = 200
x RM4 = RM800.
Profit = Sale minus Purchase = RM800 – RM600 = RM200.

The profit has made your savings swell from RM600 to RM800.

There are other ways of investing your money.

You could even buy a house, if you have loads and loads of money
(say, through inheriting a fortune from your favourite aunt who
passed away). If you rent out your house, your return will be the
amount of rental income you receive from your tenant. Which
investment method you choose depends on factors like how much savings
you have and how much returns you want to make. Each investment has
its pros and cons.
For instance, investing in shares can earn you more returns than bank
accounts, but it is riskier. If you put your savings into a bank
account, your money is safeguarded. You can’t lose it like you can
lose your money in shares if you pick the wrong share to buy. Even if
the bank gets robbed, or burnt down or goes bankrupt, the law of the
country provides that you will get your money back. Not so with
shares investing. However the return from the bank interest is rather
small.

Investing in property like a house could earn you massive returns,
but it is a long-term investment. It would be years and years before
the prices of houses rise for you to sell your house and make a
profit. (Remember? Profit equals Sale minus Purchase.) Getting your
return from investing in shares is much, much faster but like we said
before, you must be smart (and lucky enough) to select the right
share to buy or else you could lose your money invested.

In fact with all types of investment (except perhaps for bank
accounts), there is always a possibility of losing your savings, much
less about getting a return. If you invest unwisely, you could lose
both your original sum of savings and get no returns at all.

However, there’s no mistake about this: investing is the way to build
your wealth.

You just have to invest wisely.

Understand the Compounding Effect of Money

The compounding effect of money is extremely important when making
any financial decision. The compounding effect of money is often
overlooked or underestimated by people when making decisions. When
applied to all of your financial decisions, this effect is the KEY to
long-term success! To illustrate the compounding effect of money, let
me use some financial examples:

Suppose you had invested $1,000 today in a 5% savings account. In one
year, that account would be worth $1,050 [$1,000 + ($1,000 x 5%)],
yielding a $50 gain. However, in year two, that same initial
investment would be worth $1,102.50 [$1,000 + ($1,000 x 5%) + ($1,050
x 5%)], yielding a $52.50 gain. And in year three, the same $1,000
would be worth $1,157.63, yielding a $55.13 gain. By year ten, the
initial $1,000 investment would be worth $1,629 and by year 25 it
would be worth $3,386.

From looking at this example, you can see that investing $1,000 today
is much more valuable than investing $1,000 even a couple of years
from now. To accumulate wealth, you MUST use the time value of money
and the compounding effect of money to your advantage. Click here to
see how long it will take to save a million dollars.

This second example shows how the compounding effect can work against
you:

Suppose you borrowed $20,000 to purchase a car and your auto loan was
at a 10% interest rate (for 5 years). Your monthly payments would be
$424.94. Because the $20,000 loan continues to compound over the life
of the loan, you actually pay $25,496.45 over the five-year period,
meaning that you’ve in essence paid $5,496.45 because you spent the
money before you had it. In fact, in your initial payments, the
interest alone will account for almost 40% of your monthly payments.
In this case, the bank or lender that gave you the loan uses the time
value of money to their advantage.

Now look at this scenario, where instead of making the $424.94 car
payment, you invest that payment at the same rate as what your car
loan was (granted it’s a little high for a savings rate, but not
unreasonable for other investments) . Now, instead of paying the bank,
you are actually earning interest and compounding the benefit
yourself. After one year you will have saved $5,340 and have earned
$240 in interest. After two years, you will have saved $11,239 and
have earned $1,039 in interest. By the third year, your investments
will be worth almost $18,000 and you will have earned $2,457 in
interest. By month 40, you will have enough money to purchase a
$20,000 car in cash!

So let’s weigh the differences between the two scenarios above. In
the first case you paid the bank $5,496 to borrow the money and in
the second case you earned $2,457 and could buy the car in cash after
just 40 months (just over 3 years)! The opportunity cost of the first
alternative versus the second alternative results in a net difference
of $7,953 (a $2,457 gain versus a $5,496 loss). That means that by
making a simple deferral decision (buying the car in 3 years versus
today), you can get ahead by almost $8,000!

The answer is simple: as soon as you can. Ideally, you’d start saving
in your 20s, when you first leave school and begin earning paychecks.
That’s because the sooner you begin saving, the more time your money
has to grow. Each year’s gains can generate their own gains the next
year – a powerful wealth-building phenomenon known as compounding.

Here’s an example of what a big difference starting young can make.
Say you start at age 25, and put aside $3,000 a year in a tax-deferred
retirement account for 10 years – and then you stop saving -
completely. By the time you reach 65, your $30,000 investment will
have grown to more than $472,000, (assuming an 8% annual return), even
though you didn’t contribute a dime beyond age 35.

Now let’s say you put off saving until you turn 35, and then save
$3,000 a year for 30 years. By the time you reach 65, you will have
set aside $90,000 of your own money, but it will grow to only about
$367,000, assuming the same 8% annual return. That’s a huge difference.

* When should I start saving for retirement?
* Where should I save my retirement money?
* How should I invest the money?
* How should my strategy change as I get older?
* How much money will I need in retirement?
* Will pensions and Social Security be enough?
* How much should I save?
* What if I can’t save enough?
* How can I reduce the amount I’ll need?
* What if I’m running out of time?
* I’m saving a lot but will still fall short – what now?
* When can I retire?

Source:
http://money. cnn.com/retireme nt/guide/ basics_basics. moneymag/ index.htm? postversion= 2008090815

We are always hearing save, save, save. But if you don’t have a reason
to save, it isn’t likely you will.

Most people live paycheck to paycheck. Many people simply do not have
the money to save. There just doesn’t seem to be enough money left
over after paying the necessities.

And I’m not just talking about the lower-income groups. Often, those
driving new cars, living in nice homes and wearing name brand clothes
are barely making it by financially. They often have a harder time
finding extra money than do those who make incomes below poverty level.

There are a lot of people that wear money well, yet they don’t really
have any. Is that you? Are you caught in an endless cycle of wanting
more and wanting better? Do you see that it just isn’t working for you?

Sit down and examine what your main goals are in life. I mean the
really important financial ones. You may want to retire someday. Have
you started saving? Do you want your children to go to college? Have
you started saving? You might just want to be able to pay all of your
bills? Have you started saving?

You get the hint — it’s all about the saving. I’m not going to go
into how to save, you can research that later. Let’s talk about why
you should save.

The number one reason to start saving right now is for emergencies.
Things happen. People pass away. People get hurt at work. People get
laid off. We have accidents. We have cars break down, washing machines
stop working and sometimes even disasters hit our homes.

With an emergency savings, you are cushioned from the financially
ruin. You can make ends meet until you are able to figure something
out. You are able to buy that new washer without hurting your monthly
budget. You are able to sleep without worrying where you will find the
money. It’s in your savings.

I suggest starting with three to six months worth of monthly expenses.
This gives you a pretty good cushion. Put as much in as you can. My
husband recently lost his job, and we found that three months fly by
fast. Before we knew it, the fund was gone. But it gave him valuable
time to find a good job — he didn’t have to take one just to make
ends meet.

Once you have this savings built up, you should start working on your
goals. You can work on several at a time. For example, if you are able
to put $100 from each paycheck into savings, yet have three goals you
are saving for, do a portion to each.

For example, your goals are for retirement, college for your child and
buy a home. Decide which is most important to you and what you need to
dedicate of that $100 to each goal. You might put the largest amount
to your retirement, the second largest to your home and the third to
the college education.

You should save money. I can’t tell you why. That is your decision.
There are goals that can only be fulfilled from savings. Think about
what you want in life. If you want out of debt, to own your own home
or to retire comfortably, you have to start saving now.

INTRODUCTION

Savings is the act of putting aside, for sometime certain portion or
percentage of your income to either buy an item, prepare for some
unexpected expenses, or for investment purposes. For the purpose of
this write-up, we would be considering savings for investment
purposes. Most people would advice you to save up to 10% of your
income, but taking a look at the biblical story of Joseph in Egypt,
where he saved one fifth or 20% in the year of abundant, which was
their saving grace in the year of famine. I believe there is a divine
wisdom in paying yourself 20% of your income, if you can afford it.

WHY SHOULD YOU SAVE

Some people believe that their income is too small, and not sufficient
to meet all their basic needs, so they use this as an reason not to
save. This shows that they do not understand the commandment, you
shall love your neighbour as yourself, and not you shall love your
neighbour more than yourself. Whenever you spend money, you are paying
someone else, rent your landlord, transport fair the owner of the
means of transport, school fees the proprietor and buying food or
cloths the retailer. As you continue to do this, you are helping all
those you paid financially, but when you spend all your income, you
are not helping yourself. It is the little that you pay yourself by
saving, that would empower you (enable) to take advantage of
opportunities, when it they come.

It is the first step out of poverty and rat race. Many people believe
that the first step to wealth is getting a good job or starting a good
business. But what has been discovered overtime is that your expenses
and taste will increase as your income increases, so the only way out
is for you to put a certain portion of your income aside for
investment purpose. Do you know that a seed in your hands today can
become a tree tomorrow, and a tree a forest? Likewise that small
amount of money with you today has the potential of becoming millions
and billions if, it is allowed to grow and multiply with time.

SAVINGS TO POVERTY

In as much that it is good to save, make sure that it does not exceed
six month before you put it to productive use, if not, the effect of
inflation would reduce the economic value of your savings. No matter
how small your savings is, find something to invest in. All savings
that are not made for investment purpose cannot empower you to create
wealth.

SAVINGS TO WEALTH

SAVINGS + GOOD AND TIMELY INFORMATION + ACTION= WEALTH

Savings itself has a spirit, the spirit of being sensitive to
investment opportunities. As you begin to save, you should become more
interested in what in the stock market, real estate and so many other
opportunities offline and on the Internet. Seek for information,
subscribe to some financial journals or site on stock, to get updated
information on investment opportunities, and when necessary please be
prepared paid for such information, proverb 4:7 Wisdom is supreme,
therefore get wisdom, though it cost all you have, get understanding.
As you begin to gather and analyses information on difference
investment opportunities, you will discover that there are some, in
which you could start small, like buying into penny stock. Please do
not wait until you have about half of your monthly income, before you
invest, start small. Continue to do this and watch your investment
grow and grow, until it turns into a well, where you can always draw from.

———— ——— ——— ——— —
Source:
Article Source: http://EzineArticle s.com/?expert= Olumuyiwa_ Johnson

http://www.mystupidboss.com/msb/WorkplaceBullying.aspx

Bullying doesn’t just happen to kids at school; it is a very real problem in the workplace as well. Millions of days are lost to businesses each year as a result of absenteeism caused by bullying. Bullying results in low morale, lower productivity and high staff turnover. Surveys suggest bullying is responsible for 30 – 50% of all stress related illnesses in the workplace.

Have you ever been bullied by your boss? Have you witnessed a co-worker being bullied by a supervisor? A recent study by the U.S. National Institute for Occupational Safety and Health suggests that most incidents of workplace bullying are between employees, rather than perpetuated by a supervisor. Frankly, we find that very difficult to believe. Can it be true that most workplace bullying is by co-workers?

We believe a survey recently publish by the British Trade Union Congress on workplace bullying is highly significant. According to the survey, 2 million workers claim to have been bullied in the six months leading up to November 2005. What is particularly striking about this British evidence for workplace bullying is that it is senior managers, rather than co-workers, who are singled out as the worst offenders when it comes to acts of workplace bullying.

We think bullying by bosses is stupid because it is counterproductive. It is estimated that 18 million working days per year are lost through the effects of workplace bullying in the UK alone.

Are bullying bosses just a British phenomenon? Use the Submit a Story page to tell us what you think.

What is Bullying at Work?

Bullying at work is basically any behaviour that is malicious, intimidating, insulting or upsetting. It is a deliberate attempt by a colleague or boss to undermine, intimidate or control you. Bullying tends to be sustained over a long period rather than being a one off occurrence. Bullies rarely commit a physical attack but instead use more psychological tactics. The emotional problems that the victim experiences can be very hard to deal with. Any of the following can be regarded as bullying behaviour:

Verbal/physical threats
Being humiliated in public or shouted at
Blocking access to training/overtime and other benefits
Spreading malicious rumours
Persistent criticism that is undeserved
Setting impossible deadlines – setting you up to fail
Offensive reference to sex, race, age, etc
Exclusion from meetings or communications that are relevant to your job
A bully may be quite subtle when talking to you in front of other people, but when you are on your own with them, you may be subject to explosive outbursts.

Bullies will quite often try to wear you down by placing unreasonable demands on you. They may accuse your standard of work or accuse you of not pulling your weight.

What can you do about it?

Admit that you are being bullied
The first step you need to take is to acknowledge the fact you are being bullied. If you just try to ignore it, the problem will not go away.

Stand up for yourself
Try not to show the bully that their behaviour has upset you. Try to improve your assertiveness and communication skills. Look at your body language, don’t stoop or hang your head. Stand up straight with confidence and maintain eye contact. If you stand up to the bully rather than just take it lying down, chances are the bully may lose interest and turn their attentions elsewhere. Bullies prey on people that accept their bad behaviour. Don’t give them an easy ride – simply choose not accept the way they treat you. If they speak to you abusively, stand up to them and ask why they are treating you so badly. Tell them how their behaviour is affecting you. If they know that they are always going to have to account for their behaviour, your direct approach will potentially reduce the chances of them bullying you in the future.

Make a case
Gather information about this person. Is it just you they are targeting or are they bullying anyone else? Build a case to show the negative impact they are having on the workplace.

Keep a diary of bullying tactics. Make sure you include specific incidences and record exactly what was said. Specifics are much more useful than vague recollections.

Tell someone
Write a memo to the person concerned stating your criticism of the way you are being treated. Make sure you copy in your Human Resources manager. If you are called into a meeting, request that a colleague or friend comes in with you.

Request that your Human Resources department spell out clearly their policy on bullying.

What if the company does nothing?

Talk to friends
Talk to your friends and supportive colleagues. Don’t try to deal with the problems on your own.

Don’t be embarrassed to seek professional help
If you have been badly affected as a result of bullying, seek professional help. Your family doctor can refer you to counsellors and psychologists. Bullying causes stress, which can, over a sustained period of time have very harmful effects on your body. Symptoms of prolonged stress include tiredness/feeling run down, difficulty sleeping, headaches, heartburn, stomach ulcers, high blood pressure and heart disease.

Know when it’s time to move on
You need to ask yourself whether it is worth the stress of staying on. Some bullies will not back down and will continue to make your life hell. Is your job really worth it? If it is just the individual that is the problem, then the problem may be worth tackling, but in some cases the organisation may have a ‘bullying culture’. Why would you want to continue to work in an organisation that supports bullying?

Take some time out and make a list of what you are good at. Document your achievements and update your CV. Take this opportunity to push your career in a more fulfilling direction. Your health and sanity are much more important.