Patient and Disciplined Saving

Market is High! Consider Selling?

The DOW and S&P 500 are at very high levels right now. If we are attempting to always “Buy low and Sell high”, right now is a definitive moment when we should consider locking in gains on certain investments.

Which investments should we consider selling? Look at those investments that have run up rapidly, or are also at record highs simply along with the market, or don’t seem to have much more runway based on their current circumstance. Those investments are likely to go down as the market rotates lower so are good candidates to lock in gains.

Now, in fairness, as small retail investors we should look at our investments over a very long time horizon. I personally am not looking to sell anything right now. However, I am reviewing all my investments to determine if a move needs to be made.

Too often though people get excited when they see the market pushing higher and think that it is never going to end. They don’t even consider selling, if appropriate. But, markets go both up and down, and all too often, when the market turns, people panic and sell during the downturn.

So, what I have found as a more useful saying to remember is “Sell on up days and Buy on down days”. And, if the market is hitting a record, you need to think about making moves.

On another note, if you are looking for a gift for the young reader in your life, you can find some great children’s books on Amazon. Just go to these links The Desert Fairies of Oylara, The Rainforest Fairies of Oylara, and The Artic Fairies of Oylara and order them.

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!

Floating Stock

As a small investor it is important to understand what floating stock is. It refers to the number of shares available for trading of a particular stock.

Low float stocks are those with a low number of shares. Floating stock is calculated by subtracting closely-held shares and restricted stock from a firm’s total outstanding shares.

A stock with a small float will generally be more volatile than a stock with a large float. This is because, with fewer shares available, it may be harder to find a buyer or seller. This results in larger spreads and lower volume.

The amount of a company’s floating stock may rise or fall over time.

Institutional investors will often avoid trading in companies with smaller floats because there are fewer shares to trade thus leading to limited liquidity.

Make sure that as you consider a stock to buy that you take a look at what the average volume and the float are.

As always, if you are looking for a gift for the young reader in your life, you can find some great children’s books on Amazon. Just go to these links The Desert Fairies of Oylara, The Rainforest Fairies of Oylara, and The Artic Fairies of Oylara and order them.

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!

Earnings Per Share!

When you are new to investing or trying to do a quick evaluation of a stock that you are not really familiar with looking at the companies Earnings per Share (EPS) is good to review. Bluntly, it will tell you right away if the company is making money or not.

Investopedia defines EPS as the company’s profit divided by the outstanding shares of its common stock. The higher the number the more profitable the company is considered to be. If the number is negative then the company is losing money.

Like all things though, that is a simplification and may be worth reviewing more. I normally look at the trend of EPS over several years. I want to see the number getting bigger over time. If the number is positive, but getting smaller, then it is trending less profitable. Also, a trend over time many help understand a single bad year or a new company that is growing. The EPS may be negative but if the trend is moving toward profitability that can signal a good opportunity to get in on a growing company.

Therefore, do a little homework and look for EPS trends over time to help you understand a companies profitability. In general stick with companies that have a positive EPS but it doesn’t take long to look a little deeper and evaluate the EPS trend that will often tell you more of the picture. Then you can make a better decision as to whether you want to invest or not.

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!

Annual Percentage Yield (APY)

When shopping around for interest-bearing bank accounts like CDs it is very important to understand the difference between disclosed annual percentage yield (APY) and the interest rate.

The two are similar but there is a difference between them. Understanding the difference will help you know how much of a return to expect on your deposits.

The APY reflects the total amount of interest you will earn on the deposit over one year with compounding interest. The interest rate is simply the rate at which interest is earned on the original amount. Therefore the interest rate will reflect a lower percentage.

APY will list a higher percentage, which is more useful, because it includes the compounded interest that is earned during the time period. The interest rate will simply show the simple interest over the same period.

Financial institutions are required to show rates as APY. However, they also usually show the corresponding interest rate. This can be confusing if you aren’t aware of the differences between them.

So, remember, when it comes to your savings in interest-bearing accounts it is more important to know the APY as that gives you a better understanding of the growth of your investment over the time period.

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!

Good Financial Literacy Book

I came across a book entitled How Money Works: Stop Being A Sucker by Tom Mathews and Steve Siebold.

It was actually given to my family by my wife’s coworker.

After reading it I definitely think that it is a great book for all young people and anyone else looking to add a little knowledge about money.

It is any easy read at just over 100 pages and not overly technical at all.

I finished it in less than a day.

While I’m happy that there was nothing new in it for me, I still really enjoyed it and am going to have my kids read it.

It is certainly a good introduction for people starting their independent financial lives.

I also think that it is a great place to start to find other areas of personal finance that interest you so that you can do a deeper dive to educate yourself.

To me it also reinforces the message that we have to start our children’s financial lives earlier because time is by far the most important thing that we have when it comes to money.

We don’t have to be perfect or take uncomfortable risks if we use time effectively!

So, check out the book and pass it on if you like it.

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!

Basic Rule Of Investing

Every investor and borrow absolutely must know and understand the Rule of 72.

The Rule of 72 is a simple math shortcut that can be used to quickly figure out the amount of time it will take for money to double at a fixed rate of interest. The way it works is easy. All you have to do is divide 72 by your interest rate and the result is the number of years it will take your money to double. For example:

72/1 = 72 years, 72/3 = 24 years, 72/6 = 12 years, 72/9 = 8 years

It is easy to see that you always want your money to grow at a higher interest rate. But the Rule of 72 shows how even just 1%-2% make a huge difference in how quickly that money will grow. Just going from 1% to 3% made the money double 48 years earlier!

So, shopping around for the very best interest rate that you can get for your savings is absolutely worth the time and effort. Simply sticking money is a low rate savings account as your primary savings investment is a dead end. A typical savings account that is paying 1% interest will take 72 years to double. That is not where you need to be!

But, there is more good news about the Rule of 72. It works in the reverse as well to tell you how much a higher interest rate is hurting you when you borrow. To find out how much your debt will double over time you simply divide 72 by the interest rate that you are paying. With the national average interest rate for credit cards in the ballpark of 20% your debt will double every 3.6 years (72/20=3.6). So, again, work just as hard at finding the lowest interest rate you can for your debt as you do for finding the highest interest rate that you can for your savings!

Finally, the Rule of 72 has one more useful feature. It can help you figure out the interest rate that you will need based on the number of years that you have left to save. You simply do this by dividing 72 by the number of years left to save. For example, consider if you are 30 and have $50,000 in savings currently. If you are planning to have $1,000,000 to retire at 65 the interest rate required for you is 2.05% (72/35 = 2.05%). So, the Rule of 72 is a pretty awesome thing to know!

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!

Gen X Dad and His Gen Z Teens Podcast!

If you enjoy listening to podcasts as entertainment, here is a new one to follow.

The Gen X Dad and His Gen Z Teens podcast takes a light hearted look at generational differences about all manner of topics. It explores everything from pop culture to finance to relationships and politics, but, only at a very shallow level and through generational lenses.

Check it out on Spotify or Apple Podcasts.

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!

Check Your Investments Regularly

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.

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!

Best Place to Invest

The longterm advantages of the U.S. make it the best bet in the world. It has advantages that have made it and will continue to make it the most powerful economy on Earth. It is large and has favorable geography and climate. It has a large educated population, good demographics, and abundant natural resources. Finally, add in a favorable economic system, the world’s preferred currency for trade, and large innovative companies that are not reliant on globalization due to internal consumption, and you have the place to invest your money for the future.

The rest of the world has so many challenges due to demographic pressures and a less than favorable geography that doesn’t meet all their needs. No economic challenger is going to come close to the overall economic dominance of the U.S. This is not a tough decision as to where to place most of your money as the U.S. is only going to get stronger as time goes on.

Bet on the United States!

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!