Patient and Disciplined Saving

Watch Out For Investment 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!

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.

Track 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!

Opportunities are on 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 39,000. 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.

Savings Rate Goal

Getting the magic of compounding interest to work for you is the goal of savings. However, it takes time. It is not quick on its own.

There are only a couple of ways to speed it up. One is to get a higher interest rate, but that is not something that you can control. Also, higher rates imply higher risk so rates alone are not necessarily the answer. You should, based on your risk tolerance, work to get the best rate that works for you. Even then however, government and central bank policy can force rates down like they have for over a decade after the 2007/2008 financial crisis.

Savings rate is another way to speed up the effect of compounding interest. You also have more control over your savings rate than you do anything else. It takes patience and discipline but having the highest savings rate possible for yourself is a great way to build your investment portfolio and your overall wealth. Your goal should be 20% of your income. That is a big pull but it is possible. Also, if you are hitting that goal some of the pain is removed by being able to actually see the growth happen. You will definitely see results when you are hitting a 20% savings level.

So, work your way to that savings level and watch the growth happen. You can absolutely do 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!

An Eye Opening Table for Me!

When I was 22 and about to graduate from college I attended a seminar about where to place investment money. A table was shown early in the presentation that I can say literally changed my life. It has been the defining philosophy of my approach to money.

The table was made up of five columns. The first column was the “Age” column starting at 18 and going all the way down to 65. The next two columns were “Annual Investment”. The last two columns were “Investment Return Total”.

Overall the columns represented two people. The first person began investing $2000 a year starting at age 18 and stopping after 10 years at age 27. From that point, after an overall investment of $20,000, that person never put in another dime.

The second person starts their investment of $2000 at age 27 and invests every year until age 65 for a total of $78,000.

With an average of an 8% return the person with the most money at age 65 was the first person who started at age 18.

In fact, despite all the money that the second person puts in every year, they are never able to catch person number one.

That is the power of compounded interest.

I remember seeing that and being completely blown away. I had absolutely zero money saved or invested at that point, but I resolved at that moment that I was going to get started immediately because I was already four years behind.

I also understood from the table that the absolute most important money was the money that was put in early. As many of those dollars that I could put in were the ones that were going to be supercharged and make the difference 40 years down the road.

I can say that overall, by any measure, it has been successful. I’m not quite 65 yet but I’m well ahead of that table and if what I read online is correct I’m ahead of most of my peers.

You can find the table that I talked about online or it is easy enough to create it on your own with a spreadsheet program. I actually encourage you to do it.

If you are behind, don’t get down. It is never to late to start saving. You do what you can. But pass along lessons, especially to those who are younger. You won’t become fabulously wealthy, but you will have security and peace of mind.

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!

Target Date Funds

While I am not personally a fan of Target Dated Funds, they do have a place for people just starting out investing or people who are too busy or lack the interest to follow the market on a regular basis. They are definitely better than doing nothing at all.

Target Dated Funds are designed and structured to maximize the investor’s returns by a specific date. They are built with a mix of stocks, bonds, and cash that changes over the target time horizon. The intent is that they build gains at the start and the early years by focusing most of the fund on riskier growth stocks and then move towards a heavier weighting of bonds and cash towards the end of the timeframe to lock in the gains.

The philosophy is sound and the intent is good. These funds have given people an easy to understand product that they can invest in and mostly forget about.

My issue with these funds has to do with their increased cost relative to just doing the exact same thing on your own. In most cases it is very easy to replicate what these targeted funds are doing with other available funds. The best example to me is the U.S. government TSP fund portfolio. There, the Target Dated Funds are literally made up of the individual funds and you can mimic the exact fund makeup, with a lower cost, if you simply spend a few minutes of your time.

I also just think that you will get better returns along with a lower cost if you stick with large cap index funds. There your returns can be maximized to such an extent that you may never need to eventually transition to a much more conservative portfolio. That is my plan. I want my growth to be so high that I never need to put most of my portfolio in bonds or cash. So, Target Dated Funds don’t fit my investment philosophy.

But, as I said above, if you don’t want to spend the time or energy to monitor and track your investments on a regular basis, then Target Dated Funds are not a bad option. But realize that you are giving something up both in lowering your costs and increasing your gains over the long term.

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!

Buy On The Down Days

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.

Save the World One Search at a Time!

I’m always looking for ways that I can be more environmentally conscience.

A while back my oldest child told me about Ecosia, a search engine that uses a significant portion of their profits to plant trees around the world.

I try to use it as much as possible.

I think of it as an easy way to donate towards an organization that is doing something that I can get behind.

I’ve recently come across another organization that does the same thing but puts their profits towards cleaning plastic out of the oceans.

It is called OceanHero.

It works every bit as good as any other search engine I’ve used and gives me another way to support a cause that I believe in.

So, consider using OceanHero for a least some of your internet search.

My plan is to attempt to use both OceanHero and Ecosia.

I’ll use Ecosia on odd days and OceanHero on even days.

That is easy to remember and will balance my support over the long term.

Consider how you might use it in your personal life.

It is a really easy way to support a cause with something that you are already doing.

As always, don’t forgot that you can grab some great books for the young reader in your life to get them started on great reading habits. You can find them on Amazon, The Desert Fairies of Oylara, The Rainforest Fairies of Oylara, and The Artic Fairies of Oylara.

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

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

Investment Scam Red Flags

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 , and First Day Out. Enjoy.

Earnings Per Share (EPS)

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.