Wednesday, 21 August 2019

7 signs you're building wealth faster than you think

  • If you're maxing out a retirement plan and being mindful of your investments, you may be on the fast track to building wealth.
  • To be sure, most people don't get rich overnight. But, if you avoid high-interest debt, are focused on increasing your income, and have clear goals and a plan to achieve them, you're doing better than you think.

You have to commit to building wealth — it rarely happens by accident.

But if you're mindful and deliberate about saving, investing, spending, and earning money, you may be building wealth faster than you think.

Below, seven signs you could be rich sooner than you realize.

1. You max out your retirement accounts every year

IRAs and 401(k)s are two of your greatest allies in setting yourself up for a comfortable retirement.

If you can afford to put the full $19,000 into your 401(k) this year — or you're moving closer to that limit — you're accomplishing a few things.

First, you multiply your earning potential in the market. Second, if your company offers to "match" your 401(k) contributions, you score that free money. And lastly, you shelter a sizable chunk of your income from income taxes (you'll pay those taxes later, but for now your money grows tax-free).

You can also contribute up to $6,000, or $7,000 if you're over age 50, to an IRA in 2019. The tax savings are set up differently than a 401(k), but the fundamental strategy is the same: The more money you put in the market now, the more you stand to earn.

2. You're thoughtful, but not obsessive, about your investment choices

If you've made thoughtful choices about where to invest the money you put into your 401(k), you're head and shoulders above the rest.

Too many people make the mistake of treating their 401(k) like a savings account and don't touch the money once it's in there, certified financial planner Eric Roberge previously told Business Insider.

Some 401(k) plans have a fine default investment selection, but you should always double-check to make sure it matches your own time horizon and risk tolerance, Roberge says.

You're in good shape so long as you choose investments that diversify your portfolio — i.e. a mix of stocks and bonds — and don't levy too many fees. Roberge recommends choosing either an all-in-one target date fund, which automatically rebalances itself, or building a portfolio of individual funds that provide appropriate diversification.

Checking on your asset allocation periodically to ensure it matches your overall risk tolerance is smart, but obsessing over the details could easily lead to emotion-fueled mistakes.

3. You're focused on the 'big wins'

Spending less than you make may be the golden money rule — but it's not the only rule.

Yes, it's important to cut your spending "mercilessly" on the things that don't add value to your life, says financial expert and bestselling author Ramit Sethi. But people who are good with money know that $2 here and $10 there won't make you rich, he says.

"There are a few Big Wins in life where — if you simply get them right — you almost never have to worry about the small things. If you can focus on the 5-10 Big Wins, rather than 50 little things, you can have an insurmountable edge in life," Sethi says.

For example, paying down debt, saving automatically, negotiating a higher salary, and investing early will have a much greater impact — and in a shorter time frame — than forgoing your morning coffee or weekly brunches.

4. You don't keep too much cash

If you understand the power of compound interest, chances are you never keep more than you need in cash or sitting in a checking account.

The best way to multiply your money is to invest it in the market, but that's not always an option. You can still grow the money you need in the short-term by storing it in a high-yield savings account or certificate of deposit (CD).

Any savings account or CD with an interest rate above 2% is worth considering. At the very least, your money won't lose value to inflation. At best? You'll boost your savings by a few hundred dollars, with zero effort required.

5. Your income is higher than last year, but your spending hasn't changed

If you're bringing home more money than you did at this time last year, congrats! That's a huge sign of progress, particularly if you haven't increased your spending along with it.

Whether you scored a raise, landed a better-paying job, or created a second or third income stream, increasing your earnings is a form of leverage that can never be exhausted.

"If you can take the cap off of that and increase your income — it's not always easy to do that, which is probably why people don't pay attention to it — but if you can do that, it gives you a lot more room to both spend and save," Roberge said on an episode of his podcast, Beyond Finances.

6. You have no high-interest debt

Consumer debt is a proverbial wealth killer.

The stock market returns an average of 7% to 8% each year, adjusted for inflation. Meanwhile, the average credit card charges an APR of 17%. Carrying a balance at that rate would mean you have to invest twice as much money just to break even.

The bottom line: It's not worth it. When you avoid high-interest debt, you can optimize each and every dollar you have coming in.

As Robert Kiyosaki writes in the personal finance classic, " Rich Dad Poor Dad," "Most people fail to realize that in life, it's not how much money you make. It's how much money you keep."

7. You have financial goals and a plan to achieve them

There's no problem with aiming high.

But if you have a road map to getting there — and you actually put it into action — your chances of achieving your goals increase greatly.

You don't have to seek professional help for managing your money or coming up with a plan, but it could be worth it if you're feeling stuck. According to a Northwestern Mutual report, people who work with a financial adviser are more likely to know how to balance spending now and saving for later; set specific goals and feel confident that they will achieve those goals; and have a plan in place to weather economic ups and downs.

Tanza Loudenback Aug. 17, 2019

Thursday, 15 August 2019

The Biggest Lie In Investing That You Believe In | TEDx Talk

"Be greedy when others are fearful."  Warren Buffett

"The way to MAKE MONEY is to buy when blood is running in the streets."  John D. Rockefeller.

So, how to PROFIT from a or the next crisis?

If a hurricane storm (OR FINANCIAL STORM) was heading your way, what would you do?



There are 2 types of information:
1.  Information for the MASSES, and
2.  Information for the CLASSES.

Here is the lie:  "The economy is doing better, so the stock market should do better, too."


There is NO CORRELATION between the economy and the Stock Market!

Warren Buffett does NOT waste time thinking about the economy when investing:

  • GDP
  • Unemployment,
  • interest rates,
  • housing numbers,
  • bankruptcies.

Peter Lynch says:  "If you spend 13 minutes thinking about economic forecasts, you have wasted 10 minutes."

Stock Market vs. Economy

In year 2009, there were a lot of negative news around and everybody hated stocks and dumping them.  There was blood in the street.  But at that time, the insiders (the classes) were buying.  At the peak of unemployment in 2009, the stock prices gone up 60%.

What is REALLY going on?

There are about 20 funds that do 80% of World's trading.
They have between $50 - $100 billion under management.
They employ smartest individuals to figure out what the economic trends will be (e.g. unemployment).
Example:  if these Funds believe that in 3 month, job figures will improve, they will decide to buy (& vice versa).

What to buy?

We only want QUALITY STOCKS.

Would you rather buy a BENTLEY at a 75% discount to a KIA at the same discount?


= Quality Stocks

1.  Solid earnings growth
2   Undervalued
3.  Cash rich
4.  Low Debt
5.  Growing sales.

Examples: Apple, Microsoft, Intel, Coca Cola, Walmart, Rolls Royce, Caterpillar

So WHEN do we buy them?

We want to buy our stocks when NOBODY wants them.

When are stocks hated, feared and unpopular ...?

Recall what John D. Rockefeller said, "The way to MAKE MONEY is to buy when blood is running in the streets."


To invest successfully, you must do the psychologically impossible ...

And this is the hardest part.

BUY .. when everyone is afraid.

SELL .. when others are excited with greed.

Monday, 5 August 2019

Property counters: How are shareholders rewarded? How exciting are property counters in terms of investment returns?

Property counters

1. Land held for development.

2. Land being developed and properties for sale.

3. Investment properties held for rental income.

How are shareholders rewarded?

After successful development and realisation of profits from the projects, the property counter may choose to reward the shareholders by paying half their earnings as dividends.

The investment income from properties held as investment can also be partially disbursed as dividends.

[How exciting are property counters in terms of investment returns?]