Many people say that the power of debt is a good thing. Under certain circumstances I will agree that debt can be a good thing and that it can help people out in a time of need.
Debt is not a toy; and it should be used with extreme caution. The interest that people pay to creditors is incredible. The interest rates on the majority of cards are higher than the highest return the stock market has experienced.
With investments you invest in hopes of receiving a nice return, with a credit card you pay the creditor an interest rate most investors would die for.
With real estate investments one needs to really know what the market is like in his/her area. What is the average time it takes to flip the house. What is the average time it takes to find a renter. What is the going rate for rentals. If you have done your due diligence and still feel right about buying a house, buy a house that you can manage. Do not take a loan out for a house that is too much for you to handle if your were to loose your job.
Think first, dissect it, and then put it back together; and if it holds together as if it were still new then go ahead and do it.
Wednesday, November 23, 2005
Thursday, November 10, 2005
Saving Made Easy
Have your bank take out 10 percent of each paycheck and have it deposited into a savings account. After a while you will be surprised at how big your account will have grown to.
Remember that the account is not to be touched. Try to forget about it, if you can do this your net worth will grow!
A good bank to look into is ING.
Remember that the account is not to be touched. Try to forget about it, if you can do this your net worth will grow!
A good bank to look into is ING.
Wednesday, November 02, 2005
Cash Flow
Cash Flow the game is an eye opener for those who have no financial knowledge. I have had many people that were not for investing or saving, but after playing Cash Flow they had a desire to learn more and to invest their money.
I do recommend the game as a learning tool along with his first book Rich-Dad-Poor-Dad, for those who are wanting to learn or need an eye opener. The rest of his books I do not feel are worth the investment. There are plenty of better written books than those that he has produced.
"When you thirst, you learn."
I do recommend the game as a learning tool along with his first book Rich-Dad-Poor-Dad, for those who are wanting to learn or need an eye opener. The rest of his books I do not feel are worth the investment. There are plenty of better written books than those that he has produced.
"When you thirst, you learn."
Tuesday, November 01, 2005
Sound Investment Advice
Best Investment Strategy:
In "The Intelligent Investor" Benjamin Graham states that you should never have more or less than 75-25% of your investments in stocks or bonds. It does not matter how old you are in-regards to how you weigh your investments. You should invest according to how comfortable you are with your risk allocation.
He also suggests that you reevaluate your portfolio twice a year to keep the percentage allocated to each category the same. E.g. Your portfolio consists of 64% stocks and 36% bonds, if your portfolio goes to 65% stocks and 35% bonds, sell the percent in your stocks to balance your portfolio. January 1 and July 4 are two great dates to evaluate your portfolio.
Also, instead of buying separate bonds from a company, invest in a mutual fund. You can also invest in ETFs (equity traded funds; for more information regarding ETFs go to http://www.sec.gov/answers/etf.htm).
In "The Intelligent Investor" Benjamin Graham states that you should never have more or less than 75-25% of your investments in stocks or bonds. It does not matter how old you are in-regards to how you weigh your investments. You should invest according to how comfortable you are with your risk allocation.
He also suggests that you reevaluate your portfolio twice a year to keep the percentage allocated to each category the same. E.g. Your portfolio consists of 64% stocks and 36% bonds, if your portfolio goes to 65% stocks and 35% bonds, sell the percent in your stocks to balance your portfolio. January 1 and July 4 are two great dates to evaluate your portfolio.
Also, instead of buying separate bonds from a company, invest in a mutual fund. You can also invest in ETFs (equity traded funds; for more information regarding ETFs go to http://www.sec.gov/answers/etf.htm).
Remember that investing should be a long term goal. If you are day trading you are gambling with your hard earned money!
Saturday, October 29, 2005
Excellent website on Index Stocks
This is a terrific website on investing.
Go to www.ifa.com. He also has a great book that I would recommend buying. It is called the "Index Funds:The 12-Step Program." Another must have is MorningStar's (www.morningstar.com) book called, "The Five Rules for Successful Stock Investing: Morningstar's Guide to Building Wealth and Winning in the Market." You can find it by going to this link, http://www.amazon.com/exec/obidos/tg/detail/-/0471269654/qid=1130611483/sr=8-2/ref=pd_bbs_2/104-8357618-0855915?v=glance&s=books&n=507846.
For anyone that is seriously interested in learning about how to invest, look into these books and the ones that are listed under my favorites.
Go to www.ifa.com. He also has a great book that I would recommend buying. It is called the "Index Funds:The 12-Step Program." Another must have is MorningStar's (www.morningstar.com) book called, "The Five Rules for Successful Stock Investing: Morningstar's Guide to Building Wealth and Winning in the Market." You can find it by going to this link, http://www.amazon.com/exec/obidos/tg/detail/-/0471269654/qid=1130611483/sr=8-2/ref=pd_bbs_2/104-8357618-0855915?v=glance&s=books&n=507846.
For anyone that is seriously interested in learning about how to invest, look into these books and the ones that are listed under my favorites.
Friday, October 28, 2005
Savings lost by driving and not walking
Rexburg is a small city located in the north east section of the state. There are 11,000 students that live here, and a good portion of them have a car here at campus. The majority of the students are single and live with in a half of a mile from the school.
The average walking time to get to school from my house is 25 minutes, I am located a little over a mile from school. The average walking time it should take students is 13 minutes.
Our school is meant to be a walking campus. That means that the majority of students are within a very close proximity of campus. There are not enough parking spaces to accommodate all of the students that drive to campus. Because the number of parking spaces are so few, students drive around looking for someone to leave, so they can park and head to class.
My reason for writing this is to inform them, and others that read this, of the money they are losing by driving everday to campus. Gas here is about $2.80, that means for an average 10 gallon car it would cost $28 to fill up. With all of the driving around campus and then to the stores, you are looking at having to fill up twice a month. The amount of cash that will be spent for that month is $56. If we mulitply $56 by eight months we have a total of $448 used on just gas.
Lets take that $448 dollars and see what that would equate to in 10, 20, and 30 years from today with an APR of 3%.
For ten years that is a loss of: $602.07
For twenty years that is a loss of: $809.14
For thirty years that is a loss of: $1,087.41
For the first ten years you would have a profit of $154.07, not to shabby for doing nothing and adding nothing to it.
For the next ten years that profit will be at $361.14.
For the final ten years, the profit will now be at $639.41
Understand that I used an APR(annual percentage rate) of only 3%, this percentage can currently be found at many banking institutions around the USA.
If we had changed this percentage to the expected 8% yield, that the "experts" are perdiciting will be the average for the stock market, the numbers would be quite different.
At the end of thirty years you would have a profit of $5,495.92.
The seemingly simple and inexpensive trip back and forth to school is no longer so inexpensive. You will have forgone $5,495.92 in potential savings!
So next time you are tempted to drive somewhere, where you could have easily walkted too, remember the potential savings that you are burning up!
The average walking time to get to school from my house is 25 minutes, I am located a little over a mile from school. The average walking time it should take students is 13 minutes.
Our school is meant to be a walking campus. That means that the majority of students are within a very close proximity of campus. There are not enough parking spaces to accommodate all of the students that drive to campus. Because the number of parking spaces are so few, students drive around looking for someone to leave, so they can park and head to class.
My reason for writing this is to inform them, and others that read this, of the money they are losing by driving everday to campus. Gas here is about $2.80, that means for an average 10 gallon car it would cost $28 to fill up. With all of the driving around campus and then to the stores, you are looking at having to fill up twice a month. The amount of cash that will be spent for that month is $56. If we mulitply $56 by eight months we have a total of $448 used on just gas.
Lets take that $448 dollars and see what that would equate to in 10, 20, and 30 years from today with an APR of 3%.
For ten years that is a loss of: $602.07
For twenty years that is a loss of: $809.14
For thirty years that is a loss of: $1,087.41
For the first ten years you would have a profit of $154.07, not to shabby for doing nothing and adding nothing to it.
For the next ten years that profit will be at $361.14.
For the final ten years, the profit will now be at $639.41
Understand that I used an APR(annual percentage rate) of only 3%, this percentage can currently be found at many banking institutions around the USA.
If we had changed this percentage to the expected 8% yield, that the "experts" are perdiciting will be the average for the stock market, the numbers would be quite different.
At the end of thirty years you would have a profit of $5,495.92.
The seemingly simple and inexpensive trip back and forth to school is no longer so inexpensive. You will have forgone $5,495.92 in potential savings!
So next time you are tempted to drive somewhere, where you could have easily walkted too, remember the potential savings that you are burning up!
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