For those not familiar with some of the “financial terms” I have asked Joanne to give you a glossary of meanings. I read below and I understand what she is talking about however I am “empowered” and in charge of my finances — it’s just me I have to be.

As you know this site is about breaking things down to the “simple” and that just means that I give you the meaning of the terms so that you can understand what a financial person is saying only in layman’s terms. (I like that it is lay”man” and not woman). Money is something that many of us hold dear to our hearts and so if you are going to ‘part with it’ even from an investment side I want to make sure that you FULLY understand what is being told to you.

The option that Joanne has given you in ‘the closet’ idea is this (the best I can do). When I invest in my closet and clothes for the season I take into consideration how I dress — for me it is more casual however I am entering the corporate world so I need to shift my purchases a little to make them more versatile. My long term purchases are going to be the more classic and for some more conservative purchases: the black dress, a scarf, certain shoes and so on. This is clothes that will be in my closet for months and probably years. For the more trendy stuff — I just saw Sex And The City2 movie and some of those clothes were pretty out there. Some I loved — especially the shoes. When I come to a season and I look at my “cash” that is sitting in my bank (ok it’s from my credit card however I do pay it off with cash) I consider how much am I willing to pay, how many times will I wear it (that’s my return on investment) and will it be in style next season. With this in mind I shop. The more the trendy piece it is the less I want to pay for I know that I will only be wearing it for a few months, especially in the summer for our summer is short. For the winter months there is a greater return on investment because the season is longer. Thinking short-term – 1 month up to a year I keep a price in mind and then I buy the trendier clothes and feel good about wearing them. I match it up with great shoes, a purse, a scarf and the outfit increases in value tenfold!

With your money that you have in the bank, know that money sitting there brings no return or very little. In order to increase the likelihood of receiving a greater interest (these are rates set daily or for a short period of time – 1 year, 2 year) you will want to look at things that you can put your money into that is not risky (or only slightly) and come out with even more money. Keep in mind all money earned through interest is taxable so you may want to talk to your financial planner as well as your accountant.

GLOSSARY(to come shortly):

Here is Joanne’s blog:

There are a couple of alternatives to consider that may provide better returns while still providing reasonable security and access to cash when you need it, short-term bonds and money market funds that invest in short –term debt instruments. By assuming slightly higher risk, government bonds with maturities of 1 year or less potentially offer better returns over cash or guaranteed deposits. Their short maturities provide liquidity if you need access to cash. They are backed up by the federal or provincial government and can be considered very secure (although not guaranteed). Bond yields can fluctuate according to interest rates so they do have a small amount of risk. Money market funds that include bonds and other short-term debt instruments may produce higher yields with only marginally more risk than your cash savings account.

For more information please contact joanm@cpfg.com

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