Investing on the Sharemarket for the Ordinary Person

Sharemarket tips for the Mum and Dad investor

I think it is fair to say that a lot of people dream of hitting it big on the sharemarket and some do but for everyone who has found a pot of gold in the markets there are countless others who entered the markets blindly without doing their homework or having a strategy in place; this article is to give you some pointers if you have some money to spare and are looking for somewhere to invest your hard-earned cash.

In the sharemarket, as in real life, if you are able to reduce your number of bad decisions then you will be better off; not that there is anything wrong with making mistakes.

You are sometimes better off by learning a lesson the hard way if that is what it takes for you to get the lesson.

Here then are my sharemarket pointers.

1 Investing directly into the sharemarket is beyond most small investors because their ability to diversify their portfolio is limited therefore the only option is to invest all of their funds in one company which leaves them open to disaster. If that particular industry which the company is involved in suffers a downturn, value of the share heads south. It is similar to a horse racing fan attending the track and betting all of their money on the one horse instead of dividing their bankroll between several horses.

Small investors are able to invest in the markets, however, and enjoy the same benefits of larger investors by investing in managed funds; this is where your savings are combined with other investors. You do not have the choice of which companies to invest your money as that decision is left to the trust manager, however, you can choose which type of fund to invest in; growth, balanced, or conservative.

2 Investing in the markets is a long-term game, therefore, if you require the money in the short term then you may be better off leaving your money in fixed term interest bearing accounts however, having said that, investing in the markets can increase your savings if you give it enough time. Young people have the advantage of time on their side; they are able to take more risks with their money because they have more time to recove from financial setbacks than their parents.

3 Don’t try to time the markets! It is time and not timing which is the key to making money in the share

market. If you are waiting until the markets dip before investing you are missing out on plenty of opportunities to increase your capital and this is particularly true in a rising market.

4 Decide whether the money is required in the short-term, medium-term, or long-term before deciding on where to invest your money.

Money needed in the short term or on standby is money which may be needed for car repairs, a holiday, household expenses etc

Medium term funds is money needed for a new car

Long term funds are savings for your retirement such as your superannuation funds.

Short term is not money which should be invested in bank deposits where you are able to have easy access to it.

Medium term money can be invested in managed funds where you are able to have easy access to it but still have to potential for it to grow.

Long term money is money invested in a retirement fund such as kiwisaver in New Zealand.


Can a Person File Bankruptcy Twice?

While you may file for bankruptcy any time you wish, if you previously filed and received a discharge, you must wait a specified period of time before filing bankruptcy a second time – at least if you wish to receive a discharge, that is.

Believe it or not, in some situations, filing bankruptcy twice without receiving a discharge makes sense – but not for most people. Additionally, problems can arise when filing a second bankruptcy prematurely. The consequences can be disastrous.

Once you file a Chapter 7, you can’t automatically “dismiss” the petition. This has the effect of handing over your property to a bankruptcy trustee whose job it is to liquidate it at fire sale prices for the benefit of your creditors. However, receiving a nominal reduction of still-outstanding debts is not a good result for most.

Timing is everything when it comes to filing bankruptcy twice. The waiting periods applicable to filing bankruptcy a second time are addressed below.

1. When Originally Received a Chapter 7 Discharge and Plan to File Chapter 7

If you previously filed a Chapter 7 bankruptcy, you must wait eight years before filing to be eligible for discharge. Pursuant to Bankruptcy Code section 727(a)(8), this is calculated from the original filing date to the filing of the second petition. For example, if you originally filed on January 1, 2000, you would want to wait until January 1, 2008, or later.

2. When Originally Received a Chapter 7 Discharge and Plan to File Chapter 13

Pursuant to Bankruptcy Code section 1328(f)(1), if you previously filed a Chapter 7 bankruptcy and received a discharge, you must wait four years before filing a Chapter 13 in order to be eligible for a discharge.

If a Chapter 13 plan is not confirmed, a bankruptcy trustee may recommend conversion to Chapter 7. The rule stating that you cannot receive a second Chapter 7 discharge before eight years elapses from the prior Chapter 7 filing still applies, however, so in most cases you will want to dismiss the Chapter 13 action rather than convert to a Chapter 7.

3. When Originally Received a Chapter 13 Discharge and Plan to File Chapter 7

Under Bankruptcy Code section 727(a)(9), if you received a discharge in the Chapter 13, you are not eligible for a discharge under Chapter 7 for another six years, subject to a few exceptions.

4. When Originally Received a Chapter 13 Discharge and Plan to File Chapter 13

Pursuant to Bankruptcy Code section 1328(f)(2), if you received a discharge in the original Chapter 13, you cannot receive another discharge until two years has passed.

5. When Filed any Chapter but Didn’t Receive a Discharge

In most cases, you can file again after waiting 180 days. In such cases, it is important to speak with an attorney familiar with bankruptcy law.

The bottom-line is that while it is not unusual to file bankruptcy a second time, timing is crucial when you wish to receive a second discharge.


The Insurance Take on an Accident by the Person You Lent Your Car to

I had to empathize with my friend. Poor guy: out of the goodness of his heart, the man lent his vehicle to a relative. And then, his relative got into a major accident, resulting in two totaled vehicles – the car he had borrowed from my friend and the truck he collided into!

For those uneducated in the matter, when you lend your car to someone else, that driver is referred to as a permissive driver by the insurance industry. If a permissive driver causes an accident, here’s how the insurance companies will respond.

Auto Insurance and an Accident Caused by a Permissive Driver

If you gave permission to someone not listed as a driver on your auto insurance policy and that person causes a car accident, the procedure is generally as follows.

1. In the event the driver and the car owner have individual auto policies, the car owner’s insurance will pay for damages under the collision part of the coverage – after any required deductible is paid out-of-pocket by the policyholder.

2. If there are significant property damages as well as bodily injury to the other driver or his or her passengers or pedestrians, the car owner’s insurance will cover the damages as well as any legal fees of an associated lawsuit filed against the car owner. Insurance payouts are subject to the limits on the policy. If the limits on the car owner’s policy lead to an outstanding balance, the driver of the borrowed car can seek compensation from his or her own insurance company to receive the remaining owed funds for the damages. If the borrower of the car to is injured in an accident he or she caused, related payments would generally be covered under the Personal Injury Protection portion of his or her auto policy. In the event, the driver does not have this insurance protection but the car’s owner does – coverage will go through that.

3. What if the person who borrowed the car got into an accident but did not have a valid driver’s license? In this case, there’s a good chance that coverage may be denied. Many insurance company exclude coverage for an unlicensed driver. If this occurs, the car’ owner you and the ‘permissive driver’ will be responsible to pay for all damages as well as court fees if there are any.

But aside from related aggravation and possible wallet burnout,policyholders may find their premiums up at time of the policy’s renewal.

Of course, anyone dealing with an experienced independent agency that’s appointed to do direct business with many of the leading underwriters have an advantage of working with the edge in the market to locate the lowest premium available under the circumstances.