50 Budget Travel Tips and Save Money on Vacations

Want budget travel tips for free? Wouldn’t you want to travel more often without breaking the bank? What if I told you that instead of planning one family trip a year, you can go twice with the same budget? If you are at all interested, read on to find out how you can do simple things to save money next time you go on vacation.

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* Airfares *

1. Airline Tickets – Plan in advance and visit discount websites to see if there are better deals. While these sites might charge you a service fee ($5 or so), they can easily combine flight segments from different airlines easily to give you a great deal. (bonus – get even more savings by finding a Travelocity promo codebefore you book a trip)
2. Connecting Flights – You might think connecting sucks but it sure saves you a good chunk of money doing it. Consider the pros and cons and don’t write it off right away.
3. Travel Light – Airlines are starting to charge for everything now and if you have 2 bags or more, expect to be charged for it. Remember to not use over sized bags whenever possible and try to keep it all within one bag per person.
4. Substitute – Consider packing really old clothes (if you plan to buy new ones on the trip). This way, you can keep one luggage and still have room for purchases.
5. Always Look into Round Trip Tickets – Sometimes, one way tickets are so expensive that the round trip ticket is cheaper. Just don’t use the return trip. (I know it’s weird but I’ve seen it myself)
6. Try to Get Back to the Same Airport – Flying in and out of the same airport is almost always cheaper. It’s not only the flight tickets but the car rentals as well.
7. Traveling to Two Countries – If you are planning to stay in two countries and an airline makes you change planes on those countries anyway, you might be in luck. Check pricing on the flights to see if you can stay a few days at the country of the flight change instead of changing planes right away since airlines often let you do that for the same price.

* Eating *

1. Plan Your Meals – Figure out where you will be and eat before you actually go out. This is not just good for your wallet, but your stomach too since you will probably find economical restaurants that tastes great.
2. Cook for Yourself – Not many people do this but cooking while on vacation can sometimes be quite fun. Since the experience is new (cookware, dining area, supermarkets etc), it’s actually quite fun.
3. Meals Carryover – Want a breakfast that cost nothing? Ask for some bread to-go at the restaurant the night before.
4. Avoid Breakfast from the Hotels – Chances are good that the breakfast from the hotel is expensive and isn’t great. It probably pays to walk out the front door in the morning and find a local cafe. You might just stumble onto the local favorite.
5. Eat More at Lunch Than Dinners – Fancy lunches are often much less expensive than dinners. If you eat a big breakfast, lunch and a light dinner, it’s also healthier.

* Car Rentals *

1. Be Specific with Car Rentals – One way car rentals (when the pickup and drop off locations are different) are sometimes more than twice the price of standard rentals, especially if the two locations are in different states (or country). If you need the car for 7 days and will be in the same city for 5 and another city for 2 for example, break the rental period in two and have a 5-day same location rental and another 2-day one day rental. You might need to go back to the rental facility but it really doesn’t take that long and it might save you a few hundred dollars.
2. Car Rental Coverage – Some insurance and many credit cards have car rental coverage so take advantage of those when you rent a car. All you have to do is pay with the credit card that will cover you. (Just make sure you decline the coverage from the rental company when they ask)
3. Size of the Car – I used to always get the smallest car possible because not only do I not need the extra room, I also didn’t want to pay for the extra gas that bigger cars need.
4. Children Car Seats – If you are traveling with kids, you might think that bringing the car seat is cheaper. Call the car rental company and ask about rental prices. With airlines charging for extra luggage, it might save to just rent it.
5. Fill up that Rental Car – If you are renting a car and need fuel, just fill her up with regular gas since that’s what the car rental company uses anyway. Also, decline those services that fills the gas tank up for you. Even though it seems like the advertised price is cheap, they charge you for a full tank of gas regardless of how much is left in there when you bring the car back.
6. Coupon Codes – Sometimes car rental companies have coupon codes that can be used. Search the Internet.

* Transportation *

1. Rail, Metros and Subway – If you are traveling to Europe, research on multi-trip discounts. Many metros and rails have passes such as a 3-day unlimited travel passes which might be worth the cost.
2. Night Train and Flights – If the transportation is going to be long, consider traveling at night to save money on accommodation and many hours of time. Many people have a tough time sleeping on these, but it’s all mental. Once you get used to it, you will be able to have a good night’s rest.
3. Take the Slower Transportation – If flying is too short for you to take advantage of sleeping while traveling, take a bus ride. When you are sleeping, you won’t mind that the bus ride is 7 hours.
4. Avoid Taxis and Welcome Public Transportation – Tourist usually take taxis since it’s the laziest way to get from point A to B. Consider the subway or buses because it’s sometimes easier and it is much cheaper.
5. Driving is Not Bad – Want to take that 1 hour flight? With airport security and all the hassle of airport inefficiencies, you might as well drive there (it takes just as long and it’s less expensive). Once you get there, having a car is also much easier than needing to take your bags everywhere.

* Currency *

1. Watch That Currency – If you never really had a preference in travel destinations, consider the exchange rate when you travel. This sometimes makes the biggest difference.
2. Getting Cash – Many exchange centers have very bad exchange rates so don’t go there. Search the internet to find out good places to get cash in the local currency. For example, a quick search tells you that the best exchange rate is found at the airport and using ATMs in Taiwan and France respectively.
3. Try Using the Local Version of the Same Website – Due to the rapid change in currency rates, it could be much cheaper to book using the local currency. How do you do that? Go to the local version of the same website.

* Accommodations *

1. Staying in a Town Next Door – Sometimes the smaller towns close to where you are going have hotels that are much less expensive. If you don’t mind the 15 minute ride, you might just save that bundle.
2. Home Exchanges – These are pretty cool and popular especially in Europe. Your trip might not be as romantic as The Holiday (movie with Cameron Diaz and Jude Law) but if you are of the adventure type, this could be exciting and refreshing).
3. Ask – Sometimes smaller hotel chains are willing to give you free upgrades (or even free nights). If you already have a reservation booked elsewhere, call them up and tell them that you would consider changing if you can get an additional night free.
4. Vacation Home – If you are staying at a destination for at least a few days, consider a vacation home instead of hotels. They are often are more comfortable and your cost will probably be cheaper.
5. Suites – Instead of having two rooms, consider the two-bedroom suites that some hotels provide. They will end up being cheaper and you get just as much privacy with your own room.

* Shopping *

1. Duty Free – Many airports have duty free shops that you can take advantage of. They might not be the best deal around if you don’t consider taxes but tax-free might make it the least expensive option.
2. Don’t Forget About Possible Tax Refunds – Some countries let you get all or part of the retail sales tax back. You might have to fill out forms and show proof but if large purchases are made aboard, it can save you a bundle.

* Alternatives *

1. Tourist Spots May Not be That Hot – Many countries have tourist spots that aren’t really the most interesting places to go to, not to mention that everything is more expensive around that area. If you’ve been to that place already, there’s no point seeing it again and again. Instead, go to local areas and observe life. It might just spice up your vacation.
2. Walk Around – If your destination isn’t that far away, consider asking the locals directions and walking there. It’s a great chance for you to see the city and take pictures.
3. Enjoy the Local Version – Many consumables are less expensive when it’s made in the country you are visiting. Consider trying their local beer, coffee or food. You might be surprised at how great and cheap it really is.
4. Be a Little Flexible with Travel Days – Many prices are based on supply and demand, so sometimes it’s much cheaper to leave the day before (or after) instead. Look around the dates of your travel plans and see if spending an extra day is worth it. This makes a difference especially around major holidays.
5. Book a Bundle – There are many package deals that saves you money if you book hotels and flights together. Basically, the more business you can give them, the better discount they can give you.
6. Go Off Season – Everyone wants to ski or go to Hawaii in the winter. Consider this type of vacations in off-peak times (going skiing in the spring time for example). It’s cheaper and less crowded.
7. Travel Around Home – Overseas travel might be your dream vacation but there are actually many places close by that is very interesting as well. Check out those lesser known places and the local experience might very well be great.
8. Try Booking at Different Times – Online sites sometimes have rates based on the time and day of the week you book. Try different combinations and see if you can get a better deal.

* General *

1. Bid Your Own Price – Priceline.com has a great system where you can name your own price on flights, hotels and car rentals. If the same offer is available, I’ve always saved money bidding for it.
2. Discount Everything – Some countries have discount stores (I’ve seen one in Japan for example) where they sell all kinds of tickets at a discount. In that store, I’ve even seen gift cards for department stores so if you are buying something anyway, those stores will give you an instant deal.
3. Don’t Give Up Looking for Deals – Even if you have your plans set, keep trying to look for deals. Reservations can often be canceled with a full refund so if you find a last minute deal that fits into your plans, take advantage of it. (I went to Las Vegas recently and saved half my hotel cost since a last minute deal happened to fit my itinerary so it really works)
4. Reward Points – Even if you aren’t a frequent traveler, sign up for those reward programs since you might qualify eventually. It’s all free anyway and if you finally get enough points, you can get always get something free.
5. Go to the Grocery Store – Even if you are away from home, chances are high that there are grocery stores where you are traveling to. It’s worth it to take a trip there and get snacks, water, and everything you need for your trip since hotels overcharge.
6. Age, Student and Membership Discounts – Many attractions like theme parks, museums and others have discounts for senior, children or students. If you are traveling, remember to take your ID and membership cards (e.g. AAA card) with you that might qualify you for these.
7. Group Discounts – We all know there are group discounts everywhere. To take advantage, team up with a few friends and go to the same destinations together. You can even set it up so there is no obligations to be everywhere together.
8. Talk to the Locals – Be friendly and chat with them. Sometimes, they will tell you where to eat and some may even offer you to stay over (works best in small towns).
9. Mini Tours – I’m not talking about bus tours that takes days but one day tours that take you to many different places within the city. Not only will they take you to places you probably want to visit anyway, the bus driver is usually quite entertaining and informative as well.

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What to Do If Your Cable TV Bill is Too High

Cable companies are a supreme example of a natural monopoly. They’re the easiest example for economics professors to use, because, due to structural conditions, only a few competitors can exist in any cable market. Often, there is only one option that consumers can choose. The consumer has no leverage and is thus at the mercy of the cable company.

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Over the years, the price of cable has increased significantly. Luckily, other forms of technology and media have grown as well, leading to a shift in favor of the consumer.

If your cable bill is too high, you now have options. 

Netflix and Hulu Plus

The internet age has opened the door to new companies, such as Netflix streaming and Hulu Plus, to compete with cable companies.

Netflix offers a wide selection of movies and TV shows, while keeping their price low ($7.99/month). They offer full seasons of TV shows, movies, and HD quality video. While Netflix doesn’t offer a lot of newer shows, they make up for it with quality streaming and a huge array of movies. One account can have up to six devices, with up to four running at once. You can even split the cost among friends and family, which will reduce the price even more. I have had Netflix for over a year now and have been very satisfied.

For the same price as Netflix, Hulu Plus offers a similar platform with a different approach. Hulu Plus puts new episodes of shows on their site the day after they’re aired. My future sister-in-law and her husband have recently dropped cable in favor of Hulu Plus. They can now watch their favorite shows the day after they’re aired, for a fraction of the cost of cable and DVR.

Dish Network

The likes of Dish Network and DirecTV have been competing with the cable companies for a while, and they generally offer lower prices. My fiancé and I currently pay $50 a month for her cable bill, while Dish Network and DirecTV offer yearly contracts for $35/month and $30/month, respectively. For us, getting a dish is out of the question, because she lives in an apartment.

It could be a good option for homeowners, though, as they’ll get a full set of channels and could save a couple hundred dollars per year.

Call Customer Service

Sometimes, a call to customer service is enough to drop your monthly bill. If you look at the current Verizon FiOS promotion codes or AT&T U-Verse coupon codes, you’ll see that the bundle prices are usually guaranteed for one to two years. After that, the cable companies are free to raise their rates considerably.

If you call and say you’re considering switching companies, however, they’ll frequently offer you a “one-time” special offer. This may seem like a backwards approach, but I’ve seen it work numerous times.

What Will You Do?

Is cable best for you? Spending $600 a year on cable is less than ideal, but it’s what my fiancé and I decided was right for us in our current situation. In the future, when we’re both working longer hours, we may consider switching to something different.

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Why Only Thinking About Affordability Makes You Poor

In one of our dreaming moments during the weekend, Emma and I jokingly spoke about joining a private golf country club.  It was brand new, relatively close from where we live and also extremely nice.
The financial commitment to enroll were:

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1. $30,000 to join (although that can be negotiated down to possibly $20,000 we heard) and 90% of the current initiation fee can be refunded when we decide to leave the club so we can theoretically even make money on this
2. $475 monthly dues

So when we talked about whether we could afford it or not, the first reaction from the two of us were YES.  Maybe its not so much of a dream anymore because:

• We can get our initiation fee back
• $475 a month is something we could come up with

Think Harder to Stop Wasting Money

Although we could come up with the monthly payment and hence we could “afford” joining, it obviously wasn’t a very sound financial decision for us.  Here are a few reasons why:

1. We Still Need to Buy a House – We already have a sizable down payment for our house, but we should make sure we borrow as little as possible when we actually make that purchase.  It would be unwise for us to spend excessively right now and then take a larger mortgage payment.
2. Our Life is Still Ahead of Us – Not only do we have plans to get a house, there will be additional expenses in our lives once we raise children and grow our family.
3. Expect the Unexpected – 2 months ago, no one could imagine the Dow Jones Industrial Average  losing 30% in a short few weeks but unexpected events like these happen all the time.  Throwing $20,000 into an illiquid asset is not the best way to prepare for emergencies.

Thinking About Affordability is Why So Many Americans Are Poor

I have so many friends that think about nothing but whether they could come up with the monthly payment at the time of purchase. Just today, my coworker was telling me that his friend is paying $650 a month on his car lease. His friend probably didn’t do this but if he takes out his calculator and do a little math, he will realize that he is actually paying $100,000 for a car that’s worth $40,000.

The simple and common example above illustrates the danger of thinking about affordability. Think about all those stories you hear of people who’ve accumulated massive wealth because of their frugal lifestyle. These people don’t buy that new gadget or new car because they don’t see the need, not because they can’t afford it.

A Couple Other Points to Consider Other than Affordability

Despite affordability not being a good sole reason to buy something, it is still something we should consider.  On top of that, here are a couple good questions to ask ourselves when we believe we should buy.

1. Is it necessary or is it nice to have?
2. Is there a more economical version?
3. Would most people in your situation want to buy it?
4. Would you still buy it if you had time to think about it?  In other words, is it an impulse decision?
5. How is that going to affect your short and long term goals?

Mind you, I’m not saying that everything you buy have to be necessary.  If it is Emma’s birthday, I wouldn’t hesitate to get her a birthday cake even if it’s not something I will say is “necessary” for our survival.  So just use these questions to challenge yourself to think through every buying decision.

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How to Not Worry About Money 

One of the great side benefit of not being a salesperson who is on the plane way too often is that I have more time to talk to my parents over the phone. Yesterday, a question came up that affects almost all of us who weren’t born into eventually inheriting Exxon Mobil – How to not worry about money?

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Under all guidelines and measures, my finances are very solid. I’m debt free, I live below my means, my emergency fund is already setup and in some respects, my business is actually more stable than most people’s jobs. Furthermore, Emma’s salary more than covers for the family’s monthly expenses. Pretty fail proof it seems.

Yet, I still sometimes worry about money.

I’m concerned that having kids (something my wife and I definitely want to do) will increase our living costs, and I worry that the house we buy will likely add financial stress in our lives (remember, we are in an one-bedroom apartment right now so the house we purchase will likely be bigger).

After a lengthy discussion and some more thoughts into the matter, below are a couple areas that can help me (and possibly you) reduce the worry for money.

1. Realize that It’s Exaggerated – Worry is a funny feeling – it seems to exaggerate any problem. While there are certainly many people who actually run out of money, those are usually not the people that tend to worry.
   Spend the Same Time Making Money Instead – If you are going to spend time worrying about money, why not use that time and get a side job instead? Maybe start a website (or two, or three). I know it’s easier said than done, but the more you work at it, the easier it gets.
2. Confidence – Part of the reason why we worry about money is because of the lack of confidence in our own abilities to earn an income. How can we boost our confidence you ask? Confidence comes from success, and success starts from taking action. So try a few things. Learn from it and try again.
3. The workplace plays a big role in all this as well. Are your colleagues encouraging? Is your boss supportive? If not, then do something about it. Don’t get into the thinking of “I can’t find another job”. Yes you can. If you got this job, you can get another one.
4. Worrying is Actually Good – A little worrying is actually healthy for us. It’s what drives us to be better. It’s what turns our energy switch to the on position. The right way to deal with it is to channel it into your work ethic, and your desire to be better.

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Does Always Thinking About Money Really Make Me Happy?

I placed 2nd in a golf tournament and I received the trophy today. I was so excited because I never won anything other than getting certificates and ribbons before so it made me really happy to say the least. My credit card balance, my next paycheck, the stock market tumbling all didn’t matter seem to matter. As someone who always thought about money – how to save more, how to earn more, how to accumulate more – this prompted the question “Does always thinking about money really make me happy?”

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The answer to the question is probably pretty complicated. On the one hand, the thoughts often stress me out unnecessarily. I certainly don’t need to worry about survival. My business is doing well, I have a substantial amount of savings and my overall debt load is small. In many ways, I’m probably too frugal. After all, money isn’t just for hoarding, so I should really live it up a little once in a while.

On the other hand, unexpected events can always happen. The economy can tank, the stock market may have many down years and my business income can be volatile. Furthermore, my expenses in the future will only go up as my family grows. Hopefully, my income will also increase but I can’t count on it to grow faster than the increased expenses. This means that I cannot just project the same savings that I do now indefinitely. Add to the fact that I’m still very far away from reaching my retirement goal since I’m so early in my wealth accumulation process, and I should try to save as much as I can, as early as I can just in case. There’s no such thing as saving too much right?

This is definitely a good problem to have but sometimes having choices can lead to confusion. This will probably be a question that I will ponder again and again through the years. In the meantime, I will be content with my first sports trophy ever.

How often do you think and worry about money? Do you think you are worrying too much? How do you deal with it?

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The Secret of Dealing with the Financial Crisis

More often than not, our view of (rather than the situation itself) dictate our state of mind. Some people would still be happy even if the world came crashing down.  For others, a minor setback would spark off a downward spiral of deeper sadness.  New circumstances are thrown at us day in and day out.  We can either make the best of it or make it worst.  It is up to us.

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The Danger of the Trusted News

Lately, we hear lots of stuff over the news:

• We are in the worst economic environment in decades
• Everyone is losing jobs.  Look at that employment number at 7.2%.
• All banks are failing, what should we do?

The unemployment number is climbing and it’s never good when this happens, but the unemployment number was at 5.8% in 2005 (Bureau of Labor Stats).  Putting it into context, this means that less than 2 people were laid off for every 200 people we know on average.

Is it worst than it was in 2005?  Absolutely.  Is it really Armageddon?  Hardly.

Our Expectation is Sometimes Just Too High

What about our net worth that came crashing down?

Whether it’s our stock holdings, our house value or our spending power, this chart pretty much sums it all up.  I bet a few years ago when your house or stock went to crazy highs (somewhere around the red line), you were extremely happy.

The value of your asset went down rapidly the past few months.  So did mine.  In fact, if this chart illustrates the value of the asset, it went down 50% off its highs.  It hurts to see it but other than our ego, did it change things that much?  Going back to our example, isn’t it just back to the value it was a few years ago?  The exact same level when we were celebrating?

The Real Danger

Some of us got into trouble because of how we handled our new found wealth.  As our asset value rose, we began to increase our standard of living.  Each time our stocks went up, we poured in more material to build another step.  Now that the new money has stopped, so did the ability to continue building.  For some, it has gotten so bad that their standard of living fell off a cliff as their money supply dried up.

For those that lived life just the same, what really changed?

What is Your View?

There are certainly many people who are in trouble now but they are just the minority.  Unfortunately, most of us are spooked by the reporting on those suffering.  We are afraid because of the over-exaggerated news articles; we are frighten by what could (but is unlikely) to happen and we are worried that the sky is really falling.

But is it that bad?  Do you really have to be afraid and how likely is the worst going to happen?

Answer those questions truthfully and perhaps the rest of you day will be much brighter.

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Have a Great One.

What’s More Important than Money

With all the headlines about the crisis in our financial system, it is very easy to become consumed and worry about our wealth.  After all, what else are we supposed to think about when our stock holdings are tumbling in front of us?

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Then in the middle of reading about all the financial articles, a tweet from Frugal Dad brings everything back to perspective.  His mom is in intensive care unit at the hospital, and all he really wishes for is her to recover.  I’d like to use this opportunity to wish him and his mom the best and I want to dedicate this post to her.

I’m the first to admit about the important of money, but as I mature, I discover that there are just so many things more important than how much wealth we have.

Health
Without our health, nothing really matters.  We all wish that we still had the energy when we were 10 years younger.   However, we seldom do anything to slow down this process even though we realize our health slowly deteriorates through time.

We just found out my dad’s bones have severely deteriorated and the doctor told us there’s nothing we could do at this point.  As the end result might be a need for a wheelchair, we only now wished that we could’ve done more exercises with him through all these years.

Taking care of our health should be our number one priority.  This includes doing adequate exercise and maintaining a balance diet.

Family
If our health is like a building, then our family is the foundation that holds the structure up.  From our mother’s unconditional love to our spouse’s constant emotional support, many of us usually take it for granted.

We need to constantly tell our loved ones how much we appreciate them and let them know that we care about them.  We should also go out of our way to help them, because doing so will allow the family bond to stay strong.

Happiness
Some of us feel that money equates to happiness but many of us take it to the extreme and miss the point.  What ends up happening is that without really thinking about it, we sacrifice our health and family for potential wealth building opportunities.  This sounds illogical if I point out that a common example of this is working excessively, you probably understand why.  When you work too hard, you are giving up precious family time and also your health as you spend less hours relaxing and resting trying to get ahead.

Money is only a tool to assist with our lifestyle but it is not the source of our happiness.  Focus on being happy, and you will suddenly find that money is not as important as it used to be.

Final Words
I want to wish Frugal Dad and his mom the best and I wish that I could do more than writing a blog post about it.

For those reading this piece, I hope that you will focus on what’s truly important.  Stay healthy, be happy and let your family know how much you care about them.

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Money is Not Everything

My grandfather being in the hospital really puts things into perspective for me.  No matter how wealthy we are, it means nothing if we aren’t healthy.  Many people, including myself, work so hard at our jobs.  We miss lunches, and sometimes sleep just to advance our career a little more.  We work late on weekdays and on weekends because we think we can make more money that way.  Although I can tell you first hand that the financial reward is there, our health definitely suffers.

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Whether it’s the extra stress we put on our bodies or the lack of healthy food we consume, it takes a toll on our bodies over time.  When we are young, we don’t feel it but we are slowly and surely degrading our health.  We might end up being rich, but we are more likely to end up being sick.

By overworking, we are also likely neglecting our family and friends.  Unfortunately, there is only 24 hours in a day.  Therefore, we are deciding how best to use our time every minute of our day.  When we are working, we cannot be spending time with our family or our friends.  My family for instance decided that my dad should work in Hong Kong when we immigrated to Canada.  Consequently, I spent most of my teenage years away from my dad.  Although this was very hard for me, it was much harder for my father since he was the one making the most sacrifice by living alone in Hong Kong.  Although I’m sure our family’s financial situation improved because of the decision made years ago, we all traded many potential family moments for it.

In this blog, we discuss ways to achieve financial freedom.  But if we are sick, our finances are usually one of the last things that we think about.  For my grandfather, no gold will make him happy.  It is our love that he seeks now, and it is love that we will do our best to provide.

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How to Not Lose Sleep in a Bear Market

In this bear market, not even the so called “smart money” are making money. I was watching Fast Money last night where they were talking about a few billionaire investors who literally lost tons of money on bad investments. A few included:

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1. Kirk Kerkorian lost $500 million with his investment in Ford
2. Bill Ackman invested 2.4 billion in 9 stocks, many of which are bleeding money (Target alone lost 50%).
3. Carl Icahn lost $750 million with his Yahoo bet (he probably lost just as much with his Motorola investment too)
4. Aubrey McClendon bought tons of shares of Chesapeake Energy where he’s the CEO and he was forced to sell them all at its lows because of a margin call. Estimation of his lost is $1.5 billion.

And all this time, we thought we lost a lot of money.

While I have no doubt they are upset about the losses they incurred (a $1 billion dollar lost isn’t something you just forget about), I’m sure they aren’t losing much sleep over this because of primarily one reason – they don’t need the money anytime soon.

Some of us are extremely worried right now because we are afraid the money we have isn’t going to be enough. While it’s impossible to predict the future with 100% accuracy, it is safe to say that the stock market as a whole will come back up over the long run. Therefore, there’s really no need to worry about it if the money is in there for the future.

If there’s short term money in the market however, now is the time to think about slowly transferring it to safer investments. The reason has nothing to do with whether the market will go up or down but rather the fact that no one can predict what stocks will do in the short term. In a year from now, no one has any idea whether stocks will be higher or lower. There are many people that will take a guess at it and pretend like they know but no one can guarantee because there are too many variables that will affect the outcome.

Putting money that may be needed in the short term towards the stock market is too risky. If this is you, seriously think about whether the risk is appropriate and keep in mind that the whole economic crisis happened due to the lack of appreciation for risk management.

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