Finance, saving

Investment terms and their definition

Just like in every profession there are terms and conditions that an individual have to understand prior to making a decision. Some terms might be easier to understand  while  others  might take longer. Before making any decisions mean you’ll need some sort of understanding before understanding the full benefits of them. If you just getting into investing it’s important for you to review, research, and ask alot of questions. While in the process you might find yourselves understanding some of the aspects of investing but not all of it and that is perfectly okay because the world wasn’t made in one day.

Start the process small and steady. Let’s start with my favorite, all my investments is base on Dividend. Dividend is a distribution by a corporation. When the company makes a profits or a surplus a proportion of that is divided with the shareholders. Owning shares in a corporation really makes you part owner of that business. When they do well you get rewarded some company will go the extra mile just like Costco did these year distribute extra money because of a surplus. Dividends can be paid once, as a special use of them, or they can be paid more regularly, such as monthly, quarterly, semi-annually, or annually.

Portfolio is a collection of financial Investments
It can be stocks, cash,bond commodity and real estate, Arts and ETF (extend traded funds).
If you are talking to people who are using that term your circle is good. I’m always curious to see what’s in other people portfolio.

Asset / allocation: An asset is a resource or property having a monetary/economic value possessed by an individual or entity, which is capable to generate some future economic benefit. No matter how aggressive you are it’s always good to diversify your portfolio holding by allocating them to do so you divide them by classes to limit risk because some asset perform opposite to each other. For example we have technologies, pharmaceuticals, consumer staples and utilities just to name a few.

Don’t ever think of your car as an asset
It’s a liability it devalue daily and cost to maintain.
Bear market: is a market that is falling. A bear market has a downward trend, and someone who believes the market is headed for a drop
Represent by a red color and a bear.

Bull market: a bull market is a condition of a financial market in which price are rising or expected to rise usually represent by the color green and a bull.

Capital gain (or loss): is the difference between what you bought an investment for and what you sell if for. If you buy 100 shares of a stock at $10 a share (spending $1,000) and sell your shares later for $25 a share ($2,500), you have a capital gain of $1,500. A loss occurs when you sell for less than you paid. So, if you sell this stock for $5 instead ($500), you have a capital loss of $500).

Blue chip: You might hear reporters and others refer to “blue-chip stocks.” Blue chips are companies that have a long history of good earnings, good balance sheets, and even regularly increasing dividends. These are solid companies that may not be exciting, but they are likely to provide reasonable returns over time.

Those are just a few of the market terminologies
No need to learn them by heart. You can just look them up whenever but they are very important.

What is risk tolerance?
Is your ability to psychologically endure the potential of losing money on an investment.
All investment carry some type of risk while some can be riskier.

What are the best stock a bigginner investor should buy? That question do not have a straight forward answer as not all investors have the same goals nor same risk tolerance.

How do I become a successful investor?
Start with a plan, diversify, stick with your plan regardless of volatility. Focus on generating after tax returns.


The millionaire maker

The S&P 500 or simply the S&P is a stock market index that measures the stock performance of 500 large companies listed on stock exchanges in the United States. The S&P 500 to me is the easiest way to accomplish great steps towards becoming a millionaire. There is no gimmick here. I’m going to show you facts and affordable ways to accomplish this. I’m going to use real numbers nothing imaginary.

First of all the S&P 500 bring back high returns, I’m even tempted to say the highest. In 3 years you’re looking at return  around 26.98 percent. I’m not even going to round anything up just not to confuse anyone. In 5 years around  57.26 percent
And the 10 years return is about 176.4 percent. In simple math for whatever you invest in a period of 10 years that amount can easily triple.

Enough about What could be. Remember base on your lifestyle now you can change your tommorow for the better. Money is pretty tight and trust me it will get thighter overtime. One thing we don’t pay attention to is that whenever we get a raise or a promotion our spending/bills gets it too they increase and you have no idea where your money is going.

Well this little scenario should be a wake up call for you I’m going to keep it easy and simple. If you are able to make $2500 monthly, yes you can be a millionaire by only paying yourself $150 biweekly. Which is about $300 a month. Now every month invest that $300 in the S&P 500 index fund
In 12 months your total investments will be $3600 Which is 36,000 in 10 years.

This year alone you would’ve had a return of $628.56 since the S&P 500 brought back a return of 17.46 percent. But let’s only use the average of 13 percent of return. According to the above scenario with $300 a  month in 12 months that’s $3600 let’s do it for 10 years since we you’ll be working so it’s good to pay yourself as you pay every other bills.$3600 multiply by 10 equal to $36,000 don’t get excited yet.

Now let’s say after 10 years you decided not to pay yourself anymore. That $36,000 in the S&P 500 index would bring you back average yearly $4680 with each amount the year after going to be higher because of compound interest at 13 percent return. Nice, right? Before you answer that question.

Let’s say you leave that money there until you reach retirement age you’ll have way over $1.9M by only paying yourself 12 percent of your monthly income if you are making $2500 monthly. That scenario is for people under 20 years of age the older you are the more you would need to invest to accomplish that goal.

• Investments involve risk of loss and are not FDIC insured.This article is for educational purposes only. Other indexes may be more appropriate for your investment approach.


Be above average

We often measured our own success by our friend’s success. What we often don’t realize is that we are not doing our self any good services by measuring ourselves to others success. Each one us have a different path of life.

There is a moving ship and it’s has been more than two years since I’ve been trying to get people to jump on board. People see the stock market as the affluent’s gallery. Where only the elites can succeed. With that in mind it’s hard to get even family and friends involve, they read all my articles and refuse to follow the steps or share them yet they wonder why I’m doing so well.

I invest with confidence, I buy stocks and shares with value. Utilities and essentials  is where I invest all my money. It’s been a long time since I do not have a saving account to be honest with you. I don’t miss the $0.19 interest rates I used to get evey month.

At a glance I bought Apple stocks at around $79 a share, it then went over $400 a share before they spli to a 4 for one the 31of August  2020. It safe to say I made a huffty amount of investment that day. Not to mention all my other stocks still paying dividend, I know apple is no where near good devidend paying stocks, man! can it grows in value check Apple stocks price 4 years ago.

Just to give everyone a little idea of what’s going on one of my previous article I gave a breakdown of how I invest and how much my investments worth. I want to encourage people to get involve. Little investments today big returns tomorrow.

To retire comfortably you’ll need multiple sources of income. I always put accent on Investments, 401(K) or equivalent last but not least social security don’t let it be your only option.