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Cash flow and other metrics #finance

If you have been following my finance posts you’ll know that my investments haven’t been doing so well over the past few months. Last week was much better and this week I’ve made a little progress. My finances as a whole are a fairly stable but I’m still delaying any major purchases until things are looking better. Changing my car this year did put a big hole in my bank balance but I don’t need to change it again for a few years as long as I look after it so I have time to save some money! I just have to keep proper accounts and watch my cash flow.

watching cash flow

Cash flow

Cash flow is just as important in personal finance as it is in business finance. A sudden outgoing of cash can mean problems and although borrowing short-term can be the solution to the problem. High-interest rates on short-term borrowing can lead to bigger problems. I do take advantage of the short interest-free period on my credit card especially when I’m making a purchase over £100 for the added protection a credit card gives.

Investments

This week wasn’t such a good week for my stock market investments but it was an interesting week with Solo Oil going nearly 10% up and then dropping back. I’m now breaking even but the spread is at 8.33% which means the market makers are probably trying to deter trade to some extent. Some day traders who got in on the low are selling and I’m sure some private investors have lost confidence and are getting out too. The long-termers are looking for a dip to buy more. We can expect a lot of good news this month so it is a great time to buy. So I’m optimistic that Solo Oil will surge and it will probably be next week.

Cash flow problem

My other AIM shares made a little progress with Immupharma and Verona Pharm both looking promising. The takeover of Monitise was completed and so I recovered a little money from that and accepted a loss. I think that is my first loss (except on paper) for about 6 years. On the FTSE 250 there was a little progress with Debenhams formulating a strategy and shaking up its boardroom. I think we will see at little more confidence in Debenhams now and it is a similar story at the AA. I was a little tempted to buy more shares in Carillion this week. They have a lot of new contracts and the experience to make them pay. HS2 might be a vanity project and a white elephant but the contracts from that could save Carillion. Carillion could have a cash flow problem as a lack of confidence leaves them short of liquidity. With so many contracts coming from the government I think we can be confident that official help could be a phone call away so I’m not too worried.

Accounts

It s important to keep accounts and overall my accounts says my cash flow is positive with more coming in than going out this month. I have a tendency to buy expensive camera equipment and I’m resisting the temptation to buy an expensive lens. I’m making do with what I’ve got and when finances are a bit tight that is the way to go. I won’t be spending much between now and Christmas. My cash flow should be positive for at least three months. Looking forward and estimating what your cash flow will be in the coming months is a good habit to get into. I have a healthy bank balance and I can move money from my share dealing account to my current account should I need to make a major purchase. I still have cash in my share dealing account to make an investment if I think I see a bargain in the coming months, too.

Oil

The oil price has increased a little this month and reserves are lower than they have been for some time. This will benefit Solo Oil in the long-term but I am thinking of buying more oil company shares. BP looks fairly solid and pays a good quarterly dividend. They make a profit at anything over $30 a barrel so they can double their profits if oil goes back up to $70 a barrel. Premier Oil could soar on a rising oil price too.

Those are my thoughts and ideas on finance for this week. If you would like to subscribe to my blog just enter your email address at the top of the sidebar or follow me on Twitter for updates. You can also find ideas and links on my Facebook Page. Check out my thrifty and frugal post from yesterday too.

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