 DISCLAIMER - I am not a Financial Advisor and do not work for any Brokerage Firm. The opinions given are of my own and are not to be used as professional advice. These are my findings and can hopefully help you to make informed decisions on investing. Consult a Broker or Lawyer before making any investment. DEFENSE FOR A BEAR MARKET The year 2022 has turned into a full-blown Bear Market. There are several ways you know when a bear market has begun, and right now, all of them are saying BEAR MARKET. The S&P 500 for the year is so bad I have lost count of where we are. In the first half of 2022, we were down 22%. So with a loss of over 3000 points in the past two months, I am sure we are down a minimum of 25% if not more. All the world markets are struggling, and inflation is raging. I believe that 2022 will be worse than 2008, and the question comes to mind of whether it will be as bad or worse than 1972. No matter what you perceive happening in these last 3 months, it is time to play Defense. None of us control what happens to us in life. The mark of success is being able to assess a situation and respond, not in a panic, but with a decisive plan. While that is true in our day-to-day lives, it is certainly true in regards to the stock market and investing. We must take action when things go against us and get a defensive position in place to keep from losing huge sums of money. So what are your options at this point? There are several things people do in markets like this. PLANS OF ACTION
Your age should help you to come up with the right plan. My current age is 71, so if I ignored the Bear Market and stocks drop 40%, and I am invested 50% in Stocks and 50% in bonds, I will lose at least 20% of my investments. At my age, it will take too long to recover. So my goal is to minimize losses to less than 7%. If you are 30 years of age or under, you do not have to be nearly as concerned. Full stock market indexes will over time, pull in typically around 12% average per year. So a 20% loss can be overcome. But if you are 30 years old, most likely you will only have 20% of your money in bonds, meaning a larger than 20% loss on your stocks. So I will explain what I have done personally, and then give you some pointers to use no matter your age. For the first half of 2022, I continued to invest weekly as usual. I took most of my investments in Dividend Growth Stocks or Full Stock market index ETFs. I also invested about 20% of my money into Treasury I-Bonds which are currently paying 9.62%. Read about I-Bonds in 2 of my earlier articles. https://lifecanbesimple.net/blog/safe-place-to-invest-50-today https://lifecanbesimple.net/blog/best-investment-for-end-of-2022 In my Schwab account where most of my Dividend Growth Investments are, they have held their own pretty well. However, my Fidelity and Vanguard percentages are negative by 8 to 10%. So for now, I am holding about a 5% loss for the year. Last month, after taking a course by Robert Kiyosaki, I implemented Stop Loss orders on 45 of my positions. I set them to sell when they hit 80 or 85% of the yearly high. The 20 or 15% drops are used to keep small dips from liquidating your positions. By the end of last week, over 15 of those stop loss orders had fired. The purpose of this is to prevent catastrophic losses. I did a whole article on how to save yourself from huge losses in the next article. https://lifecanbesimple.net/blog/ways-to-protect-your-investments-on-huge-market-drops After hitting the 29,200 market level this week, I decided that we are not near the bottom of this market. So instead of waiting to lose all 20% of most of my stock holdings, I liquidated about ½ of them. I am cash-heavy, but cash is a good place to be. I did not liquidate any of the Dividend Growth stocks at Schwab, although a couple of them did sell off on stop loss orders. My plan is this. I will watch the market to see when the bottom hits. I expect it to be somewhere between 20,000 and 24,500. However, I could be wrong and it might happen at 27,000 or 28,000. My determination of the bottom is when we have 4 out of 5 days on an uptick. We have not had two days up in the past month that I know about. Now I have preached against trying to time the market, as you will lose a LOT of upturn on those first 3 days of upticks. However, I would rather have all 90% of my money and miss a little bit of upside than run the risk of losing more than 10% in a huge downturn. While I don’t agree with them, a few of the stock analysts are saying that we won’t stop going down until we are under 5,000 points putting us back to 1972 levels. I pray this does not happen, but no one can predict the stock market. Signs of the times show that the world is in a huge upheaval. War in Ukraine, recession on the horizon, and huge inflation. Jobs are starting to get tight again. So what are some of the ideas you could do with your money right now. I say consider the I-Bonds first. Read those two articles and lock in on that 9.62%. When the rate resets in November, but I bet the rate goes above 10%. Even if it goes lower, 8% is good in today's market. The second thing I am going to do is buy some 1 and 2-year CDs at Capital one. Check out today’s rates.  If these rates go above 4% on 5-year CDs, I may buy a few of those. What I love about Capital One is there are no minimum investments. So you can buy $25 or $50 or $100 each week at whatever time period you desire.
Check out todays Capital One CD rates at: https://www.capitalone.com/bank/cds/online-cds/ The main thing I urge you to do is take some precautions against catastrophic loss. If you can wait the market out, perhaps just leave the stocks alone and buy CDs and I bonds for the rest of this year. But stay alert, especially if you are over 50 years of age. List of All Investment Articles https://lifecanbesimple.net/investments.html List of All Minimalism Articles https://lifecanbesimple.net/minimalism.html www.lifecanbesimple.net http://www.InternetDirect.us Internet Direct Laptops
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 Are you enjoying life? Is it a joyful and rewarding experience every day? I am very passionate about minimalism. I began studying minimalism over ten years ago, and I believe that it is a journey worth taking. Before we can be truly happy and content in this life, I think we must decide what is it that we want out of life. There are many who want to make a big name for themselves.
Others are driven by power and prestige, thinking that one more big raise and promotion will put them right where they want to be. Then there are those who are driven by acquiring the next new thing. This can be so many different things. Some think that a new mansion on the hilltop will bring great happiness. My wife and I built that home in 1984, and while it was nice, in the end, we found it was not all that important. I am happier now in my paid for 1300 sq. foot home than in any of those big houses we lived in all of those prior years. Commercials bombard us daily telling us we are not good enough. Not the right hair-do, not the right clothes, or not the right car. There are those who are not happy with their two-year-old car. I remember being like that. Looking for the next best thing. I know some who think that their cell phone is outdated because something new just came out. If they were giving away I-Phones tomorrow, I personally would not care. I don’t need it and don’t want it. I am thrilled to use the free Android phones that Metro Pcs gives away every other year. A Samsung Galaxy phone does everything I will ever want to do with a cellphone, and they are free when you go on a monthly plan at Metro Pcs. So why am I so happy and content with what I have? It is all mindset. I am striving every day to be more minimalist and be happy with less. I look to God to meet my every need. I have like the apostle Paul come to the point that wherever I am, in whatever state I am in, I am happy. When a person knows Jesus Christ as Lord and Savior, things of this world are not all that important. Phillipians 4:5 Let your moderation be known unto all men. The Lord is at hand. Php 4:6 Be careful for nothing; but in every thing by prayer and supplication with thanksgiving let your requests be made known unto God. Php 4:7 And the peace of God, which passeth all understanding, shall keep your hearts and minds through Christ Jesus. Php 4:8 Finally, brethren, whatsoever things are true, whatsoever things are honest, whatsoever things are just, whatsoever things are pure, whatsoever things are lovely, whatsoever things are of good report; if there be any virtue, and if there be any praise, think on these things. Php 4:9 Those things, which ye have both learned, and received, and heard, and seen in me, do: and the God of peace shall be with you. Php 4:10 But I rejoiced in the Lord greatly, that now at the last your care of me hath flourished again; wherein ye were also careful, but ye lacked opportunity. Php 4:11 Not that I speak in respect of want: for I have learned, in whatsoever state I am, therewith to be content. Php 4:12 I know both how to be abased, and I know how to abound: every where and in all things I am instructed both to be full and to be hungry, both to abound and to suffer need. Php 4:13 I can do all things through Christ which strengtheneth me. I hope that in your life, you can reach a point of continual joy and happiness. As I strive for a simpler life, I am finding more time to do things that are important to me. Things that used to take up all my time are not important anymore, and I don’t worry myself about them. My life is not wrapped up in doing things and acquiring things that are of no significance. As my blog site name says, Life can be simple. It can be simple, but it takes a little discipline to live right and stay focused on what is important. At the end of your life, I truly doubt you will wish you had spent more hours at work. But the time spent with family and friends is what counts. Serving God with a pure conscience, and living right with your neighbors. Having a testimony that your word means something. That what you say is your bond. Set reasonable life goals, and strive for simplicity. Know what your core life values are, and never do anything that would compromise your core values. Begin today. Start analyzing what you are doing, and find ways to simplify your life. You will be glad you did. Minimalism may not be for everyone, but those who embrace and seek it find a happier and more content life. Change your mindset and find contentment. With God’s help, you can be happy in whatsoever state you find yourself in. List of All Investment Articles https://lifecanbesimple.net/investments.html List of All Minimalism Articles https://lifecanbesimple.net/minimalism.html www.lifecanbesimple.net http://www.InternetDirect.us Internet Direct Laptops  DISCLAIMER - I am not a Financial Advisor and do not work for any Brokerage Firm. The opinions given are of my own and are not to be used as professional advice. These are my findings and can hopefully help you to make informed decisions on investing. Consult a Broker or Lawyer before making any investment.
How to Read Financial Statements - Part 4 The Annual Report The year 2022 has proven that it is crucial for us to know what we are buying when purchasing Stocks. The markets are very negative right now meaning we must understand how we are investing our money very carefully. We started our study on reading financial statements 3 weeks ago beginning with the balance sheet. We then covered the Income Statement, followed last week with the Cash Flow Statement. If you missed any of those articles, I suggest reading them before proceeding into part 4 which will be the Annual Report. Article on reading the balance sheet which was part 1 of reading financial statements. https://lifecanbesimple.net/blog/how-to-read-financial-statements-part-1-of-4-balance-sheet Article on reading the Income Statement which was part 2 of reading financial statements. https://lifecanbesimple.net/blog/how-to-read-financial-statements-part-2-of-4-the-income-statement Article on reading the Cash Flow Statement which was part 3 of reading financial statements. https://lifecanbesimple.net/blog/how-to-read-financial-statements-part-3-the-cash-flow-statement I gave instructions on how to download the 10Q and 10K filings at sec.gov and their meanings in both part 1 and part 3. Refer to those articles on how to download the financial statements for specified companies. THE ANNUAL REPORT One of the important financial statements is the Annual Report. While this is more of a summary of the company's activities in the covered period, it does sometimes give an easier to understand view of what has been happening for the company, also the economy summary during the period (sometimes reflecting how this affected the company), and sometimes what earnings and changes they expect for the future. Remember this is all biased towards the company, but still must be factual. Note as mentioned below, the Annual Report is more of a summary and does not fully reflect everything as does the 10-K report which is part of the SEC filings. The annual report is a publication that public corporations are required by law to publish annually. It describes the company’s operations and financial conditions so that current and potential shareholders can make informed decisions about investing in the company. Most annual reports are divided into two sections. Section 1 shows the narrative of the company’s performance over the previous year. Section 2 strips the narrative out of the picture and presents a variety of financial documents and statements. In section 1, you find information regarding the company’s performance over the previous year as well as some forward-looking statements. These may include a letter to the shareholders from the executive office, chief financial officer, or other key figures such as plus graphs, charts, and photos. In section 2, you see more of the directly related financial documents and statements. (Balance Sheet, Income Statement, Cash Flow Statement, etc.) Unlike other pieces of financial data (sometimes that include editorials and stories about the company), annual reports are typically designed and used as marketing collateral. Annual reports are sent to shareholders every year before the annual shareholder meeting when the election of the board of directors takes place. Sometimes these annual reports are posted on the company’s website. Annual Report in comparison to 10-K report Annual reports aren’t the only documents public companies are required to publish yearly. The US Securities and Exchange Commission (SEC) requires public firms to produce a 10-K report, which informs investors of a business’s financial status before they buy or sell shares. While the two reports share similar data, the two documents are separate. 10-K reports are organized per SEC guidelines and include full descriptions of a company’s fiscal activity, corporate agreements, risks, opportunities, current operations, executive compensation, and market activity. You can also find detailed discussions of operations for the year, as well as a full analysis of the industry and workplace. Because of this, 10-K reports are longer and denser than annual reports and have strict filing requirements—they must be filed with the SEC within 60 to 90 days after the end of the fiscal year. If you need the 10-K report, remember that it is available on the SEC website. (SEC.GOV) Contents of the ANNUAL REPORT An annual report consists of the following:
WHAT TO LOOK FOR IN AN ANNUAL REPORT Some information is more important than others in the annual report. The annual report provides data that is not obscured by any sort of narrative or opinion. Of course, the most important of the four reports that are crucial to the investor are the balance sheet, the income statement, and the cash flow statement. In summary (refer to each article for greater information), the balance sheet shows the company’s assets, liabilities, and owner's equity. The Income Statement shows the revenue and expenses for the set period to gauge the financial performance. It shows all the activities for that period. The Cash Flow Statement provides what happened to the business’s cash during the accounting period. It reconciles the beginning and ending cash balances. It shows the liquidity for the period. It shows the sources of cash inflows and outflows. On the annual report, you can learn more details about what type of company you work for and how it operates.
The Annual report provides information for both investors and employees of the company. Being able to analyze annual reports helps you to gain a clearer picture of where a company sits in its industry and how it is doing during the current economy. Reading and understanding financial information allows you to read without a certified accountant. If you are an investor, being able to read all the financial statements allows you to make good decisions about whether to invest in a company. (or sell your position if doing poorly). I hope with all of the information given on all 4 of the financial statements, you can not begin looking at these filings at SEC.gov and make better decisions when deciding whether to buy (or sell) a specific company’s stock. List of All Investment Articles https://lifecanbesimple.net/investments.html List of All Minimalism Articles https://lifecanbesimple.net/minimalism.html www.lifecanbesimple.net http://www.InternetDirect.us Internet Direct Laptops  On Writing Well – William Zinsser
DISCLAIMER - I am not a Financial Advisor and do not work for any Brokerage Firm. The opinions given are of my own and are not to be used as professional advice. These are my findings and can hopefully help you to make informed decisions on investing. Consult a Broker or Lawyer before making any investment. On Writing Well – William Zinsser is a very popular book with over a million copies sold. If you have considered writing or becoming an author, this is a super book. After a few months of writing several blog articles, I felt I was beginning to get the hang of writing. And while not all I have have been writing was wrong, I picked up many ways to improve from this book. I had no idea how many writing mistakes I have been making. There are many areas that all of us can do better by reading this book. This is the 56th book I have read this year, but just the second on how to write. This one is worth your time to read. Mr. Zinsser if a college professor who has taught many classes on writing. He explains in the beginning of the book that there is no such thing as the perfect way to write. Each person is unique and must find the methods that work for that person. But whatever we choose to write about, we must really care about the topic and know much about it to do it justice. We need to convey the topic so well that it leaves the reader knowing that we know much more about that topic than what we have written. WHAT I LEARNED FROM “ON WRITING WELL” Simplicity is the key to success in writing. Clutter is a disease in American writing today. To many big words and too many unnecessary words are used. Good writers strip every sentence to its cleanest components. Thousands of ways are there to overdo it in writing. Mr. Zinsser uses Henry David Thoreau as a perfect example of how to write simply using Walden as an example. Clear thinking becomes writing. Words and sentences should flow logically and sequentially. Writing is hard work and a clear and concise sentence is no accident. To get a good book, write, rewrite, and rewrite again. It may take 3 or 4 rewrites to make it right. Clutter is the laborious phrase that needs to be pushed out. The short word meaning the same thing is best used. Great writers and authors use simple words. Minimize the use of adjectives and adverbs, particularly when they are doubling the same meaning. Do not repeat a thing by use of adverbs. Be thankful for everything you can throw away in rewrites. Simplify, Simplify as Henry David Thoreau encourages. Style is very important, and you should learn to write in your own style. To get your style right, you must relax when writing. All people have hard days. We must keep writing, even when we hit that wall. Just write. Believe in your own identity and your opinions. Use the energy provided by your ego. Keep it going and write and then write some more. You will build an audience when you master the tools of writing. Simplify, prove, and strive for order. It takes time to find your perfect writing system. The words are the only tools you’ve got. Learn to use them with originality and care. You learn to write by writing. Your first articles will not be great but continue to write, study, and improve. Learn to force yourself to produce a certain number of words on a regular basis. To have unity, everything must fit when you put it together. Write about things that interest you. Your enthusiasm about a subject will show to your readers. Interesting writing can be about your travels but be sure to include specific information about why it was a good place to visit. Don’t just list out a bunch of places or sites you visited. Whatever your job, be yourself when you write. Keep it simple and to the point, even in emails or business correspondence. Remember that humor can be your secret weapon in non-fiction writing. You can blend humor in a serious topic to make a point. Develop you own voice that readers can recognize when they read your book. You should have a unique style which is yours and only yours. Many decisions have to be made in writing. What will you write about? How will you structure your words? You must maintain your focus and intention. To be an effective writer, one must be organized. Mr. Zinsser urges his students to protect their work. Do not let editors drastically change your articles. He is so determined on this point that sometimes he has bought back some writings rather than have a modified version printed. You need to learn and grow in writing. You need to write as well as you can and continue to improve. Can you get better? Certainly, we can all improve over time with effort and perseverance. You must study, learn, and grow. We need to strive to develop that perfect style that is ours and ours alone. Our words should flow and be entertaining to the reader. As we develop as writers, our style should develop us into a unique writing personality. As I said in the preface of the article, if you want to be a good writer, this is a book you need to read. On Writing Well by William Zinsser, you will learn many important things about simple writing, writing with clarity, and unique style. List of All Investment Articles https://lifecanbesimple.net/investments.html List of All Minimalism Articles https://lifecanbesimple.net/minimalism.html www.lifecanbesimple.net http://www.InternetDirect.us Internet Direct Laptops DISCLAIMER - I am not a Financial Advisor and do not work for any Brokerage Firm. The opinions given are of my own and are not to be used as professional advice. These are my findings and can hopefully help you to make informed decisions on investing. Consult a Broker or Lawyer before making any investment. How to Read FinancialStatements-Part 3 – The Cash Flow Statement The year 2022 has proven that we must know what we are buying when purchasing Stocks. The market is almost in a bear market at this time, so we best understand what we are purchasing and be sure the stocks are worth the value we are paying for them. We began a four-part study on reading financial statements last week. If you have not read how to read the Balance Sheet and Income Statement, you can read those here: https://lifecanbesimple.net/blog/how-to-read-financial-statements-part-1-of-4-balance-sheet https://lifecanbesimple.net/blog/how-to-read-financial-statements-part-2-of-4-the-income-statement Now if you have minimal investments or you mainly purchase Mutual Funds or full market ETFs, these articles will be of minimal help to you. However, if you are directing your own ROTH IRA investments and purchasing specific stocks or specific market ETFs (Exchange Traded Funds), these articles may benefit you. On ETFs, you can identify the top 10 or 20 investments in the ETF, and analyze the quarterly filings. To properly be able to determine the company’s real value versus what it is being sold for, and see if a company is truly being managed well, takes a considerable amount of work. When I started this article, I intended to discuss it all in one article. However, after reviewing my accounting books and doing some online studies, it became clear that this is a very deep subject and will take a lot of time to cover successfully. We could spend 10 or 20 articles, but I don’t want to overly complicate the issues. So this week, our goal will be to learn how to understand the Cash Flow Statement. Each quarter, companies traded on the New York Stock Exchange and the NASDAQ are required to file paperwork with the securities and exchange commission (SEC). These quarterly filings, called the 10-Q filings, can be located at SEC.gov. The yearly financial statements are also available, and these are labeled the 10-K The 10-K is of course a more comprehensive and also audited financial statement that is filed after the end of the company’s fiscal year. Management may add some color and commentary to their yearly report. Some also provide supplements that provide additional details and sometimes give them in a more user-friendly format. I am including this again as you must know how to obtain the various Financial statements at SEC.GOV. I included this in the balance sheet, but think it is important enough to mention it again. All financial statements can be obtained at this location. Rida Morwa of Seeking Alpha did a blog on Reading Balance Sheets last month, and he mentioned that it is always important to realize that management in preparing these financial statements is inherently biased towards their companies. So while we may get a biased opinion, we can still review these statements and determine the true value of the company and whether they are worth the current stock price or if they might be selling at a discount. To find the financial statements (10-Q and 10-K), go to the SEC.GOV website and use the EDGAR search page to locate the company you wish to review. You can type in the Stocks Ticker (IE IBM ) or type in the company name. In Rida Morwa’s blog article, he searched one of my favorite stocks, MPW / Medical Properties Trust which is a Medical Reit. This is what appeared searching on MPW:  You would then click on the 10-K and 10-Q tab on the right to select the statements you want to review. What is the purpose of the Cash Flow Statement? The purpose of the cash flow statement is to provide a detailed picture of what happened to a business’s cash during a specified period of time, known as the accounting period. It will match the time normally of the Income statement, consisting normally of either a quarter (3 months) or a full year, although monthly cash flow statements can be provided. It demonstrates the organization’s ability to operate in the short and long term, based on how much cash is flowing into and out of the business. Cash flow statements are typically broken into three sections. Cash flow from operating activities, cash flow from investing activities, and cash flow from financing activities. Normally the operating activities section needs the most study, as its where we see how the cash flowed from regular goods and services and shows us both the revenue and the expenses. The investing activity is cash flow from purchasing or selling assets, which are usually some form of physical property. (Real estate, vehicles, patents, etc.) Financing activities detail cash flow from debt and equity financing. Note: There is a difference between cash flow and profit. While cash flow refers to the cash that is flowing into and out of a company, whereas profit refers to what remains after all of the company’s cash flowed in and out. Profit refers to what is remaining after all expenses have been deducted from its revenues. Both things are important. With a cash flow statement, you see the types of activities that generate cash and it can be used to make financial decisions. (like whether this is a good company in which to invest your money.) Cash from the operating income should routinely exceed net income because a positive cash flow speaks of a company’s financial stability and its ability to grow its operations. Having positive cash flow doe not necessarily mean the company is profitable. You need to examine the balance sheet and income statements for that decision. As an investor, the cash flow statement can help you better understand whether this is a good business to invest your money. As a business owner, it can help you understand the performance of your company and allow you to adjust your business strategy. As an accountant or manager, you can become more effective in managing your team, and allow you to play a larger role in your company. Non-finance professionals can also understand the concepts behind a cash flow statement. HOW CASH FLOW IS DETERMINED There are two methods to do a cash flow statement.
The direct method is based on the transactional information that impacted the cash during the specified period. In the direct method, you take all cash collections from operating activities and subtract all the cash disbursements from these same operating activities. 2. The In-Direct Method The second way depends on the accrual accounting method in which the accountant records revenues and expenses at a time other than when cash was paid or received. This means that those accrual entries and adjustments cause the cash flow from operating activities to different from net income. Instead of organizing transactional data like the direct method, the accountant starts with the net income number found from the income statement and makes adjustments to undo the impact of the accruals that were made during the period. In doing this method, the accountant identifies any non-cash expenses for the period from the income statement. The most common of these types of transactions involve depreciation. It reduces the values of the asset over time, and amortization allows spreading the payments over multiple periods. HOW TO INTERPRET THE CASHFLOW STATEMENT The cash flow statement can reveal what phase a business is in: whether it’s a rapidly growing startup or a mature and profitable company. It also can reveal whether a company is going through a period of transition or a state of decline. By reviewing this information, an investor may determine that a company with uneven cash flow may be too unstable to consider the company a good investment. A department head may look at the same statement and determine how his department is impacting the health of the company. With it, adjustments can be made to increase profitability. Cash flow is typically depicted as positive if the business is taking in more cash than it is spending. Likewise, if spending more than bringing in cash, it can be negative. These examples depict a Positive Cash flow which is desirable or a Negative Cash flow which is normally a bad sign. Negative cash flow can be caused by expenditures that do not align with the income to be produced by those expenses. Negative cash flow can also be caused by a company’s decision to expand the business and invest in future growth. Cash Flow Statement Example (Fictional Company)    From the cash flow statement above, we see the three breakouts of the money that was brought in from the activities of the company. The first section shows that the company brought in a net of $37,980. Investing Income for the year was: $581, while the net of financing and debt was $6732. The three of these made the total year increase of $45,203 which increased cash from the beginning of the year which was $15,509 to a new high of $60,712.
All of these indicators are positive as far as cash flow is involved. Increasing your net cash by 3 times the start of the year is a positive cash flow position. The Cash Flow Statement if one of the most critical financial documents prepared by the business. It offers valuable information as to whether the company is showing an increase or a decrease (Negative cash flow) which helps you in investing to decide if the company is moving in a good direction. Pay particular attention to the Cash Flow Statement and also to the profitability of the company based on the Income Statement. As mentioned in the part 1 article, the net assets give you an indication as to the true value of a stock in regards to being too high or if a lower value meaning it could be purchased below the Net Asset Value. We will conclude our study on reading financial statements next week when we cover the last of the 4 parts which is to read the Annual Report. List of All Investment Articles https://lifecanbesimple.net/investments.html List of All Minimalism Articles https://lifecanbesimple.net/minimalism.html www.lifecanbesimple.net http://www.InternetDirect.us Internet Direct Laptops  The 10x Rule – Grant Cardone
DISCLAIMER - I am not a Financial Advisor and do not work for any Brokerage Firm. The opinions given are of my own and are not to be used as professional advice. These are my findings and can hopefully help you to make informed decisions on investing. Consult a Broker or Lawyer before making any investment. The 10x Rule by Grant Cardone is another great book that I have read this year. If I have ever met someone who is fired up about work and wants to achieve his goals, it is Grant Cardone. This book is clearly geared toward people who want to be successful. If you are faint-hearted, this book is not for you. If you fear criticism or what other people may say about you, this may also not be for you. This is a “no holds barred” go after the goal book. The 10x Rule is all about giving at ten times what is expected of you. Ten times the effort, 10 times more time, and 10 times more than your competitors. Grant Cardone believes in giving all you have to be successful. Grant Cardone is a very successful mentor and teacher to hundreds of corporations in getting salespeople to perform at top levels. He is full of enthusiasm and not afraid of hard work. What I learned from the 10X Rule 10x Rule Definition: 10x Rule is based on the understanding of how much effort and thought are required to get anything done successfully. Average people do not understand 10x. 10x means giving 10 times the normal efforts. 10x makes you expect 10 times harder obstacles than average. 10X rules fuel unimaginable accomplishments. To accomplish 10x results, it takes extraordinary levels of effort. Efforts way beyond your thoughts. 10x goals are greater and larger than you ever dreamed. Your desire to reach your goals is all about whether you think you can or think you cannot. 4 Mistakes People Make
No matter how good you are, to be successful will take 10 times the effort, phone calls, emails, and work to complete your task or goal. Life is never easy -- be ready to battle. Success means different things to different people. What it means to you today will change in the future. Things to Remember about Success
It is very important to understand that there is no shortage of success. There is no limit to how much success you can have. You can have all you are willing to take, but it will take effort and work. Success is not a sum game, so there can be many winners. Shortages of success are manmade mindsets. Think big with great expectations. In life, assume control of everything. You are not a victim. Losers, whiners, and victims are never winners. 10x winners take control of their lives and accept full responsibility for all things. The more action you take the better your chances for success. Disciplined, consistent, and persistent actions are the determining factor. We have four choices when faced with a Challenge.
10x winners always take massive action. 10 times the effort, going way beyond normal. Massive action my cause new problems. That means you know you are on the right path. 10x people sometimes make unreasonable choices followed by massive action. Keep moving, keep trying. No one will make your dreams come true. It is up to you. If you follow #3 (take normal action), then you may be with the majority. Most people do just the bare minimum to get by. Average means typical, ordinary, and common. 10x people are not average. 10x goals should not be reasonable. You don’t know how far you can go until you have almost unlimited dreams and goals. Set HIGH goals. Dream BIG. Write down your goals and word them to say you’ve already attainted them. What the mind hears, it believes. Believe in yourself and set massive goals. Grant Cardone says to be fully 10x successful, we must become obsessed. Think so hard on something that you are obsessed with it, and then work all out to accomplish your goal. Nothing great ever happens without someone believing in themselves and being obsessed with accomplishing their goal. Take massive action. Go all in and over commit. That is not a typo. Grant Cardone believes you go for it and figure it out afterwards. Your most massive opportunities come from an almost unlimited mindset. Lots of action, persistence, and creativity. Don’t let fear hold you back. We all face fear, but we must overcome it. Take action and while respecting fear, you don’t let it grow. Let fear fuel your actions, not hinder you. If you are working at 10x levels, criticism will come your way. People will not understand your all-out determination to attain your goals. The only way to handle criticism is to foresee it as an element of your success formula. We must go all out to be successful when using 10x Rule. Be continuously learning and be very disciplined. Get involved and learn to love challenges and seek to solve problems. People (and corporations) love problem solvers. Be persistent until you are successful. If you fail, learn from it and come back even with greater action. Write down your goals and follow through. Go all out 10 times the normal amount. Greater success will come your way when you use the 10x rule. If you need a little encouragement to get fired up, this book is for you. If you really want to be successful, I recommend reading this book. While challenging me all the way through, I found his level of enthusiasm almost made me tired. This fellow is all about success. Listen to some of his podcasts at grantcardone.com List of All Investment Articles https://lifecanbesimple.net/investments.html List of All Minimalism Articles https://lifecanbesimple.net/minimalism.html www.lifecanbesimple.net http://www.InternetDirect.us Internet Direct Laptops  Mastering Minimalism – Eight Steps to a Life of Less Stuff and More Freedom - Emily Josephine Mastering Minimalism by Emily Josephine is a great book. If you are a seasoned minimalist you will still enjoy this book. If you are new to the topic, you will love Emily’s 8 steps to get you into action. Another great thing about this book is that for now, it is FREE. Click here to download it. (Do check that the BUY NOW price is 0 as they don’t keep these books free forever.) I love so many things about this book. Perhaps my favorite part is that Emily Josephine is a lady after my heart. She places just the right amount of humor in the book to keep you wanting to read more. I don’t want to steal her thunder, but here is a sample of her humor at the beginning of the book. I’m sure you’ve heard most, if not all, of the following reasons to move toward minimalism…. After all, I don’t want to fill your reading device with fluff that has nothing to do with the topic at hand, RIGHT? Don’t you hate it when you read a book and the author gets totally off track and goes on and on about something that you couldn’t care less about, something completely unrelated to the book’s title or its general content? Speaking of book titles, you wanna hear the funniest title I’ve ever --- Huh? Oh, I got off topic. FLUFF. So sorry. I loved it. Reminded me of the late Erma Bombeck with her dry wit. Anyway, if you loved that little segment, you will love this whole book. It is not a long read, so I will just hit the first 6 main topics which are all covered in chapter one. You will enjoy Mastering Minimalism. It truly, in a short few chapters, explains how to really get fully into minimalism and points out so many of the advantages.
The more stuff I have the less freedom I have. The more stuff I have the less freedom I have. The more stuff I have the less freedom I have. Good phrase to repeat until it really sinks in. Owning many material goods diminishes your freedom. A simpler life leads to emotional freedom in several ways. These first 6 reasons are just in the first part of the book in chapter one which is only 24% of the whole book. Check it out and you will be blessed. I hope she writes some more so I can be entertained by Emily’s sharp wit.  List of All Investment Articles https://lifecanbesimple.net/investments.html List of All Minimalism Articles https://lifecanbesimple.net/minimalism.html www.lifecanbesimple.net http://www.InternetDirect.us Internet Direct Laptops  DISCLAIMER - I am not a Financial Advisor and do not work for any Brokerage Firm. The opinions given are of my own and are not to be used as professional advice. These are my findings and can hopefully help you to make informed decisions on investing. Consult a Broker or Lawyer before making any investment.
How to Read Financial Statements - Part 2 The Income Statement The year 2022 has proven that it is crucial for us to know what we are buying when purchasing Stocks. The markets are very negative right now meaning we must understand how we are investing our money very carefully. We started our study on reading financial statements last week beginning with the balance sheet. If you missed that article, I suggest reading it before proceeding into part 2 which will be the income statement. Article on reading the balance sheet which was part 1 of reading financial statements. https://lifecanbesimple.net/blog/how-to-read-financial-statements-part-1-of-4-balance-sheet One of the most important of the financial statements is the Income Statement. This is where the profitability for a specific period is explained. The income statement, also known as the profit and loss (P&L) statement, summarizes the cumulative impact of the revenue and expenses for a given period. The document is normally shared as part of the quarterly and annual reports, but it may also be for just one period such as one month. Income Statements include the following elements:
Within an income statement, you find all revenue and expense accounts for a separate period. This allows comparisons for similar past periods. With this statement, you can determine whether the business is generating a profit. This also allows the company to compare figures to budgets and/or profit projections. There are two methods to review financial documents: vertical and horizontal. Vertical Analysis Vertical refers to the method of analysis where each line item is listed as a percentage of the base figure within the statement. This means all the line items are stated in percentages of gross sales, normally in dollars. You read down the single column and see the relative size of different expenses to the gross sales. This makes it easy to compare different periods and companies in the same industries. It helps to determine performance metrics. Horizontal Analysis Horizontal analysis reviews and compares changes in the dollar amounts in a company’s financial statements over multiple reporting periods. Sometimes it can be also used in percentages, but normally it is used for absolute comparisons. The horizontal analysis makes financial data and reporting consistent per generally accepts accounting principles (GAAP). It improves the review of a company’s consistency over time, as well as its growth to competitors. You can use this to identify changes/trends over periods of time. Of course in certain situations, both Vertical and Horizontal analysis are beneficial. In conjunction with the cash flow statement (which we will cover next), balance sheet, and annual report, income statements help company leaders and investors understand the full picture of a business’s operational results. It allows us to see the value and efficiency of the company and if the company is moving in the right direction in regards to market share and profitability in relation to others in competition with the company. Determinations can be made as to whether costs are rising or falling, as well as if sales are improving over prior periods. We will do part 3 on reading financial statements next, covering the Cash-Flow Statement. List of All Investment Articles https://lifecanbesimple.net/investments.html List of All Minimalism Articles https://lifecanbesimple.net/minimalism.html www.lifecanbesimple.net http://www.InternetDirect.us Internet Direct Laptops  DISCLAIMER - I am not a Financial Advisor and do not work for any Brokerage Firm. The opinions given are of my own and are not to be used as professional advice. These are my findings and can hopefully help you to make informed decisions on investing. Consult a Broker or Lawyer before making any investment. How to Read FinancialStatements-Part 1 – The Balance Sheet The year 2022 has proven that it is crucial for us to know what we are buying when purchasing Stocks. The market is almost in a bear market at this time, so we best understand what we are purchasing and be sure the stocks are worth the value we are paying for them. Over the next couple of weeks, we will do a 4 part series on how to read financial statements. Now if you have minimal investments or you mainly purchase Mutual Funds or full market ETFs, these articles will be of minimal help to you. However, if you are directing your own ROTH IRA investments and purchasing specific stocks or specific market ETFs (Exchange Traded Funds), these articles may benefit you. On ETFs, you can identify the top 10 or 20 investments in the ETF, and analyze the quarterly filings. To properly be able to determine the company’s real value versus what it is being sold for, and see if a company is truly being managed well, takes a considerable amount of work. When I started this article, my intentions were to discuss it all in one article. However, after reviewing my accounting books and doing some online studies, it became clear that this is a very deep subject and will take a lot of time to cover successfully. We could actually spend 10 or 20 articles, but I don’t want to overly complicate the issues. So this week, our goal will be to learn how to understand the BALANCE SHEET. Each quarter, companies traded on the New York Stock Exchange and the NASDAQ are required to file paperwork with the securities and exchange commission (SEC). These quarterly filings, called the 10-Q filings, can be located at SEC.gov. The yearly financial statements are also available, and these are labeled the 10-K The 10-K is of course a more comprehensive and also audited financial statement that is filed after the end of the company’s fiscal year. Management may add some color and commentary to their yearly report. Some also provide supplements that provide additional details and sometimes give it in a more user-friendly format. Rida Morwa of Seeking Alpha did a blog on Reading Balance Sheets last month, and he mentioned that it is always important to realize that management in preparing these financial statements is inherently biased towards their companies. So while we may get a biased opinion, we can still review these statements and determine the true value of the company and whether they are worth the current stock price or if they might be selling at a discount. To find the financial statements (10-Q and 10-K), go to the SEC.GOV website and use the EDGAR search page to locate the company you wish to review. You can type in the Stocks Ticker (IE IBM ) or type in the company name. In Rida Morwa’s blog article, he searched one of my favorite stocks, MPW / Medical Properties Trust which is a Medical Reit. This is what appeared searching on MPW: You would then click on the 10-K and 10-Q tab on the right to select the statements you want to review. What is the purpose of the Balance Sheet? Each of the 4 reports we will review has functions that are unique. If you studied accounting in College (which was my major), you already know that the Balance Sheet conveys the “book value” of the company. You see what resources/assets it owns, and how they were financed for a specific time period. When a balance sheet is reviewed internally by a business leader, key stakeholder, or employee, it is designed to give insight into how the company is doing. When the balance sheet is reviewed by someone interested in the company, It is designed to give insight as to what resources are available and how they were financed. Potential investors can decide whether this is a valuable company worthy of their investment. You can also determine the profitability, liquidity, and debt-to-equity ratio. The Balance Sheet is broken into 3 main parts. It shows
The balance sheet provides information that can be leveraged to compute rates of return and evaluate the capital structure. The basic rule of the Balance Sheet or the Accounting Equation always used is: Assets = Liabilities + Owners Equity So you can determine the Owners Equity when all things balance by taking Assets – Liabilities = Owners Equity The cardinal rule of the balance sheet is that it must balance. Assets are anything the company owns that has a quantifiable value. Liabilities refer to the money the company owes to a debtor. Examples are Outstanding Payroll Tax Expenses, debt payments, rent and utilities, bonds that are payable, and other taxes. Owners Equity is the net worth of the company. It is the amount of money that would be left if all the assets were sold and all liabilities paid. This money on a publicly traded company would be what belongs to shareholders, either private owners or public investors. It must be noted that by itself, the balance sheet does not provide any information on trends, it is just a snapshot of what they own and owe. So this is just one of the many financial statements needed to fully determine the company’s financial position. We will be covering those next two in the Income Statement and the Cash Flow Statement. The balance sheet is very important as it offers critical insight into the health of a business. It can be used by investors to determine the true value of the company and decide if they want to invest or not. Business owners use it to create a more effective organizational strategy. Workers and accountants can use it to determine if better processes can be used to reach the company’s goals. External auditors use the balance sheet to be sure the company is complying with all the reporting laws. Breakdown of the Balance Sheet Assets An asset is defined as anything that is owned by a company and holds a quantifiable value. Assets typically are tallied as positives (+) on the balance sheet and broken down into both Current and Non-Current Assets. Current Assets are typically anything the company might convert into cash within a year such as:
Non-Current Assets are long-term investments not intended to be converted to cash in the short term. Examples are:
Liabilities are the opposite of Assets. This is something the company owes and is typically shown on the balance sheet as negatives. (-) Current Liabilities
Non-Current Liabilities are long-term obligations or debts. (More than one year in length. Examples:
Owners Equity Owners equity (or Shareholders equity) refers to anything that belongs to the owners of the business after liabilities are resolved. So Assets – Liabilities = Owners Equity When reviewing financial statements, you will find that U.S. companies use “GAAP” (Generally Accepted Accounting Principles) accounting methods. This ensures that all companies are consistently represented and report using the same metrics. GAAP is a form of accrual accounting. Accrual accounting recognizes revenues when earned and expenses when the obligation is incurred, even if no cash has changed hands. It should be noted if a company has too many liabilities, it may be near bankruptcy. Equity investors rarely come out well in bankruptcy. The stronger a balance sheet is the better chance that a company has against its competition. Companies that are cash strong can quickly make moves to efficiently improve profits. In investing, you should try to stay with companies that have a strong, healthy balance sheet. By reviewing prior financial statements, we can determine if the company growing stronger or weaker over time. When reading a company’s financial filings at Sec.gov, remember that it is typically not just a single corporation. It is common for companies to be made up of various branches, different corporate names operating in different stores, or for REITS, a corporation that owns the real estate and another for operations. For various legal, taxation, and operational reasons, having multiple corporations doing different roles can make sense. All these branches fall under the same parent company, so the finances are “consolidated” for reporting. The word “Unconsolidated” indicates ownership in a company where the financials are not included with the rest of the company. Just a note to remember when reviewing financial statements. What You want to Look at in the Balance Sheet as an Investor The main thing is to watch debt and leverage. Leverage can create risks, but it may also improve returns. You need to monitor the company for changes in its risk profile. Management may say they are intending to deleverage, but are they? There are many transactions involved in this, and it may be difficult in the middle of a quarter to see the improvement of leverage or not. This is beyond the scope of our article, but be aware of leverage and its effect on the company’s risk profile. Perhaps nothing can be more clear as to the value of a company than to take the total assets and divide by the number of outstanding stock shares. This is a simple way to see what the company’s asset value is per share. If the assets value per share is $50 and the stock is selling for $35, then probably this is a good company to consider, all other things considered. Now if those numbers reverse, and the assets are $35 per share and the stock price is $50, it probably means it is oversold. Does that mean it will not make money and move up in the market? No, it does not. I doubt a review of Amazon would come close to meeting this criterion as so many are speculating on the company. This is a comment on Amazon, not proven by looking at their financial statements. Anytime the P/E ratio (Price to Earnings Ratio) goes much above 20, you probably know that the stock price may be getting too high. The most important thing is financial statements allow us to examine what is really going on in the company, not just the talk from the Public Relations of the company. If the balance sheet does not align with what management is saying, it may be a reason for caution. By keeping an eye on companies, you can typically make good moves to buy more or to reduce your stake in the company based on the company’s strengths and weaknesses. We will do part 2 on reading financial statements next, covering the Income Statement. List of All Investment Articles https://lifecanbesimple.net/investments.html List of All Minimalism Articles https://lifecanbesimple.net/minimalism.html www.lifecanbesimple.net http://www.InternetDirect.us Internet Direct Laptops |
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