Buy quality on weakness

Debt Free

Happy To Be Debt Free

The best time to buy stocks is on a generalised market sell-off. We all know this, but it can be a difficult thing to do, psychologically, when everyone else is in panic mode.

It’s always unlikely, though, that you’ll hit the absolute low point, so it’s always best to try and buy quality on weakness.

In other words, try to follow Warren Buffet’s advice: “Only buy something that you’d be perfectly happy to hold if the market shut down for 10 years.”

And if you don’t buy good quality shares when they’re cheap in a generalised panic; when do you? By following such a strategy, you will come out ahead over time. How much cash you hold when the market rallies is a tough call, though, and depends on your personal circumstances – how much you earn, your age, how much cash you need to take out etc.

Deciding which companies are good quality is, of course, the other hard part. First off, try to look out for essential suppliers of goods and services with rock-solid balance sheets. Any company which keeps coming back to the market for more cash is metaphorically calling the debt helpline.

Look for solid book value, low or negative gearing and a sustained history of profitability – and have the courage to buy on the market’s big dips. Going against the market’s tide in this way is hard, but it’s necessary for successful long term value investing. It’s perfectly possible to buy defensive stalwarts on generalised market weakness as recent history has demonstrated. Ask yourself – can we really go on without big supermarket groups, food suppliers, or utilities, for example? When the valuations of even these companies are getting trashed collectively, it’s time to start picking out those with the strongest balance sheets and lowest P/Es.

Don’t Hide Your Debts under the Door Mat

Getting the right debt advice can sometimes be a struggle especially as there are a lot of companies out there who are more interested in getting money off you rather than actually helping your situation. Throughout the UK there are a lot of people who are in debt trouble but on the surface it can easily be covered up and they can manage their normal day-to-day lives. The problem is that they are paying too much interest on their loans that they have and there is a smarter way of dealing with this problem rather than ignoring it and simply paying what you can when you can.

debt management plan

Debt Advice

What most people do not understand is that by using an experienced debt management company you will be able to get the best advice and reduce your debts even before you have started paying them off.

The worst thing you can do is pay all of your debts individually as you will be charged extortionate amounts of interest especially if you have credit cards. Also the likelihood of you missing payments and being charged a late payment fee is very high therefore increasing your debt and your next payment. This then becomes a vicious circle if an individual does not act fast and use a debt management plan. This will help put all of your payments into one manageable monthly fee and you will not have to juggle a lot of paperwork and spend time making small payments to different companies.

A plan will help you start afresh and know that your debts are being paid off and are manageable. Also this may stop the frequent calling asking you to make more payments as a lot of credit card companies can be very aggressive in the way that they recover money.

What else is important is if you are making your monthly payments and paying off your debts then you will not risk any bailiffs coming round to recover the money through taking your possessions. This is what really puts a lot of people who are in debt in fear because the personal intrusion into their home and having their furniture and belongings put under scrutiny can be extremely stressful especially if you have a family.

For those who are seriously in debt and this means owing a sum of £10,000 or more then you may want to consider an IVA. This is not a consolidation loan but where government legislation comes into force and a percentage of up to 50% to 60% of your debt could be written off straightaway. Then monthly payments are put in place and the aim is to have you debt free within five years.

This scheme has allowed many people to keep their homes and also it has prevented them from bankruptcy. It is also important that you take up this arrangement with a reputable company that will help you throughout the process. There should be no upfront fees for the application process and only a management fee placed on your monthly payment.

These are just a few tips on how to manage your debt but most importantly you should not brush them under the doormat and forget about it as the problem will only get worse.

How to create a Debt Management Plan of All time

During hard times, it is understandable on how many can suffer with the weight of increasing debt. However, debt management is possible with ideal planning.  For a surfeit of reasons, most Americans find themselves suddenly under a mountainous debt. This is common when in the middle of worst economic conditions in decades and continuous job losses. Though it is understandable, it is not acceptable and not unmanageable as well. A number of consumers should be able to see it coming early in time as they buy luxurious items. However, in most cases, some who were assiduous in the management of their budget, still end up struggling with growing debt. However, there is still hope. With little effort, that debt can be dealt with.

Constructing a Budget

When managing debt, it is imperative to comprehend that certain debts are absolutely acceptable, while there are debts to be entirely avoided. In most cases, auto loans, mortgages as well as student loans, are acceptable debts to take. However, perky spending and credit card are not good ideas when going for maintenance of financial freedom.

Minimizing Debt

Once a budget has been put in place, one should start the process of getting rid of costly expenditure. It is quite helpful to have debts organized with accordance to the interest rate they attract. The target being to pay down the higher interest debts first. This will probably involve the use of several credit cards. Consult the credit card firms and find out about shifting balances to the cards which attract lower rates. Paying down your debt seems like making a sacrifice, but it is worthy. Dining in is normally enjoyable and healthier as well, compared to eating out. Organize trips to a nearby grocery store instead of the shoe store. The movie theaters are quite too crowded and I doubt if you’ll find them as comfortable as your home. The amount of money saved from not spending on the “luxuries” would make life reasonably more relaxing since it is used to pay down the annoying loan balances we possess.

Beware of the Debt Consolidation Schemes

Regrettably, the debt consolidation firms always clamor for consumers laboring to pay off bills. They keep selling the promise of a single, low monthly payment. Unluckily, it takes ages to have the loan paid down the loan and those involved end up paying more than what they borrowed in the end after the additional charge payments as well as the other fees are introduced.

Live Debt Free

After having your debt behind you, or at least, to a great extent, manageable, make sure that it does not start its growth again. A great idea would be setting up accounts which are automated and have some amount of money deposited directly into the savings as well as the retirement accounts. In case money is not available, then there is no likelihood of spending it. And, to monitor that the amount of money spent does not exceed what you earn, save your credit cards for emergency purposes only.