 DISCLAIMER - I am not a Financial Advisor and do not work for any Brokerage Firm. The opinions given are my own and are not to be used as professional advice. These are my findings and can hopefully help you make informed decisions on investing. Consult a Broker or Lawyer before making any investment.
Back to Basics of Investing – Part 2 We began our study on getting back to the basics of Investing last week. If you did not read that article, I suggest you read it first. It is the first article on our new blog site: LifeCanBesimple.blog Back to Basics in Investing Part 1 We have dozens of articles on our old site which is LifeCanBeSimple.net I mentioned last week it is important to know HOW TO INVEST, and also what platform to use to invest. Anyone can open a standard brokerage account, but you have so many things to consider concerning your taxes. If possible, always do your investing in either a 401-K plan or a Roth IRA, or a Traditional IRA. If your employer offers a 401-K, you probably want to start investing there. Most companies will match your first 3 to 5% of your contributions. That means you will immediately have a 100% gain on the money the company matches into your account. An example of a 3% company match would be if you put in 3% of your $20,000 salary. Your contribution for the year would be $20,000 * .03 percent which would be $600. The company would also contribute $600 making your total year-end balance equal to $1200 plus any dividends or gains you might have had. Not all companies have a match, but if they do, you sure want to contribute up to that matching amount if possible. Also, realize that companies may not pay their portion of the earnings until you are fully vested. Talk with your HR department or a lawyer or tax planner to fully understand vesting. If no matching is available on a 401-K, consider investing in an Individual Retirement Account (IRA). There are two types, the Traditional IRA and the ROTH IRA. I am using ROTH IRAs on all 5 of the ones my wife and I currently have, but you may be better off taking the tax deduction on the traditional IRA if you expect to have a lower tax bracket at retirement. DIFFERENCES in IRAs Investing requires patience. Warren Buffet, one of the world's most well-known investors, said: “Wealth is a transition of money from the impatient to the patient.” Unless you have patience, you most likely will not do well in investing. You need to look at the ‘big long-haul picture.” Some people spend all their time looking for a fast dollar. The best way to make money is to study and be slow and methodical. Not losing money should be your number one goal. When making investments, it is crucial to invest using a Retirement Account. If you don’t invest in a retirement account, you will have to pay taxes on both your dividends and your capital gains or losses. A capital gain or loss happens when you sell an investment for more or less than what you originally paid for it. If you held that investment for over a year, you have a long-term capital gain or loss. If less than a year, it is a short-term capital gain or loss. There is a substantial difference in the amount of taxes you have to pay. Long-term gains are taxed at your current tax rate. Short-term gains are at a higher rate. When you own an asset or investment for one year or less before you sell it for a profit, that’s considered a short-term capital gain. In the U.S., short-term capital gains are taxed as ordinary income. That means you could pay up to 37% income tax, depending on your federal income tax bracket. You must study tax laws to determine the exact price. When investing with a retirement account, you don’t have to concern yourself with capital gains. If invested in a ROTH IRA, you will never pay taxes on your profits. On Traditional IRAs and 401Ks, when taking a distribution, you pay income tax as you take the withdrawals. It is up to you to make good decisions and study to make wise investments. I loved what Jim Rohn, a motivational speaker said. “If you don’t like the way things are, CHANGE. You are not a tree” Be smart. If you are not pleased with where you are in life, CHANGE. Change your habits and get on a steady, consistent path. What is a good investment plan? If you read 20 different investment blogs or books, I dare say all will be different. Who is right? There are many voices crying out for our attention. The Bible says that none of those voices are without signification, meaning they are either good or bad. I listened and tried dozens of them over the past 30 years. Last year I got really serious and started reading, and I mean a lot. Last year I read 90 books, and this year by June I have read 52 books. Every book has been about investments, mindset, or habits. And all have helped me to get a better idea on how to invest. Is my plan best for you? I can not guarantee you it is the best. However it is a combination of about 20 different plans that I have put together. Here are 4 common methods to invest. Plan 1 – Use a certified financial planner (CFP) to make your decisions and put together a logical plan. There is a charge for this service. It can be a fixed amount but normally is tied to the total investment value which ranges from 1 to 5%, sometimes even higher. One thing to be on the lookout for is that the person making the decisions is not making a profit on the funds or stocks they have you invest in. This is my least favorite plan as I am a hands-on person and want control over what I invest in. Plan 2 – Manage yourself and buy mutual funds that have done well over the years. Magazines like Kiplingers have lists of good quality mutual funds with ratings and percentages they have averaged over 1, 3, 5, and 10 years. Pay more attention to 3 and 5-year averages than just recently, as the market may have been down and all funds dropped during that period. Mutual funds are categorized into many groupings. Some are total bonds, some are Large Growth funds, and some are balanced funds with both types. There are small-cap mutual funds, medium-cap, etc etc. Plan 3 – Control it yourself, and invest mainly with ETFS. (Exchange Traded Funds) Investing with ETFs. You do not have to pay high management fees and can get every flavor of investments in the various ETFs. On these, always put a large number of your investments in the total stock market using ETFs like ITOT, SCHB, or VTI. You can mix in specific industries, bonds, Real Estate Investment Trusts (REITs), and dividend growth stocks. Reits and M-Reits There are so many flavors of ETFs that I need to write an article on the many types available. This is one of my best ways to invest. Plan 4 – Purchase a mix of them all. Buy Mutual Funds and Bonds for stability, Then buy a lot of ETFs, and then get into the deeper methods of investing in Preferred Stocks, Block Development Companies, Closed-End Funds, and REITs. And you always want to invest in Dividend Growth Stocks. Understanding Preferred Stocks Using the Preferred Stock Channel. Explanation of Block Development Companies Investing with Dividend Growth Stocks My current investment portfolio is tied mainly to this method with a heavy dose of Preferred Stocks and CEFs purchased at large discounts to Net Asset Value. Many of these are paying 12 to 30% in dividends. I have used all four of these methods and what works best for you may be any one of them or a combination of the others. The reason for my success in late 2022 and 2023 has been the limiting of loss of down markets using Stop Loss orders. Protecting Your Investments from Huge Losses Another method many use is to buy the same amount of a specific investment continuously. (Like weekly or monthly). This allows you to have dollar cost averaging. In high markets you buy fewer shares but more in low markets. A person using this concept is Rachel Richards, the author of Money Honey. She says she has four rules on investing, which can not always be taken into account when doing dollar cost averaging. Rule #1 – Don’t Sell when the Market is Down. Rule #2 – Don’t buy when the Market is High. Rule #3 – Hold investments for over one year before selling. Preferably for over 5 to 20 years. Rule #4 – Don’t be a control fanatic. She has followed her rules and has done very well. She only reallocates her investments twice a year. She invests using auto-pilot and lets it run itself. She uses just 4 ETFs and puts 25% of her monthly investment into each of these categories. 25% to Small Growth Stocks 25% to Mid Cap Growth Stocks 25% to Large Cap Growth Stocks 25% to Global/International funds. The 4 ETFS she mentioned that she has used were: IJR VO VV VEA The last 3 are Vanguard ETFs. You might make it 20% and put 20% in VTI to make an even more diverse portfolio. VTI is the total stock market index. So I guess we will close the second article on getting back to the investments. What you do is really up to you. There is no perfect investment plan, but there are many, many ways. What I advise you to do is this. Study, and then study some more. Try things. Don’t be afraid to have a few failures. I learned that from several of Robert Kiyosaki’s books. RICH DAD POOR DAD book review on Unfair Advantage. I have not given up when I have had failures. I kept at it and learned. You can too. Is it easy? No. But you can be successful. You are not defeated until you fail to get back up. Stick to it. Be determined. List of All Investment Articles List of All Investment Articles on New Blog List of all Minimalism Articles List of All Minimalism Articles on New Blog Facebook Internet Direct Store Internet Direct Laptops
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 DISCLAIMER - I am not a Financial Advisor and do not work for any Brokerage Firm. The opinions given are my own and are not to be used as professional advice. These are my findings and can hopefully help you make informed decisions on investing. Consult a Broker or Lawyer before making any investment.
Back to Basics – History from Cash to Mutual Funds The years 2022 and 2023 have been quite a trip regarding Investments. In early 2022, the S&P 500 was down over 30%. To say there were challenges in investing in 2022 is a vast understatement. The purpose of our blog is to help investors get started in investing. Several of you have mentioned that my most recent articles on investing have become a bit complex covering tougher subjects like Preferred Stocks, BDC (Business Development Companies), and CEFs. (Closed-End Funds.) The complexity certainly has not been on purpose. My goal is to help everyone find the niche they need to make money consistently. Like all endeavors, we must continue to grow and expand our knowledge so that we can apply what we have learned to gain the maximum returns. This is not something you learn once and never need to expand or grow for the rest of your life. So for those of you who are not ‘seasoned investors’, this week is for you. We are going to take a historical view of money and how we got to where we are today. We won’t go back to Genesis 1:1 where God spoke the earth and man into existence, but we will begin talking about the simplicity of cash. The original method of exchanging money for goods was done simply with cold hard cash. If a horse cost $10 in the olden days, you pulled out ten one-dollar bills and made the purchase. Banks came along and allowed people to store their money safely and later started savings accounts where they paid you money for the use of your savings dollars. As banks got into making loans, they then started offering CDs. (Certificate of Deposits). This tied up your money for terms of a few months to five years. If you took the money out before the maturity date of the CD, you paid a penalty which is still how it is done today. The first stock market began in the 1400’s, but the New York Stock Exhange began in 1790. So early on, companies began selling stock certificates to allow people to invest in their company. Back then it was a physical certificate, but today computers keep up with who owns the many shares of stock. Many companies began paying dividends on their profits, making it more profitable to own the stocks. Dividend-paying stocks are still one of the best investments out there. The high-quality companies began to be known as Blue Chip companies (where the term blue chip stocks originated.) They pay 1% to 15% in quarterly dividends. A stock is simply a unit of ownership in the company. If you own IBM stock, you own a part of the IBM Corporation. There are many elements to the stock market. Stocks are very liquid and also fluctuate in price a lot. In one day they might go from $95 a share to $120 and then close the day at $90. The 3 main indices of the stock market are the DOW (Top 30 stocks), the NASDAQ consisting mainly of 100 technology stocks, and the S&P 500 which are some of the largest 500 stocks. Different rules apply on who makes up these 3 lists and changes do happen year to year as to which companies make up those indices. One of the great things about stocks is they can theoretically go up and up, but the most you can ever lose is the amount you paid for the stock. There is no liability associated with owning stock, so you will never be sued for corporate wrongdoing when you own stock. You can lose your full investment (which is rare), but that is the maximum loss. Some of the Investment Categories Soon another monetary element came along called a bond. A bond was an IOU from the company paid to the bondholder. It was a debt the company was to pay the bondholder and had various maturity dates such as one to 5 years. A bond is an IOU from the company to you the bond holder. Again in the early days, there were bonds with coupons to cut out to get your monthly or quarterly interest. Today computers keep up with the ownership of the bonds and no real coupons exist. The bond market is even bigger than the stock exchange. Bonds are not as volatile in price as stock, but as interest rates change, they can move up and down rapidly in price. A Treasury bond that has 30-year maturity will go down substantially in price when interest rates rise but will go up in value when interest rates drop. All maturities fluctuate, but the 30-year maturities move the most due to the time they have to be held until maturity. What is a bond? The Pros of bonds are they are less volatile and offered in many different maturities. You can buy 90-day Treasury bills and notes, and go out to 30 years on Treasury Bonds. Corporate bonds typically are not for more than 10 years. So bonds offer less volatility and more stability. As a person nears retirement age, owning more bonds gives your portfolio more stability. One of the better investments in 2022 was the I-Bond. These are inflation-protected treasury bonds that are tied to a 30-year bond rate plus the inflation rate. In April of 2022, these were paying 9.62%, but have since dropped each six months to the current rate of 4.3%. But still not too shabby for a government backed security. Information on I-Bonds and How to buy at treasurydirect.gov The Cons of bonds are that they normally pay less than what Stocks will pay you over time. Since stocks are volatile, it means you must have holdings in many companies to diversify. That is when Mutual Funds were created. By buying into a mutual fund, you are buying a portion of many stocks and/or bonds. When you buy a share of a mutual fund, it automatically gives you a lot of diversification. Some mutual funds are just for specific types of stocks, some just for bonds of various maturities, and then some that are called balanced funds that own both Stocks and Bonds. These sort of became the marketplace gems in the early years of the 70s and 80s. You paid the manager of the fund a fee to manage your investments. These fees could be as low as 2% but some much much higher. Today most are sold as no-fee mutual funds, but while no upfront fee is paid, there are still management fees of 1 to 2%. Three Quality Fidelity Mutual Funds What investors discovered after much study was that most fund managers can not beat the average of the overall stock market. That is when Mutual Index Funds began being sold that tracked stock market indexes. These were not truly managed funds so the fee was less. Vanguard Investments is known for its low-priced index funds. Someone came up with the idea of making a type of investment that was not a mutual fund, but just an index. These became known as ETFs (Exchange Traded Funds), and they have almost no fee involved. Normally 2% and most under 1%. So if you buy an ETF like VTI (Vanguard Total Index ETF), you are tracking ALL the stocks in the whole stock market. A great simple way to save money and get consistent returns. Many say that the average return on the full stock market over the last 50 years is 12% or higher. Be aware that there are many times that the stock market has lost money for 3 consecutive years. But on average, stocks and ETFs are a good way to invest when tied to the index of the whole stock market or dividend-paying stocks. ETFs are one of the most popular investment vehicles in investment circles. You can sell them anytime the market is open. The ETF price reflects the whole market segment they represent. You must realize that there is an ETF to track almost any type of investment nowadays So what we are talking about being safer is FULL MARKET indexed ETFs like VTI, ITOT, and SCHB. SPY is another good one for the S&P 500 only stocks. Simple Path to Invest using ETFs. It is amazing how much you must talk about to make basic investing simple. It simply cannot be done in one article. I think we need to continue on this next week and explain a bit about capital gains and how to shelter your retirement from income taxes. You will not fully understand all of the options in the stock market without studying for several years. All of the articles on our Investment Page can help identify various methods to invest. List of All Investment Articles Thank you for your patience. It truly takes an investment professional to help you fully understand what is involved and the tax concerns of investing. Your lawyer or investment broker can shed more light on the complexities. You must study and grow to be effective in investing. We began last year with many basic articles if you go to the bottom of our Investment Articles list and work your way up. List of All Investment Articles List of All Investment Articles on New Blog List of all Minimalism Articles List of All Minimalism Articles on New Blog Facebook Internet Direct Store Internet Direct Laptops  DISCLAIMER - I am not a Financial Advisor and do not work for any Brokerage Firm. The opinions given are my own and are not to be used as professional advice. These are my findings and can hopefully help you make informed decisions on investing. Consult a Broker or Lawyer before making any investment.
How to Survive Without a Salary by Charles Long This book was recommended by several of the people promoting the early retirement movement. (FIRE – Financial Independence Retire Early) It is not easy to obtain. I got my copy used on eBay for $4. This link to book on Amazon is for $62. You can read about some of the people involved in FIRE movement in my article on Why Work 40 Years to Retire. I thought the book would be interesting and it was. The author is quite candid and tells you upfront that it takes great discipline to live without a traditional salary. He points out immediately that we all must have the cash to survive, so you must have an alternate stream of income like side jobs. There are many ways to make money. In years past, many bartered for their needs. And people controlled their wants much better than we are taught in society today. WHAT I LEARNED FROM LIVING WITHOUT A SALARY Charles Long begins the book by explaining how today is different from any other time in history. Think how just a few years ago, there was no Internet, now everything is tied to computers all around the world. Today we are told that we must specialize and do one thing really well. Our parents and grandparents and all our ancestors were never so taught. In the past, you needed to know a lot of things. Specialization will not help you to survive in our changing world. We need to know a LOT of things to survive. But as things change, we find out that today to survive, those that know a lot of things do much better than those who know just one specialized thing. Life is teaching us that career ladders are not working out like they did in the past. Today with Globalization, jobs are going away faster than one can realize. Today it is almost impossible to go into the job market and work a full career for one company. As Globalization expands, wages continue to drop as some other country is always willing to do the labor cheaper than the last. To combat this, we need to learn ways to survive. Mr. Long says he has lived the vast majority of his life without a traditional job with a salary. His success has been due to seeing things differently and being willing to cut costs to a bare minimum. Living below most people's standards is the key to his success. And he thinks outside of the box about almost everything. He teaches that we must learn what we truly need, and not worry about what we want. You truly can get by without that 40-hour work week. Charles Long still works, but he tries to work smart. He does things smarter and is willing to do odd jobs to make a few dollars as needed. He lives what he calls the “Conserver Lifestyle”. To accomplish this, he is willing to ask hard questions and look for alternatives to just about everything. Mr. Long gives an example of the difference in acquiring a refrigerator. Person number one goes out and buys a $1,000 refrigerator by putting it on his credit card. With a 7% tax, that comes out to $1230 after you consider the 15% extra interest on the credit card. This is based on paying it off in one year which most people will not do. And most credit cards are above 18% nowadays. If you are in the 25% income tax bracket, the reality is you must make $1,640 to make that $1,230 to pay back the loan. Person number 2 finds a quality used refrigerator for $500 and pays cash for it by withdrawing cash from his savings account. With tax, it is $535 plus $35 of lost interest as he puts money back in savings. If in the same 25% tax bracket, he must earn just $733 to pay for it, meaning less than half the cost of person number 1. Plus there is no pressure when you pay with your own money. Not to mention that debt causes stress. If in a lower tax bracket, it will cost perhaps less than $600 in total. Learning what you MUST have and limiting your tax liability can save a lot of money in a year. As many have learned, sometimes LESS IS MORE. To live the “Conservers Lifestyle”, you have to make good financial decisions. Good choices that are Deliberately Calculated. Always think things out. Don’t get in a rush, and try thinking outside of the box for alternative ways of doing things. Don’t worry about keeping up with the Joneses, most likely they are broke and looking for relief. Living a life of consumption is not living a life of freedom. Being able to wake up each day and do what you want is worth so much. Maybe you don’t have the shiniest gadget, but you can be very happy when you live the Conservers Lifestyle. Charles Long urges you to not rush out and quit your day job without thinking things out. You must survive, and a plan carefully calculated can get you to where you want to be soon. And don’t think when you quit your job that all the hard work is over. The reality it is just beginning. A freedom lifestyle may require more hard work than you have ever done in your life. Gardens require work to maintain. Raising animals bring in new costs and extra chores. As the old motto says “Nothing Is Easy”. While freedom from your job with a salary may be great, don’t believe all the hard work is over. It is not. In reality, hard work is now starting. The examples in the book on HOW to buy things are fantastic. I will never be the same when it comes to buying from now on. He explains how to buy almost everything. NEVER PAY RETAIL. If one person won’t work with you, go to the next one. Everyone wants to make a sale and keep their customers happy. And his number one rule is NEVER PAY RETAIL. At garage sales, some great prices can be found. However the best prices don’t come early in the day, but late in the day when the person is eager to get rid of all the junk. When you could not buy for $20 in the morning may be had for a couple of dollars. You might have all that is left in the yard for $10. Just be patient and wait it out. Charles Long says he sets a Maximum and Minimum price to buy items. The Maximum is much less than retail new price. If he can buy at the minimum price or less, he buys multiples and then resells the items. He never pays more than $5 for a door but sells them for $10 to $20 all the time. If he can buy one for 50 cents or less, he buys them all. Why? Doors can be used for so many things. Think of how many heavy-duty shelves you can make out of doors. A new floor for your trailer. Maybe even a wall for a shed. As I said before, this guy thinks outside of the box. One of his better chapters is on negotiating. Everything we buy can be negotiated. People who pay retail are losing out on one of the fun parts of making a purchase and wasting a lot of money. Someone owns that store. If the clerk won’t negotiate, ask for the manager. If no one will talk with you, then move on to another store. There is ALWAYS a better deal down the street, whether you are buying clothes, houses, land, or vehicles. All things can be negotiated. Dave Ramsey once said that a really good deal only comes around about once every 6 months to a year. But be ready to move on it when it comes and be able to recognize the great deal. One of my favorite stories was when Mr. Long decided to put in a wood stove. He looked for a long time until he found a used one in good condition for $50. Then he discovered you must have protection on the walls around the stove. Normally these are special panels to reflect heat made of a fire proof material like asbestos. But each sheet was over $100 and the separator/spacers were like $20 each. Thinking it out, he figured out that metal panels could do the same thing. He found 20 metal sheets for $10 and used 3 of them and sold the others for a profit. He then found some electric fence wire insulators for under $2 each to attach the metal to the wall. This is smart thinking to find cheaper and sometimes even better than new options. Most people spend over $1000 installing a wood stove, and he did it all for under $100 including the pipe. In conclusion, I would say that you should read this book. Perhaps living without a salary may not be your cup of tea, but hey, learn how to negotiate and think outside the box like Charles Long. And a good starting place is to not pay $62 for the used copy of this book. Developing the right ‘purchasing’ mindset can save you a lot of money over a lifetime. I think another way to accomplish this freedom is by having a lot of passive income streams. Nothing beats having money flowing in without you having to work for it. What is Passive Income? Can we live without a salary? Yes, but you must learn to make money in alternative ways such as side jobs. And remember, you may work harder in your life of freedom than you did at your old job. Cutting costs and living frugally will help you to get to a life of freedom. As I mentioned at the start, the book is not easy to find as it was written in 1988. But it can be found used with a little determination. After reading this book, I will certainly change my ways of buying. Look for the best buys and show some discipline in your life. How to Survive Without a Salary is definitely a recommended read. List of All Investment Articles List of all Minimalism Articles Facebook Internet Direct Store 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 my own and are not to be used as professional advice. These are my findings and can hopefully help you make informed decisions on investing. Consult a Broker or Lawyer before making any investment.
WHEN TO START INVESTING? Nothing is greater than having a loving family. We need to take steps to provide for our family, and that includes investing. What is the best age to begin? Many start in their 60’s, some in their 50s. Fewer in their 40s, even less in their 30s, and almost none in their 20s. The younger you are the less we seem to think about retirement. You think retirement is WAAAYYYYYY out there. Reality is it is on you before you can blink. The sooner you get started, the easier it is to accumulate a large amount of money. As a young person, it is hard to make the mature decisions that will give you excellent long-term results. I want to tell you a little about my own personal life and how I viewed investments starting in my 20’s. I was no different than most people in my young years. Having the cool car and motorcycle was way more important than worrying about saving money and investing. It made little difference at all to me. I preferred striving for the fastest drag racing car in those years. Riding dirt bikes was way more important in my 20s and 30s than investments. Being a Christian, God dealt with me about my lack of service to him, and in my early 20s, I gave up the dragstrip and started serving God on Sundays. Soon I got married and after a few years, we purchased our first home. At the tender age of 27, my first son was born. Investments weren't on my mind at this point. To me, I had my whole life in front of me. In my 30s, I finished up my college studies and began some investment study. I opened my first brokerage account at Merrill Lynch and was blessed with a great broker. The problem was he could not change my spending habits. Even after I started my consulting business and began making a lot of money, I could spend $1,000 more than I made, sometimes even in a month. The more I made, the more I spent. I blew a lot of money and didn’t save any for retirement. We had more children and decided to move to the country and buy land and build a large 4-bedroom home. With over 50 acres of land, we built 4 wheeler and motorcycle trails and bought more and more toys. The older the kids got, the more expensive the toys became. We also worked a lot in those days and built barns and raised cattle and horses. It was a lot of fun, but as before, we continued to spend more than we made. By the time I bought all the horse trailers and other ranch equipment, I was now spending as much as $20,000 more per year than I was making. This was accomplished by having too much credit limit on several credit cards. We traveled in those years and spent over $5,000 yearly on vacations. Someday I would easily pay it all back I thought as I made more and more money each year. When I got into my 40’s, I saw that things were out of control and sought help with Consumer Credit Counelling. With their help, I would have made it out of the bondage, but some business situations went south and I wound up having to declare bankruptcy and start over. It was in my 50s when this bankruptcy happened, and in a way, it was a blessing. I sold the big home and did a restart on my finances. With help from Dave Ramsey and his book Total Money Makeover, I finally saw the danger of debt. We got out of debt totally in 2021 and I got serious about investing. We started multiple IRAs, but by waiting so late to begin, I lost the edge in compounding. The Compound Effect by Darren Hardy explains how compounding is a great blessing in life and especially so in investments. My issue was a lack of self-discipline. Read my articles on Resilience and Determination which are attributes we need to acquire. Article on Resilience Article on Determination My lack of understanding about Compounding really hurt me. In my college years, I did study the Rule of 72 in accounting at college. The Rule of 72 In summary, the rule of 72 shows you how long it will take to double your original investment based on a specific rate of return. You take the interest rate and divide it into 72 to determine the number of years it will take to double your money. Examples: Interest Rate No. Years Calculation 6% 12 72/6 10% 7.2 72/10 12% 6 72/12 20% 3.5 72/20 In reverse, the rule of 72 can tell you what interest rate (return) it will require for the number of years to get it doubled. Divide the years into 72 to get it. If you want to double in 4 years, it will take 18%. (72/4) So, a practical example of this would be if you could make a consistent return of 12% every year, your money would double every 6 years. Think of the number of times that would happen if you started at age of 23 versus 59. If you started at age 23, you would double your investment 7 times before 65. 65-23 = 42 42/6 = 7 But at age 59, it would only double one time until you are 65. HUGE HUGE difference. The sooner you start, the sooner you can acquire a huge sum in your retirement account. Show discipline in your life and start now. If you are young, take my word for it. You really need to start now. Don’t wait until you are in your 50s as I did and miss all the simple compounding of investments. The simplest and most direct way is to start investing now in a Roth Ira. Differences in Traditional and Roth IRAs By investing in a Roth IRA, all of your Interest, dividends, and capital gains are never taxed. You don’t get a break on your initial contribution as you do on Traditional IRA, but there are no taxes on withdrawals and no forced RMDs. (Required Minimum Distributions.) If you already have a traditional IRA, it is ok to use it. But you will have to pay taxes on your distributions. One option is to convert it to a ROTH IRA and pay the taxes now. Each situation needs to be evaluated. An accountant or tax planner can give you good advice. But the answer to the question of “When To Start Investing” is TODAY. If young, get started now. If old, get started. But the sooner you begin the sooner you will start having success. Study and read about investing every day. Read books by Robert Kiyosaki and Joshua King. (Kindle books) We have many articles in our Investment’s tab. Read all of our investment articles and pick a good strategy to invest and consistently fund your IRA while you can. You must have Earned Income to make contributions. List of All Investment Articles List of all Minimalism Articles Facebook Internet Direct Store 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 my own and are not to be used as professional advice. These are my findings and can hopefully help you make informed decisions on investing. Consult a Broker or Lawyer before making any investment.
Book Review – Wealth Can’t Wait by David Osborne and Paul Morris I loved reading this book. The authors did a great job of asking the right questions to get all of us to invest and realize wealth is attainable and not so hard to attain. But it does take some effort. A few months ago I wrote an article about the importance of obtaining passive income and pointing out that The Calvary Is Not Coming. It is our job to manage our investments and no one is going to do it for us. This book is all about teaching us how to acquire wealth. The authors said many are born on third base by either inheriting money, marrying into wealth, or winning the lottery. The rest of us unfortunately wind up having to hit base hits or even worse, we strike out. This book teaches you how to have the right mindset to gain wealth and to develop the right skills to empower your freedom. Building wealth requires us to make different choices, think different thoughts, practice different habits, and conduct business differently. Building wealth is a lot like building muscles. It requires repetition and consistency to get there. We have to apply what we learn, and then do it over and over again. You don’t go to the gym once and expect to have strong muscles. It is the same with gaining financial knowledge. It takes continual study. I believe the best part of this book is listing the 7 Wealth Building Traps. If you are doing any of these 7 wealth traps, it will prevent you from gaining wealth. I think all of us have been guilty of most of these sometime in our life. If you are doing any of these, make it a point to stop doing it and move forward. The 7 Wealth-Building Traps Trap Number 1 – The Stable Cushy Job Being satisfied with where you are financially is not a good plan. You must reach beyond your job. Staying comfortable with where you are will never gain you much wealth. It takes being purposeful and building a network to get you there. Sometimes being satisfied keeps you poor. Trap Number 2 – Risk Avoidance No one wants to lose, but nothing ventured guarantees nothing gained. The biggest risk in this life is to never take a risk. Building wealth requires taking some risks. You may fail, but failure is not forever. Pick yourself up, learn from the failure, and try again. Trap Number 3 – Viewing Wealth Negatively Many people view rich people negatively. Money is not the root of all evil as many believe, but it is the LOVE of money. Having money gives a person freedom. You should celebrate the desire to gain wealth and see it accurately as nothing more than a path to freedom. Trap Number 4 – Not Staying the Course You will win some and you will lose some. You have to keep on keeping on if you have a loss. A loss is never a defeat unless you fail to get back up and fight another round. Take your loss, learn from it, and keep on trying. Don’t quit. Trap Number 5 - The Weak Social Circle Who do you associate with continually? If your circle of friends does not include some people who are striving for wealth it can hold you back. To get where you need to be, you may have to let a few negative friends go. You don’t have to disown them, just seek good uplifting friends with drive and purpose and spend more time with them. Trap Number 6 – The Victim and Negativity Trap You must realize that you are not a victim. Your financial condition is not the government’s fault or your teacher's or school’s failure to teach you the needed skills to become wealthy. If you are surrounded by victim culture or people who are negative about wealth, change your surroundings. Don’t blame your situation on someone else. Take responsibility for yourself. It is VERY hard to move forward with a positive vision when you are lugging around a negative event from the past. The past is done and gone. Change and success begin today. Today is the only day any of us have control over. Yesterday is gone, and tomorrow never comes. TODAY… do something to start your path to wealth. Move forward with a positive mindset. Don’t let any bad occurrence hold you back. Wealth Trap Number 7 – The Know It All Nobody, nobody, nobody knows it all. Unfortunately, there is one know it all in every crowd. Stephen Hawking said, “The greatest enemy of knowledge is not ignorance, but it is the “illusion” of knowledge.” You must understand that not everything you learned in your life in school is a fact. Perhaps even things that have happened to you gave you an idea of fact when it was something different than you perceived. What we think to be ‘true knowledge’ may not be factual at all. When a person thinks they know it all, it stops curiosity, and when we stop learning we stagnate. The illusion of knowledge (the Expert Syndrome) stops curiosity, hinders teachability, and limits your journey. We all need courage Don’t fail to try. “Courage is being scared to death but saddling up anyway.” John Wayne Starting your wealth-building journey is not about what you know. It is about having the courage to dive in and a willingness to learn. Things change and that means you can’t stop studying investments. What used to work may not work this year. Thinking you know it all is a recipe for disaster. It may be a bit risky but START anyway. People frozen for fear of failure are guaranteed to not acquire wealth. We must have a learning-based mind. Have a growth mindset. Try new things. Branch out of your comfort zone and try something new. Do nothing and you are guaranteed failure. Checkout the book Limitless by Jim Kwik. for information on thinking with a growth mindset and realizing that current teaching methods may fail you. Analyze things and learn from your mistakes. Learn from mentors and then tell others about what you have learned. Be a mentor to others striving to learn about gaining wealth. Share your successes and failures. If you commit to building wealth, it will happen. Have a vision for wealth. First Lady Eleanor Roosevelt once said “It takes as much energy to wish as it does to plan.” In the book, the authors give a 4-Part Plan to Gain Wealth.
“Even a bad plan is better than no plan at all.” Peter Thiel Once you have a plan, break it into small manageable action steps. Then move on step one, then step two, etc. until you are moving in the right direction. Life is risky. Doing nothing is even riskier than trying. Get some leverage by learning from talented people. We have thousands of options available to us. Find people and authors who know what they are doing and pattern after them. Let go of perfectionism and take a few risks. If we do that, we can get out of our way. I highly recommend the Wealth Can’t Wait book by David Osborne. It has many other chapters to help you begin your wealth pursuit that I did not cover in this book review. You can only cover the basics in a review. Check out this book and get started on a plan to obtain wealth. List of All Investment Articles List of all Minimalism Articles Facebook Internet Direct Store Internet Direct.US Internet Direct Laptops  Determination is not what comes to mind when you think about minimalism. But to be a good minimalist, it takes determination. We all have to fight the inborn desire to acquire more and more things. When you cut out the excess “stuff” you have more free time. You have less to keep up with, and your expenses are lowered. A few weeks back, we discussed how Resilience is important to have success in life. Today I want to discuss another word that all of us should learn and strive to make part of our day-to-day mindset.
If we can get this attribute into our daily action steps, believe me, it will allow us to have a more consistent life. I want to talk about the word: Determination. The dictionary defines determination as:
As a Christian, almost daily you will be stretched to your limit and face adversity. Can you quickly recover from hard times? We can when we have faith in God. When we ask God for faith, he has promised to give us the desires of our heart. Who in the bible was the ultimate example of determination besides our Savior Jesus Christ? I think after Christ, the first person that comes to my mind is the apostle Paul. Here was a guy, before he got saved, that was fired up to serve God, but he didn’t do it lawfully. Until he found Christ on the Damascus Road he did a lot of things but not according to knowledge. He was a great man in the sight of man, but once he knew Christ as Lord and Savior he became a fired-up Christian. Php 3:4 Though I might also have confidence in the flesh. If any other man thinketh that he hath whereof he might trust in the flesh, I more: Php 3:5 Circumcised the eighth day, of the stock of Israel, of the tribe of Benjamin, an Hebrew of the Hebrews; as touching the law, a Pharisee; Php 3:6 Concerning zeal, persecuting the church; touching the righteousness which is in the law, blameless. Php 3:7 But what things were gain to me, those I counted loss for Christ. Php 3:8 Yea doubtless, and I count all things but loss for the excellency of the knowledge of Christ Jesus my Lord: for whom I have suffered the loss of all things, and do count them but dung, that I may win Christ, Php 3:9 And be found in him, not having mine own righteousness, which is of the law, but that which is through the faith of Christ, the righteousness which is of God by faith: Php 3:10 That I may know him, and the power of his resurrection, and the fellowship of his sufferings, being made conformable unto his death; Php 3:11 If by any means I might attain unto the resurrection of the dead. Paul was a man who never gave up, no matter the circumstances. He knew that God was the one who helped and guided him every day of his life. Through Christ, Paul could do all things. Heb 11:6 But without faith it is impossible to please him: for he that cometh to God must believe that he is, and that he is a rewarder of them that diligently seek him. To have determination, you will certainly need to have a lot of resilience and the ability to stick with things when things go against you. All of these things work hand in hand to make you a person who is very productive in your life. By being determined, you keep on when others quit. When you have determination, little setbacks are just those. Failure is never a failure until you quit getting back up and fighting another round. I read about the qualities that NASA looks for in potential astronauts. The 4 attributes these men and women are required to have are:
I think we can agree that these 4 attributes are also what God desires of us who are called according to God’s purpose. If anyone should be tough-minded with a strong self-image, it should be the man or woman patterning their lives after Jesus Christ. President Calvin Coolidge once said: Nothing in this world can take the place of persistence. Talent will not. Nothing is more common than unsuccessful men with great talent. Genius will not. Unrewarded Genius is almost a proverb. Education will not. The world is full of educated derelicts. Persistence, Determination, and hard work make the difference. Reread the last sentence slowly. Persistence, Determination, and hard work make the difference. I mentioned this next paragraph in my article about Resilience, but it is so fitting for this topic of determination. And what goes hand in hand with determination? Absolutely it is persistence. Day after day you fight again and again. Failures come and failures go, but you don’t give up. Having mule-like determination will allow you to overcome almost any resistance you come up against. Thomas Edison tried over 14,000 tests in trying to create the light bulb. When his assistant said after a few months, let’s give this up. It can’t be done. Edison was reported to have said, “No. We just now know over 10,000 ways that won’t work.” Robert Cavett, a great motivator, once said: “You don’t drown by falling into water, you only drown if you stay there. It’s all right to get down, but don’t get down on yourself.” All of us stumble, but resilience and determination make us keep on going when it is not going our way. We are in a battle, and we need to know how to fight a successful fight. The great martial arts fighter Bruce Lee once said that the successful warrior is the average man with laser-like focus. We need to be able to first decide what is important, and then focus on that one thing and stick with it. As Christians, our main focus should be to live righteously before men and women at work and school. And we should always be telling others about what Christ has done for us. 1Pe 3:15 But sanctify the Lord God in your hearts: and be ready always to give an answer to every man that asketh you a reason of the hope that is in you with meekness and fear: We must let God through the Holy Spirit guide us, and that begins by reading our bible and being in tune with God’s leadership. List of All Investment Articles https://lifecanbesimple.net/investments.html List of All Minimalism Articles https://lifecanbesimple.net/minimalism.html www.lifecanbesimple.net 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 my own and are not to be used as professional advice. These are my findings and can hopefully help you make informed decisions on investing. Consult a Broker or Lawyer before making any investment. LIVING THE LAPTOP LIFE What comes to your mind when you think of the laptop life? Depending on your age, I figure it could mean a lot of things. If very young, it may not hold the same high value as it does in my advanced age. But would it not be great to run your whole life with just a simple laptop and be able to travel and do what you desire? With the internet available almost everywhere nowadays, there is little you could not do with a laptop. If you have cell service, you can toggle to your cellphone and use it for wireless connectivity. You can find things you need on eBay or Amazon and have them delivered to your current location. Life could not be much simpler, which ties to our blog site LifeCanBeSimple.net. Being free to travel and do what you want has to be close to the ideal situation. I have thought a lot about what my perfect retirement life would be like. After some reflection, I think my current life might be close to what I would consider the perfect retirement. To only work a few days a week and have money to do what I want to do, that sounds very ideal to me. To live a full life, we need to be able to do several things. No life is worth living without a close relationship with God. In Master Successful Personal Habits by Zig Ziglar, Zig Ziglar says that when you have your eternity set knowing Jesus Christ as your Lord and Savior, the rest of this life is a piece of cake. I totally agree with his assessment. Having good relationships with your family is high on my priority list. Good health is a blessing from God. And to be able to travel and handle all my investments easily makes living the Laptop Life a perfect way to have all things in control. With the right laptop and setup, you can monitor your investments and do all the needed research on new investments. I love the research available on Schwab Investments and Fidelity Investments. I did articles on both of those and explained what I loved most about them. My Favorite Brokerage: Fidelity Investments. Advantages of Schwab Investments. My favorite website to give me leads on Preferred Stocks and Closed End Funds is the Preferred Stock Channel. Each week I take the Preferred Stock Channel’s best Preferred Stock list showing the 10 top highest returns and review them for those that are quality companies just out of favor with the market. Don’t get wrapped up in the one with the highest paying dividends. Be sure that the stock is being sold at a discount to par value (below $25 per share) and paying above 10% in dividends based on lowered value. This is all explained in the article above on the Preferred Stock Channel. My laptop of choice in 2023 is the Dell Latitude 7310 with the Intel Tenth gen Core I7 Processor. I use the various laptops I have for sale on eBay, so the one pictured at the top of this article is a 16gb model with 512gb SSD. We had one before this that came with 32gb which is hard to find. Memory on this model is not upgradeable, so always buy the amount of memory you need. I explained about how my grandson Paul Culver, and I refurbish and sell these Dell Laptops on our Internet Direct eBay store in the following article. How to Save Money on Quality Laptops Each year I move up another year or two to the next I7 generation. I really love the 7310. It is lightweight and very efficient. It has a 13.3” screen which I find ideal. Sometimes I use the 12.5” models or the 14” models, but the 13.3” is my favorite screen size. Large enough to read, but the laptop is slim and trim with minimal weight. (Approximately 2 1/3 lbs.) I upgraded to Windows 11 about six months ago and am very pleased with Windows 11. I can move back and forth between it and Windows 10 easily now. If you are familiar with Chromebooks, I think they designed Windows 11 around that concept. Below is how my start window appears on my work laptop. I do most of my Visual Programming using various Visual Studio Versions. I do computer consulting work in my business focused on programming and networking.  I write a lot of articles for my blog, so I need the ability to jot down notes when I think of them, whether working on my laptop, my backup living room laptop (Dell 7300 Latitude), or my Google Pixel 5 cell phone. I accomplish this by using Microsoft OneDrive.  You find the OneDrive icon on the right side of the taskbar. The little cloud is OneDrive. You must have a Microsoft Account to use OneDrive. You can setup one for free and you get 10gb of free space. If you purchase the Office 365 package like I do yearly for $65, you get 1TB of space. (That is 1000 GB). I have tons of stuff on my OneDrive, and I have yet to use up 10gb. When you setup OneDrive, there are many options as to whether to keep the files on both your laptop or in the cloud. Normally you have a local copy in your USERS file in the OneDrive directory. You can mark directories to always maintain a copy of files on the local drive. On all my websites and documents, I keep a local copy. This is your decision. By having your files on OneDrive, you have multiple copies of your documents and pictures and they are available on all your devices including your smart phone.  What is great is I can start an article like I did today on my work laptop, and then come in and continue working on it on my living room Laptop.
If you have never used OneDrive, I urge you to try it. Google offers Google iDrive as an alternative. Ir you use a Chromebook, it is a good alternative. I don’t have the costs to compare it with OneDrive. Back when I started working with computers, we had a room full of equipment that had only 8K of memory that cost over $100,000. Nowadays, you can get 128gb of Ram on a cell phone. Things have changed tremendously, and we have so much flexibility today. If you write or use a computer at work, consider using a laptop. It will give you a lot of flexibility and takes up almost no room. I will plug the Dell Latitudes as a great value for the money. We normally have 30 to 50 different configurations listed for sale on our eBay Store. List of All Investment Articles List of all Minimalism Articles Facebook Internet Direct Store 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 my own and are not to be used as professional advice. These are my findings and can hopefully help you make informed decisions on investing. Consult a Broker or Lawyer before making any investment. Book Review – Second Chance for Your Money and Life by Robert Kiyosaki This is the fifth book I have read by Robert Kiyosaki. I read the first one (Rich Dad Poor Dad), Rich Dad’s Guide to Investing, Rich Dad’s Cashflow Quadrant, and Unfair Advantage. I never did a review on the first, but my other three reviews are listed below. I want to encourage you to read all of Robert Kiyosaki’s books. There are many. Links for the other 3 book reviews and Rich Dad Poor Dad on Amazon are: Rich Dad Poor Dad Rich Dad’s CashFlow Quadrant Rich Dad’s Guide to Investing Unfair Advantage I have read all of these books for free using the Hoopla Digital program from my local library. Check and see if you can use Hoopla to read dozens of great investment and professional books. How to Read Books Inexpensively. In all of Mr. Kiyosaki’s books, he urges us to question what we have been taught about money and investing. In the first book, Rich Dad Poor Dad, his Rich Dad taught him to invest in assets that return great cash flow. He also says we should question what we learned about investments in college. This old advice may no longer work. One of the biggest errors in current teaching is that we are taught to never make a mistake. You need to be perfect. Unfortunately, life is not that way. People who have success do not win all the time. They fail and then they get up and learn from their mistakes. This is the basic theme of this book. We all need a Second Chance. In school, do you remember what you were taught? Go to college, get a good job at a large corporation, and pour money into your 401-K with an employer’s match. Then retire happily at age 65 with all the money you need. However, this simply does not happen most of the time today. Most jobs no longer last over a few years. And many companies do not offer employer matches to their 401-Ks. Sadly some do not even offer 401-K retirement accounts. Today we need to think outside of the box and learn what works in the current world. You must study investments on an ongoing basis and find people that are teaching valid investment techniques. Robert said that in the fourth grade, he asked his teacher when the class would learn about money. The teacher said that money was not taught in schools. Mr. Kiyosaki said his poor dad told him when he got out of the military to go back to college and get his MBA. His rich dad told him he should get some street smarts and suggested he attend a 3-day Real Estate course for $365. It was the best $365 he ever spent. Robert started both the MBA and the real estate course. After getting finished with his 90-day assignment from the real estate course, he found a property to buy after analyzing 100 properties. He also gave up on the MBA and started his plunge into buying more assets that returned great cash flow. In the book, he quotes Steve Jobs who said this about determining your future. “You can’t connect the dots looking forward; you can only connect them looking backward. So you have to trust that the dots will somehow connect in the future.” In 1984, Robert Kiyosaki and his wife Kim asked themselves this probing question. “How much good is my work doing for the world?” Their answer was “Not Much”. They were working a lot but doing very little in regards to a world view purpose. After some soul-searching, Mr. Kiyosaki and his wife decided to be a bit foolish and make some major changes. In 1984, Kiyosaki and his wife decided to do 3 things:
Margaret Mead once said “Never doubt that a small group of thoughtful, committed citizens can change the world. Indeed, it’s the only thing that ever has ever changed the world.” Albert Einstein said, “We can’t solve problems by using the same kind of thinking we used when we created them.” The book is full of examples of HOW to do things. One that I loved was the example of how Robert Kiyosaki bought a small 2-bedroom house and turned it into a high money-making cashflow investment. In a good neighborhood, he purchased a 2 bedroom 1 bath home for $50,000. He paid $5,000 down and the owner financed the other $45,000 at 10%. To make money in real estate, you must keep up with the PTI which is made up of Payments, Taxes, and Insurance. He paid out $450 per month in PTI and could rent it for $750 giving him a cash flow of $300 as the renters paid for the house (which will also normally increase in value). But he saw a much greater opportunity for cash flow and to get his original investment back. He went to the bank and borrowed $5,000 for home improvement. He added a larger master bedroom and ¾ bath. Now as a 3 bedroom 2 bath home, rent went to $1,000 a month. Interest rates came down and he had the house appraised for $95,000. Went back to the bank and got a lower rate loan for $76,000 at 9% interest for 10 years. He pays off the owner-financed loan and the $5,000 home improvement loan. He put $25,000 of cash into his pocket and rented it for $1,000 a month. PTI now was $700, but he still had his $300 per month of cash flow and made a tidy profit of $20,000 after deducting his original down payment. This proves you need to think outside the box sometimes, particularly in real estate investments. Robert Kiyosaki is committed to giving people accurate needed financial advice. We all need financial education in our schools which can be available to rich and poor alike. We need a system that teaches people to not fear making a mistake but to learn from the mistake and get up and try again and again until they are successful. We are never defeated until we refuse to get back up. We should never fear making a mistake but seek to learn and get stronger in our financial affairs every day. After reading this book, I started the book “Wealth Without Cash” by Mordy Pace. He tells how he grew up in a family of 13 and how his dad worked very hard to just put food on the table. In his childhood, they moved to 17 different rent houses where his father would pour untold hours of renovation into these houses. He never learned that he could use his skills and make money for himself. Rather he worked for modest means his whole life, just barely getting by. It takes financial education to understand the world we live in. Mr. Pace’s father never learned to make money for himself, but he put many dollars in his landlords' and employers’ pockets. Fortunately, Mordy Pace was mentored in real estate and gained the financial education he needed to make much money in real estate, using other people’s money to finance his ventures. It truly is your choice. Gain this type of financial information, or live your whole life scraping from paycheck to paycheck. Second Chance was written to inspire your spirit. Your spirit needs to be a driving force to take advantage of your Second Chance… A Second Chance to take control of your money, your life, and your world. No one is going to solve your financial problems for you. It is up to you to find an education with a strong financial basis. And then take that learning and teach others so they too can have their Second Chance. Learn to do more with LESS and serve more people around the world. What a great book. Do you want a Second Chance? This can be the starting point. Keep studying. Learn what works today and apply that and move forward. I urge you to read all of the Rich Dad Poor Dad books. I now question everything about what I was taught about money and investments. I now do my best to make solid financial plans and stick to those plans, good market or bad market notwithstanding. And most of all, take advantage of my Second Chance. List of All Investment Articles List of all Minimalism Articles Facebook Internet Direct Store 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 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. WHAT I LOVE ABOUT THE PREFERRED STOCK CHANNEL There are so many websites offering stock market advice today. It is difficult to know which ones to use and which to ignore. I looked at dozens of them in the last year. Without hesitation, I can say that the Preferred Stock Channel has been one of the best in consistently guiding me to stocks that have made good money on dividends. There are 3 categories of investments that mainstream magazines and writers tend to overlook. Many of the huge hedge funds include these 3 types of investments in them. Those 3 slightly mentioned investments are: BDC (Business Development Companies) CEFs (Closed End Funds) Preferred Stocks I won’t discuss a lot about these, but I can say these 3 plus my Dividend Growth Stocks have been responsible for over 80% of my returns in 2022 and 2023. Read about each of those here: Business Development Companies - BDCs Closed End Funds - CEFs Preferred Stocks Many Preferred Stock shares pay excellent dividends, and some pay above 10%. Many can be purchased well below their par value which is normally $25 per share. Preferred Stocks (or Preferred Shares) are simply a class of equity stocks. They hold a senior position over common shares. One of the big differences (which is of little significance to small investors) is that Preferred Shares do not hold voting rights. In concept, they are much like a bond, but they are not a debt. In case of bankruptcy, bonds being debt would be paid first, then Preferred Shares, and if any money was left, the rest would be paid to the common stock shareholders. Preferred Stocks typically always sell at $25 which is par value. If you pay over $25 a share, you are paying a premium. Under $25 means you are purchasing at a discount. The dividends are paid on the value of $25 even if you purchased it at a lower rate, meaning you can get substantially higher returns than the stated rate if you buy at a good discount. It is easy to understand that if you can buy something below it’s Net Asset Value, then money can potentially be made if the stock moves back to its par value. I have purchased many of these over the past year paying 12 to 19% dividends. As I mentioned last week, every time I buy an investment, on that day, I issue a stop loss order to sell it if it drops to 92% of the price I paid. Each month if it increases in value, I set it to the new higher 92% value. Over 90% of the ones I purchased are still active after holding them for months. Of the few that did sell off, some happened after 6 months and quarterly dividends were paid once or twice. Bottom line is they are very profitable when doing it with my stop loss immediate sale if price drops. If some unforeseen news comes out on a company, I don’t have to be concerned about that and I just let the stop loss order handle the dip. Of course sometimes there is a momentary 10% drop and you would have made more if you had rode out the dip. However, what I am concerned about is the 40% drops where you can rarely make up for the loss over 2 to 3 years. Nothing prevents us from coming back after the stock price settles and repurchasing the same stock again. So what is so great about the PreferredStockChannel.com? They show you what is paying the highest dividends. Remember: Always always always, look up the company and see why the stock is paying such a high dividend. Sometimes a company is in distress, and you may wind up losing money on that kind. However, if you pay attention to these, some are just out of favor in the stock market or have gone through a dip in price. I pay attention to the charts and don’t buy if on a steady downhill slide. Look for a bottom on the chart and at least some rebound. Also look at the 52 week price range. If near the top of the 52 week price range, I do not buy. I always review all the tabs at Fidelity.com on all stocks and ETFs before I buy and see the analysts opinions. As the Preferred Stock article explains, you need to be sure that the stock is Cumulative, Perpetual, Redeemable, and preferably Fixed Dividend. (Meaning Non-adjustable interest.) I always buy at a discount, never at a premium. In other words, the prices is ALWAYS under $25 or I move to the next one. These are some of the things the Preferred Stock Channels helps me to identify. They send out a weekly email that is super (be sure to sign up for that. I read them all every week.) I am going to show you some examples of this weeks email(in April 2023) and how I used it to buy one stock and then one I did not buy and why.  I used this chart to look at several of these, and found no apparent reason to fear CSSEP. Chicken Soup for the Soul Preferred Stock. Here is the information from Fidelity when I researched CSSEP. The highlighted items are important. Price is well below the Par value of $25 (40% discount) and paying 16.357% dividend on April 27. Note major dip and recovery in the graph. I bought this stock on Monday.   There are so many options on the Preferred Stock Channel that I could not possibly cover all the options. However, here is one of my favorite links that shows the average by industry how the stocks are paying. Then you can click on the ones you are interested in and look at the list making up that industry.  Here is an example of one I did not buy. CVR Partners (UAN) shows to be paying out over 28% in dividends. In actuality, they are a partnership paying out distributions, not dividends. If you look at the yearly payouts, they have been very high every year except 2020.  This all sounds good until you see that in March of 2022, CVR paid out $5.24 per share, before cutting payout in half to $2.26 in next quarter. In August they paid out $10.05, but then only $1.77 in November. This inconsistency makes me believe they may start missing payouts. In the weekly email, they warned of this.
As I said, this weekly Preferred Stock Channel email is worthy of study. As always, I want to encourage you to do your own studies and make no decisions on buying or selling without consulting an investment advisor or an attorney. These are just for examples of how I use the Preferred Stock Channel to help me make decisions. Keep studying investments. There is a dividends group on Facebook that allows members to offer up advice on good paying dividend stocks and ETFs. I am member of that group and have found some good (and some not so good) advice there. Study and study some more. Have a great week finding some good dividend stocks to purchase. List of All Investment Articles https://lifecanbesimple.net/investments.html List of All Minimalism Articles https://lifecanbesimple.net/minimalism.html Facebook Internet Direct Store http://InternetDirect.us Internet Direct Laptops  Try Giving Yourself Away by David Dunn
This is a great book about how to live a joyful life. I think it is one of the top 4 books I have ever read. I started to seriously read books at the start of 2022. Here in April of 2023, I have now read a total of 124 books, which is an all-time high for me. In the past, I did good to read 10 books in a year, and most were not of much value but just for entertainment. I want to mention the name of the other 3 books that really set me in the right direction. The first I read 3 years ago was The Total Money Makeover by Dave Ramsey. For years I struggled with debt and tried so many ways to get out of debt. But I never fully bought off on doing just that one thing. Dave Ramsey sets you up with a simple 10-baby-step plan that works. I stuck with his exact plan and 9 months later in September of 2021, we were debt free except for our house. We then focused on it and were free of the mortgage in August of 2022. It has made all the difference and we now have plenty of money to invest. With all the other books I have read, we now have a solid plan. Read about all the different methods to invest on the Investments tab if on a Laptop. (Click on the 3 lines on top of screen if on phone). I write a new article each week on either Investments or minimalism and we currently have over 50 articles available. The earlier articles are at the bottom of the lists. The second book that got me started on the right path regarding how to study investments was recommended by my good friend and author, Joshua King. He says no one author ever helped him more than Robert Kiyosaki. I have read five of his books, and highly encourage you to read them. Start with what I think is the best of all: Rich Dad, Poor Dad. I just realized I never did a book review on that book. Here is my review of Unfair Advantage which is another great Robert Kiyosaki book. I recommend reading them all, but best to start with Rich Dad, Poor Dad as he refers back to it in his later books. Mr. Kiyosaki is the one that made me realize that all of the financial education I received in college was not true. Get a degree, go to work for a big corporation, feed that 401-K, and HOPE you can retire someday. Things are not the way they used to be. I think in The Wizard of Oz, Dorothy said, “We are not in Kansas anymore Toto.” 😊 Two of Robert Kiyosaki’s greatest points are that your home is not an investment and that rich people don’t work for money. They understand passive income and buy assets that return great cashflow. What worked 20 years ago is not valid today, and as things rapidly change, what we know today may not work tomorrow. Never stop reading and learning. The third book that has changed my life is Mastering Successful Personal Habits by Zig Ziglar. I am reading his best-selling book, “See You at the Top”, and I highly recommend it. Zig Ziglar teaches so many solid fundamentals on how to live. Trust God, live with great personal affirmations every day, and have habits that make your life better and better. I try to read those great personal affirmations every day, and they have made me a better Christian. Hard to affirm good things about yourself if you are not living up to those standards. Zig Ziglar is the one who recommended the next book “Try Giving Yourself Away” by David Dunn. The book review today is on “Try Giving Yourself Away.” I think this David Dunn book has had the greatest effect on me of all books I have ever read besides the King James Version Bible. This books teaches you so many things. I intend to read and re-read this book, and will read a Zig Ziglar book at least every other month. He knows how to fire you up to set goals and be determined. And most of all, to get results from your goal setting. I first obtained “Try Giving Yourself Away” by David Dunn through the Inter-Library Loan (ILL) program at my library. After reading it, I wanted every member of my family to read it. I found a copy on eBay and purchased it last week. WHAT I LEARNED FROM “Try Giving Yourself Away.” David Dunn said he developed giving himself away as a hobby. In giving himself away, he proved the biblical axiom that you can not outgive God. When you give and sacrifice, God blesses you back way more than you give. When you bless others, it seems to come back to you double. I started doing this as a hobby 10 days ago, and these have been 10 of the best days of my life. I intend for Giving Myself Away to be a part of my day-to-day living for the rest of my life. I had an aunt that was like Mr. Dunn. She went out of the way to always help and encourage everyone, especially children. Her name was Goldie Brown, and she made an indelible impression on me as a young person. Lots of people ask young people how they are doing and what they have been doing, but Goldie LISTENED and followed up and asked how things that were important to me were going. Never underestimate your power of encouragement with a young person. We all need it, but children are very impressionable. I want children I meet (especially my grandkids and great-grandkids) to know I hear them and really care. Mr. Dunn said he was brought up to believe that to acquire a lot in life, you had to “GET”, not “GIVE”. As he started his new hobby, it did not take long for him to discover that life was now more fun and filled with adventure. His examples of what he did are fantastic. I won’t for brevity and time’s sake mention any of those. That will give you an extra blessing when you read the book. To be effective, you must cultivate the “Giving Yourself Away” habit. Time is fleeting. I urge you to not wait another day to get started with this great hobby. Don’t waste another day without becoming an encourager. All of us can give appreciation, kindness, interest, loyalty, and understanding to those around us. There are so many ways to bless others. Just little acts of kindness mean so much to others. The bible teaches there are rewards for just offering a drink of water to strangers. None of us knows what the person we are talking with has been through in their life. Show compassion and love to all you meet. When you go into a store, and you see a hard-working employee, tell that person what exceptional work they are doing. Many have never received even one compliment. All they hear are customer complaints. You will make their day with a kind word of encouragement. Take time to send little notes of appreciation when you see someone being kind and helping others. Any deed worthy of praise should receive some recognition. Mr. Dunn said you should never do something to encourage and then receive remuneration for it. That negates the giving. Always do what you do for free with no intention of receiving something in return. Giving yourself away must be for free, not by being purchased. Freely give and freely receive the blessings that come back from your good sowing. When you give a gift, be sure it is a portion of you. Don’t just give money or things of value. Ralph Waldo Emerson wrote: “Rings and Jewels are not gifts, but apologies for gifts. The only true gift is a portion of thyself.” Always, always, give a portion of your heart. The Bible teaches that out of the heart come the issues of life. Be sure you give real gifts, not things with no thought from yourself. I will not try to cover all of this book. Just be blessed and read it all. This book will change your life as you see example after example of ways David Dunn gave himself away. Try spending a few minutes every day being an encourager. It will amaze you how much appreciation you get from a simple kind word given at the right time. I will mention that this book contains 145 pages. All of the information I mentioned here came out of the first 10 pages. I purposefully gave no examples of what David Dunn did so that they will be fresh and new for you when you get the book. Get a copy of this book and it will bless your soul. I got my copy off eBay for just $4.08. What a bargain for something that will allow you to be blessed all your life when you adopt this super hobby of “Try Giving Yourself Away.” 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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