All Money Matters

Welcome to All Money Matters, a site devoted to areas such as:

  • personal financeSaving and investing
  • Debt and borrowing
  • Home and mortgages
  • Renting and letting real estate
  • Budgeting and managing money
  • Pensions and retirement
  • Insurance

Investing

An investment is something that you purchase or put your money into with the hopes of receiving a profitable return. Examples of available investments are real estate, shares in a company (blue chip or penny stock), fixed interest securities (bonds), foreign currency, contracts for difference, art, antiques, and commodities such as coffee, gold or oil.

A a general rule, skilled investors will spread their investments over different types of assets and also spread their investments within each type of asset. They may for instance invest in both real estate, shares and art, and make sure to purchase various types of real estate, shares in different companies and art from several different artists and eras.

You can either invest in an asset directly or in a financial instrument that is based on a certain asset.  Financial instrument based on an asset will often offer you leverage.  Leverage allows you to earn more money while trading.  A leveraged product will allow you to earn several points for every point the asset moves.  If a financial instrument offer a 1:200 leverage then that means that you earn or lose 200 points whenever the assets moves 1 point.  Leverage trades increases risk since it leverages both profits and loses.

Examples of financial instruments that allow you to earn more than you would earn investing in the underlying instrument includes FOREX certificates,  CFD:s (Certificates for difference) and binary options. There is no limit to how much money you can lose when investing in FOREX Certificates and CFD:s.  Binary Options are less risky to invest in since your losses are limited  to the amount you have invested in the option. You can read more about binary options by visiting www.binaryoptions.net.

Returns on investments can come in many different forms. Fixed interest securities can give you interest payment, shares can give you dividends, real estate can give you rent, and so on. Also, the asset can increase in value so that you’ll get a return on your investment when the asset is sold.

Debt and borrowing

There are many different types of debt and it is always important to research the available options before one decides to borrow money. Take for instance the popular payday loan. It can be a life saver in certain circumstances, but it can also be high-interest slippery slope that causes your financial situation to come undone. If you are in a situation where a payday lone might be necessary, always research other possible option and also research various forms of payday loans and payday loan companies to find out the most suitable solution for you in this specific situation. Ideally also make a plan for how to prevent yourself from needing more payday loans in the future.

payday loanA payday loan is a short-term loan, typically a loan that is due to be repaid when the borrower receives his or her next salary. In many parts of the world, a small short-term unsecured loan is referred to as a payday loan even if it isn’t linked to the borrower’s payday. In order to get a payday loan, many lenders will ask you to provide verification of employment or other source of income. This can for instance be in the form of employment contract, pay stubs or bank statements. A lender can also elect to run a credit check.

In countries where checks are in common use, it is not unusual for the lending store to require the borrower to write a postdated check covering the full amount of the loan plus interest and fees. If the borrower does not return to the lending store on the agreed date to repay the loan, the lender can redeem the check. If the borrower’s check account does not have sufficient funds to cover the check, the bank will charge the borrower a bounced check fee.

Before the advent of online payday loans and SMS payday loans, a borrower would typically visit a lending store to apply for the loan and receive the money. This method is still common in areas where internet connections, mobile phones and/or personal bank accounts are rare or where borrowers prefer to visit lending stores rather than relying on more modern alternatives.

Unsecured payday loans tend to carry substantial risk to the lender, a risk reflected in the interest rate. Interest and fees payed by the borrower must also be large enough to cover the processing costs of the loan, which normally means a high interest rate and/or high fees for small short-term loans. For example, a 20% annual percentage rate on a payday loan might seem high compared to the interest rate on a 25 year mortgage, but if a lender would get a 20% APR (compounded weekly) on a £100 seven-day loan the interest would not amount to more than £0,38 and this would most likely be less than the processing costs associated with the loan.

Mortgage

A mortgage is a security interest in real property held by a lender as security for a debt. In every day speech we often refer to the loan itself as a mortgage, e.g. “my mortgage on this house is £100,000” but this is not true in a legal sense of the word. From a legal perspective, it is the house that is the mortgage – the banks security for your debt.

saveIn many parts of the world, a mortgage loan is the standard method of obtaining enough money to purchase real estate. If the borrower defaults on their loan, the lender is allowed to take possession and sell the secured property. This is referred to as foreclosure or repossession. The lender’s rights over the secured property have priority over the rights of other unsecured lenders and creditors.

The list of important features to check and compare when you are looking to obtain a mortgage loan include maturity of the loan, interest rate, how future interest rates will be determined, method of paying off the loan and any rules regarding foreclosure.