This is the holiday season and you probably deserve to give yourself the gift of of financial fitness. At the end of the year during holiday season there’s still time to wrap up 2016 and put a big bow on it. The Personal Finance Holiday List focuses on maximizing deferred savings, reducing taxes, giving gifts that keep on giving and optimizing your credit profile so you’re not paying the interest that allows other customers to get teaser rates. Keeping yourself financially fit ultimately allows you to go out and buy gifts for whoever you may desire, you included. Just remember, charity starts and home, then travels abroad.
In this episode, an interview with Jason Brown, investor, trader, instructor and developer of “The Brown Report”. Jason goes over some of the differences in trading versus investing and how to get started based on your your money goals. He explains how he got started in trading, investing and some of the ups and downs that come with the territory. Jason explains how he came to develop several intense and focused courses based on his knowledge of investing and how it can be tailored to meet individual needs.
During the interview Jason sets aside the mystique, glamour and sometime hype about investing by digging right in to the nuts and bolts of getting started with investing and trading from the ground floor. Besides offering entry level instruction and investor training, The Brown Report also offers advanced level trading strategies for those that find themselves wanting more. He has a relaxed, confident approach that only comes following some real world experience and perseverance earned during trading in both up and down market cycles. If you haven’t seen any of the ads for “The Brown Report” online or elsewhere, check it here at “The Brown Report” .
There are a lot of questions, concerns and just plain old curiosity surrounding the Brexit situation. Following our own financial meltdown in the United States and all of the crazy things that followed ranging from job losses, to people literally walking away from their homes and mortgages to portfolios getting completely crushed. People lost money like it was going out of style. So what’s up with Brexit, is it something like that? Will there be those sorts of residual problems? News reports are talking about 401k’s and IRA’s potentially taking a hit. What should someone do if anything right now? Financial Advisor, Camari Elllis breaks down the Brexit, the EU, Euros and what you should consider before making any presumptuous money moves.
OR… Maybe there is a OPPORTUNITY presenting itself loud and clear, just yelling “Over here, now is the time!” Remember Baron Rothschild, “buy when there is blood in the streets”.
During this Right NOW Segment, I discuss a new and exciting opportunity to save for retirement even if you do not work someplace where your employer offer a traditional retirement plan such as 401k or 403b. Retirement Saving is key to financial wellness, now both individuals and employers can help setup a plan that is of no cost to the employer, allows direct deposits with no fees or management costs and is transferable from employer to employer. A new, safe way to save and earn interest with no fees! Retirement Saving is available for even more people that want to save. Check out The Newest Thing in Retirement Plans to find out how you can get started Right NOW for Retirement Saving.
In my first endeavor to learn and understand more about basic finance and investing beyond saving and banking I would look over the details and information sent regarding my 401k. I tried to understand the funds, the forecasts, the purpose, costs and expectations. Soon I would come to open a separate brokerage account to make attempts at investing by buying some stocks on my own. I bought several popular and not so popular books on investing, trading, evaluating stocks and of course how to make money doing all of these things. Books ranging from “The Intelligent Investor”, (paperback thick enough to choke a horse) to “A Random Walk Down Wall Street” to books on charting and market timing, (good luck). There’s definitely a lot to the whole investing and buying stocks and bonds thing than meets the eye, or is it? Those books can make it seem like you better have a Master’s degree in “Financiophilosiphicologyconomics”, but fortunately you don’t. Like many other things, finance and investing would seem like some cloudy, murky science that only the initiated would know their way around. To get a good understanding you needed to be ushered in by someone that is already in the know fully, well not so much. It’s kind of like you don’t really need to know how a combustion engine works in order to own and drive a car. I would soon find out that beyond the super complicated things such as IRR – Internal Rate of Return, that most everyday working folk who save and invest will never be involved in credit default swaps, options trading and using the iron butterfly types of investment strategies, but I could get in on investing in many ways. I could invest straight forward by just getting some basic information and deciding what action to take “buy” or “don’t buy” –no science, and not much of a big deal either once you know a few simple basic things.
I would eventually come across a non-profit named Better Investing. This company offers education and training on investing basics for individuals that want to start investing in stocks and other investment vehicles. Once you want to go beyond the mutual funds, IRA’s and 401k plans and start looking at individual companies to invest in things are a little different. There are a few more details tom understand and evaluate your investments on when buying individual company stocks. Still, no science although the world would have you think there is some magical science to it. While it is the straight honest truth that you can just open a brokerage account online in a few minutes, link your bank account and start buying company stocks just like that. It is also true that you can do the same with a car, just walk in and buy it. However it would make a little sense to kind of understand what you’re getting into, the how and why to help make the best decision to fit your needs. This is where people get nervous and the hucksters take advantage by making people think investing at a basic stock by stock level is beyond their grasp. That they should be focused solely on mutual funds, index funds, bond funds and support the broker’s new “7 series BMW” funds. Yes, there are some things to be careful of and consider, however, so goes the same for choosing the right car with respectable loan terms and most of us have done that several times already. So when it comes to these investing basics and trying to learn how to measure up a company’s worth for your couple hundred to a few thousand dollars or so, the Better Investing folks are good at helping to understand the basics and move on to advanced concepts. Understand some very simple things like what is the P/E ratio or the EPS, why it’s important and how to evaluate it. Why and how to consider how much debt a company has, most companies have debt but it’s not a bad thing as much as how it’s being managed. What are the earnings that you sometimes hear reported on the TV news or radio, it can seem strange when they say “NIKE reported earnings of 23 cents this quarter, above analyst’s expectations of 20 cents”. I remember wondering, “How is that 23 cents significant?” and sometimes I still wonder a bit. For basic investor education and a little more check out http://betterinvesting.org/Public/Stocks/default.htm
Group Economicus. The-Money-Team of your own.
My confusion aside, Better Investing offers a good amount of education on the basics, how to get started and how to invest in individual stocks for the long haul. Long haul stocks that pay dividends, increase in value over time, and allow you to build a worthwhile portfolio that includes individual stocks. Beyond the evaluating individual companies and doing the collar cost averaging thing, there are the “Investment Clubs”. I found these to be particularly interesting as it allows you to seek out clubs to join or start one of your own. Yes, start your own little investment group with family, friends, coworkers or anyone that has some of the same interests in finance and investing. There are Investment Clubs based on gender, regional location, affiliation, interests and any number of other things as the central basis for the group. Better Investing will help you set up your own investment club from scratch and show you how to monitor, manage and maintain investments and profits accordingly for your investment club. Between the webinars, local group meetings you can attend in your area and the online education you are likely to get a good grasp of the basics. Good enough to begin selecting and investing in individual stocks based on their metrics that make them worthwhile to consider your hard earned money.
Investment Clubs can be much like hedge funds, Index Funds and Mutual Funds in their focus on a specific industry such as Oil & Gas, Apparel, Defense Contractors or Consumer Staples such as Proctor and Gamble and so on. Let’s say your club is interested in Real Estate, the investing focus surely can be geared toward owning and investing in the best REITS ranging from apartments to malls, whatever you want to focus on as an investment. Investment Clubs can focus on regions, emerging markets, the global economy or commodity stocks for precious metals such as gold or silver. When gold I up and high in demand your investment club is tied to the area of the market and possibly up too, conversely, down when it’s down also. Health Sector and pharmaceuticals, an Investment club can focus on the leading companies in healthcare such as Merck or GlaxoSmithKline, Technology stocks such as Apple and the list goes on to whatever you desire to build for your club. Google “Investment Clubs” and you’ll get good idea of how people are coming together and how they are investing together. Then, go start your own.
For more on Starting or joining investment Clubs check out http://milesweekly.com/46bn
Okay, so this sounds like some sort of push for Better Investing, but it isn’t. I did however take a class with them, learn how to track individual company stocks based on sales, growth, debt, free cash flow, enterprise value, P/E, EPS and other key metrics to make at least a half decent decision on whether to invest or not. I did compare some of their information with that of the gurus such as Jim Cramer and his first book “Mad Money” and other conventional wisdom on investing, which to me seems to steer everyone to some sort of fund for the most part. In the end, I found that it is extremely helpful to build a basic foundation knowledge set to even consider investing, whether it’s in funds, bonds, notes, options, individual stocks or your brother’s restaurant. You need to understand how the stock is trending much like if your brother has a hot hand for a short while that fades quickly, tracking the performance and history of a company is done kind of the same way. As far as the investment clubs, this allows you to play the same “Investment Group” game, just on your economic scale by picking a basket of stocks to invest in at your own pace and managing it damn near like your own mutual fund or hedge fund for that matter. Yeah, how cool would it be to build and manage your own hedge fund? Well you can and they’ll help you do it. So, this isn’t a push for Better Investing as much as it is sharing my own experience and encouraging others to do the check it out for themselves. You may try the online webinars, start or join an Investment Club or attend regional meetings in your area, either way you’ll come out ahead working with Better Investing. I’m telling you this is cool financial game for your life, check it out.
Retirement Income Strategies for Those with Less Than a Hefty 401k, IRA, or Pension.
We hear or read about it all of the time, either the stats of how many Americans aren’t saving enough in their 401k’s for retirement or how important it is to build a retirement strategy that includes a 401k and a maybe a pension too. But really, are these people talking to or about everyone? Does everyone have all of their retirement plans in the bag but you? Conversely, we also hear about all of the hundreds of thousands that are unemployed or affected by the 7 year long recession, so it doesn’t all really make sense at times. Even a hefty emergency fund alongside extended unemployment isn’t built to last 5 years! Are these unemployed folks still funding some 401k or IRA somehow? Obviously not, so for the rest of us who aren’t in the “prime” zone financially, that aren’t set just yet and whose retirement plans will be a combination of jobs worked, savings and creative financial planning, there are some key things to focus on early.
What if you don’t have a healthy well vested 401k or other retirement plan, what will you do for retirement income? Do you have a pension from your current employer? How long can you do your current line of work, until you’re 60? 70? 75? Will you be physically able to work in your later years? Will your pension be enough if you have one? The ever daunting question that begins to come clearer and clearer as time goes on ad you do happen to survive all of those near misses in life leading into your thirties. Banks and brokers are offering cash incentives to do your rollover with their firm, so many of us don’t have a rollover. So many of us don’t have the $200,000.00 or more rollover to get the free $500.00
The conventional wisdom states to start saving in your 20’s and you can save up to one or two million dollars by the time you retire and do just fine meeting your living expenses from 4% – 10% of that savings a per year. That 4% – 10% is supposed to come from interest, etc. and it sounds like a great idea, if I had a brain in my 20’s… or um, my 30’s. So now what? There’s socking away as much as you can in the 401k now at the job you’ve working at for the past maybe 8, 10, 15 years… maybe. Speaking of maybes, there’s maybe a pension for some of us, if you’re lucky because that is disappearing with the clouds these days unless you work in the public sector -with no guarantees still. Well, if none of those fit you, again, then what?
There are Roth 401k and Roth IRA annual contribution limits of about $15,000 or $5,000 annually, give or take some details. About $10,000 limits or so in Education IRA’s if you plan to stash and dash there, but that’s not tax free contributions, only growth so it doesn’t matter anyway. And we can’t forget the high yield savings accounts that get a whopping 1%, so you’re only about 1% down every year behind inflation, At best it’s a money pit stop, but don’t get too comfy trying to reach “0%” interest by getting a high yield savings account in order to keep with inflation, easier said than done. Let’s not forget Social Security, if you’ve worked and paid into the system. The government sends letters every year with the estimates of how much you could expect if you were to retire today. Is it enough to cover your living expenses where you live and how you live today? Don’t fret, because there’s always something, some ways to make it happen for those who refuse to play dead. Ways to make to retirement moves that offer relative safety of principal invested and potential growth too. You just got get to doing it.
There are many strategies ranging from setting up annuities to inventing the iPhone and the all-time worst, the ”Lump Sum” plan. Here are three strategies that anyone can employ regardless of where they are on the retirement horizon as long as they willing to work at it.
Leverage Peak “Earning Years”. The largest opportunity that exists is taking advantage of your “Earning Years” as they reach a plateau. These will be the years you can take risks, make very aggressive moves, change directions while you are at your highest level of marketability, skills are sharp and current, knowledge is current and relevant, you’ve earned your worth and know what it is. You’ve reached a point of having enough experience to command the high rate for what you offer to any employer. During these years you can lay real plans and execute them. If retirement savings isn’t caught up to where you are or want to be, then your peak “earnings years” give you one last great opportunity and they can easily last about 10 -25 years depending on your type of work.
Create Small Business, the business of You. If you have skill, talent, knowledge set, or a specific ability that is marketable then cultivate it further. So start by becoming fully invested in you, become licensed, certified, more educated or get whatever credentials necessary to operate as a small business with the intent to hand over the “production” part of the business to someone else while you still own it. Consider that even doctors and dentists have private practices where other doctors and dentists are in their employ. This may or may not last into retirement depending on the line of work, however, it does offer the possibility of getting up some serious savings from income for investing or just keeping safe. For example if you are handy or a mechanic, becoming a contractor and then hiring capable employees to carry on doing the work while your run the business. Same goes for everything from hairdresser to real estate agent to painter or car mechanic. Yes there will be some upfront investment of both time and money, yes you will need to step up your business savvy, and yes there is some risk. Just keep in mind, you are also taking the bull by the horns, by providing these answers for yourself.
Income Generating Real Estate. In any case Real Estate is an available avenue to consider, building an income property portfolio or adding it to your current retirement plan can give it a boost if done properly. Consider first building up the necessary monies and position to make quality real estate purchase in a moderately high demand market. Try to stay away from low rent and problem areas as much as possible, although they have profit too, they also require much more hands on management at times. Consider the ongoing costs of maintenance and management for everything from water leaks to tenant evictions. This isn’t something most people want to do in retirement, so be prepared to give up to 15% for this to get done, it’s deductible so keep it simple and let someone handle the potential headaches. Focus on a market close to your area of retirement. Most people have some time between now and retirement to get this done by building up savings, taking care of any credit issues, learning the ropes and locking in their income generating properties.
There are still the usual routes of saving and investing in everything from bonds, REITS, ETF’s and mutual funds and they are as good as the hundreds of other plans the finance gurus come up with. Still, for the rest of us, we may need to put together a plan that is workable to add on to the savings and investment plan that is something we can work on and cultivate. Unless you really have a ton of money invested in a mutual fund, ETF or somewhere else in the general market, then it’s just sitting… not doing much, just there, sometimes it’s up, sometimes it’s down. Some of us are hard line go getters in life and will need to take more of an active role, and feel encouraged as their plans come to fruition right in front of their eyes, that’s what this post is about. All the while, saving and investing the profits.