Moneywise24 Personal Finance

CFA stands for Chartered Financial Analyst, and its designation is gaining popularity within the world of finance. The CFA is a certificate, which can be obtained at the CFA Institute. On its website, the CFA Institute states the following:

“CFA Institute is a global, not-for-profit organization comprising the world’s largest association of investment professionals. With over 100,000 members, and regional societies around the world, we are dedicated to developing and promoting the highest educational, ethical, and professional standards in the investment industry.”

Source: http://www.cfainstitute.org/about/strategy/Pages/index.aspx, 8 June 2011

But what does the CFA mean for candidates? What does it do, and what does it not do? How much does it cost, in terms of money and time, to complete the CFA program and to become a CFA member? And most importantly, how does the CFA enhance one’s career perspective? Read the rest of this entry →

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I had quite an interesting flashback lately; as I was sitting on my couch and letting some things pass through my mind, I was struck by the fact that there are so many things I could have done much sooner, and thereby enhance the quality of my life and my personal financial situation. Then, why hadn’t I? Quite simple really: I just didn’t know… or at least I didn’t know they were that important.

In order to help some of the younger readers, I have compiled my personal top 10 list of things I wish I knew when I was a teen. I sincerely hope that for some of you it would mean a positive change of where you are at, and where you are going.

#1 – I wish I had learnt earlier to set my goals in life. It may seem a bit stupid, but during my teens my top priority seemed to have a lot of fun, while at the same time I didn’t really know where I was heading. I had no real goal in life, which at a later age resulted in me trying out many things which were not going anywhere. Now, at the age of 32, I realize that what I do isn’t really what I want to be doing, and it is much harder to change the entire structure of my life.

#2 – I wish I had studied more. I focussed on the ‘fun factor’ of life so much, that I really didn’t realize the importance of a good education. At present, I have a bachelor’s degree, and I realize that many jobs that I really want require a Master’s. Also, graduates or even post-graduates earn much more than bachelors.

#3 – I wish I had worked more. I know that parents are supposed to support their children up to a specific age legally, in The Netherlands it was up to 27. However, this also means being dependent one one’s parents. There were so many things I wanted, which I never got. In The Netherlands, everyone is allowed to work when they reach the age of 15, and I wish I had grasped that opportunity, to build on my own financial freedom. Additionally, when I went to college, I took a huge loan which was absolutely not necessary; I could have financed everything by working on the side… in stead I am now stuck with monthly payments which cut a big hole in my budget.

#4 – I wish I had aimed for independence sooner. I lived at my parental house until I was 21, then I moved out because I was going to college in another city. However, I could have moved out much sooner, enjoying all the freedom of living by myself. I am sure it would have done me good, and it would have relieved me of all the pressure at home; it would have made me more mature, and given me more energy.

#5 – I wish I had started tracking my finances earlier. I don’t even remember all the money I spent on drinks, clubs, going out, and other unnecessary items. Sure, a good social life is crucial, but if I would have tracked my finances carefully, I would have discovered that there was so much savings potential; I could have gotten most out of my money.

#6 – I wish I had started investing sooner. In stead, I used to park some of my money on my savings account, completely ignoring the benefit of higher return rates from investments. Investing some of my money would have allowed me to build wealth, and my future.

#7 – I wish I had done more sports. Actually, I had hardly done any sports in my late teens and twenties, simply because I had other priorities and I was lazy. However, doing sports regularly would have given me more energy, it would have kept me fit, and it would have built a routing, making it easier to do sports at a later age as well.

#8 – I wish I had discovered the importance of networking. I always tended to see networking as some form of superficial ‘blabla’, which I could do without; I wanted to take responsibility for my own successes. Now, I realize that networking is an integral part of life, making things easier, finding the good jobs, or even getting some tips and hints on things… and it is a great way to build a large social circle.

#9 - I wish I had become entrepreneurial sooner. It is much easier to ‘crash and burn’ when you are younger: your living expenses are much lower, and since you are not accustomed to a higher living standard, it is not difficult to give things up, or to re-build a life if things go wrong. The older you get, the more difficult it becomes. Actually, I started becoming familiar with website development back in 1998, when I developed my first website Dutchtrav.com. Too bad I had never really taken the time to develop it back then, it could have generated some nice revenues.

#10 – I wish I realized the value of time. I remember myself saying ‘I can do that later’, or ‘there is still so much time’. And before you know it, you’re 30, and you realize that you could have gotten so much out of your life. The years are literally passing by, and time is lost, it will never come back again. Therefore, I wish I had learned to enjoy every single moment in my life, and living it to the max.

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You might ask yourself, how does traveling actually contribute to personal finance, and what can I learn learn from it? Actually a lot. A can speak from my own personal experiences; traveling has many benefits, which can be applied to your personal life, also personal finance. And I believe it’s a good thing, traveling broadens horizons, you get to know new people, new experiences, and generally get to see many different situations from different perspectives.

If you have traveled a lot already, especially outside of your own country or cultural circle, you probably know what I talking about. Applied to personal finance, I believe having traveled a lot offers major benefits. I want to discuss a few of them below, but of course you are more than welcome to post comments with additional ideas.

The Unknown

One of the major features of travel, in my opinion is being confronted with the unknown. In the most extreme case, you would not speak the language, the cultural differences are like worlds apart, and you feel fairly lost in this new surrounding. However, since you are in a foreign country, far away, you have no choice to deal with it. It can be quite overwhelming, and it is also why many travelers, who meet each other on distant trips, tend to stick together during their voyage; it is a way of trying to keep the known and the unknown balanced out.

Being confronted with such an unknown situation will surely lead to more flexibility and a more ‘risk taking’ mentality when you get back, at least it did with me. And the more often you throw yourself in such unknown situation, the more you get used to it. I can only tell from my own experience, it has definitely benefited me.

Your life isn’t really that bad

My trip to Kenya in 1998 made a huge impact on my life; Kenya is a very poor country, and myself being originally Dutch (I was 19 at that time) I realized for the first time in my life how good a life I am actually leading. I used to complain about the huge loan I had to take to study, and about the small room I was living in… but I had never truly realized that there are literally billions of people on this planet, who simply don’t have enough food to eat, and whose life conditions is beyond what I could have ever imagined. Sure, I had seen it on the television and in the news quite often, but it is nothing compared to going to such a country and seeing it all live. I became more of a relaxed person, and not so money focussed.

Different cultures, different mentalities

I find it fascinating, how different nations think differently. A great example is a Dutch/German comparison. I am originally Dutch, but currently living in Germany, and honestly the Germans are much more formal and closed than the Dutch. Usually, when I meet a German people and I tell them I am Dutch, they are always so amazed how open, relaxed, friendly and easy going the Dutch are, they really seem to like that, while on the other side they are complaining about their the closedness of their own people. Yet, these people don’t change, they are caught in routines of what they just said they did not like. A bit of a long trip might give you real in-depth insights of how other cultures think, act, and related to each other, and you could adopt something of that. But more importantly, traveling lets you related other cultures to your own, and you can look at your own habits a bit more objectively; it makes you a more free person in a sense.

Getting to know people

If you are an open minded person, you will surely make many contacts while traveling; either with other travelers or with some locals. This is a great way to expand your network, and who knows you have a business partner some day, or who knows what a network might be useful for.

Traveling is a great passion of mine, and I try to plan a trip as often as I can. I believe traveling greatly contributes to the quality of my life, my development, my way of seeing things, and definitely also my personal finances.

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I had a bit of a flash today: how many people are truly passionate about the kind of work they do? Actually, I was starting to have these thoughts when I saw a television broadcasting the other day about burn-outs and all sorts of mental disorders as a result of too much stress.  And to be honest, most people I know consistently complain about their work, their bosses, their companies, in one way or the other…

… and yet we keep doing doing what we do, just in order to enter another round of complaining tomorrow.

So how do we get to that point, that we do something that we are truly passionate about? And in the end, it really comes down to only three basic factors, if combined correctly:

• Which topics interest you? What is it, that makes your personal world go round? Be it languages, countries, personal finance, marketing, mathmatics, physics, research, education, family life, children, pets, sports, blogs, internet… anything you can think of. What is it, that you can spend litterally thousands of hours reading about?
• What do you love doing? What kind of activity do you love? Is it writing? Perhaps you would love to fly an airplane? How about researching, teaching, organizing things, leading people, managing projects, reading books, etc.

If you have these two areas of your life answered, you will most probably automatically come to the conclusion of what you are passionate about, or where you have the potential to develop a passion.

For example, someone who would love to fly an airplane and loves traveling would do good to become a pilot. Or how about someone who wants to become a writer, teacher, and knows a lot about the internet and how it works? Such a person might want to start writing a blog. And what if you love to research and you love sports? Perhaps a marketing research specialist at a sports company?

I believe too few people really spend time to figure out what they are passionate about. Worst, many people are simply chasing the money, completely neglecting the fun aspect of their work. Being truly passionate about what you do will keep you healthy on the long-term. But more importantly, it will make your life more fulfilling.

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China alone has more than 1 billion inhabitants. Worldwide there are more than 800 million native Mandarin Chinese speakers. With the Chinese economy booming, is Chinese on its way to becoming the dominant global language?

The question is very legitimate, since the Chinese economy is outperforming, and an increasing number of companies are starting doing business with China. In addition, Chinese products are flooding the world markets, and the world is becoming smaller and smaller in a sense. In common business situations, language is still a barrier, and many occasions require a translator to be present.

English has mainly become the dominant global language due to the widespread presence of the British during history. The participation of the United States during WorldWar I and II. As such, English has become increasingly popular as well as important. Additionally, both Great Britain and the United States take very important position in the global economy. Looking at this history, however, the popularity and acceptance of English as a dominant global language has grown slowly over time.

Chinese could well be on its way to become a more important language in business life. In fact, the popularity of Chinese, as well as other language contributing to the global economy, is increasing. However, the language itself poses also some important limits in the way it can be used. Probably the most important limits are the use of characters and the number of limited sounds available. As soon as foreign companies become active in China, they will often have to change their name completely, in order for the company name to be written in Chinese. The same applies to names of people. In addition, schools, colleges and universities will need to adopt Chinese as an integral part of their educational program. This is a very big step, since Europeans and Americans will have a great difficulty learning the language as it belongs to a totally different language family. And still, for this to happen, the Chinese economy itself will also need to take the dominant position in the global economy.

Although it is unlikely for us to (still) experience Chinese being the dominant global language, the Chinese language is gaining importance and popularity in general; there are still many people worldwide, some of them very educated or in high positions within large corporations, who do not speak English adequately. Speaking Chinese might indeed prove to be an important asset, increasing one’s value on the emloyment markets.

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