Why I’ve Decided to Invest a Few Thousand Dollars on ME.

…I’m already hearing the haters in the comment section for this post…

I have a hard time spending money on myself. Debt or not I just have a hard time spending money I earn, on myself. I rarely buy myself clothes outside of required work stuff. I buy most of my makeup at a drugstores and usually ask for very practical gifts (I’ve been known to ask for a mop as a gift). Needless to say my personal expenses are very low. Though it’s not something I monitor as close as some PF bloggers, if I had to guess I would say I might have spent a total of $200 on myself in all of 2015.

Things are changing though. Come March I will be spending more, a lot more. I’ve started with an orthodontist and will begin Invisalign orthodontic treatment in the coming weeks. I’ve already been scanned and now await the aligners to come in. Invisalign isn’t cheap. No orthodontic treatment is, especially with no insurance. There’s good reason why I’ve decided to start now and not when all our debt is paid off as I originally planned though.

Ortho treatment is something I’ve always wanted but not something my mom could afford when I was a child. I knew if I wanted it I would have to wait until I was working full-time and pay my own way. I do work now and also happens to be in the dental industry, another huge reason why I want it. I’m a teeth person and while straight teeth does not necessarily mean healthier teeth, it is something I want even more given I work in an industry of near perfect-teeth individuals. Truthfully this is something I would really want regardless of where I work but trust me there is some unsaid scrutiny felt in my line of employment.

So why now? I met with a local orthodontist who we send a lot of referrals to. In a city with a lot of competition we send almost all of our cases to his office. He’s a good, genuine, guy who our regular patients praise, so I met with him. Long story short, given that we do so much business with his office, and if I’m being honest, given that I’m a walking advertisement for his professional work, he’s giving me a discount. A very steep discount. A discount I will never get again, especially with Invisalign.

I’m in Canada, my scans are done here and the retainers are made in a lab in California. The current exchange rate is not helping things for Invisalign patients so not only is he giving me a discount, he’s discounting the fee before current exchange rate. I can’t risk him taking early(ish) retirement and me missing out on this opportunity because it won’t happen again.

He’s allowing me to make monthly payments at 0% interest for two years (if I need that long). The payment is totally manageable and won’t affect our current goals which is important to me, because even with it being an amazing deal, if we couldn’t make it work while working on our bigger, more important goals, I wouldn’t be doing it.

31 Days In and I Hate My New Budget

calculator-385506_1280We’re officially into February which means we made it through a full month of our new budget. I spent hours over Christmas break finalizing our seemingly fail-proof system but after a month we’re throwing in the towel.

The thing with budgets (or any money monitoring system) is that they change. As life changes, so does your budget. We had been living with our old system for so long it was time (or so I thought) to fix things up. There were too many unaccounted for things within our lives and I was never totally satisfied with how our old system worked for us. I made it work but always felt like it could be better.

So, hours over my Christmas break was spent creating a new system. Everything was itemized. It was a true budget (vs what I like to call, a money monitoring system), and we were ready to rock it. We tried and for awhile and  it seemed like it might work (awhile being the first 10 days of the month…). Then I was reminded of why a cash budget doesn’t work for us.

Though we weren’t a full cash budget, all of our non-family expenses were done so with cash and for us it only works so well. I think cash budgets are great if you need help controlling your spending or have one person doing almost all of the spending. Neither of these are us.

Keeping spending under control has never been an issue for us. We didn’t get into debt from any vast overspending and still today we value our money and spending money on ”stuff” isn’t an issue. We very rarely spend money on many wants and tend to save that sort of stuff for occasions like birthdays and anniversaries. Non issue for us.

The other thing that was magnified for us in my new system, is that we really can only monitor our money and make adjustments as we go. Ridged budgets do not work for us for a few different reasons. I set up a certain amount for prescriptions for example, but when I got to the pharmacy to pick everything up (including some new ones) it was almost $80 more than I was expecting. These are necessary things obviously and had no issue paying for them but it immediately busted my budget. Another example is that with Mike’s job he is literally all over the friggin’ map some days. We’ll pack a nice lunch, he’ll go to the office for what he thinks is all day, get called to a job site for what he thinks will be like an hour, which turns into all day, which means lunch out between sites. Again, we have no issue with this, it’s our life. While we can predict some days but sometimes life throws a curveball and finding out you only have $5 cash in your wallet to buy lunch isn’t exactly feasible for most places.

I know I’m not the only one with a crazy busy life, but in 31 days I’ve discovered I’d rather log into my online banking every day to see what’s going on and tweak changes on a bi-weekly basis then have a budget I can set and forget, essentially living on cash.

And so from now on we’ll have our discretionary spending all from one account again, some weeks we’ll go over and others we’ll be fine. Our life is all over the map and I need to monitor our money as changes come.

The Path to Lower Credit Card Debt

Follow the Path to Lower Credit Card Debt is a fun infographic highlighting some of the most common “perils and pitfalls” faced by those trying to get out of credit card debt. It also offers a “survival kit” of helpful hints that consumers can use to lower their monthly credit card bills and increase their savings.

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Getting out of card debt isn’t easy, but if you know how to avoid the “perils and pitfalls” of credit card debt, you can live a debt free life, and get back on the path toward a better financial future. Provided by DebtHelper.com.

Improving Your Credit Score Quickly

If your credit scored has suffered due to high debts, missed payments or bankruptcy, there are several ways you can improve your credit score. As your credit score consistently improves, you will be able to obtain financing and receive other new credit offers that can be used responsibly. Here are a few of the best ways to raise you credit score quickly.

Stop Using Credit Cards

Continuing to use your credit cards to make purchases will only increase your debt and lower your credit score even further. It is best to pay with cash or debit cards to avoid acquiring any more debt. One of the most effective ways to avoid the temptation to use credit cards is to take them out of your wallet and leave them in a secure drawer at home.

Increase Payment Amounts

If you still have a balance on a credit card, you can pay it off faster and raise your credit score by paying more than the minimum payment amounts each month. Doing this can also save you from having to pay as much interest and can actually prove to be the most cost-effective solution in the end.

Pay Off Small Purchases Quickly

Even though this may seem like a contradiction to the aforementioned advice, you can actually improve your credit score by using a card with a low balance to make small purchases. You can then turn around and pay off your entire balance quickly. This is often one of the easiest ways to raise your credit score, but you should make sure that you are always spending responsibly and able to pay off the balance without any delays.

Set Payment Reminders

Forgetting to make a payment on time can make it especially difficult for you to build your credit score. You can set reminders if you have a difficult time remembering when each payment is due. There are many apps you can use to set reminders, or you can simply write memos on a calendar that you look at regularly. You may even be able to request certain creditors to send you reminders by email each month before your payment due dates pass.

Request Your Credit Report

There are many reputable companies you can find online that will give you a free credit report. You should check to make sure all your personal information, inquiry history and creditor information is all correct. With this report, you will be able to see whether there were any instances of someone fraudulently using any of your lines of credit, which can have devastating effects on your credit score. If you notice any fraudulent activates, you should immediately notify the proper authorities to avoid further impact on your credit. There may also be certain errors on your report that can lower your credit score.

Keep Accounts Open

It will look more impressive on your credit report if you show that you have long-term credit. Even accounts that have no balances should be kept open. If you never plan to use a certain account again, keeping it open anyway can help you raise your credit score.

Examine Your Debt Ratio

Even though it may seem like you have a low balance on a particular credit card, this can still lower your credit score if the amount you owe is almost up to the amount of the spending limit. You should prioritize paying off these cards first if you want to see your credit score jump up quickly. If you cannot completely pay off these credit cards promptly, you should at least keep your balances at 50 percent lower than the spending limits.

Consider Refinancing

Applying for refinancing on a home or auto loan can actually improve your credit score. This option might help you avoid having to apply for multiple loans, which can negatively impact your credit score when potential creditors run inquiries on your credit report. Refinancing often comes with a lower interest rate and can make it even easier to pay off your debt and raise your credit score faster.

See a Credit Counselor

If you are having trouble making all your payments to your debtors, a credit counselor can help you work out a deal that may keep your credit score from dipping further. Your credit counselor may advise you to consolidate your payments, which will make it possible to pay several of your debtors with just a single monthly payment. Plus, you can feel even more motivated to raise your credit score if you work closely with an advocate who will hold you directly accountable for your actions.

Raising your credit score is one of the best ways to gain a greater sense of financial stability in your life. Taking the necessary steps and following through on your commitments can make your credit score jump up even quicker than you may think is possible.

We Blew All Our Travel Rewards and It Wasn’t on Travel

When we bought our house we went through a mortgage broker. Long story short, the broker came back to us offering a deal with a local bank, and surprising enough, the best mortgage at the time was one that had an affiliation with a national rewards system. Basically you pay your mortgage every month and watch the points build. Worked for us.

This particular reward system (Aeroplan if you are curious) was not something I collected actively outside of my mortgage. I happened to have an account when we signed our mortgage and my balance at the time was 7 points for a previous a gas purchase I think. Like I said, I never used it. However, during our initial five year term with our mortgage we managed to build on our initial 7 points to almost 10,000 times that.

We’ve been sitting on almost 70,000 points for a few years now waiting to use them. Given how bloody expensive it is to fly within our own country (I can fly to Germany cheaper than I can fly to the other side of my own country) we thought we’d eventually use the points to fly west and pay our families a visit (at least one of us would be ”free”). We also considered using them for our upcoming trip or maybe just a weekend away somewhere closer (Ottawa perhaps). So for the last few months we’ve been playing around with scenarios and guess what? NONE OF THEM WORKED.

They have so many black-out dates, don’t allow you to use your points to pay for taxes and fees, advertise one points guide but it suddenly changes when you go to book your date (to fly to the west coast should have been 25k points per person but when looking at all my dates it was closer to 50k per person), and are honestly a pain in the butt to deal with. We were done. For the amount we’d end up paying in taxes and fees alone, for any flight, it just didn’t make sense to us to use our points on travel (we could pay cash for less than the equal points were valued at) so we cashed them out.

After Christmas I received an email that some of the gift cards you could purchase with the rewards points were being offered at a discount price so we looked into it. In the end we ended up cashing out almost all of our points for $600 worth of gift certificates instead of using in flight and it’s worked out well for us. Our $600 is broken down into:

$300 for Costco (only spent an equivalent of $250 in points): Haven’t decided how we’ll use this, will either use towards a larger family purchase or just use towards normal family spending.

$100 Old Navy/Gap: Already used for our family and got 2 pairs of jeans (him and her), 1 pair of dress khakis (him), leggings(her), tshirt (her) and 2 pants for kiddo all at an average of 50% off! Spent $100 for almost $200 worth of stuff, ordered online and it all fit!

$100 Restaurant: Will use for hubby’s 30th birthday celebrations this week!

$100 for movie theaters: Because we never get out and have many movies we’d like to see (why must movies be so expensive!?)

We’re happy with our decision. When the time does come for us to go on another vacation we’d be waiting for good seat sales anyway. Combine that with the fact that we’ll hopefully start looking into different (better) rewards card to use in the future for travel.

Do you save your rewards for travel or spending?

We’re Going on a Real Vacation and I Can’t Wait!

In two months, we’re headed off on our first real vacation in almost six years. We’ve been away a little bit, mostly family stuff for long weekends, maybe two weeks total, in the last five years. When a patient asked if I was taking time off this year, my boss actually joked that I’m a work-a-holic and never take time off. Thankfully I have a career I really enjoy or else I probably would have snapped a long time ago!

I have friends and family who work high stress jobs and need the time off or will mentally and physically burn out, I’m fortunate (or strategic in career choice?) that my weekends and odd day off are usually enough for me to re-coop from work. I don’t really need time away from my job, what I do need though, is time away to spend with my husband and family. Especially now that we have a kid.

For a long time, I couldn’t imagine spending our money on anything other than our debt. It just didn’t feel right. I was so guilt-ridden about the amount of post-secondary debt I brought into the marriage I knew we couldn’t ”afford” to take time off from our goals. So we didn’t and have grown to hate ourselves a bit for it.

Thankfully, we’re both homebodies and genuinely enjoy spending time home with our friends and family. We enjoy vacations but certainly don’t feel the desire to pick up a few times a year and jet off somewhere, but, like anyone, we need time away sometimes. Our time has come.

Our big goal, to be 100% non-mortgage debt free, is pretty grand and I’m proud of the efforts we’ve made so far, but being focused on one, singular thing, for so long, blurs the rest of your life. Suddenly you don’t totally remember why it’s so important. While throwing up a magazine cut-out focus board works wonders for some, we need to get away for a bit- take a break from our goal- to sit back and realize how far we’ve come and regroup once back at home.

So, we’re taking off. At the end of March we’re going away on an adults-only trip with four of our best friends to Nashville and I’m so excited. When the NHL schedule was released this past summer, we decided for hubby’s birthday we’d go away for a long weekend to catch a game with our favorite team, and visiting Nashville won our vote. I’ve been once and remember loving it as a kid so think it will be even more fun as an adult.

The fact that we’re going with four other people will help keep some costs down too which is always nice. We opted to rent a house through AirBnB which was huge cost savings. We’re also going during off-season which is also a bit cheaper and we watched flights like a hawk paying about $200 less per person than they’re currently advertising. Though the Canadian dollar conversion sucksssssss I don’t think we’ll make out that bad. I find food to be significantly cheaper in the US, both eating out and to buy, and portion sizes are much larger which means more sharing. Our two most expensive items (airfare and accommodations) were booked in CAN so the conversion didn’t affect us.

I’m not suggesting we’re going to blow through thousands of dollars (my fugal bone comes with me where ever we go thankfully) but we’re going to enjoy ourselves while there.  While some people enjoy shopping while on vacation, we enjoy eating, so dining out will be a big part of our vacation budget. I get excited to try new foods and restaurants, another big treat for us since our self-imposed family dine-out budget of $50 doesn’t go that far here :)

Especially in the last 24 months we’ve been grinding hard on this debt. And it’s paid off (pun intended). Last year we managed to knock off almost $30,000 alone, but all this grinding is leaving us kind of bitter. While some of you are likely of the mindset that ”you’re in debt, you’re only goal in life should be to pay it off”, and I don’t totally disagree with you, I also argue that a break may be exactly what we need. I think that we can’t afford not to take time off from our goals or we may never reach them.

Have you been to Nashville? Start the recommendations below!

What if I Can’t Afford to Save for Retirement?

Image from: freedigitalphotos.net

Image from: freedigitalphotos.net

Here’s something even the best retirement guides may not admit: saving for retirement is incredibly difficult. USA Today even named retirement as something the middle class can no longer afford! Stagnant wages, high costs of living, and an avalanche of debt can all compromise your ability to save for retirement, but even if you’re just barely getting by, there’s hope.

Get Financial Counseling

Before you give up on retirement altogether, consult with a trained financial planner. The right planner can help you find a way out even when you’re feeling hopeless. You might find that cutting a particular expense frees up funds, or that working a few hours of overtime helps fund your retirement. In a world where few of us get sound financial advice or education, the right financial planner can be a game-changer.

Look at Part-Time and Hobby Work

The mainstream economy may be floundering, but freelancing is bigger than ever. More than a third of the American workforce is made up of freelancers. If you have a skill you can share, consider consulting on the side, since even a few additional hours of income can be stashed away for your retirement. Love crafting, collecting, or vintage clothing? Try selling online to make some fast cash doing something you already enjoy.

Look to Your House

If you’re house-rich and cash-poor, you may be able to fund a portion of your retirement with a reverse mortgage. However, not everyone is eligible for a reverse mortgage. If you are eligible you could receive cash and reliable income, as well as a chance to finally take a break from the daily slog of the working world.

Cut Your Expenses

No one wants to admit it, but the truth is that we all live larger than we should, and certainly spend more than we need to. Even a small sacrifice can go a long way. That $3 coffee you buy every morning adds up to $1,095 a year. Put that money away every month, benefit from the magic of compound interest, and you may soon have a healthy retirement fund. When you’re contemplating giving up on retirement, it’s time to give up everything you don’t need first, since working forever is simply not an option.

A Little Bit Goes a Long Way

Remember that you don’t have to save up your entire retirement fortune on your own. Compound interest will greatly increase, and eventually multiply, your savings. But to get the most benefits, you need to start early. Even if you can’t foresee saving enough for retirement, save a small sum on a regular basis. This money can help you cut back your work hours, and eventually ease you into a financially stable retirement.

Consider a Different Job

If you’re not making enough money at work, consider a different job. Sometimes it’s just not financially feasible to save on a tiny paycheck, but if that’s the case, it’s time to cultivate a back-up plan. Prioritize employers who offer 401(k) matching as a benefit, since this can add up to a small fortune over the years.

Divert Your Paycheck

Would you notice an additional $20, $50, or $100 taken from your paycheck each month. Probably not—especially if you’re the sort who spends this amount of money on impulse purchases. Once the money hits your bank account, it’s hard to give it up. But if you never see it, it becomes a lot like all that taxable income you’ve paid to the IRS—something that leaves your paycheck before you even see it. Ask your employer to divert a small, manageable sum—such as 1% of your paycheck, or $50 every time you get paid—to a retirement account. If you start sufficiently early, you’ll have a small nest egg well before you reach retirement age.

Annie Doisy is a reverse mortgage expert who helps seniors enhance their lives by taking advantage of the equity in their homes. Annie writes for ReverseMortgages.com where her goal is to educate consumers on a wide range of topics around mortgages and other financial services.

Why I’m No Longer Making Long-Term Goals

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Spending time watching her ballet class is more important than thinking about how much we’d save by not paying for class at all.

It wasn’t that long ago that I wrote a post outlining my (our) goal to pay off $70,000 in just 36 months. We’re actually in a position to keep on going with this plan too but I’ve now decided to stop. kind of. Let me explain.

Our main financial goal in life (right now) is to still work on this debt and get it paid off in a timely manner but as I’ve discovered in the last 16 months since writing that post, life fluctuates and plans have to change. Obviously this isn’t new news to me, but understanding the concept, and living the concept, are two different things. It’s taken me a few months but I’m finally ok with accepting that it is in fact ok to work on more than one goal in life.

When I wrote the post I was only focused on the end result, being non-mortgage debt free, and quite honestly I didn’t care, or take time to consider all of life’s circumstances that will happen within that 36 month period. Now that we’re almost half way through our 36 months, I can see we’re coming to a crossroads in the near future in terms of our finances and how we manage them.

We’re moving into a territory of working towards multiple goals at once. When I first realized that we’d be deviating from our plan I actually felt bad. Like I was failing someone and honestly, that’s just dumb. I also realized that, especially with a kid, life is easier to manage in short-term goals.

Some people thrive on focusing solely long-term goals, but, I have discovered, I am the opposite. Long term goals consume me and I don’t enjoy the associated stress. I find myself wishing time away which, to me anyway, is not ideal. I have never had a year (2015) go so fast in my life. While it was a culmination of things, a huge reason was that I wished the year away until November when I knew we’d be getting that loan paid off. Not a big deal to some, but I want to start living in a more present state.

When I started working on my 2016 budget last month, my goal was to complete it until December 2016. Just as I like to view a whole month calendar when planning anything, I like my budget done for 12 months minimum to see the numbers all laid out. I changed my mind though. I’m only doing my budget for no more than six months at a time.

When I was doing 12 months in advance there were simply too many unknowns. I would set an end of year goal, and fixate on it. I would play with the spreadsheet and see what, and how, the goal would happen but more often than not, it wouldn’t and I’d be left feeling crappy. I’d ‘predict’ a cost (say soccer fees or car appointment) only to find out it’s actually hundreds more than I anticipated and I’d let it ruin my whole budget.

Our income varies. My husband’s pay is pretty much set but my can be all over the place. If I took a day off work (unplanned, kid sick or storm day sort of thing, without pay) I was cashing out vacation pay to make sure I would have that income target I put in my spreadsheet, like nine months prior. This isn’t real life for me. We make enough money that if I miss a day or two unplanned, an unpaid day off won’t kill us, but because I had these large goals, I was sacrificing things like actual, necessary, vacation days with my family to meet our financial goals. I need more balance.

My only ‘goal’ of 2016 is to learn how to live more in the moment. Good and bad. 2016 is shaping up to be a great year. A real vacation. Milestone birthdays. A new baby in our close circle of friends. A family wedding (and all associated planning!). I don’t want to write a post in January of 2017 describing how I feel like I missed it all.

Even in over 700 words I feel like I can’t quite describe what I’m trying to say. We still have general long-term plans like eventually start investing but because we’re not yet in a position yet to do so I’m not going to allow myself to feel bad about not reaching a goal date.

How Many Bank Accounts Is Too Many? We’re Adding More.

It’s 2016 which means we get to have a good look at the year ahead of us. How we manage our money hasn’t changed that much since we started really ”budgeting” (monitoring our money), three years ago and even though it’s worked pretty well for us, I know it’s not as good as it could be.

I spent close to 10 hours this past weekend really looking at our budget. Calculating, recalculating and trying to make it work better for us as a family. Though it was something I didn’t really *want* to do it was way overdue. With our old system there were weeks we’d be flush with too much cash and other weeks it was unnecessarily tight. I knew it needed an overhaul.

I like making really big monthly payments on debt. It just feels good, but I’ve realized that we’ve been ”succeeding” in doing this, thus far by stealing from our future. What I mean is this:

We’re paid bi-weekly but most of our bills are monthly. There are two months in the year we’re paid more. We’ve been making large monthly payments by essentially waiting for our super flush months. This means no real preparation day-to-day for things like birthdays, vacations or paying for ballet lessons. We were making that large debt payment no matter what, and waiting for our extra income to roll in to plan for other stuff. Not ideal. Especially when you have a kid.

The other thing I didn’t like was having all our variable spending come from one account. Our fixed bills (mortgage, power, insurances etc) have always been separate, but bills we have more control over like groceries, eating out, prescriptions came out of another account. This worked ok except once the family was taken care of (groceries bought, gas in car sort of thing) how the ”leftovers” got spent was never really defined. Do we buy a new coat for kiddo or go on a date? Not having proper financial designation wasn’t working, so we fixed it. In in doing so we’re now left with nine bank accounts and here’s how they’re broken down:

  1. Fixed Bills: Money gets put here and never touched just auto withdrawn when due date comes. Mortgage, insurance, lines of credit etc all get paid from here. I rarely look at this account just check time-to-time to make sure I’ve left enough money there.
  2. Family Spending Account: Groceries, gas, cat food, prescriptions, public transit fare
  3. Husband Spending: Self explanatory. Coffee, lunch out with work, clothes.
  4. My Spending: same.
  5. Kiddo’s own bank account: We’re opening a bank account for kiddo to pay for her dance, soccer, clothes. Anything she may need.
  6. Kiddos post-secondary savings: I don’t really count this as a true ”account” because we don’t have access to it but we still contribute money every month.
  7. Christmas and Gifts: We’ll be saving every month throughout the year for all gifts.
  8. Short term saving goals: this is mostly a dumping spot for my annual licensing fee, oil changes etc.
  9. Emergency Savings: Self explanatory.

Some people are fine with having one or two accounts and managing all the above but I’m not that organized. Not only do I like having things separate it’s easier on my brain.

I’m not sure if this new ”budget” will work or not but I won’t know until I try. We’ll see where we’re at in a few months and move on from there. This brings me to another topic I will be writing about soon. Why I’m no longer making long-term goals.

How many bank accounts do you have? Is 9 ridiculous?

How to Grow Assets in 2016 While Beating the Emerging Markets Bubble

Investing money in the long term is easier said than done. That’s especially true nowadays, when markets are insecure and so flooded with liquidity that it’s difficult to see any worthwhile long term investments in between all these asset bubbles.

Nevertheless, investors have to think long term. Several studies have shown that too often, short-termism is the foe of profit. The longer you hold share-based investments, the more likely they will outperform cash, says the Barclays Equity Gilt study. Hence, investors should make sure that their investment strategy will last longer than their new year resolutions.

European vs. American Stocks – to buy or not to buy into quantitative easing? That’s the question

Every financial adviser will tell you that stocks are the best long term investment ever. Usually, they also have more than enough fancy and colorful graphs to provide evidence. And it’s indeed true, stocks are a good long-term investment and should be part of every investor’s portfolio.

However, the outlook for 2016 is not that good. Don’t expect astonishing gains this year. The low price of oil will continue to weigh heavily on many corporations and US businesses suffer from a strong US dollar. As the federal reserve bank (Fed) has started to increase interest rates, the dollar rally will continue to eat into the profits of multinational corporations.

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While the Fed hiked rates last month, Europe and Japan are into quantitative easing big time. “We think this divergence in monetary policy will be broadly a tailwind to European and Japanese assets, while acting as a headwind to U.S. (and potential U.K.),” that’s according to Goldman Sachs strategists in the bank’s 2016 Global Opportunity Asset Locator (GOAL) report.

The bank therefore buys into quantitative easing and favors Japanese and European stocks. Bank of America, on the other hand, expects American stocks to outperform European stocks. Hence, “experts” do not agree about the direction of stock markets this year, so take care.

Results of global monetary policy will be currency effects and asset inflation in emerging markets

As macroeconomic policies differ fundamentally around the globe, it makes sense to hegde against currency risks. The US dollar will continue to remain strong against other currencies and could even appreciate further.

That puts US investors owning foreign assets at risk. Taking this risks seriously and hedging against currency effects is therefore a good idea. Alternatively, investors can also invest directly in currency-hedged products. iShares MSCI Germany ETF (HEWG), for example, is more than 6% up in December, while its unhedged counterpart (EWG) is down 2.5%.

However, currency effects are not the only danger that arises from quantitative easing. While developed markets seem to be better off these days, loose central bank policies all around the globe have inflated assets in emerging economies.

Specifically, low interest rates and extensive lending have been propelling economic growth in emerging markets during the last years. That will come to an end once interest rates normalize. As the Fed has now started a tightening cycle, that event comes closer.

If the emerging market bubble bursts, stocks in developed economies will be affected as well. When China’s stock market started to break down in August 2015, a global panic kicked in and resulted in a worldwide sell-off. A similar shock-wave could arise in other emerging markets.

Property, especially gold, is a way to hedge against market panic and macroeconomic risks

A way to hedge against such a shock-wave is to buy property. That’s another hot investment advice which you’d get from your banker. In fact, now is a good time to buy a home. Home-buyers face the lowest interest rate on a fixed-rate mortgage for years to come. However, buying a house is risky and capital intensive. Moreover, it’s a lifestyle decision which doesn’t fit to every investor’s preferences.

Buying commodities may be a better alternative. Especially gold is a popular crisis-proven investment. According to BitGold, no currency has beaten gold in the last 15 years, making it the best way to save money. And indeed, gold provides an effortless long-term preservation of value which is especially important in times like today, where markets are fragile and trade is based on unstable fiat currencies.

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That’s why well know investors, like for example Robert Kiyosaki, advice to purchase gold on a regular base, because it is the best way to save money. Prices may go up and down, but over the course of several years, gold will increase in value and even more important: It will keep you safe.