Have you ever wondered why some buildings crumble during an earthquake while others remain standing ?
Do you think some buildings are built better than others ?
The answer yes, it's all in the construction !
The Financial Earthquake
We all know what devastation an earthquake can cause because it is reported all over the news. Sensationalism sells, the more widespread the better.
The financial earthquake happens more in the shadows and will rarely ever be reported on. This is simply because there is nothing to show, nothing to cause a sensation. Merely dwindling savings accounts and a few bankruptcies, hardly anything to report on.
However, if not properly prepared, a financial earthquake can happen to anyone. The sad part is no one else really cares.
How to be Prepared
Just as the astute contractor builds a solid foundation upon which to build their building, so too should the average individual. Without a strong foundation, the financial earthquake can happen at any time and when least expected.
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The Quake Zone
A few examples of the financial earthquake are as follows. The loss of a good paying job or career. The loss of one's home. The collapse of a good quality investment. The loss of one's health. The loss of a loved one.
The loss of a good credit score. Plus many more.
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Components of your foundation should include all of the following. Insurance for everything that matters in your life. An emergency reserve of up to six months expenses. An ongoing savings plan to ensure your building keeps growing. A solid diversified base of income producing investments. Well thought out wills and powers of attorney to ensure continued growth for future generations.
All of these foundation components are described in greater detail in previous posts on this site. Explore them now to ensure you have every corner covered.
Without a proper foundation, you could well become a victim of the financial earthquake. Avoid being a part of the rubble by preparing yourself today. If you fail to prepare, no one else will really care. This I guarantee.
As always, I welcome your comments and suggestions for future topics.
PS To All Readers !!!
During the summer months, I generally take more time to reflect and will likely be writing less often. Please take this time to review this entire site for all you have missed. I would also really appreciate your comments on any of the topics. Remember, I am writing this blog for you. Please let me know what you would like to hear about in the future.
Have a Great Summer !!!
Richard Lyons
Friday, June 29, 2012
Tuesday, June 26, 2012
How to Keep Your Wealth - Think Like a Turtle
Have you ever wondered how the turtle has managed to survive throughout history ?
How could such a slow moving creature not have become extinct long ago ?
I believe that it's all in the shell !
Build Your Shell
We could all take a lesson from the slow moving, well protected, cautious turtle. The first part is to protect yourself from all potential financial disasters. Example. loss of a job, loss of health, loss of life for your loved ones future. Get adequate insurance for everything you value. Your income, your health, your belongings and even your very life itself.
Build your shell of protection to ward off all financial disasters that could destroy your future financial wealth building plans. A must for anyone who wants to obtain true wealth.
Step Slowly
Step very slowly and cautiously with every step you take towards achieving your wealth. Do not step into something before understanding it totally. A missed step along the way could actually cause you to lose many steps before you recover.
Stop, Look and Listen
Along your path to building wealth, it is always wise to stop and reflect on where you have come from and even reward yourself along the way for steps that you have achieved. Also, take a look ahead and ensure that the plan you initially developed is still relevant today. Don't be afraid to adjust it when necessary. A course correction so to speak.
Pull in When Danger Approaches
It is wise to become less aggressive with your investing when there has been a long period of steady growth. Most markets progress in cycles and not at a steady and even pace. Never be afraid of selling an investment to capture a gain. There will always be another opportunity in the future. Keep a higher level of cash when you feel there are few opportunities. Wait for the right opportunity at the right time.
Turtle Power
We can all learn lessons from the wise, old prehistoric turtle. The turtle has survived all these years because of built in protection and cautious movements. These are two vital components for anyone who truly wants to create everlasting wealth. Plan for the best and be prepared for the worst. An everlasting plan for true wealth creation.
As always, I welcome your comments and suggestions for future topics.
How could such a slow moving creature not have become extinct long ago ?
I believe that it's all in the shell !
Build Your Shell
We could all take a lesson from the slow moving, well protected, cautious turtle. The first part is to protect yourself from all potential financial disasters. Example. loss of a job, loss of health, loss of life for your loved ones future. Get adequate insurance for everything you value. Your income, your health, your belongings and even your very life itself.
Build your shell of protection to ward off all financial disasters that could destroy your future financial wealth building plans. A must for anyone who wants to obtain true wealth.
Step Slowly
Step very slowly and cautiously with every step you take towards achieving your wealth. Do not step into something before understanding it totally. A missed step along the way could actually cause you to lose many steps before you recover.
Stop, Look and Listen
Along your path to building wealth, it is always wise to stop and reflect on where you have come from and even reward yourself along the way for steps that you have achieved. Also, take a look ahead and ensure that the plan you initially developed is still relevant today. Don't be afraid to adjust it when necessary. A course correction so to speak.
Pull in When Danger Approaches
It is wise to become less aggressive with your investing when there has been a long period of steady growth. Most markets progress in cycles and not at a steady and even pace. Never be afraid of selling an investment to capture a gain. There will always be another opportunity in the future. Keep a higher level of cash when you feel there are few opportunities. Wait for the right opportunity at the right time.
Turtle Power
We can all learn lessons from the wise, old prehistoric turtle. The turtle has survived all these years because of built in protection and cautious movements. These are two vital components for anyone who truly wants to create everlasting wealth. Plan for the best and be prepared for the worst. An everlasting plan for true wealth creation.
As always, I welcome your comments and suggestions for future topics.
Friday, June 22, 2012
How to Get Rich - The Very First Step
What do you think the very first step is to creating a wealthy future ?
Do you think it's landing a good job or winning the lottery ?
Do you think it is marrying someone rich ?
Answer = none of the above
The Starting Point
The very first thing you must do is create in your mind a "burning desire" for whatever it is you want to achieve in your lifetime (financially, that is) You must make this burning desire so intense that you will be able to sacrifice other things in order to achieve it.
Chances are if you are reading this, you already have a strong desire to become wealthy. But what is the very first active step you can take to turn this desire into reality ? It is something extremely simple yet unobtainable for many.
Step Number One
Realize in your mind that you are entitled to keep for yourself at least ten percent of all income that you bring home. This amount that you are entitled to keep for yourself must be stashed somewhere safe before paying any of your everyday expenses. It may seem that by doing this, you are being greedy or selfish, and in a sense that is true. However, who is doing all the hard work to earn this income ? That's right, you are ! Then do you not truly deserve to keep a part of what you earn just for yourself and nothing or no one else ? Of course you do!
Keep this amount in a bank account that you can absolutely not access with your bank card. You must ensure this amount is extremely difficult to access and should only be used for future investing. Period.
Why Most Will Fail
Most people will never become wealthy simply because they fail to take the very first step that is needed. For whatever reason (and there are many) they don't feel that they truly deserve to keep a part of all they earn for themselves. They are easily persuaded or distracted by other things or other people that seem more important at the time.
Some will start off well, but become discouraged or distracted. They dip into their savings "just this once" to buy this, that or the other thing. The problem is, this dipping will become a habit that is very hard to break.
Another problem is that a person's income may only be enough to cover everyday living expenses. In this case, the person must reduce living expenses or increase income (or both) in order to take the very first step. Simple in principle, but an overwhelming obstacle for many.
First Step is The Hardest
The first step to building wealth is the easiest yet hardest step. It's easiest in the sense that you merely save a percentage of all income. Period. It's hardest in the sense that it can be a very hard discipline for most people to maintain. There are so many distractions that can take your focus away from what you truly desire for your future.
Take the first step today (if you haven't done already) and focus on your future. Become strictly disciplined in this step and you will have a future of wealth far beyond your imagination. Simple, yet hard.
As always, I welcome your comments and suggestions for future topics.
Do you think it's landing a good job or winning the lottery ?
Do you think it is marrying someone rich ?
Answer = none of the above
The Starting Point
The very first thing you must do is create in your mind a "burning desire" for whatever it is you want to achieve in your lifetime (financially, that is) You must make this burning desire so intense that you will be able to sacrifice other things in order to achieve it.
Chances are if you are reading this, you already have a strong desire to become wealthy. But what is the very first active step you can take to turn this desire into reality ? It is something extremely simple yet unobtainable for many.
Step Number One
Realize in your mind that you are entitled to keep for yourself at least ten percent of all income that you bring home. This amount that you are entitled to keep for yourself must be stashed somewhere safe before paying any of your everyday expenses. It may seem that by doing this, you are being greedy or selfish, and in a sense that is true. However, who is doing all the hard work to earn this income ? That's right, you are ! Then do you not truly deserve to keep a part of what you earn just for yourself and nothing or no one else ? Of course you do!
Keep this amount in a bank account that you can absolutely not access with your bank card. You must ensure this amount is extremely difficult to access and should only be used for future investing. Period.
Why Most Will Fail
Most people will never become wealthy simply because they fail to take the very first step that is needed. For whatever reason (and there are many) they don't feel that they truly deserve to keep a part of all they earn for themselves. They are easily persuaded or distracted by other things or other people that seem more important at the time.
Some will start off well, but become discouraged or distracted. They dip into their savings "just this once" to buy this, that or the other thing. The problem is, this dipping will become a habit that is very hard to break.
Another problem is that a person's income may only be enough to cover everyday living expenses. In this case, the person must reduce living expenses or increase income (or both) in order to take the very first step. Simple in principle, but an overwhelming obstacle for many.
First Step is The Hardest
The first step to building wealth is the easiest yet hardest step. It's easiest in the sense that you merely save a percentage of all income. Period. It's hardest in the sense that it can be a very hard discipline for most people to maintain. There are so many distractions that can take your focus away from what you truly desire for your future.
Take the first step today (if you haven't done already) and focus on your future. Become strictly disciplined in this step and you will have a future of wealth far beyond your imagination. Simple, yet hard.
As always, I welcome your comments and suggestions for future topics.
Tuesday, June 19, 2012
How to Get Rich - Be a Generalist
Have you ever wanted to know everything about everything ?
How about to know everything about something ?
Well, for most it is best to know something about a lot of things !
Why Be a Generalist
The reason that it is best to be a Generalist is that it gives you a wide base of knowledge upon which to build for the future. To know something about a lot of things will make it much easier for you to spot deceptions and to avoid the many questionable opportunities that you will face in everyday life.
To know something about a lot of things will allow you to protect yourself and your financial future from whatever the future may bring. It will also allow you to hire an expert in an area and still know enough to challenge or question any advise given. It will make it easier to maintain control over your future financial decision making, which is a must for building wealth.
Don't Be A Know it All
Never be afraid to admit that you don't know something. Nobody really likes someone who thinks they know everything about everything. This is simply not possible and everyone knows that.
It is much better to be open minded and not be afraid to learn new things. Learn from those who have more knowledge in a particular area than you. Never be afraid to ask a lot of questions, for that is how we learn.
Not Too Much Detail
To learn about a particular area, it is best to get a general understand rather than getting too bogged down in all the details and technicalities of a subject. This will allow you to focus your knowledge growth on many areas and not just one. When you need more detailed analysis in an area, you can either consult with an expert or hire an expert outright to do this work for you. This will be much more efficient use of your valuable time.
This blog site is actually designed to do just that. In other words, it is designed to give you just enough information to hopefully understand a topic without getting you too bogged down in the details of it. At least, that is my goal.
By being a generalist in many areas and an expert in none, will enable you to be open to new opportunities and not be tied down to old ways that simply no longer work. Be open to the future.
As always, I welcome your comments and suggestions for future topics.
How about to know everything about something ?
Well, for most it is best to know something about a lot of things !
Why Be a Generalist
The reason that it is best to be a Generalist is that it gives you a wide base of knowledge upon which to build for the future. To know something about a lot of things will make it much easier for you to spot deceptions and to avoid the many questionable opportunities that you will face in everyday life.
To know something about a lot of things will allow you to protect yourself and your financial future from whatever the future may bring. It will also allow you to hire an expert in an area and still know enough to challenge or question any advise given. It will make it easier to maintain control over your future financial decision making, which is a must for building wealth.
Don't Be A Know it All
Never be afraid to admit that you don't know something. Nobody really likes someone who thinks they know everything about everything. This is simply not possible and everyone knows that.
It is much better to be open minded and not be afraid to learn new things. Learn from those who have more knowledge in a particular area than you. Never be afraid to ask a lot of questions, for that is how we learn.
Not Too Much Detail
To learn about a particular area, it is best to get a general understand rather than getting too bogged down in all the details and technicalities of a subject. This will allow you to focus your knowledge growth on many areas and not just one. When you need more detailed analysis in an area, you can either consult with an expert or hire an expert outright to do this work for you. This will be much more efficient use of your valuable time.
This blog site is actually designed to do just that. In other words, it is designed to give you just enough information to hopefully understand a topic without getting you too bogged down in the details of it. At least, that is my goal.
By being a generalist in many areas and an expert in none, will enable you to be open to new opportunities and not be tied down to old ways that simply no longer work. Be open to the future.
As always, I welcome your comments and suggestions for future topics.
Friday, June 15, 2012
How to Get Rich - Keep it Simple
Do you think getting rich takes a complicated formula ?
Do you think that getting rich is just too complicated to bother ?
If you answered YES to the above, you may be quite surprised !
Complex Schemes Just Don't Work
You have probably noticed many investment schemes being advertised throughout most media sources. There have even been some that have created computer software to help simplify the process.
These schemes and programs have two things in common. First, they all try to make you believe that investing and getting rich is very complicated. They try to convince you that you cannot possibly be successful without buying their product. This is totally not true.
Second, they are all designing these schemes and programs to make money for themselves. I really have to question why these schemes and programs even exist. Let me explain.
Let's say someone developed a complex formula for getting rich that was fool proof and never failed. If this did exist, do you think this person would share it with the world ? Of course not ! They would simply use this formula to amass the largest fortune possible. They would become the richest human on earth in no time at all.
Why Simple is Better
By using a simple set of investment rules and developing a solid investment plan and sticking to it, you should be able to do just as well, if not better, than most of the above schemes. The reason is that you will totally understand what you are doing and why you are doing it. There is no need for complex formulas, because the truth is, getting rich and staying that way is really quite simple.It just takes discipline.
A sample of simple rules are as follows : always keep a minimum of ten percent of your take home pay for yourself and use it for adding to your wealth ; always invest in opportunities that put money in your pocket each and every month ; always invest in good quality investments that have a positive future outlook for growth of both capital and income ; always stay in control of your own investment decisions.
These are just a few samples of the many rules for building wealth that are simple to follow. Many more rules can be found throughout my previous blog postings. Explore now and see how many you can find !
Keep it Simple
Yes, keep your plan for building wealth simple and you will find it much more fun and rewarding than you had ever imagined. Never lose control of your future to someone who is trying to sell you their product or service.If they were truly that successful, they wouldn't need your money now would they.
As always, I welcome your comments and suggestions for future topics.
Do you think that getting rich is just too complicated to bother ?
If you answered YES to the above, you may be quite surprised !
Complex Schemes Just Don't Work
You have probably noticed many investment schemes being advertised throughout most media sources. There have even been some that have created computer software to help simplify the process.
These schemes and programs have two things in common. First, they all try to make you believe that investing and getting rich is very complicated. They try to convince you that you cannot possibly be successful without buying their product. This is totally not true.
Second, they are all designing these schemes and programs to make money for themselves. I really have to question why these schemes and programs even exist. Let me explain.
Let's say someone developed a complex formula for getting rich that was fool proof and never failed. If this did exist, do you think this person would share it with the world ? Of course not ! They would simply use this formula to amass the largest fortune possible. They would become the richest human on earth in no time at all.
Why Simple is Better
By using a simple set of investment rules and developing a solid investment plan and sticking to it, you should be able to do just as well, if not better, than most of the above schemes. The reason is that you will totally understand what you are doing and why you are doing it. There is no need for complex formulas, because the truth is, getting rich and staying that way is really quite simple.It just takes discipline.
A sample of simple rules are as follows : always keep a minimum of ten percent of your take home pay for yourself and use it for adding to your wealth ; always invest in opportunities that put money in your pocket each and every month ; always invest in good quality investments that have a positive future outlook for growth of both capital and income ; always stay in control of your own investment decisions.
These are just a few samples of the many rules for building wealth that are simple to follow. Many more rules can be found throughout my previous blog postings. Explore now and see how many you can find !
Keep it Simple
Yes, keep your plan for building wealth simple and you will find it much more fun and rewarding than you had ever imagined. Never lose control of your future to someone who is trying to sell you their product or service.If they were truly that successful, they wouldn't need your money now would they.
As always, I welcome your comments and suggestions for future topics.
Tuesday, June 12, 2012
How to Get Rich - Stay in the Shadows
Have you ever looked at someone and instantly known that they were wealthy ?
Did this person ooze wealth or was it something else you noticed ?
Chances are, you could be dead wrong on your observation !
Appearance of Wealth
I have seen and known many individuals whom I had thought on first sight were extremely wealthy. Much to my surprise, once I got to know them better, I realized they were far from the wealthy person I had envisioned.
What many individuals try to do is make themselves appear wealthy even if they can't really afford the image.This type of behavior is what I call the "keeping up with the Jones' syndrome". This type of lifestyle can be very dangerous for those who truly want to be wealthy some day.
Generally, these individuals must live beyond their means simply to maintain their image of prosperity. This means there will be no room in their lives to set aside savings and to invest those savings. Eventually they will have to borrow money just to maintain their image and some day may even have to declare personal bankruptcy.
Stay in the Shadows
A better alternative for someone who truly wants to become wealthy is to stay in the shadows. Basically, this means to live within your means and save at least ten percent of your take home pay for wealth building. Avoid situations where you feel tempted to buy something just because someone else did and you need to keep up or feel left behind.
You must learn to become modest and not shout your success. By shouting your success (or bragging as it were) others may expect you to show off more of your wealth. They may expect you to pay for more things etc. This situation could severely damage your future wealth creation efforts.
Many of the truly wealthy do not look wealthy. They live in a modest home. They drive average looking vehicles. They have no need to show off their wealth as they don't feel the need to impress anyone. They feel very comfortable financially, therefore, there is no need to portray an image of success. They don't necessarily care too much about what others think.
To become truly wealthy, learn to stay in the shadows and let others show off their desire to become wealthy. You can have the peace of mind knowing that you are doing well and soon you won't really care too much about what others think. Your wealth will be real where their's may not be. Enjoy !
As always, I welcome your comments and suggestions for future topics.
Did this person ooze wealth or was it something else you noticed ?
Chances are, you could be dead wrong on your observation !
Appearance of Wealth
I have seen and known many individuals whom I had thought on first sight were extremely wealthy. Much to my surprise, once I got to know them better, I realized they were far from the wealthy person I had envisioned.
What many individuals try to do is make themselves appear wealthy even if they can't really afford the image.This type of behavior is what I call the "keeping up with the Jones' syndrome". This type of lifestyle can be very dangerous for those who truly want to be wealthy some day.
Generally, these individuals must live beyond their means simply to maintain their image of prosperity. This means there will be no room in their lives to set aside savings and to invest those savings. Eventually they will have to borrow money just to maintain their image and some day may even have to declare personal bankruptcy.
Stay in the Shadows
A better alternative for someone who truly wants to become wealthy is to stay in the shadows. Basically, this means to live within your means and save at least ten percent of your take home pay for wealth building. Avoid situations where you feel tempted to buy something just because someone else did and you need to keep up or feel left behind.
You must learn to become modest and not shout your success. By shouting your success (or bragging as it were) others may expect you to show off more of your wealth. They may expect you to pay for more things etc. This situation could severely damage your future wealth creation efforts.
Many of the truly wealthy do not look wealthy. They live in a modest home. They drive average looking vehicles. They have no need to show off their wealth as they don't feel the need to impress anyone. They feel very comfortable financially, therefore, there is no need to portray an image of success. They don't necessarily care too much about what others think.
To become truly wealthy, learn to stay in the shadows and let others show off their desire to become wealthy. You can have the peace of mind knowing that you are doing well and soon you won't really care too much about what others think. Your wealth will be real where their's may not be. Enjoy !
As always, I welcome your comments and suggestions for future topics.
Friday, June 8, 2012
How to Stay Rich - Learn to Teach
Have you ever wondered how wealthy families have managed to keep their wealth throughout history ?
Have you ever wondered why some family member didn't go crazy and spend it all ?
The simple answer is education !
Learn to Teach
It's great to have the goal of getting rich and making lots of money. But have you ever thought of how much good it is going to do if you lose it as fast as you get it?
In order to have the most benefit for yourself and your loved ones, you must learn how to retain your new found wealth and preserve it for future generations. In order to do this, you must learn how to teach your next generation to make the right financial decisions.
Unfortunately, our school systems never teach courses on wealth creation and preservation. These lessons are generally learned the hard way by trial and error, or if you are fortunate, through a mentor who can guide you through the many obstacles.
How Wealthy Families Survive
Wealthy families have the advantage of built in mentors. They are generally very successful at teaching their new generations the valuable lessons of wealth preservation and creation. They are also successful at instilling a great sense of pride of past generations' achievements. The future generations don't want to be the ones to drop the ball so to speak.
What You Can Do Now
Chances are you did not come from a wealthy family. Therefore, you are like the rest of us and must learn these lessons on your own. The fact that you are even reading this means that you are already well on your way to learning these lessons. Congrats !
Teaching your next generation the lessons you have learned is just as important as learning them yourself. Without this continuation of education, your hard built wealth could wither and collapse in future generations.
Just as you never stop learning life's valuable lessons, you must never stop teaching your future generation these lessons as well. If you already have children, start educating them at an early age. Do not put this off until the future as none of us know what the future will bring.
Check out the web site on my links page www.kidsmoney.org as it has many valuable lessons and techniques that you may be able to use to help your next generation. Well worth a look.
Continue searching for new information that you can pass on to your future generations. This is truly the most valuable gift you will ever be able to give them and yourself. Wealth everlasting !
As always, I welcome your comments and suggestions for future topics.
Have you ever wondered why some family member didn't go crazy and spend it all ?
The simple answer is education !
Learn to Teach
It's great to have the goal of getting rich and making lots of money. But have you ever thought of how much good it is going to do if you lose it as fast as you get it?
In order to have the most benefit for yourself and your loved ones, you must learn how to retain your new found wealth and preserve it for future generations. In order to do this, you must learn how to teach your next generation to make the right financial decisions.
Unfortunately, our school systems never teach courses on wealth creation and preservation. These lessons are generally learned the hard way by trial and error, or if you are fortunate, through a mentor who can guide you through the many obstacles.
How Wealthy Families Survive
Wealthy families have the advantage of built in mentors. They are generally very successful at teaching their new generations the valuable lessons of wealth preservation and creation. They are also successful at instilling a great sense of pride of past generations' achievements. The future generations don't want to be the ones to drop the ball so to speak.
What You Can Do Now
Chances are you did not come from a wealthy family. Therefore, you are like the rest of us and must learn these lessons on your own. The fact that you are even reading this means that you are already well on your way to learning these lessons. Congrats !
Teaching your next generation the lessons you have learned is just as important as learning them yourself. Without this continuation of education, your hard built wealth could wither and collapse in future generations.
Just as you never stop learning life's valuable lessons, you must never stop teaching your future generation these lessons as well. If you already have children, start educating them at an early age. Do not put this off until the future as none of us know what the future will bring.
Check out the web site on my links page www.kidsmoney.org as it has many valuable lessons and techniques that you may be able to use to help your next generation. Well worth a look.
Continue searching for new information that you can pass on to your future generations. This is truly the most valuable gift you will ever be able to give them and yourself. Wealth everlasting !
As always, I welcome your comments and suggestions for future topics.
Tuesday, June 5, 2012
How to Get Rich - Convert Savings to Income ( Part Three )
At this point you should be well on your way to building your income producing portfolio.
Hopefully, you have been able to find a few good quality investments that you can be comfortable with.
If not, don't worry. It may be that the time is just not right to take action. Don't be afraid to keep building your cash (in your money market fund ) until the time is right or you become more comfortable with the process.
Don't Feel Rushed
You should never put yourself in a position where you feel rushed to make an investment decision. Take the time you need to learn about a particular investment and/or about the whole investment process. Once you become more comfortable and with a little experience, you will find that your decisions can be made much faster.
Remember, your investment time horizon is the rest of your life. There is no rush to do anything until you fully understand.
Review, Review, Review
Once you make investment purchases it does not mean you just forget about them. It is true that they will virtually run on their own and pay out income to you month after month. However, they must still be constantly monitored to ensure the income remains steady and there are no income cuts planned in the future. Read their financial reports and make it a point to truly understand what you are reading.
It is also wise to constantly check their market position through sites such as bigcharts (see links page) to ensure the value of your investments remain in line with your expectations. In life, things are constantly changing and you must keep up to date with the issues that may effect the value of your investments.
Keep Your Mind Open
Even when you are fully invested, it is wise to keep searching for other opportunities to invest in. For instance, you may find that a new investment you are looking into has more income or has a better future outlook than one of your current choices. If this is the case don't be afraid to sell your current investment and purchase the new one.
There is no such thing as an investment that is good forever. As times change and your current financial position changes, so should your portfolio. You must keep up to date with current trends and choose the right investments that will help you capitalize on those trends.
To achieve true wealth, you must stay on top of your game so to speak. Don't get so comfortable with what you are doing to the point where you no longer look for new options. Many investors who do this will be left behind when the next change happens. These changes can happen any time and usually when least expected.
Be prepared for change. It is inevitable.
As always, I welcome your comments and suggestions for future topics.
Hopefully, you have been able to find a few good quality investments that you can be comfortable with.
If not, don't worry. It may be that the time is just not right to take action. Don't be afraid to keep building your cash (in your money market fund ) until the time is right or you become more comfortable with the process.
Don't Feel Rushed
You should never put yourself in a position where you feel rushed to make an investment decision. Take the time you need to learn about a particular investment and/or about the whole investment process. Once you become more comfortable and with a little experience, you will find that your decisions can be made much faster.
Remember, your investment time horizon is the rest of your life. There is no rush to do anything until you fully understand.
Review, Review, Review
Once you make investment purchases it does not mean you just forget about them. It is true that they will virtually run on their own and pay out income to you month after month. However, they must still be constantly monitored to ensure the income remains steady and there are no income cuts planned in the future. Read their financial reports and make it a point to truly understand what you are reading.
It is also wise to constantly check their market position through sites such as bigcharts (see links page) to ensure the value of your investments remain in line with your expectations. In life, things are constantly changing and you must keep up to date with the issues that may effect the value of your investments.
Keep Your Mind Open
Even when you are fully invested, it is wise to keep searching for other opportunities to invest in. For instance, you may find that a new investment you are looking into has more income or has a better future outlook than one of your current choices. If this is the case don't be afraid to sell your current investment and purchase the new one.
There is no such thing as an investment that is good forever. As times change and your current financial position changes, so should your portfolio. You must keep up to date with current trends and choose the right investments that will help you capitalize on those trends.
To achieve true wealth, you must stay on top of your game so to speak. Don't get so comfortable with what you are doing to the point where you no longer look for new options. Many investors who do this will be left behind when the next change happens. These changes can happen any time and usually when least expected.
Be prepared for change. It is inevitable.
As always, I welcome your comments and suggestions for future topics.
Friday, June 1, 2012
How to Get Rich - Beware the IPO
Have you ever invested in an IPO only to see it falter ?
Do you even understand what an IPO really is ?
Be careful when looking at any IPO for your future !
What is an IPO
Let's start by defining what an IPO (short for Initial Public Offering) really is. An IPO is created when a privately held company wishes to go public and start selling shares of it's organization in the public market place such as a stock exchange.
In order to do this, the organization creates the IPO and establishes a reasonable value for it's shares based on it's economic fundamentals. It will determine how many shares will be issued and at what price. This is the general definition of the IPO.
Why the IPO is Created
There are many reasons why a company may wish to go public. However, one of the most common is that the founder of the organization feels that he/she for whatever reason can no longer develop the organization to it's full potential. Another reason could be that the founder has another project in mind and wishes to cash out so to speak and put their future efforts towards the new idea.
For whatever reason, the founder is basically selling their organization to the public through this Initial Public Offering.
Dangers of the IPO
The biggest danger with buying an IPO is that you would be buying a security that has no proven track record in the public marketplace. There is absolutely no history as to how the public will perceive this investment. Therefore, no one knows which direction this security will travel once shares start trading publicly.
The IPO generally has a lot of publicity and even some hype before it's official launch date. The founder's goal is to receive as much as he/she can from it's sale. Often emotion will play a big part in the investor's decision to purchase the IPO. This can be a terrible mistake, especially for the average investor.
The IPO and You
My advise would be to never even consider buying an IPO. Let the buying frenzy subside and wait until you see some history develop with how the public will see the new security. Let the numbers come out publicly as to the earnings and profitability of the security.
The new security may be of future interest to you. But this should only be if it fits in with your overall investment plan and the numbers make sense. Above all, never let emotions get in the way of your investment decision making.
As always, I welcome your comments and suggestions for future topics.
Do you even understand what an IPO really is ?
Be careful when looking at any IPO for your future !
What is an IPO
Let's start by defining what an IPO (short for Initial Public Offering) really is. An IPO is created when a privately held company wishes to go public and start selling shares of it's organization in the public market place such as a stock exchange.
In order to do this, the organization creates the IPO and establishes a reasonable value for it's shares based on it's economic fundamentals. It will determine how many shares will be issued and at what price. This is the general definition of the IPO.
Why the IPO is Created
There are many reasons why a company may wish to go public. However, one of the most common is that the founder of the organization feels that he/she for whatever reason can no longer develop the organization to it's full potential. Another reason could be that the founder has another project in mind and wishes to cash out so to speak and put their future efforts towards the new idea.
For whatever reason, the founder is basically selling their organization to the public through this Initial Public Offering.
Dangers of the IPO
The biggest danger with buying an IPO is that you would be buying a security that has no proven track record in the public marketplace. There is absolutely no history as to how the public will perceive this investment. Therefore, no one knows which direction this security will travel once shares start trading publicly.
The IPO generally has a lot of publicity and even some hype before it's official launch date. The founder's goal is to receive as much as he/she can from it's sale. Often emotion will play a big part in the investor's decision to purchase the IPO. This can be a terrible mistake, especially for the average investor.
The IPO and You
My advise would be to never even consider buying an IPO. Let the buying frenzy subside and wait until you see some history develop with how the public will see the new security. Let the numbers come out publicly as to the earnings and profitability of the security.
The new security may be of future interest to you. But this should only be if it fits in with your overall investment plan and the numbers make sense. Above all, never let emotions get in the way of your investment decision making.
As always, I welcome your comments and suggestions for future topics.
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