What Is Your Investment Style?
Knowing what your risk tolerance and investment style are will help you choose investments more wisely. While there are many different types of investments that one can make, there are really only three specific investment styles – and those three styles tie in with your risk tolerance. The three investment styles are conservative, moderate, and aggressive.
Naturally, if you find that you have a low tolerance for risk, your investment style will most likely be conservative or moderate at best. If you have a high tolerance for risk, you will most likely be a moderate or aggressive investor. At the same time, your financial goals will also determine what style of investing you use.
If you are saving for retirement in your early twenties, you should use a conservative or moderate style of investing – but if you are trying to get together the funds to buy a home in the next year or two, you would want to use an aggressive style.
Conservative investors want to maintain their initial investment. In other words, if they invest $5000 they want to be sure that they will get their initial $5000 back. This type of investor usually invests in common stocks and bonds and short term money market accounts.
An interest earning savings account is very common for conservative investors.
A moderate investor usually invests much like a conservative investor, but will use a portion of their investment funds for higher risk investments. Many moderate investors invest 50% of their investment funds in safe or conservative investments, and invest the remainder in riskier investments.
An aggressive investor is willing to take risks that other investors won’t take. They invest higher amounts of money in riskier ventures in the hopes of achieving larger returns – either over time or in a short amount of time. Aggressive investors often have all or most of their investment funds tied up in the stock market.
Again, determining what style of investing you will use will be determined by your financial goals and your risk tolerance. No matter what type of investing you do, however, you should carefully research that investment. Never invest without having all of the facts!
Workflow automation in the leasing industry creates efficiencies
Lease management software provider Odessa Technologies contends that automated workflow processing accelerates lease processing times, effectively manages related processes, and optimizes workforce efficiencies in any decision making environment. Any workflow process, whether it be for the decision on lease applications or vendor payments (check requests), can be accommodated by an automated workflow system that is built with adequate versatility. In fact, the automation of decision making can fundamentally change the way an organization works, forcing it to confront its bottlenecks and find new ways to create efficiencies.
<b>Workflow model applied traditionally</b>
A standard workflow that can be managed through an automated workflow system is the lease application process. Typically, a lease application traverses through various departments or stages before an approval or rejection decision is made. An application may, for instance, first go to the credit department, then funding, and finally to the legal department before getting approval. Moreover, certain applications (i.e. those which exceed a certain pre-defined dollar limit) may have to make two (or more) stops in the credit department before moving forward. Workflows such as these can be easily modeled in an automated system; further, based on certain user-defined conditional logic (such as a credit limit), the application can even move through different paths within the same workflow.
<b>Extending the workflow concept beyond the traditional</b>
With the advent of sophisticated leasing software applications, it is now possible to automate entire workflow processes within an organization. Workflow automation in the leasing environment lends itself to a high degree of control over the typical processes followed by companies with tight security controls and access rights of users and roles. It also lends itself to planning, based on the data that is maintained by the system. At any given point, managers can, for instance, accurately assess where applications stand, which payments need approval, their stage in the approval process, and any related impact on cash-flow planning, etc. Performance can be appraised based on approval rates, the quality of applications, the number and type of credit checks made, the length of time a particular role/user took to make certain types of decisions, etc. Therefore, an automated workflow system not only allows for greater efficiency, but given its data-richness, also serves as a natural control and planning tool for the entire organization.
<b>Workflow software functionality</b>
Automated workflow software provides businesses with unparalleled flexibility and functionality. Users can easily perform a range of functions such as:
-Replicate real-world workflows for efficient management of front and back office processes
-Receive applications online or through any source desired
-Set up vendor programs, unique to each vendor
-Automate credit decisioning
-Apply pre-determined price matrices
-Automate decisions based on one or many variables
-Set up unlimited workflows to process decisions
-Define unique conditions and tasks for each stage in any workflow
-Comprehensively generate and manage all related documentation
-Process complex decisions that exactly represent the needs of each situation
-Manage and control the overall system with extensive levels of control
Should I Make a Budget, and Why?
You say you know where your money goes and you don’t need it all written down to keep up with it? I issue you this challenge. Keep track of every penny you spend for one month and I do mean every penny.
You will be shocked at what the itty-bitty expenses add up to. Take the total you spent on just one unnecessary item for the month, multiply it by 12 for months in a year and multiply the result by 5 to represent 5 years.
That is how much you could have saved AND drawn interest on in just five years. That, my friend, is the very reason all of us need a budget.
If we can get control of the small expenses that really don’t matter to the overall scheme of our lives, we can enjoy financial success.
The little things really do count. Cutting what you spend on lunch from five dollars a day to three dollars a day on every work day in a five day work week saves $10 a week… $40 a month… $480 a year… $2400 in five years….plus interest.
See what I mean… it really IS the little things and you still eat lunch everyday AND that was only one place to save money in your daily living without doing without one thing you really need. There are a lot of places to cut expenses if you look for them.
Set some specific long term and short term goals. There are no wrong answers here. If it’s important to you, then it’s important period.
If you want to be able to make a down payment on a house, start a college fund for your kids, buy a sports car, take a vacation to Aruba… anything… then that is your goal and your reason to get a handle on your financial situation now.
Avoid Mistakes when Investing
Along the way, you may make a few investing mistakes, however there are big mistakes that you absolutely must avoid if you are to be a successful investor. For instance, the biggest investing mistake that you could ever make is to not invest at all, or to put off investing until later. Make your money work for you – even if all you can spare is $20 a week to invest!
While not investing at all or putting off investing until later are big mistakes, investing before you are in the financial position to do so is another big mistake. Get your current financial situation in order first, and then start investing. Get your credit cleaned up, pay off high interest loans and credit cards, and put at least three months of living expenses in savings. Once this is done, you are ready to start letting your money work for you.
Don’t invest to get rich quick. That is the riskiest type of investing that there is, and you will more than likely lose. If it was easy, everyone would be doing it! Instead, invest for the long term, and have the patience to weather the storms and allow your money to grow. Only invest for the short term when you know you will need the money in a short amount of time, and then stick with safe investments, such as certificates of deposit.
Don’t put all of your eggs into one basket. Scatter it around various types of investments for the best returns. Also, don’t move your money around too much. Let it ride. Pick your investments carefully, invest your money, and allow it to grow – don’t panic if the stock drops a few dollars. If the stock is a stable stock, it will go back up.
A common mistake that a lot of people make is thinking that their investments in collectibles will really pay off. Again, if this were true, everyone would do it. Don’t count on your Coke collection or your book collection to pay for your retirement years! Count on investments made with cold hard cash instead.
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Different Types of Stock
The different types of stock are what confuse most first time investors. That confusion causes people to turn away from the stock market altogether, or to make unwise investments. If you are going to play the stock market, you must know what types of stock are available and what it all means!
Common Stock is a term that you will hear quite often. Anyone can purchase common stock, regardless of age, income, age, or financial standing. Common stock is essentially part ownership in the business you are investing in. As the company grows and earns money, the value of your stock rises. On the other hand, if the company does poorly or goes bankrupt, the value of your stock falls. Common stock holders do not participate in the day to day operations of a business, but they do have the power to elect the board of directors.
Along with common stock, there are also different classes of stock. The different classes of stock in one company are often called Class A and Class B. The first class, class A, essentially gives the stock owner more votes per share of stock than the owners of class B stock. The ability to create different classes of stock in a corporation has existed since 1987. Many investors avoid stock that has more than one class, and stocks that have more than one class are not called common stock.
The most upscale type of stock is of course Preferred Stock. Preferred stock isn’t exactly a stock. It is a mix of a stock and a bond. The owner’s of preferred stock can lay claim to the assets of the company in the case of bankruptcy, and preferred stock holders get the proceeds of the profits from a company before the common stock owners. If you think that you may prefer this preferred stock, be aware that the company typically has the right to buy the stock back from the stock owner and stop paying dividends.
