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Month: November 2013

What is an ETF?

An ETF (Exchange-Traded Fund) is a fairly new invention and they are getting very popular. An ETF is similar to an index fund. It tracks a particular index like an index fund, but it is traded like a stock.

This means that an ETF has a ticker symbol and you can buy it by the share. Exchange Traded Funds can also track commodities such as gold and silver. This is a great way to invest in commodities with small investment amounts without holding physical assets. They also give you more liquidity than holding physical commodities…

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What is a Bond?

A bond is a form of investment. Simply put, a bond is debt.

When you buy a bond you are basically offering a loan to a company or government, and the entity that you borrow from is then in debt to you; unlike a stock where you own a share (or a piece) of a company, with a bond you are just loaning the money for a certain amount of time.

This article is for the investor wanting to know what a bond is (for investing purposes not macro economical purposes) so I won’t get too deep into monetizing, but I will say that bonds are often what people are referring to when they talk about the government printing more money out of thin air. This occurs through selling bonds to the public, as well as the government buying their own bonds (monetizing).
So what are the rates of return for bonds?

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INVEST – Let Your Money Work for You

Once you have paid off your debt (with the exception of your mortgage), you are ready to start seriously investing.

The only exception for investing before you are debt free is retirement.

It’s never too early to start investing some amount into a retirement account, whether it be through your work’s plan or on your own plan.

Retirement should be an automatic amount that is deducted every month, no matter what.

This is the philosophy: Pay yourself first!

Even if you can only afford $10/month at first, you should be investing something into a retirement account…

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DEBT – Dump Your Debt

This is a quick guide on dumping your debt.

Debt comes in many forms, such as mortgages, credit cards, loans and ways you’ve never imagined.

Nowadays, people find new, innovative ways to get themselves buried in it everyday.

It’s an art really. This brings me to my first point:

Debt is not our friend. In fact, it’s the enemy.

Racking up debt by taking out loans and making minimum payments on credit card bills can ruin your life. Fortunately there are solutions to this problem.

Here’s a little secret…

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PLAN – Be Prepared for Anything

Unexpected events are some of the only events we can expect.

How do you expect the unexpected? You need a plan.

It’s important to be prepared. Financially, there is one major step to take that can leave you feeling secure.

An emergency fund.

An emergency fund is the most important foundation of your financial health. No matter where you are in your financial journey, having an emergency fund will get you closer to your goals and limit your setbacks.

Using a credit card for emergencies can turn an emergency into a catastrophe. Getting into credit card debt will just create more problems, that’s why we plan for emergencies without credit cards, right?

Let’s start with the basics…

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