Finance

Many concentrate their efforts in activities that would earn them a lot of money failing to see that saving the money they already have is just as important. Even if a person earns a lot of money but saves nothing they still end up with nothing. One must be able to prevent this in order for one to accumulate money which they can use should an emergency need arise.

There are many kinds of financial institutions and the number of financial products they carry are varied too. It is hopeless to compare them due to their sheer numbers. I would rather concentrate on the way one can make money using these products.

What I would rather concentrate is the entirety of these financial institutions and possibly their financial products as well. One of the most important thing that you can do before you hand over your money and financial transactions to these institutions is to read the fine print of your contract. Important are what kind of service they would perform for you, how safe are your monetary assets and how they would handle your financial problems should they occur.

I learned this the hard way when I got a debit card from a bank. My money disappeared and I did not know until after a few months after it happened. My other banks would have notified me that my account was experiencing irregular withdrawal transactions but their system did not.

When I tried to know what really happened they refused to provide me written details of what happened. They notified me after a few months that they were still investigating the matter. More than a year has passed by and they are "still investigating the matter".

I investigated online their debit card and found out that others have the same experience with this bank and their debit card. There are also other complaints against the other products of the bank.

Be aware of what you are getting into before you entrust your financial transactions with any financial institution because you may lose a lot of money if you are not careful.




Saving Money

Many people dream of saving money in order to fulfill a certain goal like buying something they cannot buy at their current income like a house, car, jewellery and so on but many are unable to do so. Many would complain that their income is too small for their expenses and they have nothing saved and are even in debt.

This may be true for many but for others the problem is their lifestyle. They got accustomed to a certain lifestyle and its corresponding level of expenses that they are trapped into it. For example there is this waitress who barely makes minimum wage but still insists that she cannot live without her expensive coffee habit from Starbucks.

There are also people who complain that their salaries are too low for their daily living costs which includes more than 1 pack of cigarettes a day and dining out for lunch everyday. Surely these people can see that their lifestyle does not go with their low income.

These kinds of people need to change their lifestyle from that of consumption into saving.





Financial Institutions

There are many kinds of financial institutions like banks, investment companies, lending companies, credit cooperatives and so on and they are all different in their setup from each other. Even pawn shops are financial institutions.

Did you know that there are pawn shops that cater to millionaires as well. Millionaires pawn expensive jewelries, Rolex watches and even paintings when they need money especially in an emergency situation. There are actually pawn shops in Beverly Hills that serve rich people.

It is no secret that there are many informal transactions happening where friends and acquaintances borrow money from one to another whether or not using a collateral to secure the loan.

There are also groups of people who pool their capital to lend to others in exchange for an interest charge or to invest in financial instruments that earn them money once these investments increase in value.

From this humble beginnings these people become bigger and bigger until they become institutions themselves.

But we must also be wary of established financial institutions even though they might have been around fo a number of years. Barings Banks of England for example which was founded in 1762 collapsed in 1995 nearly 233 years after it was founded. The collapse of the bank was due to a single rogue trader who hid his trading losses until they become too big for the bank to absorb.

A lot of people lost money in this bank but not only in this bank. There are similar cases with other financial institutions were unethical behaviour, bad actions and bad decisions mostly by people in charge of the money of other people have resulted in people losing their investment and even entire life savings to financial institutions. Beware.





Cards

Most people especially those living in modern societies have at one form or another a relation with a bank. They hold at least a savings account card which serves as their link to the bank. Most people have bank credit card and/or a debit card.

There are small businesses that are totally being financed by credit cards. There are enterprising people like resellers who lack cash but have credit cards and they use it to buy their products and resell them for quick profit. Thus they earned money without actually having capital in the first place.

This is a wise use of your credit card instead of wasteful purchases which does not increase your money but drains you of your finances once it is time to pay for your credit card purchases. The secret is to as fast as possible pay your credit card debt in full. Credit card interest charges are expensive and if you let them pile up you might find yourself buried in credit card debt.

Be careful of how you use your bank cards for transacting especially online. We now live in an online world where the use of physical cash is fast being discouraged in favour of electronic and online financial transactions. Unlike physical safes and vaults and physical money electronic money data can be stolen completely by hi tech criminals.

The bad part is that if you do a lot of electronic and online financial transactions your electronic money data get stored in many computer locations everywhere which a determined criminal can put together and rob you of your entire funds. Be careful when doing electronic and online financial transactions because even the biggest companies in the world have been victims to criminal hacking.





Loans

There are many kinds of loans like personal loans, business loans, home loans, car loans ... , etc. Everybody has their own reasons why they need a loan. Even rich people need loans if they do not have enough capital to support their ventures.

I think a good use for loans is to increase your financial assets. You can use for example your business loan to actually increase your business and not spend it on frivolous purchases. You can use your home loan to create rental income. You can use your car loan to earn for example from delivery or chauffeur services.

Be aware of bank policies and loan contract terms. Banks may loan to you under certain terms which according to your computations then are in order. However may change their loan terms which could force you to untenable financial situation. There are people who have lost their homes and even livelihood because of these policy and term changes by the banks





Insurance

The business of insurance is capital intensive. Setting up an insurance company is difficult unless you have very deep pockets especially if your clients are due for big insurance payouts. Even community based insurance programs takes a lot of capital.

You can however earn money in insurance by actually selling it or be endorsing it. Just like any transactions with any company you have to make sure that you are dealing with a trustworthy one.

Getting insurance is a financial transaction. You might not get the end product immediately but it exists for you. Just like any business insurance companies can be successful or become failures which could make you lose your insurance investment. Be vigilant about your insurance company financial standing and research well its payout record.