One of the biggest challenges to being new to investing is that you simply don’t know where to start. Sure you may start by reading a few magazine articles. But it can be overwhelming when they start talking about things like asset allocation, Index funds, P/E ratios, Large cap, Growth sectors, Valuations, etc. What does all this stuff even mean? The truth is that you don’t need to know everything about everything to get rich. In fact, I would venture to say that most people don’t. In reality, you really only need two things to get started on your investment journey: Curiosity and Common Sense. We All Start Somewhere: No one comes into this world being a financial genius. It is something we learn along the way. And if you feel left … [Read more...] about Let Curiosity Guide You, But Common Sense Protect You
The first time I watched the Oliver Stone movie Wall Street 2, I was confused about something: Josh Brolin’s company, Churchill Schwartz, makes a ton of money when the company that Shia LaBeouf works for, Kellar Zabel (KZI), starts to dramatically fall in stock price. Contrary to conventional investing, how is it that someone gets “rich” from stock prices going down? How Shorting a Stock Works: Although there were a lot of factors at play in the movie, the basic answer to this question is that Schwartz was “shorting” the Kellar Zabel stock. What does that mean? Let’s look at a simple example: … [Read more...] about What is Shorting a Stock?
My wife and I just returned from a short vacation to a local casino. We went there to see our favorite comedian and decided to make an overnight trip out of it. This included hitting the casino floor to test our luck. We had a great time and surprisingly won back almost all the money we started with. More than once I heard skeptics compare investing to gambling. “What’s the point? I might lose all my hard-earned money!” Yes, it is true that you could put all your money on one stock and lose it all. But that would also be a ridiculous and non-advised investment strategy. Taking a more common approach and investing in an index fund would have quite different odds. You see gambling is much different than investing in many ways: • … [Read more...] about Gambling at the Casino – Still Not Really Investing
Let me be the first to say “Congratulations”! Despite the intimidating packet of papers you need to review and fill out as well as the dozen 401k questions you probably have, this is a great opportunity for you! Not only will you be starting down the road to financial freedom (in other words: retirement), but you'll also be given the opportunity to make FREE MONEY! Yes, I said free money! Why is it free? 1) The money you put away comes out of your paycheck BEFORE taxes and it grows tax free until you retire! 2) Your company will likely (as a lot of companies often do) kick in a little bit extra cash in addition to the money you plan to put away. Who wouldn’t take a little extra money for free! Without further ado, let's see if we can … [Read more...] about Help! I’ve Got 401k Questions! – Your Complete 401k Guide
Just admit it. You do it. I do it too. I’m talking about reading a book with reasonable advice and then never acting on any of it. Not even for a test run. It’s not that we’re lazy or not smart enough to carry it through. It’s just that for some reason it’s really hard to make that leap of faith and act on what we know we should be doing. Well, there’s always a time to start. This summer, I read the book “The Big Secret for the Small Investor” by Joel Greenblatt because I was interested in stepping up my stock picking game. If you’d like to read my book review, click here. In Part “A” of Greenblatt’s “Big Secret” plan, he concludes that: … [Read more...] about Trying Out “The Big Secret” Stock Picking Strategy
Click the image to visit Amazon.comMost financial books tell you come up with a retirement goal and to save towards it. Period. But have you ever wondered if you were on the right track? At 30, how much should I have saved for retirement? What about 40, 50, etc? What about debt, savings, etc.? Where do I stack up against my peers? … [Read more...] about Book Review: “Your Money Ratios: 8 Simple Tools for Financial Security at Every Stage in Life” by Charles Farrell