Investing in Stocks Abroad

Diversifying Portfolios With Foreign Stocks

When it comes to investing, the more options one has, the better. International markets open up new opportunities for investors with different risk appetites. Foreign stocks provide new ways to diversify portfolios and benefit from the economic growth of other geographic regions. It is often advised to ensure that 5% to 10% of a portfolio is constituted of foreign stocks. More aggressive investors may be increase their allocation to 25% which is considered as acceptable. Continue reading

Solar Investment – How Long Is The ROI

Solar Panel Systems
Solar Panel Systems

Investing in solar energy creates new opportunities to increase household savings and save the environment at the same time. Different factors determine how much can be saved for households using solar energy. Such factors also determine the length of time it takes to gain adequate return on investments. Return on investment of solar power systems are, among other factors, affected by property characteristics, electricity rates, solar renewable energy certificates, financial incentives. Continue reading

Buffett’s 7 Investment Tips

 

investment tips

Most of us are familiar with famed investor Warren Buffett.  He has amassed a fortune of over $60 billion in his lifetime.  He is known for picking great investments and sticking with them for the long run.  In a world where it is easier than ever to buy and sell stocks in the blink of an eye, day-trading has become more and more popular.  However, Buffett has always been outspoken about the negative effects of buying and selling equities over the short period.

So what does Warren think people should do to create wealth for themselves?  The link below tells you just that.  While creating a net worth equal to that of Buffett’s is highly unlikely, it is very easy to take just a few steps in the right direction to follow Buffett’s advice.

http://finance.yahoo.com/news/warren-buffett-best-investing-advice-201019702.html

Should I Save or Invest?

save or invest

Why not do both?

Whether you save or invest your money really depends on the financial objectives you are trying to accomplish.  Saving usually refers to putting money away from where it can be accessed quickly and easily for an impending purchase.  On the other hand, investing should tie up your money for a length of time, but it will also produce better returns.

TIAA-CREF’s video below breaks down the difference between the two.  After watching, decide what financial goals you are trying to achieve in both the short term and long term.

https://www.youtube.com/watch?v=PvKXr_mkF5s

 

Budget Smart, Invest Wise

How To Win The Lottery

 

win the lottery

As you are probably aware, the drawing for the Powerball tonight has reached a staggering $1.5 BILLION.  Many are rushing to the nearest supermarket or gas station to take part in this epic event.  A single-winner jackpot has NEVER been this high, and one person or multiple people could have their lives completely changed by tomorrow morning.

No, this post is not about winning tonight’s Powerball jackpot.  No, I am not going to tell you how to win the lottery in this post because there is no way anyone can tell you how to win.  Your chances of winning the biggest jackpot ever are 1 in 292 million, the more tickets you buy, the better your odds, but I’ll break it to you.  You’re not going to win.  Sorry.

Despite the fact that you won’t win the lottery, you do control your own destiny to create a great amount of financial wealth for yourself.  Take the following example.  By opening a Vanguard or Fidelity account with just $1000 and contributing $500 per month to the account every month, you can have well over a million dollars to your name after 40 years.

Winning the lottery and creating wealth are both results of math.  The math tells you your odds of winning the lottery are near impossible.  Math also tells you that following a simple plan can make you a millionaire.  Choose what math you want to follow.

 

Budget Smart, Invest Wise

 

Don’t Get Emotional

Emotional

The other day I was sitting in a conference room with some coworkers.  Our company was restructuring its retirement plan for employees.  After the changes were announced, a general conversation started taking place.  The financial recession of 2007 through 2009 came up.  One employee joked how he lost over $3,000 in the market downturn.  While it isn’t a large sum of money, it was enough of a loss for him to take his money out of stocks and place it in bonds.  He has had it in bonds ever since.

It is often said that losing money is more painful than gaining or winning money.  It is human nature for us to make rash decisions when our livelihood is being threatened.  And yes losing retirement money does affect one’s future quality of life and thus his or her livelihood.

My fellow coworker got too emotional during a time when he shouldn’t have.  When the market goes down, we hear “SELL, SELL, SELL”.  And when it goes up, “BUY, BUY, BUY”.  Don’t watch the news, don’t watch CNBC and their stock reports, and please don’t get emotional.  Investing consistently over time is the best way to ensure that you invest during dips and spikes in the stock market.  Right now the market is currently down about 6% from its all-time high.  I consider that 6% a sort of holiday discount that we should all be benefiting from.

Budget Smart, Invest Wise

Happy 1 Year

 

anniversary

Budget and Invest turns 1 today.  I know it is Thanksgiving and I want you all to enjoy your time with family so I’ll make this short and sweet.

I was inspired to start this blog a year ago by the passing of my father, a man for who I had much respect.  Although my father taught me many things, finances were something we rarely discussed.  The subject wasn’t taboo or anything, just not something that was ever brought up in conversation.  After he passed away, I started to see why.  My family’s finances weren’t as well of as I personally would have liked to have seen for my mother.  She didn’t have much say when it came to the family finances.  Dad would always tell her that he has everything handled.

The older I get, the more I realize just how open people need to be with their finances with loved ones.  I have also come to realize that the more one educates himself or herself on personal finances, the better off they’ll be.  Books like Rich Dad Poor Dad, The Millionaire Next Door, and Simple Wealth, Inevitable Wealth have taught me more about personal finance than a lifetime of schooling ever has.  That is why I share you with the knowledge I have gained and my personal stories.  In hopes that all of my readers can achieve the same financial success that I hope to and will attain in the future.

Happy Thanksgiving.

Budget Smart, Invest Wise

A Declining Market

 

As you might or might not be aware of, the US Stock Market has been declining and may continue to do so.  The market fell over 5% last week and looks to possibly continue the negative trajectory today.

This is the first 10% + pullback we have seen in a while.  10% is what experts call the correction, or when they feel stocks have gone up so much that they need to be corrected to allow new buyers to enter the market.  Markets will always continue to rise over a long-term horizon; however, these pullbacks that occur do cause fear and worry in the eyes of many investors.  I am here to tell you that you should not worry.

In one of my favorite books, Simple Wealth, Inevitable Wealth, by Nick Murray, Nick talks about how a declining market is one of the best things for your portfolio.  If you buy an index fund on a constant basis, then putting the same amount of money into that fund will yield a purchase of more shares of that fund.  Reversely, the more the fund increases the fewer shares you can purchase with the same amount.

My 3 tips for a downturn in the market:

  1. Continue buying stocks.  Just because stocks are going down doesn’t mean you should get out of them.  That is what everyone else is doing.  Cover the purchase of a range of stocks through an all-stock index fund.
  2. If you have extra funds, then put them to work.  If you have any spare cash lying around and your financial life is in good health, then use this as an opportunity to enter extra funds into a down market.  Investing in an all-stock index fund means that the price of that fund is decreasing right now, so investing extra amounts of money at a decreased price means you can take advantage of that discount.
  3. DON’T PANIC.  Don’t watch the news, don’t follow the markets, whatever it takes, don’t panic.  That is what many do during a downturn, they sell.  Can the market potentially drop an additional 10%?  Absolutely, there is no way to tell how far it will drop, but if you sell when everyone else is you are giving in to the panic.  Be a disciplined investor and continue buying while prices are falling.

Budget Smart, Invest Wise