Tag: financialtoolbox

23 Mar

Don’t Let Emotions Drive Your Investment Decisions

by marketing in Anchor Lines/Winter 2011
Content developed by CUNA Brokerage Services, provided by Jeffrey C. Hamm, CRPC®

Emotions play an important role in some of the most important decisions we make, such as the person we choose to marry, the friends we choose to spend time with, or the home we choose to buy. But
when it comes to investing, emotions can do more damage than good. Here are three ways that emotions play a detrimental role in our investment decisions and what we can do about it:

Don’t Follow the Herd

When stock prices start to fall, it isn’t uncommon for some individuals to sell their stock mutual funds. However, what starts as a few people selling their investments can quickly turn into a panic, where everyone decides to sell. Why are they selling their investments? Because “everyone else is doing it.” All of a sudden, people are making important investment decisions based on what other people are doing. It’s called “herding” and it is one of the most common mistakes that people make when markets decline.

Avoid Extreme Thinking

When markets fall, people often start to think in extremes. Everything in the market begins to look black and white. Instead of asking questions about why the market is falling, they assume
that all news is bad news and that stocks will continue to fall. There is no gray in the mind of someone thinking in extremes. It’s difficult to break free from this kind of thinking. The result is that decisions are based less on facts and more on exaggerated interpretations of the facts. The challenge is to remember that the world of investing is rarely black and white. The facts can have many meanings, and we need to think intelligently about how these facts affect us before we make any investment decisions.

Be Aware of Our Short-Term Bias

When it comes to investing, most of us have a short-term bias. Recent history has a disproportionate impact on our future expectations. All things being equal, recent memories are given more weight than distant memories. That means that recent market gains lead to excitement and higher expectations. On the other hand, recent market losses lead to suspicion and caution. The challenge for investors is not to forget both the long-term history of the markets and their own long-term goals.

Stay True to Your Goals and Your Plan

When markets are volatile, it tends to bring out our emotional side. Most of these emotions lead us down paths that result in poor investment decisions. While it might seem easy to dismiss the role of our emotions during times like these, the power of emotions can quickly overshadow a more logical approach to investment decisions.

The key for investors is to stay focused on the long term. Before we react emotionally to short-term market gyrations, we should ask ourselves some important questions. What is our long-term
goal? Have our goals changed? Was our plan to reach our goals a sound plan? Are there any good reasons to abandon our plan? Once we have asked and answered these questions our decisions are more likely to be driven by logic, not emotions.

Jeffrey C. Hamm is a Financial Advisor with the Navigator Financial Planning Services Program located at Navigator Credit Union. If you have any questions, or would like to provide feedback, regarding the information presented in this article, you may contact Jeff at 228-474-3427.

Representative is not a tax advisor or legal expert. For information regarding specific tax situations, please contact a tax professional. For legal advice, consult an attorney.
Representatives are registered, securities are sold, and investment advisory services offered through CUNA Brokerage Services, Inc. (CBSI), member FINRA/SIPC, a registered broker/dealer and investment advisor, 2000 Heritage Way, Waverly, Iowa 50677, toll-free (866) 512-6109.

Nondeposit investment and insurance products are not federally insured, involve investment risk, may lose value and are not obligations of or guaranteed by the financial institution.

CBSI is under contract with the financial institution, through the financial services program, to make securities available to members. FR061007-CEAE
23 Feb

Are You Coupon Crazy?

by marketing in Anchor Lines/Winter 2011

Everyone loves getting a good deal. Now bargain shopping is easier than ever with group deal sites like Groupon® and LivingSocial, and other coupon sites offering databases of coupons and even tutorials on extreme couponing. But make sure your zeal for finding a deal doesn’t have you spending more than you save.

Frugal or Frenzied?

If you’re spending money on products or services you normally wouldn’t buy or can’t use, you’re losing money no matter how deep the discount. Following are some tips for making sure the bargain you’re hunting isn’t circling back to bite you.

  • Beware of BOGO. Buy one get one free deals seem like a steal, but if you end up with more than you need or can use, you’ve helped the store move product without helping yourself.
  • Look into location. If you purchase a voucher for a shop across town or have to go to three stores to use all the coupons you’ve clipped, your gas usage will likely undercut your savings.
  • Focus on the fine print. Coupons purchased through group deal sites may offer half off or better on various products and services, but restrictions often dictate when they can be redeemed or tie the savings to other purchases. Make sure you know what you’re getting and that it fits with your schedule before you pay for the deal.
  • Mistrust the mob mentality. The excitement of getting in on a good deal can cloud your reasoning. Take a deep breath and think about whether you really need the product or service offered before you spend to save.
  • Eye the expiration date. A coupon purchased but not used before it expires is money wasted.
  • Be conscientious about your credit. Buying your bargains with a credit card won’t be much of a deal if you fail to pay off the balance and allow the interest to add up.

Coupons and group deals can be a savvy way to save money. Just keep in mind that when you buy a bargain, you’ve still spent money. You only win if you’ve spent less for what you needed to buy anyway.

Save ‘N Up

With the Navigator Credit Union Save ‘N Up Debit Card, you’ll save as you spend—with no coupons required! No matter how you choose to use your Navigator Credit Union debit card—to buy lunch, gas, coffee, groceries, or just about anything you want—your purchase will be automatically rounded up. With every transaction you complete, the difference between your purchase total and the nearest whole dollar amount will be transferred from your Checking Account to your high-interest Save’N Up account. Go to www.savenup.com to learn more.

THRIFTY MEASURES THAT REALLY PAY OFF

You don’t have to be a bargain-hunter extraordinaire to save yourself money. Here are a few sure-fire ways to cut spending without clipping any coupons.

  1. Visit your local library for free books, movies, music and magazines.
  2. Don’t miss deadlines for returning rented movies and pay off credit cards or other bills on time to save yourself late fees and added interest.
  3. Comparison shop by looking at cost per pound, ounce or other unit of measurement to determine which products are the best deals.
  4. Avoid impulse shopping by taking the time to know what you want and what you’ll actually use, read reviews online and scout good deals. Then sleep on it before you make your purchase!
  5. Dine in rather than going out and bring your lunch from home during the work week, and you may save more than $1,000 over a year.
08 Feb

A New Year, a New You

by marketing in Navvi News/Winter 2012

You may have heard your parents or teachers talk about their New Year’s resolutions, but what does that mean? A New Year’s resolution is a goal you set out to achieve in the coming year. Some examples include doing better in school, making new friends or exercising more. What are some resolutions you can try?

Read on:

  • Work harder on your homework. Maybe you haven’t been trying your hardest in class, and you’d like to turn that around. Talk to your teacher to see what you can do to boost your grades.
  • Befriend a shy kid at school. Perhaps there is a student in your class who few people talk to or play with. Reach out and ask him or her to sit with you at lunch.
  • Recycle more. Ask your parents if you can start recycling more items around your house. You can even talk to your teacher to see what you can recycle at school.
  • Eat more vegetables. You may hear it from your mom all the time: Eat your veggies. Maybe this year you can try some new vegetables – and fruit!

SET YOUR SIGHTS HIGH

Do you have a goal you’d like to save for? Maybe a bike, skateboard or new musical instrument is what you’re dreaming of. Deposit your money in your Navvi-Gator Super Saver’s Club account and we can help make that dream come true.

26 Oct

How to Keep Your Money Safe

by marketing in Navvi News/Fall 2011

Bobby was excited to get a birthday card from his grandparents. He tore it open right at the mailbox. As he read the card, he didn’t see the crisp, new $20 bill fall out.

Suzie hid three weeks’ worth of allowance in her school desk. She planned to go shopping with her best friend after school. Unluckily for her, someone else saw her stash the cash too.

Kyle couldn’t resist using the money his mom gave him for school supplies to buy his friends some snacks at the mall instead.

What do Bobby, Suzie and Kyle have in common? They didn’t keep their money safe. Bobby’s $20 was lost. Suzie’s allowance was stolen. Kyle spent his mom’s money on something other than its intended purpose.

HAPPIER ENDINGS FOR YOUR CASH

You can learn from Bobby, Suzie and Kyle. Here are some ideas for protecting your cash:

  • Deposit gift money (or money you want to save for the future) in a savings account – before it can be lost.
  • Store money you plan on using soon (like Suzie) at home in a piggy bank or money box until you need it.
  • Buy what you need first. Then if anything is left over, you can buy something you want.

Your Navvi-Gator Super Saver’s Club account is the safest (and smartest) place to store your money until you need it. It is protected from being lost or stolen. Plus,it will grow as we pay you interest just for saving it with us.

26 Oct

Need Cash? Start Your Own Business

by marketing in Real Money/Fall 2011

Starting your own business can be a great way to earn cash to pay for the fun things you like to do, as well as save for the things you hope to do in the future.

Generate Ideas

If you enjoy making jewelry for friends, ask your parents if it’s OK to try selling a few pieces. If you love playing with kids, a babysitting service could be perfect. And if you enjoy being animals, offer to wash neighborhood dogs.

Flesh It Out

Once you’ve selected your business, spend some time honing your idea. Ask yourself these questions:

  • Is my idea practical? If your neighborhood is full of children and you don’t mind working weekend evenings, babysitting could be very successful.
  • What is my competition? For example, if you have friends in the neighborhood who babysit.
  • What is my advantage over existing businesses? Charging less than the competition is always an advantage!
  • How can I deliver a better quality service? For instance, having Red Cross babysitting certification assures parents that you’ll provide top-notch child care.

Once your business is up and running, your savings account is a smart place to stash your cash.

21 Oct

What’s New for First-Time Homebuyers?

by marketing in Anchor Lines/Fall 2011

With the low interest rates on home loans from credit unions and great deals to be had in the housing market, the mantra these days seems to be “now is the time to buy!” If you’re in the market for a home, now is the time to check out the many home mortgage options you have with Navigator Credit Union. You can view credit union loan rates online. And when you’re ready to move ahead, you can apply online for home loans.

Here are some general tips you need to know before becoming a homeowner:

1. Put more money down. While there are still many first-time homebuyer programs out there that require smaller down payments, making a larger down payment of 10% to 20% of the home’s purchase price can be a smart move. Having a larger down payment will show lenders that you are responsible, and may make getting a loan easier. Also, mortgage insurance premiums on low down payment government-backed Federal Housing Administration mortgages doubled from September 2010 to April 2011, and may continue to rise.*

2. Plan to stay longer. As anyone who purchased a home in 2006 planning to sell in three to five years can tell you, a home is not the short-term investment it once was. A sounder plan is to buy with the long term in mind. Don’t buy a home you think you’ll outgrow quickly, or one that requires renovations that may be outside your comfort zone. It’s hard to predict where the housing market will go, but buying a home instead of an investment is always a smart move.

3. Come see us. The changing landscape of the housing market is hard to keep track of, and if you’re thinking of making the leap to homeownership, you’ll want someone experienced on your side. The mortgage professionals at Navigator Credit Union keep abreast of all the latest rules and regulations and can walk through the process of prequalifying for a mortgage. Visit www.navigatorcu.org or call 228-475-7300 for more information.

*
Source: The New York Times, Feb. 24, 2011.
21 Oct

The Truth about Debt: It’s Not All Bad

by marketing in Anchor Lines/Fall 2011

Debt is a four-letter word – and it’s often used like one. We avoid it. We spurn it. We don’t mention it in polite company. But debt isn’t all bad. In fact, debt can actually help you build wealth – if you learn to use it wisely. Navigator Credit Union can help you sort out the good from the bad.

Good vs. Bad

Generally, debt is considered good if you use the money to buy something with the potential to grow in value. A college education stands to boost your earning power throughout life, so a student loan may be a good debt. Owning a home gives you a place to live and affords you tax advantages, plus the home’s value may appreciate over time, so a mortgage is often a good debt. But even good debt has a few warnings: Be sure to borrow only what you can afford to pay back, and shop around for the best credit union loan rate.

Using credit to buy disposable goods (like a T-shirt or a pizza) or anything that falls in value would result in bad debt, which can quickly stanch your cash flow. For example, if you charge a $500 high-definition TV to a credit card with a 17% interest rate, you could end up forking over $622 in total if you took just three years to repay the debt and paid only the minimum. And the higher the purchase price, the more interest you’ll pay.

But the line between good debt and bad debt isn’t always so stark. For instance, you may find it necessary to buy a car in order to hold down a job, but lack the funds to purchase it outright. While a car doesn’t have much potential to grow in value, it doesn’t have to be a bad debt. The trick is to be conservative and buy only what you can afford.

Where Do You Stand?

Most money savings experts recommend spending no more than 36% of your monthly income to pay off debt. Most lenders will consider this figure – called a debt-to-income ratio – when determining whether they will lend you money, and at what rate.

Do you know your debt-to-income ratio? A BALANCE? Financial Fitness counselor can help you assess your financial picture and suggest ways to improve it, all at no charge to you. Just contact BALANCE at 888-456-2227 to get started. Establishing a savings deposit program with Navigator can also help you avoid or reduce future debt. Call 228-475-7300, visit www.navigatorcu.org or stop by a branch today to learn more.

21 Oct

Where to Safely Stash More Cash at Navigator Credit Union

by marketing in Anchor Lines/Fall 2011

Financial experts recommend having three to six months’ worth of living expenses in a regular savings account in case of emergency. If you’ve followed this advice and have reached your savings goal, don’t stop saving! Now’s a great time to consider other highest yield savings options that can help take your money to new heights.

The following savings vehicles from Navigator Credit Union can continue to help your money grow while still keeping it safe. Just like a regular savings account, they are NCUA insured.* Plus, you can keep tabs on these savings options just as easily as you can with your regular savings account. Here’s how they work.

Certificates of Deposit. One of the basic ingredients to a well-rounded savings plan is a certificate of deposit (or CD) that gives you a guaranteed rate of return – and that means peace of mind. CDs are high-yield deposit investments, with terms ranging from six months to five years. The interest rate for CDs tends to be higher than regular savings, which helps your money grow faster. If you are a new investor, take advantage of Navigator’s 1st Nvestor CD. For as little as $10/week, this CD gives you the opportunity to jump-start a savings plan at higher deposit rates without the requirement of a large opening balance.

Money Market Accounts. Add some muscle to your savings with a Money Market Account. This hard-working vehicle offers a higher rate than a Regular Savings Account and can be opened with an initial deposit of $2,500. Then, as your balance grows, your rate increases, too! It’s a smart way to save for a down payment on a home or to build an emergency fund as a financial cushion.

Individual Retirement Accounts (IRAs). Navigator offers traditional and Roth IRAs, two helpful ways to boost savings for your golden years. In addition to helping your funds grow safely, IRAs offer tax benefits.**

Find Your Highest Yield Savings Options

Opening other savings accounts with us combines safety with convenience. You can easily check your balance with online banking and make transfers between accounts. To learn more about our savings options and view our best savings account rates, visit www.navigatorcu.org, give us a call or stop by – we’ll be happy to talk with you.

*
NCUA insurance covers $250,000 per depositor, per legal account category.
**
This financial institution does not give tax advice. Consult your tax advisor for information specific to your situation.