Low-Risk Investments that Yield Worthy Returns

While most investors will stay away from day trading or trying to find a short-term investment that booms in a very short time, many still want a good yield on a safe investment. Usually, you’ll hear that risk is proportional to reward in that the more risk you take, the more reward you get. Now the important thing to keep in mind is that there is no such thing as a risk-free investment because whether you’re talking about market changes, inflationary risks, or even political-related risks, any one of those things could affect an investment. But there are a few investments that will usually bring in pretty good returns while not putting your portfolio in jeopardy.

Preferred Stock Investments

Not all stocks are the same, and generally, they’re classified as either preferred or common stocks, though there are even more categories within these. The advantage of owning preferred stock is that you can own a piece of a company if you want to do so without being heavily involved in it. You also have priority for dividend payments if the company is doing well and makes them, and you also could still recover your principal investment if the company has to liquidate its assets, although bondholders still have the top priority in this. The disadvantage is that preferred stocks can be more influenced by the Fed’s interest rate movement, but they still tend to have higher returns than most bonds.

Established Bond Fund Investments

The bond market can be a little trickier than the stock market, and one of the risks that come with it is liquidity, or being able to sell bonds when you need to. With bond funds, which are mutual funds that have a variety of bonds in their portfolio from corporate bonds to municipal bonds, there’s a chance you may have higher yields than most “safe” bonds while still having about the same level of risk. This is because some of these mutual funds in the bond market are made up of high-yield below investment grade bonds, but they’re also balanced out by investment-grade corporate bonds or low-risk government bonds. The bottom line is you don’t have to relegate your investments to US Treasury bonds to have low risk in the bond market.

REIT Investments Or ETFs Based In REITs

A real estate investment trust (REIT) can be a good asset to add to your portfolio that doesn’t require as much hands-on work with real estate. If buying individual REIT shares is too much for you, you can invest in them through an exchange-traded fund (ETF). Now compared to the stock and bond market, there can be a little more risk to REITs, and events like what happened in 2008 are reasons you shouldn’t put too many eggs in this basket. But they can have huge rewards such as being required by law to pay out 90℅ of their income in dividends. Also, they can be a hedge at times against inflation, and they can perform well when the Fed’s interest rates are low without the volatility of stocks. If stocks, bonds, mutual funds or other ETFs aren’t looking too attractive at the moment for you, a REIT may provide a great alternative.

This article was originally published on YoussefKabbaj.com

Why Philanthropy is Good For Business

Philanthropy not only serves as a way to uplift a community, but it’s also good for business. Companies all around the country have implemented charitable giving and volunteerism into their social responsibility policies. These organizations realize that philanthropy is good for business for the following reasons, and have benefitted immensely from adapting them into their culture.

Improves the Image of the Business

Good branding is essential to the success of any business. Philanthropic endeavors such as volunteering ensure that the public will associate the brand with positivity and community involvement. Viewing the company in this way will endear the public to the brand and increase the likelihood that the public will purchase goods and services from the business. Shareholders and potential investors also want to know that the business is giving back to the community.

Establishes Relationships With Potential Clients

Community involvement and volunteering are also essential because it allows a business to build relationships with potential clients. Volunteering allows companies to build networks with people who share similar values and may result in the development of business relationships in the future. This type of networking is extremely valuable and can be difficult to quantify. However, most successful businesses understand the importance of nurturing such relationships through community engagement.

Assist With the Recruiting and Retaining of Employees

When recruiting new employees, the consistent and far-reaching philanthropic endeavors of a company may set it apart from the competition. As such recruits may be more likely to accept a position with a company that is committed to helping the less fortunate. Additionally, philanthropy is good for the morale of employees.

The people that work for a company want to know that they will also have the opportunity to give back to their community. A recent study found that 74% of employees reported finding more fulfillment while working when they were also able to volunteer through opportunities presented by the business. The study also found that more than 50% of employees will not work for a company that isn’t dedicated to community engagement.

Businesses should seek to have meaningful and effective community engagement. In doing so, the business will improve its image, attract stellar employees, and establish relationships with potential clients. Philanthropic work is not only beneficial to society but to the individual businesses that endeavor to assist others in their time of need.

This article was originally published on YoussefKabbaj.org

Embracing AI’s Impact on the Financial Industry

As Artificial Intelligence (AI) empowers any industry that can be touched by computers, the financial sector needs to both embrace and protect itself from tech advances.

There’s a massive opportunity for wealth when it comes to streamlining financial data, but there are opportunities to manipulate the rules–or even create bad exceptions to the rule. Manipulation can happen in high-tech ways that tech novices aren’t likely to question because they don’t know what they’re reading.

AI-Powered Credit Decisions

Credit decisions need to lack human bias. Whether they’re conscious of their bias or not, people may make decisions based on a name, someone’s appearance, or details about someone’s life that triggers the decision-makers’ stigma. It’s not about being hostile on purpose; unconscious bias can create negative, but unnoticed decisions that trickle down into incorrect decisions.

AI is a driving force in removing as many points of unconscious bias as possible. Lenders can instead generate raw data about details that matter to financial decisions, such as credit history, income, the intended purchase, market pressures, and other details. That said, what if some bias points are right? This is hardly a justification for some of the worst examples of bias that step into unjustified bigotry, but what if a team wants to analyze related data that seems unrelated.

Until proven, that data shouldn’t be factored into an automated decision. However, a separate set of analyses that consider the removed factors alone, the financial sector-approved factors alone, and then those factors together for experimental decisions can be done. This grinds out many instances of unconscious bias, delivers information for the curious, and makes it harder for intentional discrimination by putting a brighter spotlight on fewer individuals who make the final call–all while making that final call easier to make.

Fraud Prevention in the Automated Age

Detecting fraud is about more than catching obvious thieves. Crime and justice are constantly evolving after each other, with innovative methods of stealing coming from innovative ways of catching a crime. AI is at the frontier for everything, crime and justice included.

For fraud prevention, the financial sector has common theft to handle in bulk and innovations in fraud. For standard instances of fraud that are simply written off as losses, fraud prevention simply needs to detect known patterns and flag them for review. That kind of flagging automation is where automation and AI thrive, and represent the proven, standard use for AI in the business world. You know what the problem is and you know how to find it, so you build or buy AI that can detect it.

Concerned about catching the wrong people? You don’t need to program AI to flag and penalize people. AI can simply become the system that helps your fraud specialists find the most suspicious accounts for immediate review. At the frontier of fraud prevention, discovering new, erratic patterns can help you find the newest criminals. Any sophisticated criminal will make their activities look as legitimate as possible, and the current method of finding sophisticated thieves is via random checks.

Those random checks can be automated along with manual, human-managed checks. The AI can learn alongside the human worker, and they can verify each other’s work for both speed and getting a second set of eyes–real and artificial. A flagged, but legitimate, random check is no different than a human’s random check, so the worst-performing AI will at least help workers pick random accounts. Better systems will find eccentricities and possibly stumble upon previously unseen fraud patterns that will help humans detect fraud.

Its automating coincidence and luck in some ways. Humans will still have an instinct or simple luck, but augmenting those opportunities with AI is still helpful.

This article was originally published on YoussefKabbaj.com

Overcoming Leadership Stigmas

While overcoming the stigmas that exist around leadership in the workplace can be a difficult process, the truth is that time and effort can significantly aid us in reaching our full potential as leaders. Here are just a few ways that we can help challenge outdated notions of leadership in our own careers, and why doing so can be a life-changing experience.

Leaders Cannot Be Open

To a certain generation of business professionals, leaders were often seen as cold and distant figures; if you were an employee of such a person, you probably wouldn’t want to earn their attention. In recent years, however, the notion that leaders should not be emotionally open has earned many critics. When people do not feel that they can approach their managers about problems or concerns, in other words, they are unlikely to make those managers aware of critical problems in the workplace. For many businesses, that lack of two-way communication can spell disaster.

Leaders Must Be Excessively Strict

For many of even today’s greatest business leaders, overcoming the myth of the hardline manager who is excessively strict with employees can feel insurmountably difficult. For years, the image of the arrogant, overly-strict boss has been reinforced in the public imagination via Hollywood films and popular television shows such as “Mad Men” and “Billions”; in reality, excessively strict leaders usually face an uphill battle in maintaining employee loyalty.

To be a truly good leader in this day and age, a person must be both flexible and willing to meet employees halfway on important decisions. That does not mean being a pushover, of course, but it does mean that leaders must cultivate an attitude of understanding and empathy with their charges to truly succeed.

Leadership Skills Must Come Naturally

When they experience difficulties in managing people effectively, many leaders feel that they are not “cut out” to run a business. They may feel that leadership skills are simply beyond them, or that they do not have enough natural talent to be a truly successful leader.

According to Stanford psychologist Carol S. Dweck, however, such negative beliefs can arise from the “fixed” mindset that many leaders develop early in their careers. In Dweck’s estimation, we sell ourselves short when we ascribe excellent performance in the workplace to natural talent. For most people, in other words, cultivating leadership skills is a process rather than a fixed destination. When we view the development of leadership through this “growth” mindset, we’ll be far more likely to move forward in life when we experience difficulties or setbacks.

For these reasons, challenging negative stereotypes around business leadership can be a profoundly positive way to reach new chapters in our business careers. While negative stereotypes about leaders can be pervasive and even harmful in today’s society, “being the change that we want to see” in the workplace can often help us forge a new path towards career success. Truly, that is leadership at its best!

This article was originally published on YoussefKabbaj.net

6 Tips For Improving Your Credit Score

Improving your credit score goes beyond quick-fix tips and tricks. The best place to start is by paying bills on time and being aware of your credit utilization. Using more than 30% of your available credit limit starts to lower credit scores. Failing to pay bills on time stays on a credit report for the duration of the account.

Changing credit usage and paying bills on time is the best starting point for turning things around. Here are a few tips to improve your credit score further.

Payment Reminders

Start by writing down all payment deadlines for the month on a calendar. Use a smartphone app to set up reminders that give plenty of notice before bills are due. Frequently referencing this document and changing it as your debt obligations evolve can help keep finances on track. Consistently paying bills on time is the best way to improve your credit score.

Pay Twice A Month

Budgeting in an additional payment per month can help pay down debt faster. Paying down debt is another great way to improve your credit score by lowering credit utilization.

Contact Creditors

For people who are struggling to make ends meet, discussing the situation with creditors can help. Creditors can lower interest rates, set up monthly payment plans, and may give you some leeway on one missed payment. Communicating with creditors about debt shows a willingness to acknowledge a bad situation, and most creditors appreciate that.

Be Careful With Old Debt

Missing payments on old credit cards may significantly lower a credit score. It may be tempting to make payments on old debt that is marked charged off, but that might be a bad idea. Charged off accounts mean the creditor expects no more payments to be made. Any payment made on the account may reactivate the debt, and that could lower your credit score.

0% Transfer Offers

For people who are serious about paying down their debt in favorable conditions, a balance transfer offer may help. Many credit card companies offer a 0% interest on transferred balances for an introductory period. Paying off the transferred debt within that period gives you 12-18 months of interest-free payments.

Debt Consolidation

Debt consolidation plans can help get debt under control, but they also temporarily impact credit scores. Making payments to the plan on time means a definite improvement to credit scores.

This article was originally published on YoussefKabbaj.com

Common Misconceptions About Philanthropy

Charity and philanthropy are major concepts that often feel out of reach to the average person. While the everyday consumer may make a donation here and there, substantial contributions are typically reserved for the wealthy and famous. As a result, there are many misconceptions about philanthropy that could stop people from being as actively contributive as they may like to be.

All Charities Help the Poor and Needy

Although people donate with the intention of helping people in need, the U.S. charity industry is a thriving business that benefits many people who are not in crisis. Each year, American charities earn over $1.5 trillion dollars. Although money does go toward its designated cause, it is not granted to the recipients in its entirety.

Consider hospitals, the largest sector of charitable contributions in the United States. While some donations go to improving general healthcare, much more is reserved for installing luxury upgrades and services that benefit guests and staff more than patients.

The truth is that many organizations are run as a charity without doing much good at all. The Internal Revenue Service approves 99.5 percent of all charity applications, which is why there are many popular groups that are earning tax-free income without making any generous contributions. These organizations include the U.S. Golf Association, Renegade Roller Derby team in Bend, Oregon, and the All Colorado Beer Festival.

It’s important to extensively research the organization behind any donation. Any group that is worth donating too will have a viable track records with tangible results.

All Money Goes to Support the Cause

Whether someone donates $10 or $10,000, they want all of their contribution to go directly to the cause. Unfortunately, not all charity organizations reduce overhead costs to give recipients as much financial support and resources as possible.

Any organization will have expenses, so it’s a mere logistic that some money from donations has to go toward the general operation of the group. However, some charities contribute as little as 15 percent of their total income to their cause.

Tax Breaks Motivate Wealthy Donors

Research shows that those with the lowest incomes actually donate the greatest percentage of their income to charitable causes. Most low-income donors rarely itemize their deductions, and they have far less disposable income than their wealthy counterparts.

Although there is a definitive increase in charitable donations before the year’s end, most Americans simply give because they want to help others, and charities may be the easiest way they can do so.

The Importance of Activism

Anyone who wishes to donate to a charitable organization should first research the group extensively. When they are unable to find any proof of how past donations have been used to benefit a cause, they should find means to contribute directly to those in need as well as offer other services.

Donation does not always have to be monetary; time, labor and resources can be just as meaningful in people’s lives.

This article was originally published on YoussefKabbaj.org