Monday, February 29, 2016

Financial Thought of the Day February 29, 2016: Berkshire Hathaway’s Superstar Returns


On February 27, 2016, Berkshire Hathaway (NYSE: BRK.A) (NYSE: BRK.B) came out with its 2015 annual report. In the report, the company illustrated that its stock gave shareholders a 20.8% annualized return from 1965 – 2015. Over 50 years, a 20.8% annualized return would turn a $100 investment into $1,268,664.29.

*Disclosure William Bias (stockdissector) owns shares in Berkshire Hathaway’s Class B shares.

Friday, February 26, 2016

Financial Thought of the Day February 26, 2016: Building Wealth (Revisited)


The key to building wealth is spending less than you earn and save/invest the rest. It is as simple as that.

Go to stockdissector.com

Thursday, February 25, 2016

Financial Thought of the Day February 25, 2016: Something Doesn’t Come for Nothing


Something never comes for nothing. Don’t sit around waiting for a family member, politician or some other party to do something. Maintain the mindset of working for your money and spending less than you earn.


Wednesday, February 24, 2016

Financial Thought of the Day February 24, 2016: Saving a Percentage


It’s best to set aside 10% of your paycheck for a rainy day. If you can’t do that then try 5%, 3% or even 1%.


Tuesday, February 23, 2016

Financial Thought of the Day February 23, 2016: Keep Emergency Fund in Cash


Your emergency fund should be kept as cash in a really liquid bank account such as a passbook savings account or checking account. Don’t put that money at risk. If you invest in risky assets such as stocks then you may have to sell at a loss when you need it the most.


Monday, February 22, 2016

Financial Thought of the Day February 22, 2016: Invest in Yourself


Learn skills and/or concepts that will enable you to earn enough income to exceed your expenses.

Go to stockdissector.com

Friday, February 19, 2016

Financial Thought of the Day February 19, 2016: Stock Market Risk


Investing in the stock market doesn’t come without risk. There is always a chance of loss.

Go to stockdissector.com

Thursday, February 18, 2016

Wednesday, February 17, 2016

Financial Thought of the Day February 17, 2016: It’s About the Fundamentals


When you buy shares of a stock you effectively become a business owner. A good business will have growing demand for its products, keep costs to a minimum and generates cash for its owners. Any publicly traded business in your portfolio that doesn’t do these things should be re-evaluated.

Go to stockdissector.com

Tuesday, February 16, 2016

Financial Thought of the Day February 16, 2016: Investing Versus Speculation


Investors buy/sell financial instruments based on the underlying financials with the intention of holding for the long-term. Speculators are looking for a quick profit and see the financial markets as nothing more than a gambling casino.

Monday, February 15, 2016

Financial Thought of the Day February 15, 2016: Save for a Snowy Day


Always set aside some money for the proverbial “snowy days” in life such as a job loss, medical bills not covered by insurance, etc. It pays to have the equivalent of 6-12 months of personal expenses set aside in a savings account.


Friday, February 12, 2016

Financial Thought of the Day February 12, 2016: Beware of Frothy Markets


Extreme bullish markets produce stocks with high valuations, which can correct in a major way when market sentiments turn sour.

Go to stockdissector.com

Thursday, February 11, 2016

Financial Thought of the Day February 11, 2016: Stock Market Volatility Creates Opportunity

The year 2016 proved a volatile year for the stock market. Long-term minded investors should seize this opportunity to buy good quality publicly traded companies on the cheap.

Go to stockdissector.com

Wednesday, February 10, 2016

Financial Thought of the Day February 10, 2016: Money Provides Options Other Than The Opportunity to Buy Luxury


Remember money can provide options other than the opportunity to buy luxury items. It can purchase the peace of mind of not having worry about being broke right before payday.


Tuesday, February 9, 2016

Financial Thought of the Day February 9, 2016: Be Prepared for Storms of Life


Having an emergency fund will help prepare you for the storms of life. It pays to have one year’s of expenses.


Monday, February 8, 2016

Financial Thought of the Day February 8, 2016: Papaw Wisdom


My grandfather once said, "You can’t make $50 a day and spend $60."


Friday, February 5, 2016

Financial Thought of the Day February 5, 2016: The Formula for Future Value of a Single Amount


This week I talked about what compound interest can do for a single amount over a period of time. The formula for the future value of a single amount is FV = (1 + i)^N where i is interest and n is the number of compounding periods. In my illustration involved annual compounding.
A table for the various rates of returns for a $1,000 can be found below:


Go to stockdissector.com

Thursday, February 4, 2016

Financial Thought of the Day February 4, 2016: Berkshire Hathaway: The Ultimate Example of Compound Growth


Building wealth is a function of amount invested, the rate of return and time. Warren Buffett has ran Berkshire Hathaway (NYSE: BRK-A) (NYSE: BRK-B) for over fifty years. From 1964–2014 the company’s class A stock returned 21.6% compounded annually. Here’s what $1,000 would have done with that rate of growth over time in the table below. It takes investment genius to achieve this and this rate is definitely not guaranteed and few people could probably achieve this.

$1,000 Amount
Time
Rate
Amount After Compounding
10 Years
21.6%
$7,068.64
20 Years
21.6%
$49,965.65
30 Years
21.6%
$353,189.06
40 Years
21.6%
$2,496,565.69
50 Years
21.6%
$17,647,319.43

A similar table to the one found above for different compound growth rates can be found here:


William Bias (stockdissector) owns shares in Berkshire Hathaway Class B

Wednesday, February 3, 2016

Financial Thought of the Day February 3, 2016: Here’s What 15% Can Get You Over Time


Building wealth is a function of amount invested, the rate of return and time. Yesterday, I illustrated how much 10%, which represented the potential return of an index mutual fund, can get you over time given a $1,000 investment. Today, I will illustrate what 15% can do for a single $1,000 over time. It takes a little investing skill by investing in solid publicly traded companies, risk taking and luck to get these returns and is definitely not guaranteed (table below).

$1,000 Amount
Time
Rate
Amount After Compounding
10 Years
15%
$4,045.56
20 Years
15%
$16,366.54
30 Years
15%
$66,211.77
40 Years
15%
$267,863.55
50 Years
15%
$1,083,657.44


Tuesday, February 2, 2016

Financial Thought of the Day February 2, 2016: Here’s What 10% Can Get You


Building wealth is a function of amount invested, the rate of return and time. Yesterday, I illustrated how much 2%, which represents a risk free rate of return, can get you over time given a $1,000 investment. Today, I will illustrate what 10% will get you. You have to take a little more risk to get this rate of return by investing in a mutual fund and there is no guarantee you will get it (see table below).

$1,000 Amount
Time
Rate
Amount After Compounding
10 Years
10%
$2,593.74
20 Years
10%
$6,727.50
30 Years
10%
$17,449.40
40 Years
10%
$45,259.26
50 Years
10%
$117,390.85


Monday, February 1, 2016

Financial Thought of the Day February 01, 2016: Here’s What 2% Can Do For Your Money Over Time


Building wealth is a function of amount invested, the rate of return and time. Here’s what 2% (the rate for a 10 year Treasury Note) can do for you over time:

$1,000 Amount
Time
Rate
Amount After Compounding
10 Years
2%
$1,218.99
20 Years
2%
$1,485.95
30 Years
2%
$1,811.36
40 Years
2%
$2,208.04
50 Years
2%
$2,691.59

Note: William Bias (stockdissector) does not own any Treasury Notes.

Go to stockdissector.com