I would like to share my references of inspiration and information. Below are links to the common sites that I use for great information about stocks as well as personal finance advice in general.
Please share with us some of the websites that you use for your personal financial management. We would love to check them out and add it to our list. Thanks!
Knowledge is power. -Sir Francis Bacon (1561 - 1626)
A common saying that I have heard is "if people knew better, they would do better". This is so true as the importance of education (knowledge) is being emphasized more than ever today. In earlier times, graduating with a high school degree could basically get you any type of job you wanted. As time has progressed though, more and more employers are requiring degrees of "higher education". Even without a degree, they will more than likely require some duration of experience that can carry you through, but in most cases, a degree is necessary.
Now, by no means am I saying having a "higher education" degree makes you knowledgeable because there are plenty people out there with degrees that still have no idea of what they are doing. On top of that, there are plenty of people out there that seem to be very intelligent but have no common sense. There is a balance that needs to be maintained, however, the more knowledge you have, the better the chance that you will have a general idea of what it takes to be successful.
For instance, take some of the great men of our century:
(Click the name to read the Wikipedia bio of the person)
One thing that you will find in their biographies is that they all pursued educating themselves in their field. If Martin Luther King Jr. was not as meticulous in his research about civil disobedience and non-violence, there is a large possibility that the Civil Rights Movement would not have been successful as it was. If Warrent Buffet was not as thirsty to understand the principles and concepts provided by his mentor, there is a strong probability that he would not have amassed the great fortune that he has today. All in all, they took steps to increase their individual stock price (and the price of others) by becoming more knowledgeable.
Below are some of the keys things that I have done to help invest in my knowledge and increase my overall stock price.
Read, Read, and then Read more.
Searching on google alone can give you a plethora of information in regards to ANYTHING. (Blogs, information websites, etc). Many people want to share the information, we just need to know where to look to get it.
The local library has a large collection of books that can be used to further enhance your knowledge all for free (just be sure to bring the books back on time).
If you have a free day, check out your local Barnes and Nobles. You can get a table, couch or the floor and read until your heart is content, unfortunately you cannot take the books home without paying for them.
Talk to people with experience.
During my quest to enhance my knowledge about computers, I surrounded myself with people who were great with computers. The amount of information that I soaked up from just being around them was priceless.
Learning from other people's experience will help to prevent you from making the same mistakes that they made.
People sharing their experience can increase our knowledge and help to open up our minds. We can learn to think in a way we typically would not think, allowing us to have better options to making a decision.
Attend classes, seminars, free information.
There are many non-profit organizations as well as educational institutes (Pamplona Finance Group) that offer free classes and workshops to help increase your knowledge about a particular subject.
If you know better, you will do better. Most people do not do anything about personal finances because they do not know anything about personal finances. Being ignorant to the fact that you need to save for your retirement does not make it go away and allow you to magically have money once you hit retirement age. We have to take control today and make it a point to educate ourselves on the important matters of our lives so we can live the future that we want to live.
What are some of the ways you invest in your knowledge? If you do not invest in your knowledge, when are you going to start?
Look to your health; and if you have it, praise God and value it next to conscience; for health is the second blessing that we mortals are capable of, a blessing money can't buy. -Izaak Walton (1593 - 1683)
Unlike financial situations, our health is less resilient to sudden drops and dips. There have been many people who filed for bankruptcy but were able to turn their financial situation around and recover their financial situation by having patience and implementing a sound financial strategy. (Link to Story about recovering from Bankruptcy) Unfortunately, our health is a different story.
My mom has always told me "son, you only have one life, you need to take care of yourself". However, that particular statement did not really resonate with me because at times, as most other twenty somethings, I felt "invincible". However, there are times when life gives you a reality check and you are reminded of how vulnerable you really are. My reality check came in the form of the doctor telling me that I have high blood pressure at the age of 24. I was in shock because I was under the impression that those type of things only happen to older people, but I now see that it can happen to everyone.
This particular situation allowed me to realize that "maybe mom was actually on to something". Armed with this new knowledge, I began to institute some new changes in my life to increase my life expectancy by taking better care of my health. Below are a few instrumental changes that were made to help improve my overall condition:
Eat Right
What I did wrong
Rather than eating 3+ times a day as recommended by most health officials (Nutrition, Dietary Guidelines), I would skip breakfast and try to make up for it at dinner.
Instead cooking healthier meals, I would go out to eat spending on average $10/meal.
What I am doing now
Make it an effort to cook everyday during the work week.
Try to eat at least three meals a day (most importantly breakfast) and try to refrain from eating out during lunch.
Purchase frozen dinners (approximately $2.50/meal) (the healthier kind) for lunch and limit myself to one per lunch period.
Current results
Have lost approximately 11 pounds since the beginning of this year.
Feel more upbeat and energized to complete my day.
Save on average $40/week since I do not eat out as much.
Exercise at least three times during the week
What I did wrong
Always gave myself an excuse as to why I could not workout.
Did not give myself a clear goal to work towards.
What I am doing now
Provided myself a goal of running a marathon at least once a year.
Exercise 3 - 4 times a week for one hour.
Keep exercising interesting by challenging myself to new activities.
Current results
Lost 11 pounds since the beginning of the year.
Completed the Peachtree Road race on July 4th, 2008.
Getting more positive comments about differences in my appearance.
Get at least 7 - 9 hours of sleep
What I did wrong
Continued to go out and party during the work week
Stayed up to 1 or 2 AM during the week
What I am doing now
Going to bed around 11 AM during the week
Sleep for a least 7 hours a night
Current Results
Feel more refreshed and able to perform at work
No longer tired during the week and weekdays
Reduce Stress
What I did wrong
Spent too much time dwelling on past mistakes
Did not accept that I could not change somethings
Tried to make everyone happy
What I am doing now
Turned my mistakes into lessons
Finding the positive out of negative situations
Laughing more
Current Results
Establishing better relationships with friends and colleagues
Enjoying life
In addition to these results, I have saved a lot of money by taking better care of myself. Keeping in good health allowed me to avoid buying medicine as well as reduce the amount of visits the doctor, all which keeps more money in the pocket.
We must learn to make ourselves the best we possibly can in order to increase our stock (self-worth). Once we increase our stock, we may inspire someone else to do the same and in turn continue to "pay it forward" to help someone else. Knowing this new information, are you ready to increase the value of your stock?Also, please comment and let us know your recommendations to invest in your health.
In a previous article the “It’s easy as P.I.E” method was discussed in detail.If one were to set a long term goal of achieving a certain level of net worth or retiring at a certain age, the first order of business would be to specifically plan the action steps needed to reach that goal.Secondly, once this plan was created then each step would need to be implemented in a way in which every action taken would be an advance toward goal completion.Very few would argue that investing in both mutual funds and stocks are vital implementation steps toward achieving extraordinary financial success.Many realize this, yet most are not willing to take the time to educate themselves about these two very powerful wealth creating avenues.Thus, many so called “investors” become “gamblers” leaving their portfolios to fate or in the hands of investment “professionals.”In these next few articles, I will provide a basic overview of each investment allowing you to see how each can be incorporated to benefit your personal portfolios.The first of this two-part series will cover stocks.
Stocks Overview
The concept behind a stock is simple, but at the same time very powerful.When you own a share of stock in a company, you literally own a portion (albeit very small) of the company.The primary reason a company issues stock to its employees and the public is because it provides another means for raising capital.Issuing stock also provides another advantage for the company in that money raised from the stock is interest-free.Also, the company doesn't have to guarantee any return to the purchaser.For this reason, issuing stock to generate capital is known as an equity financing.This is in contrast to debt financing, where a company must pay back money raised in the form of a bond or outstanding loans.
Common Stock vs. Preferred Stock
These are the two types of stock that are issued to stockholders and each has its own distinct advantages and disadvantages.
Common Stock
This is the type of stock that people are referring to in their everyday usage of the word from an investing standpoint.There are two primary advantages of common stock: dividends and capital appreciation.Oftentimes, when a company has increased profits for a period of time (i.e. quarterly), the shareholders reap the rewards in the form of dividend payments.The downside is that companies are not required to pay out dividends to common stockholders even if they have garnered a profit.Capital appreciation or capital gain is another advantage of common stock investments.The shareholder can simply buy stock at certain price and then sell it at an appreciated price for a profit.The reverse, however, presents a disadvantage in that shareholders can lose money if the stock depreciates in value.Lastly, an owner in a company's common stock is entitled one vote per each share owned on issues related to company management and business structure.
Preferred Stock
Preferred stock differs mainly from common stock in that it is much more stable but doesn't offer as much potential for great returns.The chief advantage is that preferred stock owners are guaranteed dividends that fall in line with market interest rate levels and not company performance, like that of common stockholders.In the event that a company liquidates, preferred stockholders are the first ones to receive any company assets (before common stockholders) left over after company debts have been paid.Unlike common stockholders, owners of preferred stock are not entitled to any voting rights on company issues.
Investment Philosophies
Value Investing
This is the method that is frequently employed by investment tycoons Benjamin Graham and Warren Buffett.Since the 1960's, Buffett's investments have generated almost a 22% return, doubling that of the average return of the market over the same time period.The concept behind value investing lies in looking for subtleties, whether it be in the company's business structure or day-to-day operations, that give the company value or future growth potential not seen in the present.This is known as looking at a company's intrinsic value.Oftentimes an investment made on this philosophy is done so without regard to how the market is currently doing.Using this type of investment strategy requires great skill since you must identify underlying intangible factors that suggest the company in question is undervalued.
Robert Kiyosaki’s 20-10-5 Cycle
This is another investing technique that author and successful real estate investor Robert Kiyosaki discussed in his book Who Took My Money?Kiyosaki suggested that markets operate in various cycles and that one can use this method to anticipate the rise and fall of these markets.He notes that every twenty years, the stock market is on a high and one can usually expect above average returns on their investments.Every ten years, the commodities market (gold, silver, etc.) is the dominant player.Lastly, he pointed out that every five years a major crisis would occur greatly affecting the markets.Based on his theory, right now is an excellent time to jump into the stock market.The last major catastrophe we had that affected all markets (especially commodities) was that of Hurricane Katrina in 2003.Although this method isn't an exact formula for success, it can be used as a tool for gauging when to buy, hold or sell securities that you own.
"There are admirable potentialities in every human being. Believe in your strength and your youth. Learn to repeat endlessly to yourself, 'It all depends on me.'" -Andre Gide (1869 - 1951)
While there are many people getting rich by playing the stock market, there are also many who are losing it all. Many analysts are looking for the "Next Big Thing" in the stock market. I constantly read online articles that ask about the "Next Google" as if being rich is the only way that is going to define happiness in life.
The ironic thing about this is that even if you did happen to stumble across the "Next Google", it would not necessarily make life happier. Sure, you would have more money, but what about all of the new "family" members you would get begging for a dollar, or how about all of the taxes you would have to pay on the capital gains? Isn't there a better investment that would not carry the same burden when it is time to cash out?
Well, I have a secret for you, there is an investment that carries a GREAT return that you do not have to pay taxes on and that you probably would not mind sharing with others. Ok, you ready...the investment is...
YOURSELF
Yes, we are our best investment. Whether we realize it or not, our "stock" affects the overall population just as a regular stock affects the economy. In our current economy, when big mortgage companies like Fannie Mae and Freddie Mac suffer, many other stocks share the same fate.
In everyday life, you can simply meet someone (with high stock) who lets your jump in front of them while in the line at a store because they have noticed that you had one or two items and they had twenty. This in turn may motivate you to let someone in front of you while driving home from the store, continuing the cycle of raising the population economy. This principle is commonly referred to as "Paying it forward". (Link to Pay It Forward from wikipedia)
In short, our stock is contagiousand affects our environment and the people around us. When you smile at someone, there first reflex is to smile back. So give yourself a new reason to smile by increasing your "stock" price. To increase this price, I recommend investing in the following things:
Investing in your health
Investing in your knowledge
Investing in your experience
Investing in your future
It is very important to learn that we must take care of ourselves. By investing in in these key parts of our lives, we will see our self-worth grow exponentially. In turn, we can "pay it forward" to someone else and help them increase their self-worth also.
With this situation being a win-win for everyone, what is holding you back?
Stay Disciplined!
P.S. - This is going to be the beginning of a multi-part series in regards to"Investing in Yourself", stayed tuned for more articles going into more detail about how to invest in yourself.
This article is not geared towards personal finance but rather to opportunities for finance undergraduate and pre-MBA students. There are still many useful resources provided in this article for personal growth and development to professionals so I encourage all to read.
So I happened to have stumbled upon a gold mine for finance undergraduate and pre-MBA students by way of a friendly email. Not only do you get to attend free webinars from prominent figures in leading corporations, access to a large job bank and many other resources all for the pricetag of FREE.
At first, I was honestly skeptical because opportunities like this seem too good to be true. However I attended my first "Toigo Talk" on Wednesday and was literally blown away. The Toigo Foundation secured a vice president from Bank of America to give a presentation about "Corporate Culture". The presentation was very informative in regards to the cultural atmosphere at Bank of America (which can probably be applied to many other corporations). Of course Bank of America made a plug to recruit more talent for their company at the end of the presentation, but all in all, a small price to pay for some very valuable knowledge.
The structure and organization of the presentation was superb. The webinar started on time and the facilitators encouraged participation from the group by holding question and answer session with the Bank of America Vice President. It is not very often do you get a chance to ask questions to many prominent figures in corporate America and this particular presentation gave one the outlet to do so.
So, without further delay, I would like to present to you...
http://www.ready-for-finance.com
Below is a short summary of the organization provided from a representative of the foundation:
======================================================================== The Robert Toigo Foundation (founded in 1989) is a national organization committed to preparing exceptional minority pre-MBA and MBA students to enter the field of finance and leverage their academic and professional roles into future positions of leadership in the global economy. To ensure that developing finance professionals receive access to the resources that will help them succeed, the Foundation created ToigoTalks™, an undergraduate initiative that cultivates talent at an early stage by providing active outreach, knowledge-building support, and guidance through a series of on-campus presentations, educational networking events, sponsor-hosted webinars, and a resource-rich website. ========================================================================
I encourage taking advantage of this resource because there are not many foundations around like it. If you have any comments to share about your personal experience with the foundation, please leave them below.
So, for those who are unfamiliar with the story of the Tortoise and the Hare, below is a version of the story found on Wikipedia:
------------------------------------------------------------------------------------------- The story in extended version
Once upon a time a hare saw a tortoise walking slowly along and began to laugh and mock him. The tortoise challenged the hare to a race and the hare, thinking himself the fastest animal around, accepted. They agreed on a route and started off the race. The hare shot ahead and ran briskly for some time. Then seeing that he was far ahead of the tortoise, he thought he'd sit under a tree for some time and relax before continuing the race.
He sat under the tree and soon fell asleep. The tortoise, plodding on, overtook him and finished the race. The hare woke up and realized that he had lost the race.
(Click here for a direct link to the story cited in Wikipedia)
At first glance, you might be wondering why I am referencing a childhood fable in regards to personal finance. Well, when we look a little deeper, we actually see some very important principles we can apply to our personal finances.
When you are doing the right thing, you may be considered "different".
Just as the rabbit mocked the tortoise for walking slowly, you will find as you embark on your journey to financial freedom that many others will question your intentions and abilities.
Many people have a false sense of fulfillment from buying stuff. They may question your happiness especially if you do not buy unnecessary "things" to fill a void.
Making the choice to secure your financial future may not be a popular choice although it is the right thing to do.
All that glitters is not gold.
Many people who seem to have "everything" also have a huge amount of debt to go with that "everything".
Although they may seem happy and care free today, there will come a time when the debt has to be repaid or emergency funds are needed and their emotional state will change.
Slow and steady wins the race.
Unfortunately, there are not too many ways to "Get Rich Fast". Sure you could hit the lottery or have a really rich uncle that decided to leave his whole inheritance to you after he passes, but what are the odds of that happening.
Following sound financial principles have been proven to provide financial security in both good and bad economic times.
Over time, compound interest works wonders in building future wealth. The earlier you start, the better. (for tips to retire a millionaire, read this)
So yes, I really extrapolated a deeper message out of this children's fable, but these ideas need to be brought to the forefront. David Ramsey said it best when he said "Live like no one else today, so you can live like no one else tomorrow". Securing your financial freedom is not an easy road to go down, but once you reach your destination, you will look back and realize that it was worth every single step.
I could only imagine that the Hare, waking up to find that the tortoise had already crossed the finish line, was in a state of disbelief and shock. How could he let himself get to the point where he lost the race although he was thought as being the uncontested winner of the race. I would say the same thing about those who live in the "now" without any savings or investments for their future.
So which one are you going to be, the tortoise or the hare?
The Pamplona Finance Group aims to educate and motivate you to take control of your personal finances through our wide range of products and services. We are fueled by an unrelenting desire to see you triumph in the pursuit of financial freedom. It is our sole mission to assist in cultivating your enlightenment to ensure lifelong financial empowerment.
Posts
