The forex market is the largest and most liquid in the world, with around $5.3 trillion traded every day on average. This makes it highly attractive for individuals to begin trading in an attempt to make a good profit, yet trading forex also holds many advantages for small businesses. There is an element of risk involved, and many companies won’t want to put some of their profits on the line, yet if your businesses does and has worked out how much it can afford to trade, there are various reasons for doing so.
Flexible Ways to Profit
There are many different ways to trade on the forex market, meaning you can make a profit whether a currency is rising or falling, depending on the type of trades your business makes. With much more flexible ways to trade than other markets, such as the stock market where you can only profit if they increase in value, it provides more opportunities to be successful. As a highly volatile market it can therefore be better to place trades on the assumption of some currencies weakening.
Simplified Choice
For beginners, the forex market appeals due to its more simplified nature and lack of choice compared to others. There are around seven major currency pairs that provide a good starting place, with a lot of information, news and analysis surrounding all of them to keep you well informed when making trades. Then it is simply the decision of whether you think a currency will increase or decrease in value.
Diversified and Expanded Portfolio
Trading forex with Oanda offers the opportunity to diversify the company’s existing portfolio. All SMEs need to expand and grow to be a success, and widening forex trading capabilities is a good start. Spreading your small company’s investments into more places reduces volatility and means if something goes wrong in one area, it may hopefully be offset by successes in another.
Tax Incentives
The first 40% of profits made from forex trading are taxed at short-term capital gains rates, whether they are made in the first minute or month after you enter a trade. The remaining 60% is then taxed at long-term capital gains rates, but this is still a lot better for SMEs than other options available. There are also no commissions involved either, offering more financial advantages. Consider these points before your SME begins trading forex.
(This post is brought to you by Oanda Europe Limited.)
FACT #1: SINGAPORE’S DEBT-TO-GDP RATIO RANKS THIRD IN THE WORLD
With a Debt-to-GDP ratio of 382%, Singapore ranks third in the world according to a 2015 report published by McKinsey Global Institute. The global report found out that Japan lead with 400% followed by Ireland and Singapore.
This significant percentage includes the total debt of the government, households, and non-financial corporations. It comes no surprise that a large part of the country’s debt hails from the corporate sector.
FACT #2: OVER 9 MILLION CREDIT CARDS WERE ISSUED
The credit card is one of the most powerful tools of our nation’s consumers. Would you believe that the summation of the country’s credit card debt is worth over S$5 billion. All these are in the form of balances rolled over to the next statements. Shocking and scary at the same time, is it not?
Furthermore, over 9 million credit cards were issued in the past decades as of November 2015. I can only imagine how this number will grow after a year!
FACT #3: OVERWHELMING DEBT IS ASSOCIATED WITH MENTAL HEALTH ILLNESSES
A review of 65 studies published in the Clinical Psychology Review showed that there is potent association between mental health illnesses and debt. In fact, your likelihood of having a mental health problem is about 3 times higher if you have debt. This is because debt is a common stressor.
FACT #4: HOUSEHOLD DEBT IS SOARING IN THE RECENT YEARS
Singapore is a crucial financial hub across the globe. At 77% in 2013, its household debt relative to the GDP is among the highest rates in the Asian countries. It evidently rose from 2007’s rate of approximately 64%.
The rapid growth in the recent years were in accordance with the booming property market.
FACT #5: DEBT CAN CONTRIBUTE TO DIVORCE
As mentioned a while ago, debt is a common stressor. It can negatively influence relationships and marriages due to its alarming nature. Psychology Today found that couples who argue about money periodically were less likely to divorce over time than those who argue about money on a weekly basis.
FACT #6: YOU MUST OWE AT LEAST S$10,000 TO BE BANKRUPT
An individual becomes bankrupt if he or she owes at least S$10,000 and has no means to pay for it. It starts with the filing for bankruptcy by the creditor or the debtor. A deposit of S$1,600 to the Official Assignee (OA) is required. The OA is the authority that is responsible for selling as many of your assets as possible to repay your creditors.
Image Credits: pixabay.com
The effect of bankruptcy does not only take a toll on your finances but also on other aspects of your life.
A prosperous retirement is more than just attaining financial independence. It involves finding happiness and meaning in this fresh chapter of life as well as stretching your financial resources to aid your journey.
Here are the must-read publications if you are looking for ways to make the most of your remaining years:
1. “HOW TO MAKE YOUR MONEY LAST: THE INDISPENSABLE RETIREMENT GUIDE” BY JANE QUINN
Are you at the library right now? Check out the self-help books and other resources about retirement. You will notice that most of these books focus mainly on how to invest your money to create a potent retirement fund. The author’s experience supported this. Quinn once said: “I found books and websites on how to invest but practically nothing on how to prudently parcel your money out. If you take too little from savings, you’re depriving yourself of some of the comforts that you worked for. If you take too much, you’ll go broke.”
You see, spending your money wisely is just as important as building a nest. Find a balance between these elements by reading this book. Written in plain terms, this book explains how you can stretch your money once you are in retirement.
2. “THE NEW RULES OF RETIREMENT: STRATEGIES FOR A SECURE FUTURE” BY ROBERT CARLSON
For people who are far from the retiring age or who are in the earlier stages of retirement, this gem is perfect for you. It is dubbed to be a “global book” that seeks to help its readers to wrap their minds around the whole subject. It takes a realistic look at the diverse life patterns that are emerging in the retiring Baby Boomers in the recent years.
It includes chapters that educate you about managing your fund, avoiding scams, planning for long-term care, and more. These chapters are detailed and easy to read.
3. “HOW TO RETIRE HAPPY, WILD, AND FREE” BY ERNIE ZELINSKI
What makes this book shine above the rest is its Canadian humor and its focus on the non-monetary aspects of retirement. It encourages its readers to improve their physical, spiritual, and emotional well-being. It puts heavy emphasis on how to live during retirement. This is why the contents of the book are not only practical but also relevant.
4. “THE RETIRING MIND: HOW TO MAKE THE PSYCHOLOGICAL TRANSITION TO RETIREMENT” BY ROBERT DELAMONTAGNE
A Psychological transition to retirement entails dealing with the emotional stress that comes with this significant milestone. A substantial part of the book is dedicated to finding the reader’s inner being to create a fulfilling life and to enhance personal relationships. Dr. Delamontagne helps us to understand our personality types as it influences how we grow toward the next stage. These nuggets of knowledge are backed by his personal experiences.
5. “WHAT COLOR IS YOUR PARACHUTE? (FOR RETIREMENT: 2ND EDITION)” BY JOHN NELSON & RICHARD BOLLES
Learn about the wide array of variables that are involved in retirement as this book provides you with useful guidelines on how to be healthy, happy, and successful. There are worksheets and exercises inside for hands-on or practical learning.
Image Credits: pixabay.com
Ultimately, the authors view retirement as a crucial stage in life and not just an event that occurs when you stop working.
Some Singaporeans have gone off the idea of travel insurance. While it used to be considered an absolute necessity, more travellers now think of it as an unnecessary waste of S$50 to S$100.
This is particularly true of those who go on short trips, to whom travel insurance becomes a significant expense. But are they doing the right thing?
Why No Travel Insurance?
The most common reasons are:
They have personal accident insurance
They feel the claims process is unrealistic and restrictive
The seek cost-efficiency
They are already covered by credit card
They are covered under their employer’s insurance
They Have Personal Accident Insurance
For some travellers, their main concern is their healthcare related. They do not want to face medical expenses if they suffer from a fall, get hit by a car, etc.
They are less concerned about the other things that travel insurance covers. These are things like lost jewellery (they may not be carrying anything valuable), flight delays (not an issue if they have airline memberships that already compensate them), or tour agency issues (they may not be on a package tour).
For those travelling to countries where they have friends or family, some of the emergency assistance from travel insurance may be irrelevant. For example, if you are travelling to stay with your uncle in Canada for a few days, it may not be a big deal if your luggage is diverted for a day or two. The inconvenience may not be worth a S$100 insurance policy.
(It might be a different story if you are travelling alone, and know nobody where you’re going).
These travellers typically add personal accident coverage to their existing insurance policies, in the form of a rider. This can give them comprehensive protection wherever they are, for a fairly low cost (e.g. under S$30 a month).
If they are going skiing, for example, they may be happy to rely on their personal accident coverage, without adding travel insurance.
They Don’t Want to Go Through the Claims Process
Some seasoned travellers are intimately aware of travel insurance terms, and are dissatisfied with them.
For example, many policies do not allow you to make claims for lost jewellery. For lost cash, the maximum claimable amount might be too small to be relevant (e.g. The maximum claimable amount is S$250 regardless of how much you lose, and then insurance policy alone is already over S$100).
There are often tight limits on maximum claim amounts, on a per item basis. Even if the policy insures you for you to S$1 million, for example, the maximum claimable amount on your broken iPad may only be S$500.
Some travellers also feel the claims process is unrealistic, or too convoluted. For example, you may be required to present original receipts if you want to make a claim for your broken laptop.
With regard to trip cancellations, some policies only pay out only under specific conditions. For example, a policy may not pay out if the cause of the cancelled trip is the Singapore haze or a strike (the trip may only be insured against poor weather).
As such, a subset of travellers believe travel insurance has too many restrictions to be useful. If you want to join their ranks though, you will have to be sure that you make up for lack of travel insurance with the right safety precautions, and the right personal insurance policies.
They Seek Cost-Efficiency
As a rule of thumb, it is not cost-effective to insure expenses you can pay out of pocket.
For example, it would not make sense to pay premiums to insure your socks, or to insure cheap canned food in your kitchen pantry – the odds of losing them are so low, and the cost of replacement so cheap, that the premiums would just be a waste of money.
The same theory can be expanded to things like second-hand laptops, cheap watches, old clothes in your bag, etc. Some travellers would feel no significant pain from losing these items, and prefer to have more cash on hand for shopping or better accommodations. Should they lose the items, they have more than sufficient money to replace them immediately.
(Note: if your worry is losing your luggage and having no clothes, toiletries, etc., you should note that most airlines provide supplies or funds for passengers whose luggage they lose).
Their Credit Card Offers Free Travel Insurance
Many air miles credit cards, such as the Citi PremierMiles Visa Card, come with complimentary travel insurance if you charge your travel tickets to it. The Citi PremierMiles Visa Card covers up to S$1,000,000 in case of death or permanent disablement from accident in a common carrier, up to S$40,000 for medical expenses during a trip, and travel inconvenience.
If you are satisfied with these, there’s no need to buy more travel insurance.
They are Covered by Their Employer’s Insurance
Many people overlook this, so make sure you don’t.
If you are flying abroad for business, check with Human Resources on whether you are covered under your employer’s insurance. If there already is one, you do not need to buy your own.
Some companies have generous corporate insurance plans, that will cover you even if you are not on official business. If so, all you need to do is familiarise yourself with the terms (and get private only if you are unsatisfied).
Investing is a pursuit that suits many. An ideal means of increasing your income and boosting your bank balance, it also offers excitement, challenge, and complexity to those seeking a new and compelling pastime.
It’s common for those thinking of investing to struggle at the start of their venture. Many people simply don’t know where to begin, and with so many instruments and options to consider, this is hardly surprising.
So, to help you gain a head-start, here are three of the best investment options to add to your portfolio…
#1: Precious Metals
Precious metals are always a good starting point for those who choose to invest, and this is largely down to their ‘safe haven’ properties. Gold, in particular, tends to hold its value during periods of economic turmoil, and indeed often sees an increase in its price tag when times are tough. Silver acts in a similar way, but has the added advantage of enjoying a surge in popularity thanks to its growing usage in industry. With products as diverse as cars, cameras, and even industrial machinery utilising it, it’s worth looks set to continue booming throughout 2016, making it an ideal addition to your portfolio.
#2: Forex
For those looking for a more high-risk venture than precious metals can offer, the foreign exchange might be worth considering. Trading around the clock, the currency markets are flexible, accessible, and have the potential to be highly profitable. Indeed, with a reputable broker like OANDA to aid them, many investors enjoy significant successes. Although the risks can be just as great as the potential rewards, forex trading remains an ideal challenge for those looking for excitement, exhilaration, and the chance to make big money.
#3: Shares
Thirdly and finally, look at investing in shares. The stock markets are filled with a wide variety of different businesses, all offering you the opportunity for part ownership. A lot of inexperienced investors, in particular, gravitate towards these, thanks to the familiarity of the names that you’ll be trading. Offering a unique chance to play a role in the future of your favourite companies, as well as the possibility of making some tidy profits, the stock markets can be an ideal addition to any investor’s portfolio.
Choosing the assets that you add to your portfolio is essential to your success on the financial markets: choose well, and profits are there for the taking; choose poorly, and you could scupper your opportunities. Do your research, make your selection with care, and secure the future you’ve been dreaming of.
