Tag: investing

A Few Reasons Why Some Startups Fail

On February 19, 2021

In Career, Finance, Investing, Leadership, Nicholas Fainlight

Every new startup faces risks of failure, but, as an entrepreneur, it’s up to you to minimize those risks as much as possible. One way you can do this is by taking the time to understand why startups do fail. In doing so, you can take steps to avoid those common pitfalls.

Failing to Fulfill a Need
While your product might be fascinating or utilize the latest technological advances, it will gather dust on shelves if it’s not fulfilling a need. Products that solve problems in new and more efficient ways are the ones that attract consumers. Your goal should be to convince consumers that they can’t live without your product.

Failing at Providing Good Customer Service
Another weakness of new entrepreneurs is failing to recognize the importance of providing good customer service. In today’s digital world, customer experiences are instantly shared and consumed online. This creates a force for developing brand reputations over which businesses seemingly have no control. In fact, your only control over your business’ reputation is in how you promote customer satisfaction.

Failing to Hire the Right People
You can’t be present for every interaction each consumer has with your business. Instead, your own employees will collectively become the face of your business. Employees that seem uninterested or rude will lead to customer dissatisfaction and fewer consumers will visit your business. Your goal should be to hire individuals with a passion for your products or for the field of interest your business operates within. Additionally, they should be knowledgeable about your industry and passionate about performing well in their jobs.

Failing to Generate Capital
From the moment you launch your business, you’ll have to create a cycle of growth and reinvestment. This requires generating enough capital on a continuous basis to provide you with surplus cash to invest back into your business. Whether the capital is used for marketing, enhancing the business, or meeting growing customer demands, you should continue to reinvest in your business. If you’re not generating the capital to meet these demands, your business will likely fail in a very short time.

While addressing these issues won’t guarantee success, your actions can increase your chances for success. In addition to avoiding these common mistakes, you must also dedicate yourself to succeeding. While talent will take you far, perseverance has the power to take you all of the way.

How To Balance Profit And Purpose In Business

By Nicholas Fainlight

On January 28, 2021

In Career, Education, Finance, fitness, health, Investing, Leadership, Nicholas Fainlight, postgraduate, Technology, Uncategorized

Entrepreneurs need to build business empires while still staying committed to their purpose. A significant number of business people struggle to commit to their purpose while still keeping their enterprises profitable. Businesses need to demonstrate their contribution to humanity while still growing their profit margins. Here are ways businesses can balance profit and purpose.

Go Green

In the past few years, many businesses have shown their commitment to adopting more sustainable production methods. No matter the size, every organization can play a role in reducing its environmental footprint. Surprisingly, the current generation prefers to buy green products. Therefore, companies that will demonstrate high sustainability credentials will gain numerous customers who want to buy green.

For instance, manufacturers can reduce carbon emissions by sourcing closer to home. When raw materials are transported for short distances, it helps cut both transport costs and carbon emissions. Besides, leaders who have a passion for conserving the environment can shift to renewable energy sources.

Find an Inspiration

Walk away from your comfort zone and start doing something new that challenges you. Learn from these things and find inspiration in them

Leverage Technology

Technology is changing every aspect of life, including how consumers interact with brands and how they buy products and services. For example, online sales have doubled in the past five years. Additionally, organizations are using machines to understand customer needs better. This means that businesses must stay on top of the latest innovations to remain competitive in their respective industries.

Share Your Success

Entrepreneurship is a murky journey characterized by ups and downs. Therefore, successive entrepreneurs should consider sharing their experiences with novice business people. When you balance profit and purpose, your impact is significant and tangible, and more consumers will want to be associated with your business.

Understand Your Purpose

Purpose goes beyond providing high-quality goods and services to consumers. It also means that your business prioritizes the common good of the community. For example, some companies such as Unilever have already developed a unique living plan to track their progress of minimizing their environmental footprint. Business leaders should devote time to learn about societal impact and how to improve it.

To change business operations to meet new expectations requires exceptional and visionary leadership. In today’s versatile business world, leaders who will adopt agility will be in a better position to achieve long-term success.

Person skydiving in a clear blue sky, image used for Nicholas Fainlight blog on risk in finance

The Importance of Risk When It Comes to Finance

By Nicholas Fainlight

On November 3, 2017

In Finance, Investing, Nicholas Fainlight

Risk is involved in every aspect of life. The risk of taking your first steps is falling; the risk of asking a person on a date is rejection; the risk of interviewing for a job is failure; the risk of parallel parking is hitting another vehicle. So, it is guaranteed that creating a business or investing in something financially, as well as physically, involves considerable risk.

What is risk? According to Google, risk is the possibility that something unpleasant or unwelcome will happen. However, according to the business dictionary, risk is a probability of damage, liability, loss, or any other negative occurrence that is caused externally.

From a finance point of view, risk is the probability that an investment’s return will be less than expected. However, risk also offers the chance of reward. For example, a reward could be an increased return compared to a lower expectation. Financial risk is comprised of multiple categories: basic risk, capital risk, delivery risk, exchange risk, interest rate risk, political risk, settlement risk, underwriting risk, and much more.

Examining financial risk includes looking at daily finance operations, such as cash flow, transactions made by the business, and the business’ financial systems set in place. You may consider things like which clients owe the company, how the company plans to retrieve the money, insurance, and its coverage, as well as whether the business can extend credit to customers and how.

When calculating financial risk, external factors like interest rates and foreign exchange rates should be considered. Those factors can affect company competitiveness with services produced abroad; changes in interest rates and exchange rates can immediately affect debt repayments.

All businesses should extensively discuss risk management within the business’ strategic management. Doing so allows the company to identify and tackle any risks before they become an issue, which will in turn aid the chances of reaching defined business goals.

Once the risks have been pinpointed, there are several ways to address them: accept it, transfer it, reduce it, and eliminate it. Acceptance of a risk might happen if the costs are too high to handle it in any other way. The risk could be dealt with by transferring, which typically takes place with the company insurance. Reducing a risk is merely introducing safety measures to keep the risks from occurring, and eliminating the risk could be something like changing the production process. Once the risks have been determined and the type of management has been decided, take steps to put the measures into place.

Risk management is not a one time kind of deal; it requires consistent monitoring and should often be reviewed to ensure the management approach is successful. Set the plan in stone by creating a risk management policy that will identify the company’s approach to risk, and it’s management. The CEO’s and the board should all be on the same page before moving to the management policy phase.

All choices in life and business involve risk to some extent. By understanding what risk is and how to manage it, business and employees are more likely to meet their financial goals.

Piece of paper with a graph on it sitting on a table, image used for Nicholas Fainlight blog about learning to invest

How to Teach Yourself About Investing

By Nicholas Fainlight

On October 24, 2017

In Finance, Investing, Nicholas Fainlight, Technology

Far too many people are unaware of the basics of investing, even though it’s one of the best ways to build your wealth. Public schools do not teach anything about it and if you go to college, you really only learn about investing if you take business or finance courses. This lack of knowledge leads to people shying away from investing and relying on a steady and reliable source of income. They often view the stock market as a way to simply lose money, especially if they lack basic knowledge about investing. This viewpoint is completely understandable, but not one you should subscribe to. If you know nothing about investing, it’s never too late to learn! Here are some ways you can teach yourself more about investing and get ready to start a portfolio of your own!

Take a look at your finances

The first step you’ll need to take is examining your finances and determining how much money you want to put into investments. If you’re heavily in debt or have no savings, you should take care of those issues before attempting to invest large amounts of money. Get an accurate picture of your finances so you know how much you have available to invest.

Learn the basics

When you first begin looking at everything that goes into the markets and investing, it can feel overwhelming. People spend years trying to learn the secret to investment success. Instead of feeling intimidated by these approaches, simply start by learning the basics of investing. Learn what different terms mean and how creating an investment portfolio works. But, don’t take too long; the sooner you begin investing, the better!

Check out online resources

After you feel like you have a basic understanding of investing, it’s time to start learning about the different approaches people take and cultivate a deeper understanding of the market. A great place to look is online, because there’s a seemingly endless amount of online resources, such as ebooks, blogs, podcasts, and many websites that offer expert advice. Check out the credentials of a source before believing everything you read, but most information on investing can be useful, even to just teach you what not to do.

Find experienced people

You might know someone who’s a financial advisor or who spends a lot of time following the market and knows about investing. These are the people you should talk to. Even if you don’t personally know anyone like this, you can certainly find a forum or website where you can chat with someone who can give you actual advice about investing.

Set your goals

Before you actually start investing, take a bit of time to set your individual goals. How much money do you want to invest? Why are you investing? What return do you hope to see? People invest for different reasons, not simply to generate wealth. Once you’ve decided what your individual goals are, you can start investing.

Start small

As you begin your journey as an investor, remember to first start small. You definitely shouldn’t take your entire savings account and invest in high risk stocks; use a smaller, manageable amount first and invest smart. Research the best types of stocks and start out with moderate risk.

Person holding a phone with a bunch of apps on the screen, image used for Nicholas Fainlight blog on whether or not investing apps are worth it

Are Investing Apps Really Beneficial?

By Nicholas Fainlight

On October 16, 2017

In Finance, Investing, Nicholas Fainlight, Technology

Lately, there’s been a rise of apps offered to help you manage your personal finances. There are various types of apps and options to choose from. Whether you merely want to work on budgeting, keep track of your credit score, or begin investing, you have plenty of apps to check out. However, many people question whether or not these apps are actually worth it, especially investing apps. Is your information secure? Are you wasting money? Will you see any kind of return? I’d like to examine whether or not investing apps actually benefit the user.

The concerns about them

One of the main issues surrounding investment apps is the security of them. When you create an investment portfolio with a recognized bank or investment company, you must go through layers of security every time you want to do anything, even if it’s simply transferring money into an account. With investment apps, it doesn’t seem as though there’s as much security. Many people are also wary of putting their information online, so creating a new account with an app seems like the perfect way to have your account information compromised. While this concern is completely understandable, all of the popular investment apps have layers of cybersecurity, very similar to that of a banking website. Many apps also guarantee insurance for accounts up to a hundred thousand dollars, so if you’re below that number, you’d still be able to recover all of your money.

Another concern is whether or not the apps are worth the cost. Some of them charge high trading fees or have regular monthly fees, which can seem like a waste of money, especially when you’re trying to grow your wealth. The answer to this issue is a little murkier than the last. While you should certainly be investing your money in some way, it’s up to you what app you choose. Research the fees associated with each app and learn what different keywords mean, such as how much the app charges per trade. Decide how much you’ll be planning on investing into these accounts and whether or not regular fees are worth it.

Benefits of investing apps

One of the greatest benefits of investing apps is how most of them are designed for beginners to use. Many people do not have the first clue about investing and the best practices for it, so these apps have been designed with this issue in mind. Most investing apps are relatively simple to use once you take some time to play around with them. Some even offer blogs and other tips to help you with investment decisions. Still others offer you direct assistance from a financial advisor.

Another great benefit of investment apps is that you can open an account with relatively small amounts of money. You can start investing spare change or a few dollars and grow your portfolio. For younger investors, this feature is great, especially since many traditional investment companies require you to have a minimum of a few thousand dollars to invest upfront.

How to make them work for you

Finally, if you decide you do want to get into the world of investing and an app on your phone is the best option for you, there are ways to make sure you make the most of it. The best thing you can do is take your time and research the various apps. Check out blogs that focus on investing, financial advice, and financial apps to see what expert opinions are on the different apps and decide which one best fits your needs.

Do Natural Disasters Affect Stocks?

By Nicholas Fainlight

On October 2, 2017

In Finance

A natural disaster such as a hurricane or earthquake can create devastating consequences for any human or home that stands in its way. Buildings are crumpled, water damage from flooding wreaks havoc and what was once a community becomes an area requiring total repair. However, this wreckage does not always indicate that a disruption will also take place in the stock market. While there may be short-term fluctuations in the price of oil and insurance stocks, the long-term health of the stock market is dependent on other factors as well.

Looking To The Past

To understand how natural disasters affect the stock market, it’s best to look at the past and see how it fared after the occurrence of major hurricanes. One example of a major natural disaster that caused widescale destruction was when Hurricane Katrina passed through Alabama, New Orleans and other areas near the Atlantic Ocean. This 2005 event created $108 billion in damages — still the costliest on record. Yet, the stock market continued to head higher and shake off the devastation. How could this be?

What Drives Markets Higher?

While the devastation from a natural disaster does cause a considerable amount of monetary damage, the spectrum of events that occur after the damage has taken place must be examined. In the short term, there will be price fluctuations related to equipment or buildings that have been taken out. However, the United States stock market seems to shake off disasters and continue its steady price movement upwards. This could be due to other economic factors that are already in place such as low inflation, declining unemployment or policy from the Federal Reserve.

Outcome of Hurricanes Harvey and Irma

Hurricane Harvey passed through Texas in late August 2017 with wind speeds reaching 130 miles per hour. One week later, the state of Florida was hit by Hurricane Irma — a Category 4 hurricane. Both of these monsters destroyed anything that stood in their path. Yet, near the end of September, the S&P 500 was reaching new highs. One must consider the rebuilding and investment that will need to be done to create new communities. These factors may be part of the reason for the continued gains seen in the stark market as well as other economic factors that are already in place.

While one would think that major hurricanes or other natural disasters would cause the stock market to fall — that’s not the case — the stock market has continued to rise after these devastating events.

How The World’s Stock Markets Have Evolved Over Time

By Nicholas Fainlight

On October 2, 2017

In Finance

Stock markets are one of the most important parts of the global economy. Stock markets are an important part of economic growth. The origins of the stock market can be traced back to France, where residents used a system that managed debts while serving the best interests of the banks. In Italy, bankers started trading government securities. The actual beginning of the stock market occurred in Belgium and the Netherlands. Antwerp, Belgium is recognized as having the World’s first organized stock market system. However, during this time period, debt was being regularly traded instead of shares of a company.

East India Company

The East India Company is considered the first publicly traded company in the World. Investors realized that going all in was not a long term beneficial strategy. They started buying shares in other companies so that investments would be less risky. Over the next few years, many European countries started using the system. Investors traded ideas in coffee shops. However, due to a lack of regulation, the early days of the stock market were very unorganized.

New York Stock Exchange

The New York Stock Exchange was considered a breakthrough. Soon the NYSE established itself as the center of US trade. Thanks to a void of any real competition, the NYSE thrived.

Today’s Climate

Almost every country in the World has their own stock market. Over a trillion dollars are traded on stock markets throughout the World every day. NASDAQ has moved the stock markets into the future. NASDAQ was created by the Financial Industry Regulatory Authority and The National Association of Securities Dealers. NASDAQ is unique because instead of relying on a physical location, all of the trading is performed electronically on a network of computers. NASDAQ has influenced a new era of innovation and expansion.

Looking Ahead To The Future

Stock markets are an important part of the World’s economy. Analysts feel that we will continue to see mergers among different stock markets. There is even an outside chance of a single global stock market. The recent natural disasters that have occurred have also challenged the stock market. While Hurricane Harvey has caused lots of damage, the stock markets have shown growth in these damaged areas. This is another example of how the stock market is relatively immune to the impact of natural disasters. Investors are aware of the economic growth that will take place in the aftermath of these disasters because there will be a lot of jobs created through rebuilding the damaged areas.

Futures Trading Part 3: Risk

By Nicholas Fainlight

On February 23, 2017

In Finance

If this is your first time tuning in, then you’ll probably want to check out my first two blogs in this futures trading series first, where I cover a basic introduction to futures trading and leverage. I’ve had an interest in futures trading for about as long as I’ve had an interest in finance- which is to say, it’s been awhile. It’s a tricky area of the stock market to explain to anyone because it is both a part of and separate from the overall stock market. Long story short, futures contracts have set expiration dates and stocks do not. But there’s a lot more to it than that, so I broke my explanation of futures trading into four sections covering key concepts. This is lesson three of four, covering risk.

Risk: you know what it is in general terms, but do you know how it relates to futures contracts? Unless you study the stock market as I do, probably not, but I’ll do my best to explain. Essentially, investing in futures contracts can be risky business. Managing risk is an important consideration for stock investment; however, unlike with traditional trading, with futures trading you can stand to lose more money than you put in. Therefore, you should have a full understanding of risk capital before trading in futures.

Risk capital is defined as the funds that traders can afford to lose. According to Rich Ilczyszyn, CEO and founder of iiTRADER.com, “You should not be trading futures with money reserved for necessities, such as housing, food, transportation.” Instead, you should consult an experienced broker to help you develop and assess your risk profile, and determine the right asset classes.

To know what you’re getting yourself into and avoid trading with risk capital, there are several considerations that should factor into your decisions before trading in futures. First, do your research and go with an experienced brokerage firm. Commission rates, margin requirements, level of executions, types of trade, software and user interface, and customer service are all important considerations. Also consider the level of service you require. If you’re more of a do-it-yourself person, then you may want to save yourself some money and go with a discount broker for lower commissions and fees. However, if you’ve never traded in futures before (or any stocks) then a full-service broker may be for you, as they will provide a higher level of service and advice for a slightly higher cost.

Your next considerations should be the category and type of futures that you want to trade. There are various categories involved in the futures market, which Investopedia suggests thinking of as industries. The individual contracts within these categories can be compared to stocks. For instance, agriculture energy, equity index, currency futures (FX), interest rates, and metals are all categories and there are contracts within those categories. As a general rule of thumb, you should stick to what you know when deciding which market categories and instruments you will trade. If you have a background in agriculture, for example, then you might want to trade in that category since you already have an understanding of the market.

There are also different types of trades to consider. At the most basic level, you can either buy or sell futures contracts, but there are different trading techniques employed by futures traders, starting with basic trades whereby the trader makes a wager that the price difference between investment and futures will fluctuate, and encompassing spread trades (a wager that the price difference between two futures contracts will change) and hedging (where a trader sells a futures contract to protect against a stock market decline).

My explanation of risk management in futures trading is by no means exhaustive, but hopefully it makes you realize that there are a lot of important considerations that go into futures trading and encourages you to do your research before committing to a contract.