Patient and Disciplined Saving

Keep An Eye On Your Investments

As a small investor you should always be focused on the long-term. You should work on developing your patience and discipline so that you are not panicking at every bit of bad news that comes out and therefore making emotional decisions that are probably going to hurt you more than help you.

Rather, trust that you made an investment for the right reasons and are in it for an appropriate amount of time. I use that phrase rather than a generic long-term because not everyone has the same definition for long-term in regard to every one of their investments. Not every single investment needs to be held until cashed out in retirement. There certainly may be other reasons to sell well before then.

Yet, as a small investor our time horizon needs to be substantial, otherwise you are a trader and that is definitely not my area of expertise.

That said, just because the time horizon we are looking at is significant doesn’t mean that after the investment is made that we should then ignore it. No! You should still look at it on at least a weekly basis. I personally will look at my portfolio at least every other day.

I make very few changes annually to my portfolio. However, I look at it a lot not because I want to see the daily ups and downs, but rather I want to stay attuned to any changes of information that could affect that investment.

Examples include accounting issues (HUGE Red Flag), changes in market conditions, changes in corporate strategy, and changes in company products among other things. I’ve had all of these issues to consider. A pharma company had a major drug recall, a tech company had a major new product fail, an aircraft company had a new aircraft that crashed because of their design. Those are all reasons to reconsider that investment, but you have to be paying attention.

You also have to be aware of how the company is reacting to new market conditions. A famous example is how the introduction of the automobile crushed the buggy whip/carriage/saddle industry. Those were large companies that seemed solid right until they weren’t.

Therefore, you need to pay attention to your investments! Don’t let yourself be caught off guard thinking that you never need to do anything until retirement.

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Additionally, check out this very cool podcast on Spotify called Gen X Dad and his Gen Z Teens. Entertaining!

Finally, check out some pretty cool music on YouTube if you have a few minutes: Introduction , Mosh, Smoke, Watch Out , and First Day Out. Enjoy!

Watch Out For Scams!

A comfortable retirement in our later years starts with investment money in our current years. Watching money grow as it compounds is awesome but it is not a quick process. It is in our nature to want to speed that process along.

However, scammers and frauds count on these feelings of impatience to try to separate you from your money. It is essential to know how to spot a scam before you give any of your hard-earned money away.

Below are some of the red flags that are associated with investment scams:

A promise of a high return with minimal risk. Risk versus return is foundational truth of investing. The greater the return the greater the risk. If you are being told otherwise it is likely a scam.
The investment was unsolicited. If you are offered an investment that you did not inquire about but rather showed up out of the blue you should proceed extremely cautiously. If it was such a great deal they probably would have kept it to themselves.
They are using aggressive sales tactics. Scam artists will always be aggressive to get you to close the deal. They’ll refer to the “investment” as the opportunity of a lifetime or tell you that you are missing out by waiting. If you feel pressured to make a decision you should walk away.
They are asking for non-standard payment methods. Most investments are handled by check or bank transfer to a U.S.-based account. Scams will tell you to wire money to overseas accounts or use unconventional payments like gift cards or crypto. These payments leave you little to no recourse to get your money back.
They are not registered professionals. A big portion of investment fraud is committed by unregistered persons. Avoid people trying to get at your money who can’t show some sort of professional license.
No one else is involved in the investment. Most investments will also include accountants, law firms, and or brokerage firms. If no one else is involved or you are told not to contact any other party that is a big red flag.

So, be very careful out there and don’t get greedy. There are big rewards out there if you stay patient and disciplined!

Additionally, check out this very cool podcast on Spotify called Gen X Dad and his Gen Z Teens. Entertaining!

Finally, check out some pretty cool music on YouTube if you have a few minutes: Introduction , Mosh, Smoke, Watch Out .

Buying Opportunities Are On The Down Days!

Buy low and sell high! Easy to say and really really hard to actually do. We love to watch our investments go up and hate to see them go down. It is well documented that people often do the exact opposite of what they should do when it comes to buying and selling stocks. They get very excited when the market is going up and that makes them want to buy. Then when the market goes down they panic and sell at the worst possible time. Hence, they end up buying high and selling low.

How do you change that? First, don’t try to time the market. As a retail small investor you will always lose at that game. Rather, simply follow what the title says and you will mostly be fine. It will at a minimum keep you from buying and selling at the worst extremes. Just be disciplined enough to enjoy the up days in the market through observation if you are looking to buy knowing that there will be a down day soon where whatever it is that you want to buy will be at a better price. Do the opposite if you are looking to sell. Simple as that.

Finally, just in my investment timespan I’ve watched the stock market go from around 4000 to over 40,000. Betting on the U.S. has been a fantastic bet. Things are actually only looking brighter for the U.S. going forward because of geography and demographics. Get into the market but do it with a guiding principle to do your very best to buy low and sell high.

Additionally, check out this very cool podcast on Spotify called Gen X Dad and his Gen Z Teens. Entertaining!

Finally, check out some pretty cool music on YouTube if you have a few minutes: Introduction , Mosh, Smoke, Watch Out , and First Day Out. Enjoy.

A Good Financial Literacy Book For Teens!

I’ve recently come across a good financial book for teens titled, A Teenager’s Path To Becoming A Millionaire, by Dennis Goode.

It is simple, clear, and less than 100 pages. I like that it gets right to the point about the important financial concepts that young people need to know.

The heavy emphasis on starting to save early is also a highlight. Making the power of compound interest begin working as early as possible needs to be constantly shouted from the rooftops.

This book will make for a nice gift to recent graduates or to help start a conversation with teens about money. The earlier that they become educated the better off they will eventually be!

Additionally, check out this very cool podcast on Spotify called Gen X Dad and his Gen Z Teens. Entertaining!

Finally, check out some pretty cool music on YouTube if you have a few minutes: Introduction , Mosh, Smoke, Watch Out , and First Day Out. Enjoy!

Your Money Needs to Last Longer!

The average lifespan for all people has been going up. This is due to better technology and huge advancements in health care. Despite the blip downward caused by the Covid pandemic, we are all living longer.

That is great news! However, it comes with its own challenges.

A big challenge is not having enough money once you retire. The fear of running out of money after retirement is a real fear for many people. And, while many governments have pension schemes for older people, it often is not enough on its own. Most government pension schemes are based on augmenting money that one has saved over their lifetime.

Most government schemes are also not adapting to the realities of the demographic future. Countries are aging rapidly putting pressure on these public schemes in the form of benefits, but are not supported by the number of current workers that is needed to maintain the benefits. These public pension schemes are not going to continue in their current form.

Therefore, you have to do more to ensure a good retirement for yourself. I recommend on this blog to get started early and treat your retirement preparation as something close to a job. You must pay attention and be an active part in preparing for your future as an older individual. There are significate tools like compounding interest that are incredibly powerful, but they take time. The earlier you can start the more powerful they become and the harder they will work for you.

So, do not delay. Get thinking about your retirement and your retirement goals and start being proactive in shaping your own future. You will not regret the time and effort that you put in right now.

Additionally, check out this very cool podcast on Spotify called Gen X Dad and his Gen Z Teens. Entertaining!

Finally, check out some pretty cool music on YouTube if you have a few minutes: Introduction , Mosh, Smoke, Watch Out , and First Day Out. Enjoy!

Dividends

All small investors should be familiar with dividends. I will actually also go out on a limb and say that small investors should love stocks with dividends.

A dividend is a distribution of a portion of a company’s earnings to its shareholders. The amount is determined by the company’s board of directors. Companies that pay dividends normally do so at a regular interval. The most common interval is quarterly.

The dividend yield is the amount of money per share and is expressed as a percentage of a company’s share price. For many years as the Federal Reserve kept interest rates low, many many company dividend yields were a place to receive a better rate on your money than a bank savings account despite having to deal with stock price risk.

A dividend overall is a reward paid to the shareholders for their investment in a company’s equity. These payments, which typically come from net profits reflect positively on a company and help maintain investors’ trust.

A high-value dividend can indicate that the company is doing well and is generating good profits.

A company with a long history of dividend payments shows strength. It can also show that a company has a stable cash flow and is generating profits. With a large enough position it can also provide investors with recurring revenue. Many countries also offer preferential tax treatment to dividends.

Therefore, there are many things to like about dividend payments from a company and every small investor needs to keep them on their radar. They can be a great tool to help build wealth!

How to Think About A Purchase

I just watched a video on Youtube from the Erin Talks Money channel that I wanted to highlight. She brought up an alternative way that new investors should think about purchases.

Overall, it is about focusing on the potential tradeoff between a purchase made today versus what that money, if invested instead, could turn into in the future. She told a story about how listening to Warren Buffet make this point was a eureka moment for her.

What Warren Buffet said was that every dollar that we can invest today can turn into $100 in the future. For example, if you purchase $10 worth of goods or services right now you are likely giving up $1000 dollars down the road. That is a profound way of putting needs versus wants into perspective.

I do appreciate that there is no guarantee that every $1 will turn into $100, but the math is very solid that it will definitely grow. And, the longer you can let compound interest work for you the more that it will grow. That is really powerful.

So, get started today and know that every little bit that you can put into an investment portfolio will absolutely make a difference! It very well could grow to a $100/$1 ratio. Again, the math works. You just have to get stated and be patient and disciplined.

Don’t wait!

Finally, check out some pretty cool music on YouTube if you have a few minutes: Introduction , Mosh, Smoke, Watch Out , and First Day Out. Enjoy!

Keep Track of Your Money!

A boss of mine years ago explained to me that if you want to effect change in some way the most powerful way to do that is to track whatever it is. That is an incredibly powerful idea and I wholeheartedly believe in it. I attempt to use it in many aspects of my life but by far the most powerful is in the realm of personal finance. I’ve been tracking my money for years now and it has been a huge help and advantage.

I believe that everyone intuitively knows that having a budget is very helpful and would help them. However, most people shy away from a budget because it can feel overwhelming initially the future is unclear. I get that. For that reason I advocate that you simply start by looking backwards and simply track expenses with a basic spreadsheet. I also advocate making it yourself rather than using something that someone else created as that will never completely fit you and your needs. Also, break out your categories however you want. The major reoccurring bills are easy but amount of pop-up nonrecurring costs can be frustrating. I have a miscellaneous column for all those things that don’t fit into nice rows. The overall point is that, contrary to some personal finance folks, not every dollar needs a name. The important thing is to just get started tracking your money.

Once that happens, then it will grow. You will gain insights are what is happening to your money and at some point you will start projecting into the future. That is very powerful and give you a much fuller sense of control. It will also help you plan for the future and help you execute that plan. You will not be disappointed with the time spent doing this.

Additionally, check out this very cool podcast on Spotify called Gen X Dad and his Gen Z Teens. Entertaining!

Finally, check out some pretty cool music on YouTube if you have a few minutes: Introduction , Mosh, Smoke, Watch Out , and First Day Out. Enjoy!

Always Keep an Eye on Your Investments!

woman drinking coffee and looking at a laptop

Yet, as a small investor our time horizon needs to be substantial, otherwise you are a trader and that is definitely not my area of expertise.

Therefore, you need to pay attention to your investments! Don’t let yourself be caught off guard thinking that you never need to do anything until retirement.

Additionally, check out this very cool podcast on Spotify called Gen X Dad and his Gen Z Teens. Entertaining!

Finally, check out some pretty cool music on YouTube if you have a few minutes: Introduction , Mosh, Smoke, Watch Out , and First Day Out. Enjoy!

Standard and Poor’s 500

The Standard and Poor’s 500, or as it is more commonly referred to S&P 500, is a stock market index that tracks the performance of 500 of the largest companies listed on stock exchanges in the United States. It is one of the most followed indices and accounts for approximately 80% of the total market capitalization of U.S. public companies.

The index traces its origins back to 1860, however, the version that we see today really came about in 1957. It was at that time that it was expanded to 500 companies.

A committee assesses a company’s merit in order to be added or subtracted from the index. The committee uses criteria like market capitalization, public float, volume, and domicile to assess company’s inclusion or exclusion.

How this index moves is a very good indicator of how the overall U.S. economy is doing. Again, as it represents approximately 80% of public companies, when it is up the economy is typically growing and when it is down the economy is struggling.

There are many investment products that simply track this index and I’m a big believer in low cost options that do this. At a minimum though, you should pay attention to this index as a small investor. It will help you.

Additionally, check out this very cool podcast on Spotify called Gen X Dad and his Gen Z Teens. Entertaining!

Finally, check out some pretty cool music on YouTube if you have a few minutes: Introduction , Mosh, Smoke, Watch Out , and First Day Out. Enjoy!