What Are Mutual Funds?

If you've heard of mutual funds but aren't quite sure exactly what a mutual fund is then I have found a site that discusses mutual funds and what they are. This site discusses varoius types of funds and helps you understand how mutual funds are different from stocks and why they are safer. I hope you find this link helpful. You can see the site here:

http://financeshelp.com/mutual-funds/

What Is An Investment?

Today I wanted to discuss the meaning of investment. While I know this may seem trivial a lot of people simply just do not understand what an investment really is. According to the Wikipedia, an investment (or investing) is a term that has several closely-related meanings in business management, finance and economics, related to saving or deferring consumption. An asset is usually purchased, or equivalently a deposit is made in a bank, in hopes of getting a future return or interest from it. Literally, the word means the "action of putting something in to somewhere else" (perhaps originally related to a person's garment or 'vestment').

So what does this mean? In simple terms an investment means that you buy something now with the anticipation that the value of that item will increase in value at at a later period of time.

What Is Compound Interest?

Compound interest is interest based not only on the original principal balance, but also on any unpaid interest that has been added to the principal. The rate that balances grow is directly related to how often interest in compounded. The more frequently interest is compounded, the faster the balance grows.

Another Day Another Dollar

You might think that one dollar a day is not much but it can really add up over time. If you just save $1 each day you would have $365 dollars at the end of one year. If you were to put this into a savings account with a modest interest rate you could have even more money after one year.

The key to saving money is being disciplined. You have to be able to put that dollar back each day and know that you are not going to spend it. If you can train yourself to handle your finances in a correct way then you can continue to increase your net worth throughout your lifetime.

I recently found a good finance website. The URL is http://www.financewebpage.com. I would encourage you to check it out.

Just Say No To Credit

While you may think that credit can be helpful, if you are not careful it can harm you way more than help. Only in rare instances can credit be good. For instance, when someone wants to buy a home usually the only way to do so is with a loan (known as a mortgage). In the case of a mortgage you are getting property which is something physical you have which means if for some reason you fail to pay the mortgage then then lender can come and take your home in place of the mortgage.

Other types of credit, however, are not like buying a home. Credit card debit is one such type. With credit card debt you usually buy a lot of smaller items and you do not have one big thing to show for it. So if someone can't pay back their credit card then there is nothing for anyone to take.

While this might sound okay, it can severely affect your credit report, which in turn can affect your ability to get other loans and/or credit that you might need (such as a mortgage).

So be very careful about obtaining and using credit cards. They can do far more harm than good!

Welcome to Finances For Dummies

The goal of this blog is to discuss financial matters and try to make them as easy-to-understand as possible. I want to be able to help people who are struggling with their finances and to help them better manage the money they have. Stick around...I'll have more to say soon.