Creating a Budget that Works for You: Tips and Strategies
Michael G Donkor CFP?
The Financial Tech Planner | I help Tech professionals maximise their income so they can focus on more fulfilling life experiences. Chartered FCSI | CERTIFIED FINANCIAL PLANNER? |
Network and Chill
Reflecting on my time at Network and Chill, I can confidently say it was a fantastic opportunity to collaborate with like-minded professionals while hearing inspiring pitches from groundbreaking businesses.
My key takeaways from the event:?
It's always inspiring to meet passionate professionals who are driving change and pushing boundaries in their respective fields. Thanks to Alexander F. for always keeping me in the loop with what's happening outside the world of finance. ??
I'm excited to use these insights to make better investing decisions for myself and my clients! ?? But first, let's look at developments in the tech sector from July 2024.
U.S. Market Summary
July proved to be a volatile month as markets digested several notable economic and political developments. The first half of the month was positive as the broad market index jumped +1.02%, and notched a seventh straight day of gains. The Nasdaq composite advanced +1.18% while The Dow Jones Average added +1.09%.
Friday Market Close Turmoil
A brutal week on Wall Street ended with major indexes near two-month lows on Friday 2nd August after sluggish U.S. jobs data rekindled economic slowdown fears and sent stock market volatility skyrocketing to nearly two-year lows. July U.S. jobs growth slowed to 114,000 from a downwardly revised 179,000 in June 2024, and unemployment climbed to 4.3% from 4.1%, adding pressure on the Federal Reserve to cut rates.?
The S&P 500 ($SPX) index dropped -1.8% and finished down -2.1% for the week; the Dow Jones Industrial Average ($DJI) dropped -1.5% and finished down -2.1% for the week; the Nasdaq Composite ($COMP) fell -2.4% and ended down -3.4% for the week.?
UK and Emerging Market Summary?
U.K. stocks performed progressively, with the FTSE All-Share rising +3.1% over the month. Robust service sector PMIs in July and stronger-than-expected economic growth for the second quarter pointed to improving economic momentum. Stronger than expected GDP growth in the second quarter, combined with persistent services inflation, suggests that interest rate cuts may be more gradual compared to the U.S. and Europe.
Japanese Stock Crash
Japanese stocks on Monday, August 5th, 2024, experienced their biggest loss since 1987 as fears of the U.S. economic slowdown sent shock waves through global markets. The Nikkei 225 index of leading stocks in Tokyo lost a staggering 4,451 points, its biggest point drop in history.
On a percentage measure, the index closed more than -12%, its largest one-day fall since October 1987. The drop took Nikkei’s losses since early July to -25%, pushing it into bear market territory. Taiwan’s Taiex ended down -8.4%, its worst day ever, while South Korea’s Kospi
finished -8.8% lower. Hong Kong’s Hang Seng Index and China’s Shanghai Composite were down -2.3% and -1.3% respectively.
The volatility was due to the Bank of Japan’s hiking of interest rates for the second time this year and announced plans to taper its bond buying. Traders expect more rate hikes to come later this year as the BOJ seeks to control inflation. The Japanese TOPIX index underperformed last month, falling -0.5%, declining partly from the weakness in global tech stocks, but returns were also pressured by a strengthening yen.?
Expectations of earlier Fed interest rate cuts, coupled with an interest rate hike from the Bank of Japan led to the yen appreciating by +6.5% against the U.S. dollar, the strongest monthly move since June 2016. Amidst recent market volatility, including dips in market prices, it is important to embrace a long-term and diversified investment approach.?
Robinhood buys AI-powered investment research platform Pluto Capital
Robinhood Markets, a popular brokerage among retail investors, appears to be embracing the artificial intelligence trend. Robinhood (HOOD) announced its acquisition of Pluto Capital, an investment research platform that uses AI to offer tailored investment strategies.
Robinhood showcased several AI-driven features available on Pluto's platform, like personalised investment strategies tailored to a user's past behaviour and risk tolerance, real-time updates, and financial data analytics powered by Pluto's language-learning models. Robinhood has a history of using acquisitions to add more features to its product offerings.
Robinhood’s acquisition highlights my belief in the need for asset diversification and to have a personalised plan when seeking to maximise your finances. I encourage clients to often diversify their portfolios and think about what is a priority to them, not just which investment gives them the greatest returns. More money, more problems is also a thing, especially if you don’t know what your goals are with your finances.?
领英推荐
STMicroelectronics cuts full-year outlook for the second time
Chipmaker STMicroelectronics (STM) cut its full-year revenue and margins guidance for a second time as industrial customer orders did not improve and automotive demand declined. The manufacturing and design company, whose clients include Tesla and Apple, said it expects revenue of $13.2 billion to $13.7 billion for 2024, down from a previous forecast of $14 billion to $15 billion.
STM, a manufacturer of various chips including microcontrollers and sensors for smartphones and cars, has been affected by declining industrial demand and elevated inventory levels. Demand for electric vehicles (EVs) has also slowed sharply in Europe, with data from the region's trade body last week showing sales rose by just +1.3% in the first half.
The implication of this trend signals potential challenges ahead for the company and the EV market as a whole. As a financial advisor, I encourage clients holding STMicroelectronics shares to review their investment strategy and have a look at the reason behind the cuts. Furthermore, clients should evaluate the company’s future cash flows and spending to consider their future plans. This could be a good time to review diversifying your portfolio to mitigate risks.
Tesla Inc. CEO, Elon Musk plans $5bn investment in AI startup xAI
Tesla’s chief executive, Elon Musk has revealed that there would be a discussion with the board to invest $5bn in his artificial intelligence start-up xAI, potentially furthering his network of tech companies. Elon Musk posted a poll on his social media network X asking “Should Tesla invest $5B into xAI , assuming the valuation is set by several credible outside investors? More than two-thirds of nearly one million respondents voted in favour, though it is unclear how many of them are Tesla investors.
The businessman launched xAI, as he seeks to compete with OpenAI, the creator of ChatGPT—a program he accused of being politically biased and irresponsible. Musk reiterated his stance to primarily focus on developing advanced AI systems that are truthful, competent, and beneficial for all of humanity (Yet, all I see is deep fakes impersonating celebrities and pretty women, lol).?
However, the investment would also occur at a critical time for Tesla. The company’s recent financial performance has raised eyebrows among investors about its ability to sustain growth and profitability. Nonetheless, diversification into AI could assist Tesla in tapping new revenue streams and reducing its dependence on the growing competitive electric vehicle market.
Sonos CEO apologises for the disastrous rollout of the new app
Sonos unveiled a new version of its mobile app, promising more flexibility, improved customisation, and ease of use but the result was very different, with customers experiencing issues and many of them unhappy about certain functions.
The revamped Sonos app was aimed at making the audio company appear more in touch with customer needs while introducing a sleeker user experience. Initially, Sonos defended the app overhaul, asserting that it required "courage." However, in an open letter on the company website, Sonos CEO Patrick Spence has now acknowledged that the app overhaul has been a disaster.?
Undoubtedly, this emphasises the need for having a financial planner to guide you through your financial journey.? To learn how to balance being courageous with living in the moment, and also planning for a better tomorrow. Moreover, with the increasing complexity of tech-driven markets, a financial planner's expertise is crucial in navigating regulatory challenges, capitalising on emerging opportunities, and maintaining a competitive edge. You don’t want to be like everyone else, you want to be like you, so make your plan a personal one.?
So How does this Movie End??
Just like the Avengers needed a strategy to beat Thanos and save the world (Spoilers: they lost the fight, but won the war btw), you need a solid plan to manage your money and achieve your financial goals. But every hero has a different approach, and so does every budget.
One of the essential things to do when building a financial plan is have a budget to help you understand your financial goals. I encourage clients to take time to define short-term and long-term financial goals as clear goals give your budget purpose and motivation. The key to successful budgeting is flexibility—regularly review and adjust your budget to ensure it remains aligned with your financial goals.
In addition, prioritising savings and investing are crucial to budgeting. ‘You will find wealth in the money you don’t spend’. Allocate a portion of your income to savings and investments before covering other expenses and to make this process easier, you can automate transfers to your savings or investment accounts.
I am deeply committed to helping clients achieve their financial goals, through meticulous planning.? My passion lies in witnessing clients gain financial confidence, grow their wealth and invest more efficiently, to build a secure future, turning what may seem like daunting financial tasks into easy empowering steps.? If you want ideas on how best to budget, Download my eBook now and discover actionable tips that can transform your financial future. Click this link below to get started.?
Do you have questions about tech, budgeting tips, and strategies, or how to build a killer portfolio? Send me a message anytime—I'm always here for a chat! Hit that subscribe button and flick on the notification bell to stay tuned for Mike’s Moments! ????
References
1- MarketWatch (2024). Available at:
2- The Economic Times (2024). Available at:
3- Proactive Investors (2024). Available at:
4- JP Morgan (2024). Available at:
5- Scwab (2024). Available at:
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