Joshua Rodriguez is the head of CNA Finance, a personal finance blog that collects some of the most fascinating and intelligent personal finance writing on the web. He sat with us to talk about binary options and personal finance, among other topics.
You have a section on binary options. What are they, and why did you become interested in them?
Binary options are an investment that's like nothing else out there. Instead of purchasing a piece of an asset, or several assets, the investor makes predictions on the movement in prices of an asset. If their predictions are correct, they can earn incredibly large returns, but if they're not, the trader loses it all. So, it can definitely be risky.
When it comes to how I got into binary options, a couple years ago, I was contacted by a broker and asked to write news, advice, tips and more related to binary options. Although I'd briefly looked into them in the past, until then, I never really had a reason to look further into the concept. When I started writing on the topic, I became more and more interested in the concept of making money through this investment vehicle. After all, I love the idea of finding data and using that data to make money. This seemed like the perfect way to do that. Although it is high risk, I pride myself in my ability to find trends in the market. After a small initial investment, I had fallen in love. Now, I've decided to teach people what I learned through the "Binary Options Corner" on my site, in hopes that it will help them avoid the same beginner mistakes I've made.
When investing, what's your criteria? What will make you buy in or look elsewhere?
I guess the answer really depends on the type of investment. When it comes to any investment, I'm a data junkie. Before buying a stock or making a trade, I make it a point to look at historic charts for that stock or trade to find trends. Once I find a trend I think will be valuable for me, I do my best to exploit it. The truth is, I never make an investment unless I'm able to find a solid trend that supports my theory behind the investment. Anything else would make me turn away...sorry, IPOs!
What's the most effective saving tip you've found, and why?
I think the most effective tip I can give when it comes to savings is to create a plan. I spent years throwing money out of the window. I'd always tell myself, "I'll save whatever I have left when I get my next paycheck." There was never really a number attached. The only problem is, I wouldn't always necessarily have anything left when I got the next check; this led to a cycle of paycheck-to-paycheck living. Eventually, I decided I wanted more for myself and created a savings plan. The key for me was sitting down and deciding what I could afford to save. Then, when I got paid, I'd set it aside and forget about it. I never had a saving problem again!
When you assess your budget, what's your criteria for cutting an item or adding one?
I look over my budget often these days. When assessing a cost, I think about the return I receive from that cost. It could be enjoyment, comfort, who knows. Then I weigh the reward against the cost. For instance, I decided that an hour of TV a week wasn't worth paying $80 a month for cable. I called my cable company and asked what we could do. We dropped the cable to basic and bundled it with the internet I was already paying for as well. As a result, I pay $3 more for cable than I would internet alone. Sure, I don't get the fancy channels anymore, but I do have enough options for my little bit of time a week in front of the TV!
When should you pull your credit report and why?
Although I strongly suggest pulling your credit report once per month, I would say you should pull it a minimum of three times per year. At AnnualCreditReport.com, you have the ability to get one credit report per year from each of the major credit reporting agencies. By spreading these out over the year, you can get one report for free every four months. However, I think it's important to say again that you should comb through your credit report at least once per month.
What are some trends in personal finance we should be keeping an eye on?
I think my favorite trend in the personal finance industry is that we're starting to see more and more automated tools that make budgeting, frugality, spending and saving more fun. Tools like Mint seem to be the cornerstone of taking a nerdy, boring concept - financial literacy - and making it more enjoyable and engaging. As more and more tools like this arise, we're starting to see more and more financially sound consumers. It's absolutely amazing what technology has done for personal finance, and I honestly believe that we've only seen the tip of the iceberg!