Investing 102

[GregWeld]

..... And as long as we're talking about how to make some money - whether it's for retirement - or for further investing etc. Rich people DO think differently. They DO live differently. Money DOES make Money. The problem with most people is that they don't do anything with what they have. Rather - they figure they have nothing so how could they possibly ever get anywhere.

This thread started out with a couple simple questions.... and what some of us have tried to do with it is to take a little of the mystery out of "the stock market" etc.

I stumbled on to this book -- and have not read it - but have read many excerpts from it.... and what this book really is - and what I've read - is about how to THINK. That's what I've been harping on in this entire thread -- not what "I" think YOU should do - but rather - how you should think about investing... and then you need to take it from there. Whether it's rental real estate - or stocks - or starting a business.... whatever.


The book is about the DIFFERENCES in how people think -- the "rich" vs "the average person". I don't particularly like "labels".... but it is what it is. For $14 a copy it might be eye opening for THINKING about investing or seeing opportunity that might present itself.



http://www.amazon.com/Rich-People-Th.../dp/0975500341

[Vegas69]

I agree Greg. If you have $10 bucks, turn it into $12. The common philosophy is that if you don't have much, you can't become much. Most of us have to start at the bottom and work our way up the ladder. Moral of the story, if you don't make good decisions with little, you will never have a lot. And it leaks into every aspect of life, not just money.

[Tony_SS]

I turned my son from a spender into a saver. He couldn't hold onto a dollar to save his life.

I took him to the bank, opened an account, they gave him a cool green pig, and they matched his first $20 deposit, along with another $20 for his straight A's and community service. The have a cool coin counter machine he likes to work. He has over $88 and is all about "saving" and going to the bank now.. not bad for a 6 yr old who's bombarded with cool stuff to buy.

Saving, then investing, right?

[glassman]

A friend of mine (whos very monetarily wealthy btw) said if you count your pennies, the dollar's add up.

When i refer people to this thread (about 20 who are serious) I tell them "its a thread on HOW to buy, not WHAT to buy"

Be consistant.
Diversify.
Dont invest and forget (i did for 15 years, now my bottom hurts lol).
Start early.

And most of all, KISS (keep it simple stupid) *ask me how i know this one? cause i tend to overcomplicate everything in my life, ahhh, the job of an analyst...

[glassman]

Originally Posted by Vegas69

I agree Greg. If you have $10 bucks, turn it into $12. The common philosophy is that if you don't have much, you can't become much. Most of us have to start at the bottom and work our way up the ladder. Moral of the story, if you don't make good decisions with little, you will never have a lot. And it leaks into every aspect of life, not just money.

And Todd, since you see this everyday in your job, is living within your means....

[sik68]

I was flipping radio stations last night on my commute home, looking for the MNF game. I couldn't believe I heard an ad for obtaining a home equity line of credit. "Bay Area housing prices are up an incredible 20% recently, call us to see if you qualify to borrow against your home to get money in your pocket!"


I'm also happy to report I have a friend who I have HOOKED on THINKING about money and investing. He's turned the corner in a matter of a few short weeks and I know it will positively affect him for the rest of his life. Feels good to spread the knowledge!

[ErikLS2]

Another good, although kind of dull, read

http://www.amazon.com/Millionaire-Mi...aire+next+door

[Vegas69]

Originally Posted by glassman

And Todd, since you see this everyday in your job, is living within your means....

That is one major change I've seen over the last few years. People are more likely to buy economically today. Many have learned a few lessons or were conservative from the start. I still get the calls once in a while from someone with three nickels that thinks they should buy a home.

Originally Posted by sik68

I was flipping radio stations last night on my commute home, looking for the MNF game. I couldn't believe I heard an ad for obtaining a home equity line of credit. "Bay Area housing prices are up an incredible 20% recently, call us to see if you qualify to borrow against your home to get money in your pocket!"


I'm also happy to report I have a friend who I have HOOKED on THINKING about money and investing. He's turned the corner in a matter of a few short weeks and I know it will positively affect him for the rest of his life. Feels good to spread the knowledge!

History always repeats itself. I've already seen some noise of sub prime loans. There is always a hare waiting in the wings.

[GregWeld]

So here's why LIMIT ORDERS don't always work the way you think/want them to.


This morning I thought I'd add 3000 shares of British Petroleum Prudhoe Bay (BPT) to the 5000 shares I already own... I entered a limit order at $86.70 against an ASK of $86.96 --- last trade was showing as $86.75..... so I'm a nickel under the last trade and .26 under the ask price.

By the time I checked my order status - the shares were trading at $86.95

So had I just entered a "Market order" I might have scooped up some shares... as it was --- SO far I'm going begging and my limit order is sitting with only 100 of the shares being "filled" (bought at my limit price).

So here's my point --- there were shares trading at $86.75 (the last print) and I chose to bid under that --- and while trying to be "cute" -- the shares ran another .20

I canceled the order. Why? Because I don't buy on UP days. I'll wait.


I do this stuff EVERY DAY -- ALL DAY.... It's my first love and a hobby. I've been doing this all day every day for years... MY POINT?? You guys DON'T... and I'm buying larger amounts of shares -- you are not.... is it really worth your time to babysit the market for .20 on 100 shares (a whopping $20). And by the way -- I just showed that messing around probably cost me that $20 because the stock ran away from me.

Now --- I'll stay on top of it and I will get my shares eventually -- and before the next X date. But would you?? Or would you get busy and forget all about it -- miss the X date (thus missing a $2.00 a share dividend). This is where you need to learn about YOURSELF and how you invest.

If you're the type that would have got busy and forgot all about the shares --- thus the buy -- and you'd put in a "cute" limit order -- and now you just missed out on "A") the run and "B") the $200 dividend payment for the quarter.... was the $20 "savings" you were trying to get worth it?


Just sayin'

[GregWeld]

Originally Posted by glassman

And Todd, since you see this everyday in your job, is living within your means....

I have to chime in here -- on the whole "living within your means".





It's FAR FAR easier to live within your means if you have plenty of "means". LOL


I've had this discussion many times with many of my friends. I've always been very open about money - money management - and discussions like this aren't and shouldn't be embarrassing. They ARE embarrassing if you are embarrassed by your own personal situation. By that I mean --- if you're one of those people that APPEAR to be doing well.... driving the new Audi - New house - out to dinner all the time - etc.... and your cards are about maxed out... and if you lost your job next week -- you couldn't make your next house payment... YEAH -- you should probably not be discussing your finances without being embarrassed. You're EGO is driving you to bankruptcy. You need help but your ego would never allow you to actually get some.


I'm saying this hypothetically -- to "America" -- not to anyone here. The people here are (I presume) working to help themselves and improve their financial situation.



I've never ever had anyone tell me their cards are maxed and they can barely make the minimum payment. EVERYONE always makes the blanket statement "I always pay my cards in full every month". While I'd really like to believe it - and really hope that it's true.... the majority of people just ARE NOT doing that. They are managing their money by keeping their PAYMENTS in check -- and in the meantime are paying 18 or more percent interest.

GUYS ---- REALLY???


To the investors here -- how many of you would L - O - V - E to be earning 18% dividend on your investments???? HOLY COW --- I'D BE RICH!!!!