Dec
9
I’ve posted many blogs on how and why to invest. The choice is yours to make. You might have many excuses why you can not invest now. It could be money or just rather have the money now then putting it away. You are not getting any younger. By investing for many years and letting that money compound over time you’ll have a nice sum of money at the end of the road. You can start with as little as $50 a month in a mutual fund which will do the investing for you. Mutual Funds invest in stocks on your behalf with little time on your part spent. Timing is also important. Start now while you’re young before it’s too late. Right now is a good time to jump into a Fund. Many Mutual Funds are very cheap and affordable since the market has taken a severe drop. Also like I’ve mentioned in the past post that you can even use the amount you invested into certain funds to write that off your income during tax time. Also now that Obama is about to start his term in January, certain energy sector funds could be promising. The market will go back up and will you be there to ripe in the nice returns? I know I will be. Do you want to be working till the day you die or retire at a decent age because you took the chance of investing early? The ball is on your court, make the decision.
Nov
30
What to invest in once Obama takes control of the office in January
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Obama wasn’t elected as president to make our military strong or because he’s black. He was elected to fix a very bad economy. He made his plan clear and investors can use this to establish a new investing strategy. One thing Obama was going to use government grants and give it to companies that use alternative energy. Wind and solar companies are going to be a good to invest in. Another good investment is anything that the government backs. These investments are Treasury bills and government bonds. Some of these bonds currently offer yields that approach 10%. So is due to tax benefits that they offer. Treasury Bills are still risky since people are scared to buy them. You have to wait once Obama starts his term to look into T Bills. My favorite types of investment once Obama takes over are going to be infrastructure companies. Companies that build things for the government like toll roads, airports, and waste management companies are considered infrastructure companies. One of these companies that have solid growth is a company called Caterpillar. Caterpillar own the machines and the resources that make these structures for the government. This company has done very well during these tough times and will grow even more once Obama starts his term. There are many companies in this sector that look promising. You just have to research them out. I’m a fair believer that Obama will fix this problem that we have at hand during his presidency. It’s going to be a hard road but I think we will prevail. Keep and eye on these company sectors and you might watch your earnings increase.
Nov
12
Black Tuesday
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I was reading an article on the weekly reader about the crash of the stock market in 1929. Back then in the 20’s everyone had some what of the same mentality that we have today. It’s the get-rich-quick mentality. People invested heavily on land and business. That is something that we do today. People buy houses they simply can’t afford. Even sometimes buy a second or third house as an investment. In 1929 the housing bubble burst. Driving the stock market completely down and creating huge panic in Wallstreet. It’s strange reading this since this is exactly what’s going on today. People are losing money and even losing their homes. Another part of this article which is happening right now is the banking crisis. Days after the great depression of the 20’s banks were unable to give their customers money. Companies went bankrupt. People lost jobs. By 1933, about 25 percent of the U.S. workforce was unemployed(Weekly Reader). Today banks are failing. Record level job loses are occuring across the country. Companies that were once so big that nothing can drop them are going bankrupt. We are defintely going through bad times. After every decline there’s always an uptrend in the economy. Companies are trading on the stock market at the lowest prices in years. Getting in now at these low prices can make people a lot of money. It will take time. Watch your investments, adjust your finances to whats at hand. Things will get better.
“Black Tuesday.(Stock Market Crash).” Current Events, a Weekly Reader publication. 107. 15 (Jan 28, 2008): 5(1). Opposing Viewpoints Resource Center. Gale. CCLA, Palm Beach Comm College. 12 Nov. 2008 <http://find.galegroup.com/ovrc/infomark.do?&contentSet=IAC-Documents&type=retrieve&tabID=T003&prodId=OVRC&docId=A174283313&source=gale&srcprod=OVRC&userGroupName=lincclin_pbcc&version=1.0>.
Nov
9
Don’t invest all your money in CD’s and high yield savings account
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If you have money that you not going to use for five years or more you should consider putting it in a mutual fund. Mutual funds have very low fees and can create a higher return then a CD or savings account. Now don’t get me wrong a CD which is a certified deposit is good for a short term play. I say for less then five years. Anything more then should be put into some sort of retirement account. The return of a mutual fund investing in stocks is double that of a CD. The overall profit/return of the stock market throughout the years had been about 8% per year. Now on the other hand savings accounts and CDs normally return about a 3.5%. You might ask yourself if a 5% diffrence between the two is that much of a diffrnece. It’s a huge diffrnece. The key board is componding. When your money is left into a mutual fund for say 20 years and it keep componding year after year this can turn out to be very profitable. A ten thousand dollar investment would grow to $21,600 after 10 years at 8% per year. Now a cd with a ten thousand dollar investment would grow to a meer $14,100 with a interest rate of 3.5% per year. That’s huge if you ask me. Now sometimes you might get more of a return on a mutual fund or less. But overall in this intense market if you keep your money in there for a long time your return should be a nice one.
Oct
26
Smart steps to take to achieve your goal
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First thing you want to do is to set a plan. You need a solid investing plan so you know what and how long you’ll be saving for. Once your plan is set you need to do the obvious. You need to start saving in a 401k plan or an IRA. The sooner you start the better you’ll be at the end of your saving plan. Becoming aggressive while you’re young is important. Never have all of your money in one stock/mutal fund. If something bad happens you don’t want to have all your eggs in one basket. Make sure when your funds pay out dividends that you reinvest it. You also want to create a savings account in case of emergencies. Unfortunate things happen, so make sure to have a back up plan. You never want to take money out of your retirement because you didn’t have money to back up the problem. Once this is established make sure to watch your spending over the years. Buy a house you can afford. Watch your debt and the amount of credit cards you have. Through out the years you’ll get pay increases. When this occurs amp up your savings. Put more away as you make more. And if you end up getting married and have two incomes coming in save even more. All this will pay off in the long run. Next week I will talk about the rest of the steps to follow so you can acheive your investment plan.
Oct
19
The Best investor in the world belives now is the time to buy
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The guy I’m talking about is Warren Buffet. Not only is he they most successful investor the world has every seen but this year he surpassed Bill Gates as the richest person in the world. His net worth is at 62 billion dollars. And all of his fortunes came from investing. On October 17, 2008 he said that now is the time to buy. “The financial world is a mess, both in the United States and abroad. Its problems, moreover, have been leaking into the general economy, and the leaks are now turning into a gusher,” he wrote in the New York Times piece. “So … I’ve been buying American stocks,” he continued. The question you might as yourself is why buy stocks when the economy is doing so poorly. The answer is if you buy great and respectable companies now, you’ll get them at a huge bargain. Warren Buffet has one rule that many people respect: “A simple rule dictates my buying: Be fearful when others are greedy, and be greedy when others are fearful.”He is set to make record profits after this turmoil swings into a positive situation. He will set new profit records,five to twenty years from now. His followers that invest in Berkshire(An investment company he owns) have an annual rate of return of 21 percent. This is huge when it comes to returns. If this guy is loading up on American companies right now then he’s telling us something. If you wait till things are good and prices are high you’ll be out on a golden opportunity.
Oct
8
Recently the market has been very unstable. Many companies have reported losses and the dollar is weakening. Some people have halted their investing completely. Even though times are tough investing in the stock market might not be such a bad idea. When the market is down and prices have drop there’s two things that you should invest in. If your risky and want to reap in higher returns then invest in stocks that have dropped to their 52 week low so you can make a bigger return once they go up. Now I’m not just talking about any company stocks. I’m talking about big corporations that have a lot of value and wealth and aren’t going to go anywhere anytime soon. Examples of these big companies are Microsoft,Coke a Cola, Home Depot, and Bank of America. When you invest in a brand name company that has a track record you’ll cut some of the risks. Now if times are very bad and you don’t want anything to do with the Stock Market you can always get yourself in lower volatile investments. Some of these investments which have a lower return for your money, but are FDIC insured and safe, can range from bank cd’s and market savings account. On the other hand safe investments which have a higher returns are money market funds, Treasury Bills, and government bonds. The bottom line is that you never want to stop investing. Have a goal and keep with it. It’ll payoff in the end.
Sep
24
Blog I read
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I read a blog at http://www.tobinvanostern.com/tblog/2008/06/27/how-to-start-investing-young/. It is very informative on the topic that I am discussing. This blog breaks the investing formulas better and shows how you can start with $100 a month and after X amount of years this can turn out to be a huge sum. The writer also explains how and where to open your retirement accounts. He explains the minimums that some firms require to open an account. For example he shows us how it’s better to go through Etrade since they have no commission charges on their mutual funds. Commission charges can take a toll on our retirement accounts over time. Imagine every single time you buy a share of your fund your paying fees. That’s why you have to go with a no load fund. He also does a good job of giving some advice when to buy and when to sell. The universal rule to this is buy low and sell high. Warren Buffet which is the greatest investor to ever lived is the master of this principle. One thing that I use which he added on his blog is to use Morning Stars which is a mutual fund rating system. This is extremely important due to the fact their are thousands of funds. You don’t want to get yourself into a mutual fund that has a bad track record. Morning Stars rates the funds with a star system. Five stars being the highest and one being the lowest. Well this blog I read helped a lot. I’ll be adding more on this topic on my next blog.
Sep
23
Formulas on getting to this point
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Many retirement calculators/formulas are out there that can give you an idea on how much you’ll have at a given time if you save. I saw one on MSN that explains how crucial it is to start saving young. If you started investing $2,000 a year which is less then $200 a month into an IRA, you’ll have $560,000 in 40 years. Now this being you get an %8 annual return. Now in retrospect if you started saving the same amount but started saving 10 years later at 35 you would only have $245,000. Its unbelievable how 10 years can make such a big difference. Now these nunbers/fogures can change dramaticly. Saving more and even getting a hihger return for your money can throw these numbers into the sky. On my next post I will talk how you can cut corners in your spending habits so that you can save a little more each and every month. This is important since we all spend way to much money on things that are not worth it.
Sep
3
Investing
Filed Under Uncategorized, invest now | 4 Comments
Most young adults don’t realize the key prinicple to investing. Start now and not tomorrow. The way money grows is by compounding. Years and years of putting something every month and watching it grow through the years. The only hard part is that you do not want to touch this money. This is something you will keep on saving and adding to for for many years to come. Now if your young (20-30 years of age) and you start saving something in a retirement account such as an IRA account your going to be ahead of the game. Also what you put into a traditional IRA can be used as a tax write off for the ned of the year. For example the 2008 max you can put into your IRA is $5000. If you put this full amount into your IRA you can deduct this amount at the end of the tax year. If your young you have a lot to risk. You want to invest in Mutal Funds that are for High to Mid growth. For some of you that might not know what a mutal fund is or does I will explain. It’s a company that will invest for you. There are many categories for a Mutal Fund. Some Invest in energy stocks as others invest in the finaincial sector. There are many diffrent types but you want to select one thats good for you. Now do you want to be that 65+ year old person working to survive. Or that same aged person relaxing and living the dream? Now you can say that you don’t have enough money to save, or you rather spend it now then save it. A little bit goes a long way. On the next blog I will put in formulas on how this can be achieved.