I stuck my head in the sand June 19th and just pulled it out today. Did something happen?


If I was in a good cash position to make some buys.....Monday had potential. :secret:

No that's not what I was trying to say. What I was saying is that the RETAIL investor -- mom and pop folks -- that contribute to 401K's etc -- tend to (as a group) stop investing or contributions or cut back on their contributions... in down markets. Doing exactly the opposite of what they should do.

The individual investor/trader (they're all the same - except for the holding period)... does the same. They buy on up days and sell on down days. The opposite of what they should do.

Yes you missed it -- WE all made a million bucks during that time frame.

Sometimes a guy just manages to get it right......


That post was dated JUNE 5th....




http://www.usatoday.com/story/money/...funds/2460831/

Does anyone have any wisdom on the Sprint merger?

My wife has had a few shares for awhile and now needs to decide if she wants to hold it or sell it. I haven't had much time to dig into the history or the 'word on the street' to know if the "post merger" company has any promise.

:headscratch:



The company I work for just went public today and had the big IPO day at NASDAQ. Hopefully, there will be stock options for employees next year. :popcorn2:

Randy

Randy --- Your decision is simple....

Do you think SPRINT is a viable cellular provider going forward. Or not.

If not -- then cash out and use the money to invest in something you think has more potential going forward.

If yes -- then let them exchange the shares for the new ones...


Here's my personal view.... or how you might find an answer. Go around to every friend you have and ask them who their cellular provider is...

Good call. I honestly didn't even think about those type of investors when I made my comment. I guess that's a good thing from the stand point of being programmed not to sell at the first sign of a hiccup. I was referring to the people that do know there are options and or methods of investments that will make them money or set them up for the rebound during a down period.

I woke up this morning thinking about what "investing" really is...

To most it's trying to game the system. Trying to buy "stocks" etc at one price and hope that when they want to sell - they're higher.

Here's what an INVESTOR should be focused on.

When you buy shares of a company - you are now a PARTNER in that company. Many of you own and operate your own small companies. You've not only invested your money - but you've also invested a great deal of your TIME. Maybe 15 or 20 years... You've been thru good times and bad and managed to survive and even prosper. STOCK investing is the same. Before you buy - ask yourself if you'd like to be a part owner (which is what you're going to be!) in this company. Do you like the products etc. Before you'd become a partner in a business - you'd hopefully understand what they do as well.... You'd never just blindly give someone your money because they asked you to "invest" --- hell no! You'd pester them with all kinds of questions. Cramer calls this "doing your work". When you do a modest amount of "work" beforehand - you'll feel better about your investments.

But here's the important part. When you think of yourself as a PART OWNER rather than "I'll buy some stocks"... you'll become a far better investor, and you'll be more likely to really enjoy the process thru the good and the bad.

You wouldn't put your money in your own company and then have a bad week or a bad month - and then just decide "I'm outta here" would ya? You'd only do that if you didn't really believe in the value of the company to begin with.... So don't become a partner in something you don't believe in to start with!

This reminds me of a friend in Seattle. We're both "boaters" and belong to the same club etc. We'd occasionally hook up on the water -- and the kids were the same ages etc. Eventually talk would turn to business and eventually that turned into a possible business deal. We were going to buy a city block - tear down the 1 story buildings - and put up a 4 story "mixed use" building - retail on the street level and apartments above. One day at lunch as we're getting into the "partnership" details (I was the bank - 51% - he was the managing partner - 49%) - he asked me. "Do you like pride of ownership or the depreciation and tax advantages of a building"? I said --- Pride of ownership. He said -- then our partnership wouldn't work out very well because I just want to cash flow buildings and then dump them within 10 years. He was right on! We wouldn't have made good partners at all! We had a nice lunch and that was that. Had we done the deal - I would have driven by and thought the building needed to be painted.... he would have let the paint peel off as long as we had full occupancy. I'd have gone crazy... I want to drive by and point the building out and say "I own that bad boy" and be proud of it (and make some money off it). We were polar opposites. We're still friends. I understand the way he wants to do business and he's quite well off... his method works for HIM. My guts would have been churning daily had we done the deal and I'd have been looking for a buyer for my "investment" and probably taken a loss.

Does that make sense to you guys.

That right there is true maturity not drivin by greed but savoy business practice. Most people in that arena would of tried to "work something out", when in fact, IT DOESN"T WORK!!.

Ya wouldn't of still been friends 5 to 10 years later, i've been told this many times in business "its just business", when i'm thinking, "ah, no, its just your greedy mismanaged bullsh!#".

Hard work continues to teach us lessons, I tell my employees when they "fail", ya didn't fail, you worked hard at something and the results were'nt what we wanted, but you learned from it, and education isn't free....

Hard work always produces results, just sometimes not what we expected.

Kinda off topic here, but i tell my clients and coworkers, "you don't go into Walmart and buy a reputation, you earn one, bad or good, they both come earned"

This morning I'm (as usual) watching the talking heads on CNBC... and again they're always blabbering about the same stocks... BLACKBERRY (BBRY) is one they just can't seem to forget... So as usual -- I decide to pull up the stock on Google Finance website just so I can "confirm" why I wouldn't be interested in listening to whatever they're talking about.

5 plus years ago all of my working professional friends had Blackberry phones - in fact - we jokingly called them Crackberries. If you were a lawyer etc -- you had one. But I noticed -- because that's the way my brain is wired (to pay attention to small details) that one by one - these folks were switching and their new phones were mostly iPhone - but the point is - they were buying anything but another Blackberry.

The chart is just awful --- regardless of what period you stretch it out to... so unless you bought it at it's IPO -- you're underwater in a major way.

Year to date you'd be DOWN 13% in a market that's UP 13% --- so your "loss" is even more dramatic - because while owning a loser you've also missed a gain in some other name.

I'm posting this -- not because it's so informational -- but to once again ask that as "investors" -- to pay attention to what you see and or feel about some business - or product - regardless of what it is. If you're a carpenter and notice that everyone used to use Makita -- and now all the saws and tools are Black and Decker... or vice versa -- those things (trends) can make you -- or loose you (if you're invested in the WRONG one!) money.

Let's say you own Home Depot or Costco or Wal Mart or Nordstrom or (pick a name/brand/product).... and you find yourself not going there anymore... Then you need to check your ownership - because you just might be part of a trend that you need to pay attention to.

Let's just pick on Apple because it's so obvious that there has been a major trend towards their products... if you looked around this Christmas and nobody got a new "iWhatever"... that would raise the hair on the back of my neck if I owned the shares. Or if you owned Faceybook -- and you notice there are fewer of your buddies posting and they've switched to using Instagram (I'm pulling these out of my you know what because I use neither). Just saying -- use your own "sense" for what's going on.

I did this/seen this with Apple. I knew it was "right around teh corner".. I knew they were going to take a hit. I own like $100 worth of apple from a purchase of about 6 years ago. I didnt sell it, really isnt worth the trouble at that price. But when Apple was pushing $700 I chuckled inside. I just knew it was only a short time before the wind left its sails. How did i know this? because *I* was tired of apple myself. It got "boring". No "ground breaking technology". They just keep polishing the same old turd. And I left Apple. I still have some of their stuff, its not bad stuff, it "always works". But, i need something more interesting. :)

How is Lowes doing? It seems like they do great in this area, and there aren't many Home Depot's at all. That is the trend here anyway.

I get this "judgement" from my kids.... they're the "out front" leading edge of what's hot or not in tech... and they still LOVE Apple. I don't own the shares. They're too expensive - just dollar wise - with too small of a dividend for MY portfolio.

That's a question you'd have to research for yourself... and for me -- since I shop at both... if I want "housewares" I might go to Lowe's -- if I want hardware or lumber I go to Home Depot. I own neither stock. I think as a "guy" I prefer Home Depot... but I seem to make more trips to Lowe's. Go figure.




As a stock --- Home Depot (HD) is killin' Lowe's (LOW) in the share appreciation department on a YEAR TO DATE basis... the only place they have any parity is ONE YEAR - otherwise HD has been the place to be invested.

Research has shown this is how it breaks down. Women shop at Lowes. Men shop at Home Depot. The stores, while similar, have a different feel to them on the inside. I personally shop at which ever has the cheaper price. Well, I used to anyway. Back in Georgia, they were across the street from one another. Here, I only have a Home Depot 65 miles away. I shop on Amazon now :D

I wish I had some words of wisdom to add to this thread.... but what I really hope is that some of you actually INVESTED and are now seeing what that's all about, and are happy that you did.

Had a WIN today.

Selected 2 stocks that I have been watching and used the low bid technique.
Picked up the one yesterday but then it went down so that was a bust. About even today. The other I put in must have came through after hours and automatically was up 0.70/share. An even + increase = WIN! Plus both have dividends! :headspin:

Lets hope they stay in the green...

Don't get caught thinking to short term. This is LONG TERM INVESTING. not day trading. Those two stocks will have their good/bad days. But what matters is where they will be 10 years from now, 20 years, etc. In fact, in the short term, you WANT them in the red. Then your getting a discounted purchase from your dividend payments.

On a good note, the market has picked up again (for my bunch). I'm back at +7% overall since Feb. :)

I am and I hope others are as well! Right now, I'm just biding my time and watching the changes the account is going through. I'm still thinking of adding more stocks to a different account with money I have in savings. We'll see.

Tesla Motors
 

I'm laying in my hotel room this morning looking out at Victoria harbor (B.C.). I drove the '32 up (and then took the ferry) for Deuce Days.... should be a good car show and there are 957 entrants... with the cut off date at 1951.

So as usual I'm reading anything "market related" and came across a decent piece on TESLA. Since it's both CAR and "Investing" related --- I thought it was worthy of a link.

I've been asked about investing in TESLA. My response has been -- I love the idea and the product.... but a guy sometimes has to interject abject business math -- with some stock market mindset and try to come up with an "investment". For me - the answer is no... but I'm the same guy that has never bought a share of Google either... it was too high priced at $400/500/600.... now that it's almost $1000. So obviously the market thinks better than I do. My point being -- sometimes you gamble and win -- sometimes you gamble and lose. With TESLA.... Who knows. We don't have a crystal ball. I tend to agree with the comment in the article that once the rich "green" / uber cool guys have bought their car.... there's not a market after that UNLESS ---- YES the "unless" ---- Tesla manages to come out with a more affordable version.... etc. Who knows. I don't.

Remember my "priced to perfection" posts... in order for a stock to maintain a price point that is super high... the company has to do everything spectacularly. One hiccup and you get slaughtered. The "fast money" shifts very quickly!

But ---- The car is spectacular (IMHO) which tells me that this company is quality. And people can make HUGE money by being "early" and catching a 1000's fold return.

http://www.thedetroitbureau.com/2013...nalyst-report/


EH!!

I don't know if it's been covered but I thought I'd post it either way.

Taking stock in your personal finances is key to investing. Where is the money going? I've had a spreadsheet with hard costs for quite some time but recently I broke it down and spend every penny before it comes through the door. The hardest part is the discretionary spending. Look at your bank statements over the last 6 months and it will make you sick. Allocate a specific monthly budget for misc. and blow money AFTER your hard cost including future expenditures like car maintenance, car replacement, home maintenance, etc.. I'm able to track my approximate monthly net worth gain from savings, retirement contributions, and principal reductions. This is a great way to keep yourself accountable and really dissect your finances. It's also a great way to lay out a path to financial freedom. You'll now know how much discretionary income you have left over. I'm increasing my retirement contributions and mortgage principal reductions with some of the excess. I'm commission so I use the average over a 6 month or 12 month period for my income. I've also combined Kelli and I's numbers so it's a WE deal.

Bottom line, a major key to investing is additional money to allocate to that avenue. Until you get a real grasp on your expenditures, you aren't maximizing your investments. I don't care if you have three nickels to rub together or if you are filthy rich. It's just as important.

Todd,

I always enjoy reading your posts, either here or in the Health threads. Always inspirational.



This year my life somewhat settled down for me. I have always been really good with money and finances and never in debt. Between school, a period between school and finding a job, getting married, moving, buying a house and a few other expenses, I had acquired more debt than I ever thought I would have. Again, I've always been smart financially, so my goal was always to pay off all my debt. This year things finally settled down for me and I was able to start knocking things off. I took the Dave Ramsey Total Money Makeover approach and knocked them off a list, smallest to largest. I'm over halfway through and it feels amazing. Luckily my wife is on the exact same track as myself. Every single day she goes over the finances, looks at where money is coming in and where its going out. This sucks for my car habit, but I don't complain. Its nice to see my debt going down and my play money going up. My goal is to be 100% debt free, my house and everything. I know that's a few years off, but I still don't see any reason I can't make that happen over the next 15 years instead of 30.

Getting out of debt is very liberating. However, I believe in 'good debt'. For example, You have $25k and need to buy a car. Are you going to use your liquid cash when you can use the bank's money at 1.9%? This is probably the only example of good debt that I can think of. It seems that even your mortgage is not an investment anymore. Property values in our county fell 4% last year! One of the biggest drops ever. And to think there was a day when your own property was a good investment.

In my eyes, that 1.9% financing cost gets added to the depreciation cost of the car as well. If you finance a car at 1.9% that depreciates at 10%, your $25k needs to make like 11.9% per year just to keep up (this is not official math, just for demonstration). So for a depreciating asset, it may be best pay cash.

You're going to have to educate me on this...

If I choose to keep the car forever, then how does the depreciation factor into the investment equation?

But even if I don't, let's say I sell it in 3 years, I don't get any more or less money for the car at that point (all else being equal) whether I financed it or not.

But if I invested the $25k for those 3 years, then I've made money on that, and hopefully more than the 1.9% that the money cost me. If I put all $25k into the car, I have no possibility to make any return on that $25k.

So how does the depreciation factor into how you want to pay for it?

:confused18:

Don't mistake me for a pro! I should say that it isn't so much how much it's depreciating, but that it does depreciate is why I (philosophically) hesitate to finance. You're borrowing money that loses value.

And more specifically depreciation rate does matter if/when you decide to sell your car while owing more than it's worth.



I am assuming that you have a monthly income stream besides this $25k. So with the income stream, you can either

1) Finance the car/Invest $25k for 3 years.
$714 per month pays down the loan in 36 months. Total payments = $25,704
Earn 5% per year on $25k. Account Balance = $28,941
Car value = $18225
Balance Sheet: 28941 + 18225 = $47166

2) Cash for the Car/Invest Mo. Payment for 3 years
$714 invested per month at 5%/year for 36 months. Account Balance = $27785
Car value = $18225
Balance Sheet: 27785 + 18225 = $46010

So in this case, yes if you pay down the loan in 3 years, you will come out ahead under option 1). But you can also see that if you play with the rates, duration etc. that you can lose money by financing a car vs paying cash. When rates are low and the time duration is short, the results are no fun and don't explain much. Drag out the loan longer and that's when you feel it in your pocketbook.

Thanks for the kind words.

I'm one of Dave's ElP's. I like his philosophy on getting debt free and recently read the total money makeover.

Personally, I'll take debt free all day including Sunday. The turtle wins the race.

Sorry Steven ---- Even I will finance a car at 1.9% -- or even 2.9%....


The very reason you state -- depreciation -- is the reason why... and the #1 reason is -- it takes way more effort to gather up the 25K ---- than it does to make the payment from monthly cash flow. The 25K should be MAKING you money -- and capital -- so in 4 years you should have 35K.... Where as the 25K car is going down in value -- so in 4 years it's only worth half.

Think of CHEAP car payments as rental... you're just paying for the amount you used along the way.

I just bought a Land Rover for our Idaho dump.... they're relatively expensive... I was trading (getting rid of) my pick up -- 2oK trade in -- and the gal says to me -- you sure you don't want to make payments --- HELL NO! I don't make payments..... But! She says... It's only 1.9% interest rate. I said -- how much down do I need then? She says -- just your pick up....

OKAY -- I wrote a check for ZERO and left with a new car... Payment? $1200 a month. Cash saved? 70+ Grand.... the 70K makes 5%.... and should have a total return of maybe 20%....

Neither of these scenarios changes the depreciation. Either way - the auto depreciates. But if I'm making 5% and paying 1.9%.... then I'm ahead. And I have the cash too!


I could buy 5,800 shares of Annaly Capital Management (NLY) at $12 a share -- and get paid $9,000 a year in dividends. That covers most of my payment -- which by the way is a LOT of principal reduction and not much in actual interest cost! So in 4 years I'd pick up 36K in cash payments -- I would have the Land Rover paid for -- so if it's worth half --- it's worth say 35K..... So I'd have 70 in cash (that I didn't put out of pocket) -- I'd have received 36K in dividends - and I'd still own a truck worth 35K...


If I paid all cash -- I'd have 35K.


Does that make sense??


BY THE WAY ---- I didn't do any of the math in order for it to have any validity.... I was just writing to make a point. The numbers would have to all be worked out. But either way -- the POINT is made.

I'll make the argument that 95% of Americans with their financial position and knowledge are better off debt free than borrowing money and investing.

May be.... but then again.... they're not the ones reading this thread. And we're trying to change that. It's like fat people are fat because they don't exercise and eat right....

Normal people don't know how to invest - or how to manage money. Doesn't mean they can't read and educate themselves and try to do better.

I think they are reading this thread, just not posting. One thing I've learned from my real estate newsletter that I've been sending out for over 5 years is the fact that even if they read it, they don't completely understand the details. Don't take your knowledge for granted. It's a very simple game for you at this stage of your life.

I like the plan to buy a 4-5 year old car from an old lady that only drove it on Sunday cash, and invest the car payment into the market every month. :D When you don't have debts, you can dip your toe in all kinds of buckets.

I met with my advisor this week to discuss my game plan and additional contributions. One thing we discussed was TAXES. I'm 36, and it's logical to assume that taxes will be much higher when I'm 65. Ten thousand citizens are turning 65 every day in this country and a majority are living on social security, ONLY. It's not a pretty picture... I picked 65 because that's around the time I'll start drawing on SEP, ROTH, and life insurance. I really like the tax advantages of the Roth and life insurance policies at retirement age due to the huge shelter they create down the road. Let's say you have a great year and don't want to bump up into the next tax bracket, you have the option to draw off your roth or life insurance policy to enjoy some tax free income.

Opportunity Cost is the name of the game in this whole Finance vs Pay Cash for car deal.... by paying cash you give up the opportunity to make that 3% spread on the 1.9% loan vs a conservative 5% return on the cash invested. I do not currently have any car loans but would not hesitate to and plan to in the future.

Another thing here on the whole "debt free" deal that is somewhat common is the strategy of not paying off your 2nd mortgage (HELOC) entirely because you can throw all kinds of purchases/expenditures (remodel, cars, anything) on there without any questions and the interest is tax deductible. Used responsibly it can be a very good tool or option to have.

My retired neighbor does it (former IRS employee) and puts all his vehicle purchases on there and I know for a fact he has done the math and pencils out in his case. Your results may vary. :)

And yes, you do need to change that avatar. Its freaky.

From your friend in the tri valley you haven't met yet:)

Mike

Don't forget about capital gains tax on your gain. Also, 1.9% is for a new car or dealer purchase normally. Used car loans may not be so attractive. Especially, private party. I sleep great at night with the title in my safe and no chance of losing money on my investment AND having a car payment. We all have different tolerance for risk. My point is that 95% of Americans have no business taking these risks.

Well, today is a good day. I checked in on my company match 401k and I'm now fully vested. That's a nice 5% pay raise every year that's now all mine from here on out. Fidelity is doing a good job at managing it too based on the returns it's earning. Combine that with my ESPP which allows me to buy company stock at a 10% discount, a stock that also pays a dividend, and I'm more than happy. I've never had this much money before and while it's only a small percentage of what I need/want to retire, I finally feel like I'm on the right path and actually making progress towards my long term financial goals. Today is a good day.

Greg you have made many excellent points in this thread but I got to agree with Todd on this one. Most people when they finance a car do so by asking "how low of a payment can I get?" usually never considering the interest rate, term, etc. They look at that low interest rate and figure out how much cash they'll have left over to buy more, yep, STUFF!. If they did it your way, sure, a great move, but teaching them that discipline is the challenge. I guess you're both right!

I love this thread and all it's points about investing. It wouldn't hurt to add to the discussion some tips on how to buy stuff, finance it if needed, as wisely as possible. I've always said one of the easiest ways to make money is to not lose it in the first place (or spend it foolishly). :G-Dub:

The entire key to this thread is about how to better manage your money. Save. Invest. Earn a return on your investments thru the good markets AND the bad.

There is little point in accepting that everyone must be so stupid that they can't make good decisions --- or that with some help in understanding their options... that they can't think through what is a better more reasonable way of doing things.

To me it's like telling someone that they shouldn't buy anything -- and should ONLY concern themselves with saving money for retirement. Pure BS!

How does a guy buy rental property?? The smart money puts down enough to make the payment be low enough that the rental income covers most if not all of it. You do that by taking on debt. It's leverage. The difference is that you hope the value of the property goes UP over time... and, of course, someone else is making your mortgage payment for you.

This thread is about how to THINK... it's never been about WHAT YOU SHOULD DO. Like our cars -- you take a little info from a variety of sources and do with it what you will. To say one is wrong and one is right is just crazy. But the INFO is what you should be gathering and thinking about. Some guys can only live by being debt free... okay... I'm good with that. Some people can manage debt and use it to make themselves even more money. Some people will just plain fail at all of it. The key is to be able to think your way through all the scenarios and take a little from here and a little from there and make a plan that fits YOU, whatever that is.

In regards to buying vehicles, Clark Howard, who is a consumer advocate out of ATL, has always said that if you buy used, keep it for at least five years. If you buy new, keep it for at least 10 years. Doing it this way means the depreciation hit no longer matters. Combine that with what's been mentioned involving loans and interest rates and you can help yourself in the long term not lose money on a vehicle purchase. Especially, one that is a daily commuter and not something with sentimental value such as our project cars.

I intend to only buy used and pay cash. I'm also not buying anything expensive. I came out of pocket just under $5000 for my 01 Sierra. I don't like making payments on anything or being in debt for something like a vehicle. So, for me, it works that way. I doubt that will change as I get older and have a family involved but we will see. In the meantime, I've got my credit in order to help ensure I can get favorable rates when I do need to borrow money. I'm just focused on the long term which is what this thread is geared towards.

When we get new guys in at work, I do my best to convince them to think long term as well and take advantage of the company matched 401k and ESPP. It's not easy to convince guys in the early 20s to put money away when they are making 50k + a year. I usually phrase it in the terms of them getting a raise every year when all they have to do is simply agree to put money away each month. It's still not easy and some of them are eager to do what it takes to get a raise or promotion. Many of them are too hooked on being consumers. I guess the marketing folks in this country are doing their jobs well.

Yep, they are doing a great job of turning most into completely consumer driven society, one of which can't stand. We need jobs back, growth, bringing back blue collar, here in the states.

I am looking more at foreign markets now, but i like investing in what i know....

Freaky is/was the goal. Guess I succeeded. :D

True. Agree with Greg though that well managed debt (leverage) is a powerful tool when part of overall sound financial management.