Friday, October 31, 2014

Financial Thought of the Day October 31, 2014: Being Broke—The Ultimate Halloween Horror

Being broke to me is a horrifying thought. That means you have no money to fix your car if it breaks down or buy gas causing you to lose your job. It also means you could not have money to pay for the doctor’s co-pay allowing you to figure out what is wrong with you. To me that is the ultimate Halloween horror.

Thursday, October 30, 2014

Financial Thought of the Day October 30, 2014: Value Trap

Sometimes a company’s stock price goes down without regards to that company’s fundamentals because the stock market as a whole is in a state of fear. This is a bargain. However, a company’s stock price can go down and stay down due to permanent company fundamental degradation. This is NOT a bargain. This is called a value trap.

Wednesday, October 29, 2014

Financial Thought of the Day October 29, 2014: What Goes Up Must Be Bought on the Way Down

In the stock market prices can go up and up and up. This can be really exciting especially when you own the stock that is doing the rising. crashes. Instead of panicking, long-term investors should be joyed and buy some more shares on the cheap.

Tuesday, October 28, 2014

Financial Thought of the Day October 28, 2014: Diversification

Remember the old adage don’t put all your eggs in one basket. If one goes rotten you have others that you can fall back on.

Monday, October 27, 2014

Financial Thought of the Day October 27, 2014: Less Competition is Good

When looking for a publicly traded business to invest in it always pays to look for companies with few competitors and high barriers to entry. Competition forces lower prices and erode margins.

Friday, October 24, 2014

Financial Thought of the Day October 24, 2014: Perseverance in Long-Term Investing

Investing for the long-term represents your best bet in making money in the stock market. If you don’t trade for a long time you don’t pay commission and/or taxes on your gains. Sometimes it takes the courage to NOT hit the trade button during steep market corrections. It takes perseverance.

Thursday, October 23, 2014

Financial Thought of the Day October 23, 2014: Election Day Coming Up

Election Day is coming up. Whoever gets elected will not hand you a paycheck. You got to work for it.

Wednesday, October 22, 2014

Financial Thought of the Day October 22, 2014: Every Dollar Has a Purpose

Every dollar has a purpose such as: bills, savings for emergency and for retirement, a new car, etc. Losing sight of this mindset could derail you on your path to wealth.

Tuesday, October 21, 2014

Financial Thought of the Day October 21, 2014: Dividend Stocks

Buying dividend stocks can make a big difference in returns over the long-term. Stocks that continually boost dividends can also really add up. The S&P 500 Dividend Aristocrat list which is comprised of companies that boosted dividends for 25 consecutive years has given investors an annual return of 10.55% vs. 7.83% for the S&P 500 as a whole over the past ten years.

Monday, October 20, 2014

Financial Thought of the Day October 20, 2014: Thick and Thin

It’s important to continue thinking long-term both through thick and thin. When the markets corrects it’s imperative to hold onto your shares in good solid companies and to not take any losses. Eventually Mr. Market’s mood will improve and most likely those losses will disappear and turn into gains.

Friday, October 17, 2014

Financial Thought of the Day October 17, 2014: Stock Market Corrections is Good

Recent stock market volatility has some people worried. Long-term investors should rejoice they can find good quality companies on the cheap.

Thursday, October 16, 2014

Financial Thought of the Day October 16, 2014: Stock Ownership

Owning a share of a company means you own a share of a dynamic business. Look for companies that sell a needed or highly wanted product. Whenever you can, buy during market corrections.

Wednesday, October 15, 2014

Financial Thought of the Day October 15, 2014: Interesting Places to Get Investment Ideas

Investing legend Peter Lynch once said, "If you stay half-alert, you can pick the spectacular performers right from your place of business or out of the neighborhood shopping mall, and long before Wall Street discovers them."

Anyone can begin their investing research by looking at the stores and the products they sell. However, it’s just a start. It always pays to research the fundamentals such as revenue, cash flow generation, and the balance sheet.

Tuesday, October 14, 2014

Financial Thought of the Day October 14, 2014: Trading Stocks Over the Short Term is Like Gambling

Investing legend Peter Lynch once said, "Absent a lot of surprises, stocks are relatively predictable over twenty years. As to whether they're going to be higher or lower in two to three years, you might as well flip a coin to decide."

Buying stocks for short-term gain is akin to gambling.

Monday, October 13, 2014

Financial Thought of the Day October 13, 2014: Stock Ownership Should Be a Long-Term Commitment

Investing legend Warren Buffett once said, "If, when making a stock investment, you're not considering holding it at least ten years, don't waste more than ten minutes considering it." Owning a share of stock means you own a share of a business and should entail the same long-term commitment.

Friday, October 10, 2014

Financial Thought of the Day October 10, 2014: A Moat Built Out of Cash

Having a solid cash cushion or emergency fund is like living in a comfortable castle surrounded by a wide moat full of alligators protecting you against your enemies.

Thursday, October 9, 2014

Financial Thought of the Day October 9, 2014: Deserted Island Desperation

Living paycheck to paycheck is like the desperate individual on a deserted island urgently awaiting a supply or rescue ship.

Wednesday, October 8, 2014

Financial Thought of the Day October 8, 2014: New Cars Cost More than You Think

Buying a new car for say $25,000 is fine and dandy when you bring it home. The neighbors are impressed and they look at you with jealousy and envy of your new toy. However, if you buy a car for $15,000 you save $10,000. First, a person may be more apt to pay cash for a car that is just $15,000 saving interest cost on a loan. Also, if you are person who can pay cash for the $25,000 then the $10,000 can add up over time. If you take that $10,000 and invest it in an index fund that earns 8% per annum for the next 30 years that $10,000 becomes $100,626.57 (see calculations below).

$10,000 x (1.08^30) = $10,000 x 10.0627 = $100,626.57

Tuesday, October 7, 2014

Financial Thought of the Day October 7, 2014: Contentment defines the word contentment as “the state of being contented; satisfaction; ease of mind." Being satisfied with what you have is a key to lowering greed and the desire to keep up with the Jones which causes you to spend money unnecessarily. It makes it easier to spend less. Spending less than you earn is the key to saving and building wealth.

Wednesday, October 1, 2014

Financial Thought of the Day October 1, 2014: Pursue Your Passions

Getting up and going to work everyday can be hard. Remember pursuing something you are passionate about will make success in life easier.