Nancy OHare - Reclaim your Financial Wits

In eight simple steps, learn how to best manage your money and build wealth.

Most people stumble along the way, get distracted or listen to people who would rather grow their own money than yours. This guide shows you how to avoid such pitfalls.

Personal finance is a complex topic. These lessons offer bite-sized advice to start your path towards financial prosperity. For those with enthusiasm to learn more, see the section for additional resources.

By following the learnings in this book consistently, you can reach your financial goals.

Attaining financial freedom allows you to feel like the queen or king of your own castle!

Stock Markets are where shares of public companies are bought and sold. Most countries have a stock market for owners of businesses registered in that country who want to sell pieces of their company to other people. Pieces of the company are called stock, shares or equity.

Why dostockmarket movementsdiffer fromwhat you seehappeninginyourlocal economy? Local businesses such as restaurants, gyms and trades are often not listed on the stock market. They are private businesses and their profits or losses are not picked up in public stock exchange results.

Investment-grade bonds are a type of loan thought to be fairly safe. Independent credit rating agencies rank borrowers based on their credit risk, such as AAA, AA, A or BBB. These particular ratings are all considered to be investment grade. Any lower rating is viewed to have low credit quality. What does this mean? A higher credit rating means the company or government borrowing money (via a bond) has a better chance of repaying you, the lender. Likewise, a low credit rating indicates the borrower is more likely to default (not repay) you, the lender.

By putting some of your money into safer fixed income investments, you give yourself a buffer from the ups and downs of the stock markets. Fixed income investments generally earn less money than equity, usually in the form of interest. This is your protection money .

By putting some of your money into equities , you give yourself the chance to grow your money and the chance to lose your money. Equity generally earns more money than fixed income over the long term, but it has more volatility (ups and downs). This is your growth money .

Exchange Traded Funds (ETFs) are collections of stocks and/or bonds that track or mimic underlying indexes or markets. Mutual funds are similar baskets of stocks and/or bonds that are selected by fund managers and typically have different fee structures than ETFs. For further clarification between ETFs and mutual funds, go to https://investor.vanguard.com/etf/etf-vs-mutual-fund.